-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TUCsURPRzj6tNyPSGGg4+zCASn3QGuwahGivQThVDmmOc2KGe8DpeK5fmEzzE9Fb /qfYLaCbhDdn6FEdwusbjw== /in/edgar/work/0000927016-00-003477/0000927016-00-003477.txt : 20001003 0000927016-00-003477.hdr.sgml : 20001003 ACCESSION NUMBER: 0000927016-00-003477 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000929 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NSTAR/MA CENTRAL INDEX KEY: 0001035675 STANDARD INDUSTRIAL CLASSIFICATION: [4911 ] IRS NUMBER: 046830187 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-14768 FILM NUMBER: 732470 BUSINESS ADDRESS: STREET 1: 800 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6174242000 MAIL ADDRESS: STREET 1: 800 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02199 FORMER COMPANY: FORMER CONFORMED NAME: B E C ENERGY DATE OF NAME CHANGE: 19980421 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON EDISON HOLDINGS DATE OF NAME CHANGE: 19970313 10-K/A 1 0001.txt FORM 10-K/A, AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM___________TO____________. Commission file number 1-14768 ------------------------------ NSTAR ----- (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-3466300 ------------- ---------- (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 800 BOYLSTON ST., BOSTON MASSACHUSETTS 02199 - ------------------------------------------------------- ---------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-424-2000 ------------ SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE --------------------- TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ------------------- Common shares, par value $1 per share New York Stock Exchange Boston Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE 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 disclosure 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 reference in Part III of this Form 10-K or any amendment to this Form 10-K [ X] The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 15, 2000 computed as the average of the high and low market price of the common stock as reported in the listing of composite transactions for New York Stock Exchange listed securities in the Wall Street Journal: $2,209,524,613. Indicate the number of shares outstanding of each for the registrant's classes of common stock, as of the latest practicable date. CLASS 0UTSTANDING AT MARCH 15, 2000 ----- ----------------------------- COMMON SHARES $1 PER VALUE 56,836,646 SHARES DOCUMENTS INCORPORATED BY REFERENCE PART IN FORM 10-K ------------------------------------ ------------------ Portions of the Registrant's Notice of 2000 Annual Parts I, II and III Meeting, Proxy Statement and 1999 Financial Information Dated March 30, 2000 (pages as specified herein)
NOTICE This Form 10-K/A, dated September 29, 2000, amends NSTAR's 1999 Form 10-K as filed on March 30, 2000. Certain additional material contracts, as listed within Part IV, Item 14, "Exhibits, Financial Statement Schedules and Reports on Form 8-K", and the Consent of Independent Accountants are being filed in this Amendment No. 1. Item 14 is provided in its entirety and should be read in conjunction with NSTAR's 1999 Form 10-K. 2 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) The following documents are filed as part of this Form 10-K: 1. Financial Statements:
Page ------- Consolidated Statements of Income for the years ended December 31, 1999, 1998 and 1997. 34 Consolidated Statements of Retained Earnings for the years ended December 31, 1999, 1998 and 1997. 35 Consolidated Balance Sheets as of December 31, 1999 and 1998. 36 Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997. 37 Notes to Consolidated Financial Statements. 38 Selected Consolidated Quarterly Financial Data (Unaudited) 17 Report of Independent Accountants. 81 2. Financial Statement Schedules: Schedule II--Valuation and Qualifying Accounts--years ended December 31, 1999, 1998 and 1997. 78 3. Exhibits: Refer to the exhibits listing beginning on the following page. (b) Reports on Form 8-k: None
3 NSTAR (REGISTRANT)
Exhibit 2 Plan of Acquisition, Reorganization, Arrangement, Liquidation or Seccession - ---------- ---------------------------------------------------------------------------------------------------------- 2.1 Amended and Restated Agreement and Plan of Merger, dated as of December 5, 1998, amended and restated as of May 4, 1999, by and among BEC Energy, Commonwealth Energy System, NSTAR, BEC Acquisition LLC and CES Acquisition LLC (Incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus, Registration Statement on Form S-4 of NSTAR (No. 333-78285)). Exhibit 3 Articles of Incorporation and By-Laws - ---------- ---------------------------------------------------------------------------------------------------------- 3.1 Declaration of Trust of NSTAR (incorporated by reference to Annex D to the Joint Proxy Statement/Prospectus, which forms part of the Registration Statement on Form S-4 of NSTAR (No. 333-78285)). 3.2 Bylaws of NSTAR (Incorporated by reference to Annex E to the Joint Proxy Statement/Prospectus, which forms part of the Registration Statement on Form S-4 of NSTAR (No. 333-78285)). Exhibit 4 Instruments Defining the Rights of Security Holders, Including Indentures - ---------- ---------------------------------------------------------------------------------------------------------- 4.0 Management agrees to furnish to the Securities and Exchange Commission, upon request, a copy of any other agreements or instruments of the Registrant and its subsidiaries defining the rights of holders of any long-term debt whose authorization does not exceed 10% of total assets. 4.1 Indenture dated as of January 12, 2000 between NSTAR and Bank One Trust Company N.A. (Incorporated by reference, Exhibit 4.1 to NSTAR Registration Statement on Form S-3, File No. 333-94735). Exhibit 10 Material Contracts - ---------- ------------------------------------------------------------------------------------------------------ 10.1 NSTAR Excess Benefit Plan, effective August 25, 1999 (Filed Herewith). 10.2 NSTAR Supplemental Executive Retirement Plan, effective August 25, 1999 (Filed Herewith). 10.3 Special Supplemental Executive Retirement Agreement between Boston Edison Company and Thomas J. May dated March 13, 1999, regarding Key Executive Benefit Plan and Supplemental Executive Retirement Plan (Filed Herewith). 10.4 Key Executive Benefit Plan Agreement dated as of October 1, 1983 between Boston Edison Company and Thomas J. May (Filed Herewith). 10.5 Key Executive Benefit Plan Agreement dated September 1, 1989 between Boston Edison Company and Ronald A. Ledgett (Filed Herewith). 10.6 Employment Agreement between Thomas J. May and NSTAR dated May 11, 1999 (Incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus in Part I of the Registration Statement of NSTAR on Form S-4 (File No. 333-78285)). 10.7 Employment Agreement between Russell D. Wright and NSTAR dated May 11, 1999 (Incorporated by reference to Annex A to the Joint Proxy Statement/Prospectus in Part I of the Registration Statement of NSTAR on Form S-4 (File No. 333-78285)). 10.8 Employment Agreement between Boston Edison Company and Ronald A. Ledgett dated April 30, 1987 (Boston Edison Company Form 10-K for the year ended December 31, 1994, File No. 1-2301). 10.9 Change in Control Agreement between NSTAR and Thomas J. May dated May 11, 1999 (Filed Herewith). 10.10 Change in Control Agreement between NSTAR and Russell D. Wright dated May 11,1999 (Filed Herewith).
4 10.11 NSTAR Deferred Compensation Plan (Restated Effective August 25, 1999) (Filed Herewith). 10.12 NSTAR 1997 Share Incentive Plan, as amended June 30, 1999 and assumed by NSTAR effective August 28, 2000 (Filed Herewith) BEC Energy and Subsidiaries Exhibit 3 Articles of Incorporation and By-Laws - ---------- ------------------------------------------------------------------------------------------------------ 3.1 Boston Edison Restated Articles of Organization (Form 10-Q for the quarter ended June 30, 1994, File No. 1-2301). 3.2 Boston Edison Company Bylaws April 19, 1977, as amended January 22, 1987, January 28, 1988, May 28, 1988, and November 22, 1989 (Form 10-Q for the quarter ended June 30, 1990, File No. 1-2301). Exhibit 4 Instruments Defining the Rights of Security Holders, Including Indentures - ---------- ------------------------------------------------------------------------------------------------------ 4.1 Medium-Term Notes Series A--Indenture dated September 1, 1988, between Boston Edison Company and Bank of Montreal Trust Company (Form 10-Q for the quarter ended September 30, 1988, File No. 1-2301). 4.1.1 First Supplemental Indenture dated June 1, 1990 to Indenture dated September 1, 1988 with Bank of Montreal Trust Company 9/7//8% debentures due June 1, 2020. (Form 8-K dated June 28, 1990, File No. 1-2301). 4.1.26 Indenture of Trust and Agreement among the City of Boston, Massachusetts (acting by and through its Industrial Development Financing Authority) and Harbor Electric Energy Company and Shawmut Bank, N.A., as Trustee, dated November 1, 1991 (Form 10-K for the year end December 31, 1991, File No. 1-2301). 4.1.27 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken August 5, 1991 re 9/3//8% debentures due August 15, 2021 (Form 10-K for the year ended December 31, 1991, File No. 1-2301) 4.1.25 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken September 10, 1992 re 8/1//4% debentures due September 15, 2022 (Form 10-K for the year ended December 31, 1997, File No. 1-2301). 4.1.26 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken January 27, 1993 re /6//80% debentures due February 1, 2000 (Form 10-K for the year ended December 31, 1992, File No. 1-2301). 4.1.27 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken March 5, 1993 re /6//80% Debentures due March 15, 2003 and 7.80% debentures due March 15, 2023 (Form 10-K for the year ended December 31, 1992, File No. 1-2301). 4.1.28 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken August 18, 1993 re 6.05% debentures due August 15, 2000 (Form 10-K for year ended December 31, 1993, File No. 1-2301). 4.1.9 Votes of the Pricing Committee of the Board of Directors of Boston Edison Company taken May 10, 1995 re 7.80% debentures due May 15, 2010 (Form 10-K for the year ended December 31, 1995, File No. 1-2301).
5 Exhibit 10 Material Contracts - ---------- ------------------------------------------------------------------------------------------------------ 10.11 Boston Edison Company Deferred Fee Plan dated January 14, 1993 (Form 10-K for year ended December 31, 1992, File No. 1-2301). 10.10 Deferred Compensation Trust between Boston Edison Company and State Street Bank and Trust Company dated February 2, 1993 (Form 10-K for the year ended December 31, 1992, File No. 1-2301). 10.5.1 Amendment No. 1 to Deferred Compensation Trust dated March 31, 1994 (Form 10-K for the year ended December 31, 1994). 10.10 Employment Agreement Applicable to Ronald A. Ledgett dated April 30, 1987 (Form 10-K for the year ended December 31, 1994, File No. 1-2301). 10.12 Boston Edison Company Restructuring Settlement Agreement dated July 1997 (Form 10-K for the year ended December 31, 1997, File No. 1-2301). 10.1 Boston Edison Company and Sithe Energies, Inc. Purchase and Sale and Transition Agreements dated December 10, 1997 (Form 10-Q for the quarter ended March 31, 1998, File No. 1-2301). 10.11 Boston Edison Company Directors' Deferred Fee Plan Restatement effective October 1, 1998 (Form 10-K for the year ended December 31, 1999, File No. 1-2301). 10.12 Boston Edison Company and Entergy Nuclear Generation Company Purchase and Sale Agreement dated November 18, 1998 (Form 10-K for the year ended December 31, 1999, File No. 1-2301). 10.13 License Agreement Between Boston Edison Company and Becocom, Inc., dated Jule 17, 1997 (Form 10-K for the year ended December 31, 1999, File No. 1-14768). 10.14 Chilled Water Service Agreement between Northwind Boston LLC and Prucenter Acquisition LLC, March 23, 1999. (Form 10-K for the year ended December 31, 1999, File No. 1-14768). Exhibit 21 Subsidiaries of the Registrant - ---------- ------------------------------------------------------------------------------------------------------ 21.1 Boston Edison Company (incorporated in Massachusetts), a wholly owned subsidiary of BEC Energy. 21.2 Boston Energy Technology Group, Inc. (incorporated in Massachusetts), a wholly owned subsidiary of BEC Energy.
6 21.3 Harbor Electric Energy Company (incorporated in Massachusetts), a wholly owned subsidiary of Boston Edison Company. Exhibit 99 Additional Exhibits - ---------- ------------------------------------------------------------------------------------------------------ 99.1 Settlement Agreement between Boston Edison Company and Commonwealth Electric Company, Montaup Electric Company and the Municipal Light Department of the Town of Reading, Massachusetts, dated January 5, 1990 (Form 8-K dated December 21, 1989, File No. 1-2301). 99.2 Settlement Agreement between Boston Edison Company and City of Holyoke Gas and City of Holyoke Gas and Electric Department et. al., dated April 26, 1990 (Form 10-Q for the quarter ended March 31, 1990, File No. 1-2301). 99.3 Information required by SEC Form 11-K for certain employee benefit plans for the years ended December 31, 1997, 1996 and 1995 (Form 10-K/A Amendments to Form 10-K for the years December 31, 1997, 1996 and 1995 dated June 25, 1998, June 26, 1997 and June 27, 1996 respectively. COMMONWEALTH ENERGY SYSTEM Exhibit 4 Instruments Defining the Rights of Security Holders, Including Indentures - ---------- ------------------------------------------------------------------------------------------------------ 4.1.1 CES Note Agreement ($40 Million Privately Placed Senior Notes) dated June 28, 1989 (Exhibit 1 to the CES Form 10-Q (September 1989), File No. 1-7316). Exhibit 10 Power Contract - ---------- ------------------------------------------------------------------------------------------------------ 10.1.1 Power contracts between CEC (Unit 1) and NBGEL and CEL dated December 1, 1965 (Exhibit 13(a)(1-4) to the CEC Form S-1, File No. 2-30057). 10.1.2 Power contract between Yankee Atomic Electric Company (YAEC) and CEL dated June 30, 1959, as amended April 1, 1975 (Refiled as Exhibit 1 to the 1991 CEL Form 10-K, File No. 2-7909). 10.1.2.1 Second, Third and Fourth Amendments to 10.1.2 as amended October 1, 1980, April 1, 1985 and May 6, 1988, respectively (Exhibit 2 to the CEL Form 10-Q (June 1988), File No. 2-7909). 10.1.2.2 Fifth and Sixth Amendments to 10.1.2 as amended June 26, 1989 and July 1, 1989, respectively (Exhibit 1 to the CEL Form 10-Q (September 1989), File No. 2-7909). 10.1.3 Power Contract between YAEC and NBGEL dated June 30, 1959, as amended April 1, 1975 (Refiled as Exhibit 2 to the 1991 CE Form 10-K, File No. 2-7749). 10.1.3.1 Second, Third and Fourth Amendments to 10.1.3 as amended October 1, 1980, April 1, 1985 and May 6, 1988, respectively (Exhibit 1 to the CE Form 10-Q (June 1988), File No. 2-7749). 10.1.3.2 Fifth and Sixth Amendments to 10.1.3 as amended June 26, 1989 and July 1, 1989, respectively (Exhibit 3 to the CE Form 10-Q (September 1989), File No. 2-7749). 10.1.4 Power Contract between Connecticut Yankee Atomic Power Company (CYAPC) and CEL dated July 1, 1964 (Exhibit 13-K1 to the Parent's Form S-1, (April 1967) File No. 2-25597). 10.1.4.1 Additional Power Contract providing for extension on contract term between CYAPC and CEL dated April 30, 1984 (Exhibit 5 to the CEL Form 10-Q (June 1984), File No. 2-7909). 10.1.4.2 Second Supplementary Power Contract providing for decommissioning financing between CYAPC and CEL dated April 30, 1984 (Exhibit 6 to the CEL Form 10-Q (June 1984), File No. 2-7909). 10.1.5 Power contract between Vermont Yankee Nuclear Power Corporation (VYNPC) and CEL dated February 1, 1968 (Exhibit 3 to the CEL 1984 Form 10-K, File No. 2-7909).
7 10.1.5.1 First Amendment dated June 1, 1972 (Section 7) and Second Amendment dated April 15, 1983 (decommissioning financing) to 10.1.5 (Exhibits 1 and 2, respectively, to the CEL Form 10-Q (June 1984), File No. 2-7909). 10.1.5.2 Third Amendment dated April 1, 1985 and Fourth Amendment dated June 1, 1985 to 10.1.5 (Exhibits 1 and 2, respectively, to the CEL Form 10-Q (June 1986), File No. 2-7909). 10.1.5.3 Fifth and Sixth Amendments to 10.1.5 dated February 1, 1968, both as amended May 6, 1988 (Exhibit 1 to the CEL Form 10-Q (June 1988), File No. 2-7909). 10.1.5.4 Seventh Amendment to 10.1.5 dated February 1, 1968, as amended June 15, 1989 (Exhibit 2 to the CEL Form 10-Q (September 1989), File No. 2-7909). 10.1.5.5 Additional Power Contract dated February 1, 1984 between CEL and VYNPC providing for decommissioning financing and contract extension (Refiled as Exhibit 1 to CEL 1993 Form 10-K, File No. 2-7909). 10.1.6 Power contract between Maine Yankee Atomic Power Company (MYAPC) and CEL dated May 20, 1968 (Exhibit 5 to the Parent's Form S-7, File No. 2-38372). 10.1.6.1 First Amendment dated March 1, 1984 (decommissioning financing) and Second Amendment dated January 1, 1984 (supplementary payments) to 10.1.6 (Exhibits 3 and 4 to the CEL Form 10-Q (June 1984), File No. 2-7909). 10.1.6.2 Third Amendment to 10.1.6 dated October 1, 1984 (Exhibit 1 to the CEL Form 10-Q (September 1984), File No. 2-7909). 10.1.7 Agreement between NBGEL and Boston Edison Company (BECO) for the purchase of electricity from BECO's Pilgrim Unit No. 1 dated August 1, 1972 (Exhibit 7 to the CE 1984 Form 10-K, File No. 2-7749). 10.1.7.1 Service Agreement between NBGEL and BECO for purchase of stand-by power for BECO's Pilgrim Station dated August 16, 1978 (Exhibit 1 to the CE 1988 Form 10-K, File No. 2-7749). 10.1.7.2 System Power Sales Agreement by and between CE and BECO dated July 12, 1984 (Exhibit 1 to the CE Form 10-Q (September 1984), File No. 2-7749). 10.1.7.3 Power Exchange Agreement by and between BECO and CE dated December 1, 1984 (Exhibit 16 to the CE 1984 Form 10-K, File No. 2-7749). 10.1.7.4 Service Agreement for Non-Firm Transmission Service between BECO and CEL dated July 5, 1984 (Exhibit 4 to the CEL 1984 Form 10-K, File No. 2-7909). 10.1.8 Agreement for Joint-Ownership, Construction and Operation of New Hampshire Nuclear Units (Seabrook) dated May 1, 1973 (Exhibit 13(N) to the NBGEL Form S-1 dated October 1973, File No. 2-49013 and as amended below: 10.1.8.1 First through Fifth Amendments to 10.1.8 as amended May 24, 1974, June 21, 1974, September 25, 1974, October 25, 1974 and January 31, 1975, respectively (Exhibit 13(m) to the NBGEL Form S-1 (November 7, 1975), File No. 2-54995). 10.1.8.2 Sixth through Eleventh Amendments to 10.1.8 as amended April 18, 1979, April 25, 1979, June 8, 1979, October 11, 1979 and December 15, 1979, respectively (Refiled as Exhibit 1 to the CEC 1989 Form 10-K, File No. 2-30057).
8 10.1.8.3 Twelfth through Fourteenth Amendments to 10.1.8 as amended May 16, 1980, December 31, 1980 and June 1, 1982, respectively (Filed as Exhibits 1, 2, and 3 to the CE 1992 Form 10-K, File No. 2-7749). 10.1.8.4 Fifteenth and Sixteenth Amendments to 10.1.8 as amended April 27, 1984 and June 15, 1984, respectively (Exhibit 1 to the CEC Form 10-Q (June 1984), File No. 2-30057). 10.1.8.5 Seventeenth Amendment to 10.1.8 as amended March 8, 1985 (Exhibit 1 to the CEC Form 10-Q (March 1985), File No. 2-30057). 10.1.8.6 Eighteenth Amendment to 10.1.8 as amended March 14, 1986 (Exhibit 1 to the CEC Form 10-Q (March 1986), File No. 2-30057). 10.1.8.7 Nineteenth Amendment to 10.1.8 as amended May 1, 1986 (Exhibit 1 to the CEC Form 10-Q (June 1986), File No. 2-30057). 10.1.8.8 Twentieth Amendment to 10.1.8 as amended September 19, 1986 (Exhibit 1 to the CEC 1986 Form 10-K, File No. 2-30057). 10.1.8.9 Twenty-First Amendment to 10.1.8 as amended November 12, 1987 (Exhibit 1 to the CEC 1987 Form 10-K, File No. 2-30057). 10.1.8.10 Settlement Agreement and Twenty-Second Amendment to 10.1.8, both dated January 13, 1989 (Exhibit 4 to the CEC 1988 Form 10-K, File No. 2-30057). 10.1.9 Purchase and Sale Agreement together with an implementing Addendum dated December 31, 1981, between CE and CEC, for the purchase and sale of the CE 3.52% joint-ownership interest in the Seabrook units, dated January 2, 1981 (Refiled as Exhibit 4 to the CE 1992 Form 10-K, File No. 2-7749). 10.1.10 Agreement to transfer ownership, construction and operational interest in the Seabrook Units 1 and 2 from CE to CEC dated January 2, 1981 (Refiled as Exhibit 3 to the 1991 CE Form 10-K, File No. 2-7749). 10.1.11 Power Contract, as amended to February 28, 1990, superseding the Power Contract dated September 1, 1986 and amendment dated June 1, 1988, between CEC (seller) and CE and CEL (purchasers) for seller's entire share of the Net Unit Capability of Seabrook 1 and related energy (Exhibit 1 to the CEC Form 10-Q (March 1990), File No. 2-30057). 10.1.12 Agreement between NBGEL and Central Maine Power Company (CMP), for the joint-ownership, construction and operation of William F. Wyman Unit No. 4 dated November 1, 1974 together with Amendment No. 1 dated June 30, 1975 (Exhibit 13(N) to the NBGEL Form S-1, File No. 2-54955). 10.1.12.1 Amendments No. 2 and 3 to 10.1.12 as amended August 16, 1976 and December 31, 1978 (Exhibit 5(a) 14 to the Parent's Form S-16 (June 1979), File No. 2-64731). 10.1.13 Agreement between the registrant and Montaup Electric Company (MEC) for use of common facilities at Canal Units I and II and for allocation of related costs, executed October 14, 1975 (Exhibit 1 to the CEC 1985 Form 10-K, File No. 2-30057). 10.1.13.1 Agreement between the registrant and MEC for joint-ownership of Canal Unit II, executed October 14, 1975 (Exhibit 2 to the CEC 1985 Form 10-K, File No. 2-30057). 10.1.13.2 Agreement between the registrant and MEC for lease relating to Canal Unit II, executed October 14, 1975 (Exhibit 3 to the CEC 1985 Form 10-K, File No. 2-30057). 10.1.14 Contract between CEC and NBGEL and CEL, affiliated companies, for the sale of specified amounts of electricity from Canal Unit 2 dated January 12, 1976 (Exhibit 7 to the Parent's 1985 Form 10-K, File No. 1-7316).
9 10.1.15 Capacity Acquisition Agreement between CEC, CEL and CE dated September 25, 1980 (Refiled as Exhibit 1 to the 1991 CEC Form 10-K, File No. 2-30057). 10.1.15.1 Amendment to 10.1.15 as amended and restated June 1, 1993, henceforth referred to as the Capacity Acquisition and Disposition Agreement, whereby Canal Electric Company, as agent, in addition to acquiring power may also sell bulk electric power which Cambridge Electric Light Company and/or Commonwealth Electric Company owns or otherwise has the right to sell (Exhibit 1 to Canal Electric's Form 10-Q (September 1993), File No. 2-30057). 10.1.16 Phase 1 Vermont Transmission Line Support Agreement and Amendment No. 1 thereto between Vermont Electric Transmission Company, Inc. and certain other New England utilities, dated December 1, 1981 and June 1, 1982, respectively (Exhibits 5 and 6 to the CE 1992 Form 10-K, File No. 2-7749). 10.1.16.1 Amendment No. 2 to 10.1.16 as amended November 1, 1982 (Exhibit 5 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.16.2 Amendment No. 3 to 10.1.16 as amended January 1, 1986 (Exhibit 2 to the CE 1986 Form 10-K, File No. 2-7749). 10.1.17 Power Purchase Agreement between Pioneer Hydropower, Inc. and CE for the purchase of available hydro-electric energy produced by a facility located in Ware, Massachusetts, dated September 1, 1983 (Refiled as Exhibit 1 to the CE 1993 Form 10-K, File No. 2-7749). 10.1.18 Power Purchase Agreement between Corporation Investments, Inc. (CI), and CE for the purchase of available hydro-electric energy produced by a facility located in Lowell, Massachusetts, dated January 10, 1983 (Refiled as Exhibit 2 to the CE 1993 Form 10-K, File No. 2-7749). 10.1.18.1 Amendment to 10.1.18 between CI and Boott Hydropower, Inc., an assignee therefrom, and CE, as amended March 6, 1985 (Exhibit 8 to the CE 1984 Form 10-K, File No. 2-7749). 10.1.19 Phase 1 Terminal Facility Support Agreement dated December 1, 1981, Amendment No. 1 dated June 1, 1982 and Amendment No. 2 dated November 1, 1982, between New England Electric Transmission Corporation (NEET), other New England utilities and CE (Exhibit 1 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.19.1 Amendment No. 3 to 10.1.19 (Exhibit 2 to the CE Form 10-Q (June 1986), File No. 2-7749). 10.1.20 Preliminary Quebec Interconnection Support Agreement dated May 1, 1981, Amendment No. 1 dated September 1, 1981, Amendment No. 2 dated June 1, 1982, Amendment No. 3 dated November 1, 1982, Amendment No. 4 dated March 1, 1983 and Amendment No. 5 dated June 1, 1983 among certain New England Power Pool (NEPOOL) utilities (Exhibit 2 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.21 Agreement with Respect to Use of Quebec Interconnection dated December 1, 1981, Amendment No. 1 dated May 1, 1982 and Amendment No. 2 dated November 1, 1982 among certain NEPOOL utilities (Exhibit 3 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.21.1 Amendatory Agreement No. 3 to 10.1.21 as amended June 1, 1990, among certain NEPOOL utilities (Exhibit 1 to the CEC Form 10-Q (September 1990), File No. 2-30057). 10.1.22 Phase I New Hampshire Transmission Line Support Agreement between NEET and certain other New England Utilities dated December 1, 1981 (Exhibit 4 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.23 Agreement, dated September 1, 1985, with Respect To Amendment of Agreement With Respect To Use Of Quebec Interconnection, dated December 1, 1981, among certain NEPOOL utilities to include Phase II facilities in the definition of ''Project'' (Exhibit 1 to the CEC Form 10-Q (September 1985), File No. 2-30057).
10 10.1.24 Agreement to Preliminary Quebec Interconnection Support Agreement--Phase II among Public Service Company of New Hampshire (PSNH), New England Power Co. (NEP), BECO and CEC whereby PSNH assigns a portion of its interests under the original Agreement to the other three parties, dated October 1, 1987 (Exhibit 2 to the CEC 1987 Form 10-K, File No. 2-30057). 10.1.25 Preliminary Quebec Interconnection Support Agreement--Phase II among certain New England electric utilities dated June 1, 1984 (Exhibit 6 to the CE Form 10-Q (June 1984), File No. 2-7749). 10.1.25.1 First, Second and Third Amendments to 10.1.25 as amended March 1, 1985, January 1, 1986 and March 1, 1987, respectively (Exhibit 1 to the CEC Form 10-Q (March 1987), File No. 2-30057). 10.1.25.2 Fifth, Sixth and Seventh Amendments to 10.1.25 as amended October 15, 1987, December 15, 1987 and March 1, 1988, respectively (Exhibit 1 to the CEC Form 10-Q (June 1988), File No. 2-30057). 10.1.25.3 Fourth and Eighth Amendments to 10.1.25 as amended July 1, 1987 and August 1, 1988, respectively (Exhibit 3 to the CEC Form 10-Q (September 1988), File No. 2-30057). 10.1.25.4 Ninth and Tenth Amendments to 10.1.25 as amended November 1, 1988 and January 15, 1989, respectively (Exhibit 2 to the CEC 1988 Form 10-K, File No. 2-30057). 10.1.25.5 Eleventh Amendment to 10.1.25 as amended November 1, 1989 (Exhibit 4 to the CEC 1989 Form 10-K, File No. 2-30057). 10.1.25.6 Twelfth Amendment to 10.1.25 as amended April 1, 1990 (Exhibit 1 to the CEC Form 10-Q (June 1990), File No. 2-30057). 10.1.26 Phase II Equity Funding Agreement for New England Hydro-Transmission Electric Company, Inc. (New England Hydro) (Massachusetts), dated June 1, 1985, between New England Hydro and certain NEPOOL utilities (Exhibit 2 to the CEC Form 10-Q (September 1985), File No. 2-30057). 10.1.27 Phase II Massachusetts Transmission Facilities Support Agreement dated June 1, 1985, refiled as a single agreement incorporating Amendments 1 through 7 dated May 1, 1986 through January 1, 1989, respectively, between New England Hydro and certain NEPOOL utilities (Exhibit 2 to the CEC Form 10-Q (September 1990), File No. 2-30057). 10.1.28 Phase II New Hampshire Transmission Facilities Support Agreement dated June 1, 1985, refiled as a single agreement incorporating Amendments 1 through 8 dated May 1, 1986 through January 1, 1990, respectively, between New England Hydro-Transmission Corporation (New Hampshire Hydro) and certain NEPOOL utilities (Exhibit 3 to the CEC Form 10-Q (September 1990), File No. 2-30057). 10.1.29 Phase II Equity Funding Agreement for New Hampshire Hydro, dated June 1, 1985, between New Hampshire Hydro and certain NEPOOL utilities (Exhibit 3 to the CEC Form 10-Q (September 1985), File No. 2-30057). 10.1.29.1 Amendment No. 1 to 10.1.29 dated May 1, 1986 (Exhibit 6 to the CEC Form 10-Q (March 1987), File No. 2-30057). 10.1.29.2 Amendment No. 2 to 10.1.29 as amended September 1, 1987 (Exhibit 3 to the CEC Form 10-Q (September 1987), File No. 2-30057). 10.1.30 Phase II New England Power AC Facilities Support Agreement, dated June 1, 1985, between NEP and certain NEPOOL utilities (Exhibit 6 to the CEC Form 10-Q (September 1985), File No. 2-30057). 10.1.30.1 Amendments Nos. 1 and 2 to 10.1.30 as amended May 1, 1986 and February 1, 1987, respectively (Exhibit 5 to the CEC Form 10-Q (March 1987), File No. 2-30057).
11 10.1.30.2 Amendments Nos. 3 and 4 to 10.1.30 as amended June 1, 1987 and September 1, 1987, respectively (Exhibit 5 to the CEC Form 10-Q (September 1987), File No. 2-30057). 10.1.31 Agreement Authorizing Execution of Phase II Firm Energy Contract, dated September 1, 1985, among certain NEPOOL utilities in regard to participation in the purchase of power from Hydro-Quebec (Exhibit 8 to the CEC Form 10-Q (September 1985), File No. 2-30057). 10.1.32 Agreements by and between Swift River Company and CE for the purchase of available hydro-electric energy to be produced by units located in Chicopee and North Willbraham, Massachusetts, both dated September 1, 1983 (Exhibits 11 and 12 to the CE 1984 Form 10-K, File No. 2-7749). 10.1.33 Power Purchase Agreement by and between SEMASS Partnership, as seller, to construct, operate and own a solid waste disposal facility at its site in Rochester, Massachusetts and CE, as buyer of electric energy and capacity, dated September 8, 1981 (Exhibit 17 to the CE 1984 Form 10-K, File No. 2-7749). 10.1.33.1 Power Sales Agreement to 10.1.33 for all capacity and related energy produced, dated October 31, 1985 (Exhibit 2 to the CE 1985 Form 10-K, File No. 2-7749). 10.1.33.2 Amendment to 10.1.33 for all additional electric capacity and related energy to be produced by an addition to the Original Unit, dated March 14, 1990 (Exhibit 1 to the CE Form 10-Q (June 1990), File No. 2-7749). 10.1.33.3 Amendment to 10.1.33 for all additional electric capacity and related energy to be produced by an addition to the Original Unit, dated May 24, 1991 (Exhibit 1 to CE Form 10-Q (June 1991), File No. 2-7749). 10.1.34 Power Sale Agreement by and between CE (buyer) and Northeast Energy Associated, Ltd. (NEA) (seller) of electric energy and capacity, dated November 26, 1986 (Exhibit 1 to the CE Form 10-Q (March 1987), File No. 2-7749).
12 10.1.34.1 First Amendment to 10.1.34 as amended August 15, 1988 (Exhibit 1 to the CE Form 10-Q (September 1988), File No. 2-7749). 10.1.34.2 Second Amendment to 10.1.34 as amended January 1, 1989 (Exhibit 2 to the CE 1988 Form 10-K, File No. 2-7749). 10.1.34.3 Power Sale Agreement dated August 15, 1988 between NEA and CE for the purchase of 21 MW of electricity (Exhibit 2 to the CE Form 10-Q (September 1988), File No. 2-7749). 10.1.34.4 Amendment to 10.1.34.3 as amended January 1, 1989 (Exhibit 3 to the CE 1988 Form 10-K, File No. 2-7749). 10.1.35 Power Purchase Agreement and First Amendment, dated September 5, 1989 and August 3, 1990, respectively, by and between Commonwealth Electric (buyer) and Dartmouth Power Associates Limited Partnership (seller), whereby buyer will purchase all of the energy (67.6 MW) produced by a single gas turbine unit (Exhibit 1 to the CE Form 10-Q (June 1992), File No. 2-7749). 10.1.35.1 Second Amendment, dated June 23, 1994, to 10.1.50 by and between Commonwealth Electric Company and Dartmouth Power Associates, L.P. dated September 5, 1989 (Exhibit 4 to the CE Form 10-Q (June 1995), File No. 2-7749). 10.1.36 Power Purchase Agreement by and between Masspower (seller) and Commonwealth Electric Company (buyer) for a 11.11% entitlement to the electric capacity and related energy of a 240 MW gas-fired cogeneration facility, dated February 14, 1992 (Exhibit 1 to Commonwealth Electric's Form 10-Q (September 1993), File No. 2-7749). 10.1.37 Power Sale Agreement by and between Altresco Pittsfield, L.P. (seller) and Commonwealth Electric Company (buyer) for a 17.2% entitlement to the electric capacity and related energy of a 160 MW gas-fired cogeneration facility, dated February 20, 1992 (Exhibit 2 to Commonwealth Electric's Form 10-Q (September 1993), File No. 2-7749). 10.1.37.1 System Exchange Agreement by and among Altresco Pittsfield, L.P., Cambridge Electric Light Company, Commonwealth Electric Company and New England Power Company, dated July 2, 1993 (Exhibit 3 to Commonwealth Electric's Form 10-Q (September 1993), File No 2-7749). 10.1.37.2 Power Sale Agreement by and between Altresco Pittsfield, L. P. (seller) and Cambridge Electric Light Company (Cambridge Electric) (buyer) for a 17.2% entitlement to the electric capacity and related energy of a 160 MW gas-fired cogeneration facility, dated February 20, 1992 (Exhibit 1 to Cambridge Electric's Form 10-Q (September 1993), File No. 2-7909). 10.1.37.3 First Amendment, dated November 7, 1994, to 10.1.37 by and between Commonwealth Electric Company and Altresco Pittsfield, L.P. dated February 20, 1992 (Filed as Exhibit 3 to Commonwealth Electric Company's Form 10-Q (June 1995), File 2-7749). 10.1.37.4 First Amendment, dated November 7, 1994, to 10.1.37.2 by and between Cambridge Electric Light Company and Altresco Pittsfield, L.P. dated February 20, 1992 (Filed as Exhibit 2 to Cambridge Electric Light Company's Form 10-Q (June 1995), File 2-7909). 10.2.1 Transportation Agreement between CNG and CG to provide for transportation of natural gas on a daily basis from Steuben Gas Storage Company to TGP (Exhibit 10 to the CG 1991 Form 10-K, File No. 2-1647). 10.3.1 Pension Plan for Employees of Commonwealth Energy System and Subsidiary Companies as amended and restated January 1, 1993 (Exhibit 1 to CES Form 10-Q (September 1993), File No. 1-7316). 10.3.2 Employees Savings Plan of Commonwealth Energy System and Subsidiary Companies as amended and restated January 1, 1993 (Exhibit 2 to CES Form 10-Q (September 1993), File No. 1-7316).
13 10.3.2.1 First Amendment to 10.3.2, effective October 1, 1994. (Exhibit 1 to CES Form S-8 (January 1995), File No. 1-7316). 10.3.2.2 Second Amendment to 10.3.2, effective April 1, 1996 (Exhibit 1 to CES Form 10-K/A Amendment No. 1 (April 30, 1996), File No. 1-7316). 10.3.2.3 Third Amendment to 10.3.2, effective January 1, 1997 (Exhibit 1 to CES Form 10-K/A Amendment No. 1 (April 29, 1997), File No. 1-7316). 10.3.3 New England Power Pool Agreement (NEPOOL) dated September 1, 1971 as amended through August 1, 1977, between NEGEA Service Corporation, as agent for CEL, CEC, NBGEL, and various other electric utilities operating in New England together with amendments dated August 15, 1978, January 31, 1979 and February 1, 1980. (Exhibit 5(c)13 to New England Gas and Electric Association's Form S-16 (April 1980), File No. 2-64731). 10.3.3.1 Thirteenth Amendment to 10.3.3 as amended September 1, 1981 (Refiled as Exhibit 3 to the Parent's 1991 Form 10-K, File No. 1-7316). 10.3.3.2 Fourteenth through Twentieth Amendments to 10.3.3 as amended December 1, 1981, June 1, 1982, June 15, 1983, October 1, 1983, August 1, 1985, August 15, 1985 and September 1, 1985, respectively (Exhibit 4 to the CES Form 10-Q (September 1985), File No. 1-7316). 10.3.3.3 Twenty-first Amendment to 10.3.3 as amended to January 1, 1986 (Exhibit 1 to the CES Form 10-Q (March 1986), File No. 1-7316). 10.3.3.4 Twenty-second Amendment to 10.3.3 as amended to September 1, 1986 (Exhibit 1 to the CES Form 10-Q (September 1986), File No. 1-7316). 10.3.3.5 Twenty-third Amendment to 10.3.3 as amended to April 30, 1987 (Exhibit 1 to the CES Form 10-Q (June 1987), File No. 1-7316). 10.3.3.6 Twenty-fourth Amendment to 10.3.3 as amended March 1, 1988 (Exhibit 1 to the CES Form 10-Q (March 1989), File No. 1-7316). 10.3.3.7 Twenty-fifth Amendment to 10.3.3. as amended to May 1, 1988 (Exhibit 1 to the CES Form 10-Q (March 1988), File No. 1-7316). 10.3.3.8 Twenty-sixth Agreement to 10.3.3 as amended March 15, 1989 (Exhibit 1 to the CES Form 10-Q (March 1989), File No. 1-7316). 10.3.3.9 Twenty-seventh Agreement to 10.3.3 as amended October 1, 1990 (Exhibit 3 to the CES 1990 Form 10-K, File No. 1-7316). 10.3.3.10 Twenty-eighth Agreement to 10.3.3 as amended September 15, 1992 (Exhibit 1 to the CES Form 10-Q (September 1994), File No. 1-7316).
14 10.3.3.11 Twenty-ninth Agreement to 10.3.3 as amended May 1, 1993 (Exhibit 2 to the CES Form 10-Q (September 1994), File No. 1-7316). 10.3.4 Guarantee Agreement by CEL (as guarantor) and MYA Fuel Company (as initial lender) covering the unconditional guarantee of a portion of the payment obligations of Maine Yankee Atomic Power Company under a loan agreement and note initially between Maine Yankee and MYA Fuel Company (Exhibit 3 to the CEL Form 10-K for 1985, File No. 2-7909). CAMBRIDGE ELECTRIC LIGHT COMPANY Exhibit 4 Instruments Defining the Rights of Security Holders, Including Indentures - ---------- ------------------------------------------------------------------------------------------------------ 4.2.1 Original Indenture on Form S-1 (April, 1949) (Exhibit 7(a), File No. 2-7909). 4.2.2 Third Supplemental on Form 10-K (1984) (Exhibit 1, File No. 2-7909). 4.2.3 Fourth Supplemental on Form 10-K (1984) (Exhibit 2, File No. 2-7909). 4.2.4 Sixth Supplemental on Form 10-Q (June 1989) (Exhibit 1, File No. 2-7909). 4.2.5 Seventh Supplemental on Form 10-Q (June 1992), (Exhibit 1, File No. 2-7909). COMMONWEALTH GAS COMPANY Exhibit 4 Instruments Defining the Rights of Security Holders, Including Indentures - ---------- ------------------------------------------------------------------------------------------------------ 4.4.1 Original Indenture on Form S-1 (Feb., 1949) (Exhibit 7(a), File No. 2-7820). 4.4.2 Sixteenth Supplemental on Form 10-K (1986) (Exhibit 1, File No. 2-1647). 4.4.3 Seventeenth Supplemental on Form 10-K (1990) (Exhibit 2, File No. 2-1647). 4.4.4 Eighteenth Supplemental on Form 10-Q (March 1994) (Exhibit 1, File No. 2-1647). 4.4.5 Nineteenth Supplemental on Form 10-K (1997) (Exhibit 1, File No. 2-1647).
15 SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, 1997 (DOLLARS IN THOUSANDS)
ADDITIONS ----------------------- BALANCE AT PROVISIONS DEDUCTIONS BALANCE BEGINNING CHARGED TO ACCOUNTS AT END DESCRIPTION OF YEAR OPERATIONS RECOVERIES WRITTEN OFF OF YEAR - ---------------------------------------- ---------------- ----------- ---------- ------------ ----------- YEAR ENDED DECEMBER 31, 1999 Allowance for Doubtful Accounts...... $14,158(a) $23,098 $5,260 $20,089 $22,427 YEAR ENDED DECEMBER 31, 1998 Allowance for Doubtful Accounts...... $10,228 $ 9,555 $4,242 $14,959 $ 9,066 YEAR ENDED DECEMBER 31, 1997 Allowance for Doubtful Accounts...... $ 2,000 $24,884 $3,593 $20,249 $10,228
(a) The beginning balance includes $5,092,000 that relates to COM/Energy's reserve balance at the merger date of August 25, 1999. CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-94735) of NStar of our report dated January 26, 2000 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated January 26 relating to the financial statement schedules, which appears in this Form 10-K. PricewaterhouseCoopers LLP Boston, Massachusetts 16 FORM 10-K/A NSTAR DECEMBER 31, 1999 AMENDMENT NO. 1 SIGNATURE 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. NSTAR ---------- Registrant By: /s/ Robert J. Weafer, Jr. ------------------------------- ROBERT J. WEAFER, JR. VICE PRESIDENT, CONTROLLER AND CHIEF ACCOUTING OFFICER Date: September 29, 2000 17 EX-10.1 2 0002.txt NSTAR EXCESS BENEFIT PLAN EXHIBIT 10.1 NSTAR EXCESS BENEFIT PLAN (EFFECTIVE AUGUST 25, 1999) ARTICLE I Background; Amendment and Replacement of Prior Plans ---------------------------------------------------- The NSTAR Excess Benefit Plan set forth herein (the "Plan") amends and replaces in their entirety, effective August 25, 1999, the Boston Edison Company Excess Benefit Plan (As Amended January 1, 1999) (The "Edison Excess Plan") and the excess benefit portion of the Executive Salary Continuation and Excess Benefit Plan For Employees of Commonwealth Energy System and Subsidiary Companies (As Amended as of January 1, 1993) (the "CES Excess Plan"). Therefore, pursuant to the applicable provisions of the Edison Excess Plan and the CES Excess Plan, said plans are terminated effective August 25, 1999 and no further benefits are payable thereunder to any Participant in this Plan or his or her beneficiary. ARTICLE II Purpose of Plan --------------- This Plan is maintained by NSTAR (the "Company") for certain members of the NSTAR Pension Plan, as amended from time to time (the "Pension Plan") described below (the "Participants"), and their spouses. The purpose of the Plan is to restore retirement benefits with respect to those Participants who retire or have retired under the Pension Plan and whose Pension Plan benefits are, or will be, reduced by (i) the limitations imposed under section 415 of the Internal Revenue Code (as amended and in effect from time to time, the "Code"), or (ii) the limitations imposed under Section 401(a)(17) of the Code. For purposes of this Plan, the limitations described in the preceding sentence (the "Limitations") shall be deemed to include the corresponding limitations set forth in, or applicable under, the terms of the Pension Plan. With respect to those Participants whose Pension Plan benefits are, or will be, reduced by the limitations imposed under section 415 of the Code, the Plan is intended to be an "excess benefit plan" within the meaning of section 3(36) of the Employee Retirement Income Security Act of 1974, as amended from time to time ("ERISA"), and shall be administered in a manner consistent with that intent. With respect to those Participants whose Pension Plan benefits are, or will be, reduced by the limitations imposed under section 401(a)(17) of the Code, the Plan is intended to be "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of sections 201(2), 301(a)(3) and 401(a)(3) of ERISA, and shall be administered in a manner consistent with that intent. Nothing in the Plan shall be deemed to require the setting aside of any assets, in trust or otherwise, for the payment of Plan benefits. Interests in the Plan are non-assignable, and are not subject to alienation, anticipation, garnishment, attachment or any other legal process. A Participant's or beneficiary's rights to benefits under the Plan shall be no greater than the rights of a general, unsecured creditor of the Company or its affiliates. However, the Company or its affiliates may establish one or more trusts of which the Company or its affiliate is treated as the -2- owner under Subpart E of Subchapter J, Chapter 1 of the Code (a "grantor trust"), and may from time to time deposit funds in such grantor trust or trusts to facilitate payment of benefits provided under the Plan. In the event the Company or its affiliate establishes such a grantor trust or trusts with respect to the Plan and at the time of a Change of Control (as defined in Appendix A attached hereto) any such trust (i) has not been terminated or revoked and (ii) is not fully funded (as determined in its sole discretion by a majority of the individuals who were members of the Executive Personnel Committee as defined in the Pension Plan (the "EPC") immediately prior to a Change of Control), the Company or its affiliate shall within ten days of such Change of Control deposit in such grantor trust or trusts assets sufficient to cause the trust or trusts to be fully funded (as determined in its sole discretion by the majority of the individuals who were members of the EPC immediately prior to a Change of Control). Nothing in this Plan shall give any Participant any right to be employed or to continue employment by the Company or an affiliate. ARTICLE III Benefits -------- Each Participant in the Plan, or the surviving spouse of a deceased Participant, shall be entitled to a benefit, payable in accordance with Article III below, equal to the excess (if any) of: (a) the amount of the Participant's or surviving spouse's benefit under the Pension Plan, computed under the provisions of the Pension Plan without regard to the Limitations, over (b) the amount of the Participant's or surviving spouse's benefit under the Pension Plan, computed taking into account the Limitations. -3- ARTICLE IV Payment of Benefits ------------------- Benefits payable under the Plan shall be payable to each Participant or to his or her surviving spouse as follows: (a) If the Participant or surviving spouse does not make the election described in (b) below, the benefit shall be paid in the same form and manner, and commencing at the same time, as the benefits payable to such person under the Pension Plan. (b) A Participant may at any time, not later than the end of the calendar year prior to commencement of payment and subject to such other limitations as the EPC may prescribe, irrevocably elect in writing to receive his or her benefits hereunder in a form or at a time other than that in which such person's benefits under the Pension Plan are payable. (c) Notwithstanding (a) and (b) above, the EPC may in its discretion, upon the written request of a Participant or his or her surviving spouse, commute remaining Plan benefits to a single lump sum (using an interest rate determined by the EPC in its sole discretion) or otherwise make such benefits payable in a different form. In determining whether to pay a benefit in a lump sum or otherwise to vary the form of payment, the EPC shall take into account the interests of the Company as well as considerations (such as financial hardship) applicable to the individual petitioning for a different form of payment. -4- ARTICLE V Administration; Claims ---------------------- The Plan shall be administered and construed by the EPC in its sole discretion. The EPC may delegate administrative tasks under the Plan to employees of the Company or its affiliate or others. Claims for benefits hereunder, and appeals from the denial of any such claim, shall be subject to the same procedures as those which apply to claims for benefits under the Pension Plan, except that references to the "Committee" shall be deemed to refer to the EPC. ARTICLE VI Amendment and Termination ------------------------- The Plan may be amended or terminated by the Company or the EPC. However, no amendment or termination shall reduce or otherwise adversely affect the rights of any Participant or his or her beneficiary to benefits accrued under the Plan immediately prior to such amendment or termination without his or her prior written consent, and no amendment or termination following a Change of Control shall eliminate or reduce the Company's or its affiliates' obligations to deposit assets in the grantor trust as described in Article 1. Furthermore, following a Change of Control, this Article VI may not be amended. ARTICLE VII Governing Law ------------- The Plan shall be construed in accordance with the laws of Massachusetts to the extent such laws are not preempted by the Employee Retirement Income Security Act of 1974, as amended. -5- IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized officer this 4th day of August, 2000. NSTAR By: /s/ Thomas J. May ----------------- -6- Appendix A ---------- "Change of Control" For the purposes of this Plan, a "Change of Control" shall mean: 1. The acquisition by any Person of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding common shares (or shares of common stock) of the Parent (the "Outstanding Parent Common Shares") or (ii) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of trustees (or directors) (the "Outstanding Parent Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Parent, (ii) any acquisition by the Parent or an affiliate of the Parent, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent, the Company or any affiliate of the Parent or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Appendix A; or 2. Individuals who, as of the date hereof, constitute the Board of Trustees of the Parent (the "Incumbent Board") cease for any reason to constitute at least a majority of such board; provided, however, that any individual becoming a trustee (or director) subsequent to the date hereof whose election, or nomination for election by the Parent's shareholders, was approved by a vote of at least a majority of the trustees (or directors) then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but -7- excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees (or directors) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than such board; or 3. Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the then outstanding common shares (or shares of common stock) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of trustees (or directors), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Parent or all or substantially all of the Parent's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Parent or the Company or such -8- entity resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding common shares or shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of trustees (or board of directors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Trustees of the Parent, providing for such Business Combination; or 4. Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent. For purposes of this Appendix A, the term "Parent" shall mean NSTAR, or, if any entity shall own, directly or indirectly through one or more subsidiaries, more than 50% of the outstanding common shares of NSTAR, such entity, and (ii) the term "Person" shall mean any individual, corporation, partnership, company, limited liability company, trust or other entity, which term shall include a "group" within the meaning of Section 13(d) of the Securities Act of 1934, as amended. -9- EX-10.2 3 0003.txt SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN EXHIBIT 10.2 NSTAR SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (RESTATED EFFECTIVE AUGUST 25, 1999) SECTION 1. PURPOSE; BACKGROUND The purpose of the NSTAR Supplemental Executive Retirement Plan (the "Plan") is to reward certain key executive employees of NSTAR (the "Company") and its affiliates through supplemental retirement payments. This Plan is an amendment, restatement and continuation of the Boston Edison Company Supplemental Executive Retirement Plan. The effective date of this restated Plan is August 25, 1999. SECTION 2. ADMINISTRATION The Executive Personnel Committee (the "EPC") and the Retirement Committee (the "RC"), each as defined in the NSTAR Pension Plan, will be responsible under the Plan for carrying out their respective administrative and other duties as set forth in the Plan. In addition, the EPC has the full discretionary power and authority to interpret the plan, settle all disputes which may arise in connection with the Plan, and establish any claims procedures required by the Employee Retirement Income Security Act of 1974, as amended from time to time. The decisions, interpretations and determinations made by the EPC or the RC relating to the Plan will be final and conclusive on all persons. The Company agrees to indemnify and to defend to the fullest possible extent permitted by law any member of the EPC and the RC (including any person who formerly served as a member of the EPC or the RC) against all liabilities, damages, costs and expenses (including attorneys' fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan. SECTION 3. PARTICIPANTS Participants in the Plan will be those key executive employees of the Company and its affiliates selected from time to time by the EPC to participate in plan benefits. SECTION 4. BENEFITS (A) FULL BENEFIT. Each Participant who attains his or her Full Benefit Age (as hereinafter defined) while an employee of the Company or its affiliates and who thereafter ceases to be an employee of the Company and its affiliates will receive an annual benefit calculated as of the date he or she ceases to be an employee of the Company and its affiliates, expressed as a single life annuity, equal to the excess (if any) of (A) over (B), where (A) is the excess of (i) 60% of his or her Highest Average Total Compensation ( as hereinafter defined), over (ii) 50% of the Participant's Primary Social Security Benefit (as hereinafter defined), which excess is then multiplied by a fraction the numerator of which is his or her Full Years of Continuous Service (as hereinafter defined) at the time of his or her termination (which in no event shall exceed 20) and the denominator of which is 20; and where (B) is the sum of the lump sum benefits which the Participant would be entitled to receive at such time from the NSTAR Pension Plan (as from time to time amended) and the NSTAR Excess Benefit Plan (as from time to time amended), expressed as an actuarial equivalent single life annuity (as determined by the RC with reference to such actuarial factors as it shall select from time to time). -2- For purposes of (B) above, it will be assumed that the Participant elected a lump sum benefit under said NSTAR Pension and Excess Benefit Plans regardless of the actual form of benefit elected by the Participant. (B) REDUCED BENEFIT. Each Participant who attains age 55 while an employee of the Company or its affiliates, who completes five Full Years of Continuous Service and who thereafter ceases to be an employee of the Company and its affiliates (but prior to his Full Benefit Age) will receive a reduced annual benefit calculated as of the date he or she ceases to be an employee of the Company and its affiliates in the same manner as described in Section 4(a) above for a full benefit, but reduced by an amount equal to .41666% multiplied by the aggregate number of months between the date his or her benefit commences and his or her Full Benefit Age. A Participant who has not attained age 55 or who has not completed five Full Years of Continuous Service, but who has entered into a change in control agreement with the Company and whose age plus the number of any additional years of service credited to him under said change in control agreement for purposes of the Plan is 50 or more, will be considered to have an accrued benefit under the Plan for purposes of said change in control agreement, based upon his or her number of Full Years of Continuous Service and calculated and reduced as of his or her termination date in the same manner as described in the preceding provision of this Section 4(b). -3- (C) PAYMENTS OF BENEFITS. The annual benefit payable to a Participant under Section 4(a) or (b) above will be paid as a single life annuity, a Spousal Joint and Survivor Annuity (as hereinafter defined) or a Single Sum (as hereinafter defined), as elected by the Participant in accordance with rules and procedures established by the RC. (D) BENEFIT DEFINITIONS. For purposes of the Plan, the following terms have the following meanings: (1) HIGHEST AVERAGE TOTAL COMPENSATION means the average of the Participant's Total Compensation (as hereinafter defined) for the 36 consecutive months in which the Participant had the highest Total Compensation. (2) SINGLE SUM means a single payment of actuarial equivalent value to a single life annuity (as determined by the RC with reference to such actuarial factors as it shall select from time to time). (3) FULL BENEFIT AGE means, for each Participant, age 62 or such other age as the EPC may determine for a Participant. (4) PRIMARY SOCIAL SECURITY BENEFIT means the "Primary Social Security Benefit," as defined under the NSTAR Pension Plan (as from time to time amended), as determined by the RC. (5) TOTAL COMPENSATION means, for any calendar month, the Participant's base compensation and annual bonus payments paid to the Participant during such calendar month by the Company or its affiliate, plus any amounts that would have been paid to the Participant during the calendar month by the Company or its affiliate as base compensation or annual bonus but for a salary reduction agreement in effect during such month under the NSTAR Deferred Compensation Plan, as from time to time amended, or pursuant to Sections 125 or 401(k) of the Internal Revenue Code of 1986 as amended. -4- (6) SPOUSAL JOINT AND SURVIVOR ANNUITY means an annuity of actuarial equivalent value to a single life annuity (as determined by the RC with reference to such actuarial factors as it shall select from time to time), under which the Participant receives a reduced benefit during his or her lifetime, and following the Participant's death, 50% (or 66 2/3% or 100%, as elected by the Participant) of such reduced benefit is paid for the life of the person who was the Participant's spouse on the date benefits commenced to the Participant. (7) FULL YEARS OF CONTINUOUS SERVICE means, for each Participant, the number of full years of continuous service with the Company and its affiliates, beginning with the date on which the individual becomes a Participant in the Plan, credited to the Participant for purposes of the Plan by the EPC, plus such other periods, if any, as the EPC shall determine. SECTION 5. PRE-RETIREMENT DEATH BENEFIT In the case of a Participant who dies after attaining age 55 and completing five Full Years of Continuous Service, but prior to the commencement of his or her benefits under Section 4 above, his or her surviving spouse, if any, will be entitled to receive an annual benefit for his or her lifetime equal to the benefit such spouse would have received if the Participant has ceased to be an employee of the Company and its affiliates and commenced receiving his or her benefit under the Plan immediately prior to his or her death under the 50% Spousal Joint and Survivor Annuity form. In lieu of such annual death benefit, the surviving spouse may elect to receive his or her benefit as a Single Sum in accordance with rules and procedures established by the RC. -5- SECTION 6. NO PLAN ASSETS Except as herein provided, the Company and its affiliates shall not be required to set aside or segregate any assets of any kind to meet its obligations hereunder and all benefits payable under the Plan will be paid from the general assets of the Company and its affiliates. The Company or its affiliates may, however, but is not required to, establish one or more "grantor trusts" of which the Company or its affiliate is treated as the owner under subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (a "grantor trust") and may deposit funds with the trustee of the grantor trust sufficient to satisfy the benefits. In the event the Company or its affiliate establishes such a grantor trust or trusts with respect to the Plan and at the time of a Change of Control (as defined in Appendix A attached to the Plan), any such trust (i) has not been terminated or revoked, and (ii) is not "fully funded" (as determined in its sole discretion by a majority of the individuals who were members of the EPC immediately prior to a Change of Control), the Company or its affiliate shall within ten days of such Change of Control deposit in such grantor trust or trusts assets sufficient to cause the trust or trusts to be "fully funded" as of the date of the deposit (as determined in its sole discretion by a majority of the individuals who were members of the EPC prior to a Change of Control). -6- SECTION 7. PARTICIPANT'S RIGHTS; NO ASSIGNMENT A Participant's or beneficiary's rights to benefits under the Plan shall be no greater than the rights of a general, unsecured creditor of the Company or its affiliates, and shall not be assignable or subject to alienation, anticipation, garnishment, attachment, or any other legal process by his creditors. SECTION 8. NO CONTRACT OF EMPLOYMENT The Plan will not be deemed to constitute a contract of employment between the Company or its affiliates and any Participant, or to be consideration for the employment of any Participant. SECTION 9. APPLICATION OF ERISA The Plan is intended to be "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended, and shall be administered in a manner consistent with that intent. -7- SECTION 10. AMENDMENT OR TERMINATION This Plan may be amended or terminated at any time and in any respect by the Company or the EPC; provided, however, that no amendment or termination shall reduce or otherwise adversely affect the rights of a Participant or his or her beneficiary to benefits accrued under the Plan immediately prior to such amendment or termination without his or her prior written consent; and further provided, that no amendment or termination following a Change of Control shall eliminate or reduce the Company's or its affiliates' obligations to deposit assets in the grantor trust or trusts as described in Section 6. Furthermore, following a Change of Control, this Section 10 may not be amended. SECTION 11. GOVERNING LAW This Plan shall be governed by and construed under the laws of the Commonwealth of Massachusetts, to the extent such laws are not preempted by federal laws. IN WITNESS WHEREOF, NSTAR has caused this Plan to be executed by its officer hereunto duly authorized this 4th day of August, 2000. NSTAR By: /s/ Thomas J. May ------------------ -8- Appendix A ---------- "Change of Control" For the purposes of this Plan, a "Change of Control" shall mean: 1. The acquisition by any Person of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding common shares (or shares of common stock) of the Parent (the "Outstanding Parent Common Shares") or (ii) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of trustees (or directors) (the "Outstanding Parent Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Parent, (ii) any acquisition by the Parent or an affiliate of the Parent, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent, the Company or any affiliate of the Parent or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Appendix A; or 2. Individuals who, as of the date hereof, constitute the Board of Trustees of the Parent (the "Incumbent Board") cease for any reason to constitute at least a majority of such board; provided, however, that any individual becoming a trustee (or director) subsequent to the date hereof whose election, or nomination for election by the Parent's shareholders, was approved by a vote of at least a majority of the trustees (or directors) then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but -9- excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees (or directors) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than such board; or 3. Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the then outstanding common shares (or shares of common stock) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of trustees (or directors), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Parent or all or substantially all of the Parent's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Parent or the Company or such -10- entity resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding common shares or shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of trustees (or board of directors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Trustees of the Parent, providing for such Business Combination; or 4. Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent. For purposes of this Appendix A, the term "Parent" shall mean NSTAR, or, if any entity shall own, directly or indirectly through one or more subsidiaries, more than 50% of the outstanding common shares of NSTAR, such entity, and (ii) the term "Person" shall mean any individual, corporation, partnership, company, limited liability company, trust or other entity, which term shall include a "group" within the meaning of Section 13(d) of the Securities Act of 1934, as amended. -11- EX-10.3 4 0004.txt SPECIAL SUPPLEMENTAL EXECUTIVE RETIREMENT EXHIBIT 10.3 - ------------------------------------------------------------------------------- SPECIAL SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT BETWEEN BOSTON EDISON COMPANY (the "Company") AND THOMAS J. MAY (the "Executive") - ------------------------------------------------------------------------------- Effective as a sealed instrument under Massachusetts law this 13th day of March, 1999. WHEREAS, the Executive and the Company previously entered into a Key Executive Benefit Plan Agreement (the "KEBP Plan"); and WHEREAS, the Company has adopted the Boston Edison Supplemental Executive Retirement Plan (the "SERP Plan"); and WHEREAS, the Company now wishes to provide the Executive with a benefit (the "Maximum Benefit") equal to the greater of the benefits provided under either the KEBP Plan or the SERP Plan (collectively, the "Plans"), such Maximum Benefit to be in lieu of any benefits payable under the Plans; NOW, THEREFORE, it is agreed as follows: 1. The Executive shall be entitled to the Maximum Benefit. The "Maximum Benefit" shall be the greater of the benefit that would have been payable under applicable circumstances under either (but not both) the KEBP Plan or the SERP Plan. The Maximum Benefit shall be determined by the Company's actuary using reasonable actuarial assumptions. Payment of the Maximum Benefit shall be in full satisfaction of any liability the Company may have had under the Plans. 2. The Executive will cooperate with the Company in taking any steps necessary to implement this Agreement, including the completion of any election forms and beneficiary designations. 3. This Agreement shall not be construed as modifying or amending the Change In Control Agreement between the Executive and the Company. WITNESS OUR SIGNATURES AND SEALS: THOMAS J. MAY (The "Executive") WITNESS /s/Thomas J. May /s/Carol O'Rourke ---------------- ----------------- (signature) (signature) BOSTON EDISON COMPANY (The "Company") By: Paul Jeannette -------------- (print name) /s/Paul Jeannette ----------------- (signature) Title: Compensation Manager EX-10.4 5 0005.txt KEY EXECUTIVE BENEFIT PLAN EXHIBIT 10.4 BOSTON EDISON COMPANY KEY EXECUTIVE BENEFIT PLAN -------------------------- AGREEMENT --------- THIS AGREEMENT is made as of October 1, 1983 between Boston Edison Company (the "Company"), having its principal offices at 800 Boylston Street, Boston, Massachusetts, and Thomas J. May (the "Employee") residing at Westwood, Massachusetts. WITNESSETH ---------- WHEREAS, the Employee is employed by the Company; and WHEREAS, the Company has purchased and owns policy no. 6913603 (the "Policy") on the life of the Employee issued by New England Mutual Life Insurance Company (the "Insurance Company"); and WHEREAS, the Company and the Employee heretofore have agreed upon a plan for the payment of the premiums and interest due or to become due on the Policy, the disposition of the Policy, the mode of payment of death benefits thereunder, and for supplementary retirement benefits to be paid under certain circumstances, and for the protection of their mutual interest, desire to set forth their agreement in writing; NOW, THEREFORE, in consideration of the premises, it is mutually agreed by and between the Company and the Employee as follows: 1. The Employee agrees that the Company as long as it is the owner of the Policy, may exercise all rights of ownership with respect to the Policy, except as otherwise hereinafter provided. 2. The Company agrees to pay all premiums on the Policy (except as otherwise provided in paragraph 8) to the earlier of (a) the date the Policy is fully paid or (b) the date the Employee purchases the Policy under paragraph 5, if he does, in fact, purchase the Policy. 3. The Company agrees that the proceeds payable under the policy after the payment of all policy loans shall be an amount equal to three times the Employee's annual salary at the time of his death or retirement, less $50,000. 4. The Employee and the Company agree that if the Employee dies while an active employee of the Company and has not elected the Supplementary Retirement Benefit under paragraph 6, death benefits will be payable in two (2) parts, as follows: (a) The proceeds payable under the policy referred to in paragraph 3 shall be paid to such beneficiary as shall have been designated by the Employee or the Employee's assignee; and (b) The balance shall be paid to the Company. If the Employee dies while an active employee and has elected the Supplemental Retirement Benefit, the benefit will be payable annually for 15 years to the Employee's beneficiary. 5. The Company agrees that, unless the Employee has elected pursuant to paragraph 6 to receive the Supplementary Retirement Benefit, upon the termination of Employee's full-time employment with the Company (other than by reason of death), the Company shall, upon the written request delivered to the Company by the Employee, sell the Policy to the Employee or his assignee for an amount equal to the excess of (i) the aggregate cash premiums (including dividends used to purchase additional paid-up insurance on the life of the Employee) paid by the Company under the Policy to the date of such sale over (ii) the aggregate loans (including any interest outstanding on such loans) against the Policy outstanding on the date of such sale. 6. The Company agrees that if the Employee is at least 60 years old he may elect to forego the right to purchase the Policy pursuant to paragraph 5 and instead receive upon termination of employment at age 65 a Supplementary Retirement Benefit, the amount of which shall be equal to 33% of the Employee's annual salary as of his date of termination, payable annually (without interest) for 15 years to the Employee or his beneficiary. If the Employee retires prior to age 65, he will be eligible to receive the Supplementary Retirement Benefit only if he is at least 62 years old. Both parties agree that if the Employee elects to receive a Supplementary Retirement Benefit, the Company will retain ownership of the policy and all rights and benefits of the Policy will accrue to the Company. 7. The Company agrees that if the Employee qualifies for the Supplementary Retirement Benefit under paragraph 6, he may elect to apportion benefits between paragraph 5 and 6 in a manner satisfactory to the Company. -2- 8. The Employee agrees that, prior to termination of full-time employment, he will annually pay the Company a sum equal to the payment he would have made if he had elected the Company's Supplemental Life Insurance. 9. The Employee acknowledges that as of the effective date of this Agreement he cedes all coverage greater than $50,000 under the Company's Group Life Insurance Plan (except for the double indemnity coverage) and is ineligible to elect Supplemental Life Insurance under that Plan. Both parties agree that the Employee will retain $50,000 coverage under the Company's Group Life Insurance Plan so long as he is an active Employee and , after retirement, will retain $50,000 coverage, subject to the limitations contained in the normal declining scale of retirees' death benefits, in the Company's Group Life Insurance Plan as it may be in effect from time to time. 10. The Employee agrees that for purposes of this Agreement he shall be bound by the determination of the Company of (a) whether and for what months the Employee was or was not in the full-time employ of the Company, and (b) what constitutes full-time employment. 11. The Employee may assign the right to name the beneficiary and any other rights he may have under his portion of the life insurance policy. The Employee's rights to receive benefits under this Agreement are solely those of an unsecured general creditor of the Company. Except as provided in the first sentence of this paragraph, the Employee's rights to benefits under this Agreement may not be assigned or otherwise transferred and are not subject to be taken by the Employee's creditors by any process whatsoever, and any attempt to cause such interest to be so subjected will be of no force and effect. 12. The Employee agrees that he has no rights to any benefits under this Agreement except under the circumstances described in paragraphs 4, 5, and 6. 13. The Company can amend this Agreement from time to time by a written instrument delivered to the Employee. However, no such amendment can reduce the Employee's benefits without his consent. 14. It is the understanding of both parties that the Employee's benefits under this Agreement, as of the date hereof, will be as shown in Schedule A attached hereto. -3- IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as of the day and year first above written. /s/ Ronald Anntona /s/ Thoams J. May - ---------------------------------- -------------------------------- Witness Employee BOSTON EDISON COMPANY By: /s/ Thomas J. Griffin Jr. ---------------------------- -4-
Schedule A - Page 1 of 2 Age - 36 - ------------------------ -------- Taxable Less Annual Executives Death Value of Executive Taxable Cash Asset Age Benefit (A) Insurance Payment Income Value (B) - ----------------- -------------------- ------------------- ------------------- ------------------- -------------------- 37 181,000 281 628 -0- -0- 38 181,000 288 628 -0- -0- 39 181,000 295 628 -0- -0- 40 181,000 302 628 -0- -0- 41 181,000 313 628 -0- -0- 42 181,000 324 628 -0- -0- 43 181,000 335 628 -0- 2,083 44 181,000 348 628 -0- 4,638 45 181,000 362 628 -0- 7,698 46 181,000 384 628 -0- 11,298 47 181,000 409 628 -0- 15,301 48 181,000 436 628 -0- 19,922 49 181,000 467 628 -0- 25,232 50 181,000 500 628 -0- 31,290 51 181,000 538 628 -0- 38,141 52 181,000 577 628 -0- 45,841 53 181,000 623 628 -0- 54,453 54 181,000 672 628 44 64,046 55 181,000 724 628 96 74,688 56 181,000 787 628 159 86,460 57 181,000 854 628 226 99,487 58 181,000 929 628 301 113,859 59 181,000 1,008 628 380 129,677 60 181,000 1,100 628 472 147,054 61 181,000 1,207 628 579 166,119 62 181,000 1,332 628 704 187,011 63 181,000 1,475 628 847 209,875 64 181,000 1,636 628 1,008 234,871 65 181,000 1,810 628 1,182 262,175 ------ ------ ----- Total 20,895 18,212 5,998 ====== ====== =====
Note: Asset values include guaranteed value and dividends. Dividends are on the 1983 scale and are not guaranteed. All figures are approximate using age at birthday closest to the policy anniversary date. (A) Three times annual salary, less $50,000. (B) Cash asset values are available only after termination of full-time employment under the insurance option. At that time they may be borrowed at 8% interest. -5-
Schedule A - Page 2 of 2 Age - 36 - ------------------------ -------- Summary of Page 1 Average Total Executive Death Total Payments Taxable Cash Asset Year Benefit By Executive Income Value - --------------------- ---------------------- ---------------------- ---------------------- ---------------------- 5 181,000 3,140 -0- -0- 10 181,000 6,280 -0- 11,298 15 181,000 9,420 -0- 38,141 20 181,000 12,560 299 86,460 25 181,000 15,700 2,257 166,119 29 181,000 18,212 5,998 262,175
Results at Age 65 - ----------------- I. All contributions stopped at age 65: II. Executives options at age 65: A. Remain insured to age 65 and then receive: Fully paid-up life insurance of $270,645 Less loan for corporate contribution 89,645 Net death benefit continues at 181,000 Annual interest on loan (at 8.00% tax deductible) 7,172 Net $ 3,586 Yearly increasing tax free dividend starting at 20,226 Yearly increasing cash value starting at 7,420 B. Assign all rights in the policy to the corporation and receive a supplementary retirement benefit of $25,410 for 15 years. C. Other flexible options and combinations are available on retirement, i.e. 50% insurance, $90,500 and 50% supplemental pension for 15 years, $12,705. Note: Asset values include guaranteed values and dividends. Dividends are on the 1983 scale and are not guaranteed. (A) Cash values are only available after termination of employment and selection of the insurance option. -6- AMENDMENT TO KEY EXECUTIVE BENEFIT PLAN AGREEMENTS Pursuant to Paragraph 13 of all Key Executive Benefit Plan Agreements (the "Agreements") existing as of this 1st day of February, 1986, between Boston Edison Company (the "Company") and certain of its employees (hereinafter collectively the "Employees" and individually the "Employee"), all such Agreements are hereby amended as follows: I. In order to clarify (a) that except where purchase of the Policy is elected under Paragraph 5 of Agreements the Employees are no longer required to contribute to premiums payable under the Policy referenced in the WHEREAS Clauses of the Agreements and (b) that henceforth the Employees are no longer prohibited from participating in the Company's Supplemental and Dependents Life Insurance Programs in addition to their participation in these Agreements, Paragraphs 2, 8 and 9 of the Agreements are hereby amended as follows: A. The parenthetical phrase "(except as otherwise provided in Paragraph 8)" is hereby deleted from Paragraph 2 of the Agreements. Henceforth said Paragraph 2 shall read as follows: 2. The Company agrees to pay all premiums on the Policy to the earlier of (a) the date the Policy is fully paid or (b) the date the Employee purchases the Policy under paragraph 5, if he/she does, in fact, purchase the Policy. B. Paragraph 8 of the Agreements is hereby deleted in its entirety and the succeeding paragraphs are renumbered accordingly. C. The words "and is ineligible to elect Supplemental Life Insurance under that Plan" are hereby deleted from the first sentence of Paragraph 9 of the Agreements. Henceforth, the first sentence of said Paragraph 9 shall read as follows: The Employee acknowledges that as of the effective date of this Agreement, he/she cedes all coverage greater than $50,000 under the Company's Group Life Insurance Plan (except for the double indemnity coverage.) II. In order to clarify that the proceeds payable to an Employee under the Policy upon death or retirement after the payment of all policy loans shall be an amount equal to three times his or her annual salary without the addition of any bonuses or any other additional compensation but prior to any deductions for contributions to the Boston Edison Savings Plan or salary deferrals under any deferred compensation agreement, Paragraph 3 of the Agreements is hereby amended to read as follows: 3. The Company agrees that the proceeds payable under the Policy after the payment of all Policy loans shall be an amount equal to three times the Employee's annual salary at the time of his/her death or retirement, less $50,000. For purposes of this Agreement, "annual salary" shall mean the annual compensation payable to the Employee by the Company, exclusive of all bonuses and all other forms of additional compensation, but including any amounts elected by the Employee to be contributed to the Boston Edison Company Savings Plan or any non-bonus amounts deferred under any deferred compensation agreement. III. In order to clarify that the $50,000 coverage under the Company's Group Life Insurance Plan to which the Employees are entitled pursuant to Paragraph 9 of the Agreements shall remain constant from retirement until the Employee's death without being subject to the normal declining scale of retirees' death benefits otherwise contained in the Company's Group Life Insurance Plan, the second sentence of Paragraph 9 of the Agreements is hereby amended to read as follows: -7- Both parties agree that the Employee will retain $50,000 coverage under the Company's Group Life Insurance Plan so long as he/she is an active Employee and, after retirement, will retain $50,000 coverage without being subject to the limitations otherwise contained in the normal declining scale of retirees' death benefits, in the Company's Group Life Insurance Plan as it may be in effect from time to time. This Amendment to the Agreements to take effect as of the day and year first above written. BOSTON EDISON COMPANY By: /s/ STEPHEN SWEENEY --------------------- Stephen Sweeney -8- AMENDMENT TO KEY EXECUTIVE BENEFIT PLAN AGREEMENT Pursuant to Paragraph 12 of the Key Executive Benefit Plan Agreement existing between Boston Edison Company (the "Company") and Thomas J. May (the "Employee"), Paragraph 6 of the Agreement is hereby amended to read as follows: 6. The Company agrees that if the Employee has at least 5 years' service occurring after June 1, 1987, he may elect, at any time prior to his date of termination, to forego the right to purchase the Policy pursuant to paragraph 5 and instead receive upon termination of employment a Supplementary Retirement Benefit, payable annually (without interest) for 15 years to the Employee or his beneficiary, in accordance with the following schedule: Percent of Annual Salary ------------------------ After 5 years' service 16.5% After 6 years' service 19.8% After 7 years' service 23.1% After 8 years' service 26.4% After 9 years' service 29.7% After 10 years' service 33.0% Both parties agree that if the Employee elects to receive a Supplementary Retirement Benefit, the Company will retain ownership of the Policy and all rights and benefits of the Policy will accrue to the Company. BOSTON EDISON COMPANY By: /s/ STEPHEN SWEENEY ---------------------- /s/ THOMAS J. MAY ---------------------- Thomas J. May October 30, 1989 -9- KEY EXECUTIVE BENEFIT PLAN Thomas J. May Agreement dated October 1, 1983 Amendment dated February 1, 1986 Amendment dated October 30, 1989 -10- EX-10.5 6 0006.txt STANDARD FORM OF AGREEMENT EXHIBIT 10.5 BOSTON EDISON COMPANY KEY EXECUTIVE BENEFIT PLAN STANDARD FORM OF AGREEMENT MAY, 1986 WITH MODIFICATIONS AGREEMENT --------- THIS AGREEMENT is made as of September 1, 1989 between Boston Edison Company (the "Company"), having its principal offices at 800 Boylston Street, Boston, Massachusetts, and Ronald A. Ledgett (the "Employee") residing at Kittery Point, Maine. WITNESSETH ---------- WHEREAS, the Employee is employed by the Company; and WHEREAS, the Company has purchased and owns policy no. 8529321 (the "Policy") on the life of the Employee issued by New England Mutual Life Insurance Company (the "Insurance Company"); and WHEREAS, the Company and the Employee heretofore have agreed upon a plan for the payment of the premiums and interest due or to become due on the Policy, the disposition of the Policy, the mode of payment of death benefits thereunder, and for supplementary retirement benefits to be paid under certain circumstances, and for the protection of their mutual interest, desire to set forth their agreement in writing; NOW, THEREFORE, in consideration of the premises, it is mutually agreed by and between the Company and the Employee as follows: 1. The Employee agrees that the Company, as long as it is the owner of the Policy, may exercise all rights of ownership with respect to the Policy, except as otherwise hereinafter provided. 2. The Company agrees to pay all premiums on the Policy to the earlier of (a) the date the Policy is fully paid or (b) the date the Employee purchases the Policy under paragraph 5, if he does, in fact, purchase the Policy. 3. The Company agrees that the proceeds payable under the Policy after the payment of all Policy loans shall be an amount equal to three times the Employee's annual salary at the time of his death or retirement, less $50,000. For purposes of this Agreement, "annual salary" shall mean the annual compensation payable to the Employee by the Company, exclusive of all bonuses and all other forms of additional compensation, but including any amounts elected by the Employee to be contributed to the Boston Edison Company Savings Plan or any non-bonus amounts deferred under any deferred compensation agreement. 4. The Employee and the Company agree that if the Employee dies while an active employee of the Company and has not elected the Supplementary Retirement Benefit under paragraph 6, death benefits will be payable in two (2) parts, as follows: (a) The proceeds payable under the Policy referred to in paragraph 3 shall be paid to such beneficiary as shall have been designated by the Employee or the Employee's assignee; and (b) The balance shall be paid to the Company. If the Employee dies while an active employee and has elected the Supplemental Retirement Benefit, the benefit will be payable annually for 15 years to the Employee's beneficiary. 5. The Company agrees that, unless the Employee has elected pursuant to paragraph 6 to receive the Supplementary Retirement Benefit, upon the termination of the Employee's full-time employment with the Company (other than by reason of death), the Company shall, upon the written request delivered to the Company by the Employee, sell the Policy to the Employee or his assignee for an amount equal to the excess of (i) the aggregate cash premiums (including dividends used to purchase additional paid-up insurance on the life of the Employee) paid by the Company under the Policy to the date of such sale over (ii) the aggregate loans (including any interest outstanding on such loans) against the Policy outstanding on the date of such sale. However, if the Employee is over age 55 when this Agreement is entered into, and has attained the age of 65 upon termination of full-time employment, and does not elect to receive the Supplementary Retirement Benefit, the Company will retain the Policy and provide death benefits to the Employee, under paragraph 3, until the tenth anniversary date of the Policy. At that time the Company will sell the Policy as stated above. 6. The Company agrees that if the Employee has at least 5 years' service occurring after September 1, 1989, he may elect, at any time prior to his date of termination, to forgo the right to purchase the Policy pursuant to paragraph 5 and instead received upon termination of employment a Supplementary Retirement Benefit, payable annually (without interest) for 15 years to the Employee or his beneficiary, in accordance with the following schedule: Percent of Annual Salary ------------------------ After 5 years' service 16.5% After 6 years' service 19.8% After 7 years' service 23.1% After 8 years' service 26.4% After 9 years' service 29.7% After 10 years' service 33.0% Both parties agree that if the Employee elects to receive a Supplementary Retirement Benefit, the Company will retain ownership of the Policy and all rights and benefits of the Policy will accrue to the Company. 7. The Company agrees that if the Employee qualifies for the Supplementary Retirement Benefit under paragraph 6, he may elect to apportion benefits between paragraph 5 and 6 in a manner satisfactory to the Company. -2- 8. The Employee acknowledges that as of the effective date of this Agreement he cedes all coverage greater than $50,000 under the Company's Group Life Insurance Plan (except for the double indemnity coverage). Both parties agree that the Employee will retain $50,000 coverage under the Company's Group Life Insurance Plan so long as he is an active employee and, after retirement, will retain $50,000 coverage, without being subject to the limitations otherwise contained in the normal declining scale of retirees' death benefits, in the Company's Group Life Insurance Plan as it may be in effect from time to time. 9. The Employee agrees that for purposes of this Agreement he shall be bound by the determination of the Company of (a) whether and for what months the Employee was or was not in the full-time employ of the Company, and (b) what constitutes full-time employment. 10. The Employee may assign the right to name the beneficiary and any other rights he may have under his portion of the life insurance policy. The Employee's rights to receive benefits under this Agreement are solely those of an unsecured general creditor of the Company. Except as provided in the first sentence of this paragraph, the Employee's rights to benefits under this Agreement may not be assigned or otherwise transferred and are not subject to be taken by the Employee's creditors by any process whatsoever, and any attempt to cause such interest to be so subjected will be of no force and effect. 11. The Employee agrees that he has no rights to any benefits under this Agreement except under the circumstances described in paragraph 4, 5, and 6. 12. The Company can amend this agreement from time to time by a written instrument delivered to the Employee. However, no such amendment can reduce the Employee's benefits without his consent. 13. It is the understanding of both parties that the Employee's benefits under this Agreement, as of the date hereof, will be as shown in Schedule 1 attached hereto. IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as of the date and year first above written. /s/ Ronald A. Ledgett - ------------------------------------- ------------------------------------ Witness Employee BOSTON EDISON COMPANY By ---------------------------------- -3- PRELIMINARY ----------- Schedule A - Page 1 of 2 Age - 51 - ------------------------ -------- Taxable Death Value of Age Benefit (A) Insurance --- ----------- --------- 51 296,500 $ 418 52 296,500 445 53 296,500 471 54 296,500 498 55 296,500 531 56 296,500 581 57 296,500 640 58 296,500 712 59 296,500 792 60 296,500 878 61 296,500 990 62 296,500 1,115 63 296,500 1,254 64 296,500 1,408 65 296,500 1,586 ------- Total $12,319 ======= Note: Asset values include guaranteed value and dividends. Dividends are on the 1989 scale and are not guaranteed. All figures are approximate using age at birthday closest to the policy anniversary date. (A) Three times annual salary, less $50,000. -4- Schedule A - Page 2 of 2 Age - 51 - ------------------------ -------- Summary of Page 1 Average Total Death Taxable Age Benefit (A) Income --- ----------- --------- 5 $296,500 $ 2,363 10 296,500 5,966 15 296,500 12,319 Results at Age 65 ----------------- I. All contributions stopped at age 65: II. Executive's options at age 65: A. Remain insured to age 65 and then receive: Fully paid-up life insurance of $626,500 Less loan for corporate contribution 330,000 Net death benefit continues at 296,500 Annual interest on loan (at 8.00%) 26,400 Yearly increasing tax free dividend starting at 13,500 Yearly increasing cash value starting at (A) 10,000 B. Assign all right in the policy to the corporation and receive a supplementary retirement benefit of $38,115 for 16 years. C. Other flexible options and combinations are available on retirement, i.e. 50% insurance, $148,250 and 50% supplemental pension for 15 years, $19,058. Note: Asset values include guaranteed values and dividends. Dividends are on the 1989 scale and are not guaranteed. (A) Cash values are only available after termination of employment and selection of the insurance option. -5- EX-10.8 7 0007.txt EMPLOYMENT AGREEMENT EXHIBIT 10.8 BOSTON EDISON Executive Offices 800 Boylston Street Boston, Massachusetts 02199 Stephen J. Sweeney Chairman, President and Chief Executive Officer April 30, 1987 Mr. Ronald A. Ledgett Rural Route #1 Box 7A Crockett Neck Road Kittery Point, Maine 03905 Dear Mr. Ledgett: Boston Edison is pleased to extend an offer of employment to you as Assistant to the Senior Vice President - Nuclear commencing May 1, 1987, at a monthly salary of $8,333.34, which, when annualized, equals $100,000.08. The position grade is established at grade 89. In addition, the Executive Personnel Committee of the Board of Directors has voted you to membership in the Senior Management Incentive Compensation Plan at the non-officer level. Please be advised, however, that on April 2, 1987, I suspended the Plan for the Plan Years 1987 and 1988. The Company provides extensive benefits which are described in our benefits handbook, a copy of which is enclosed. In addition, you will be provided with a Company car (with a telephone), four weeks of vacation and the option to defer both salary and any incentive award granted you by the Executive Personnel Committee in whatever proportion you elect, as part of the deferred compensation plan. Boston Edison maintains a qualified pension plan under which benefits are paid based upon a formula which takes into consideration the average of the best three of the last ten years of your final base pay and years of Boston Edison service (less a 50% primary Social Security offset). In addition to benefits payable under the pension plan, Boston Edison will pay you additional monies equal to the difference, if any, between your pension plan benefit and the amount you would receive if the attached vesting schedule were used to calculate your pension plan benefit. Any additional monies shall be paid on an unfunded basis from the Company's general funds. If you purchase a residence in the Boston-Plymouth area on or before January 1, 1988, the Company will provide a lump sum payment of $25,000 toward the purchase price. Mr. Ronald A. Ledgett April 30, 1987 Page 2 If within five years from your date of employment your services are no longer required at Pilgrim Nuclear Station due to the termination of plant operations or Boston Edison Management thereof, we will provide, on an unfunded basis from the Company's general funds, severance pay equal to one year's salary. This provision will not apply if you are offered a comparable position with any successor management at the station. Upon your acceptance of this offer, we will terminate your consulting contract. Your purchase order will be closed following payment of your April expenses. I trust this offer is acceptable and ask for your prompt reply. I look forward to you joining our Nuclear team. Very truly yours, /s/ STEPHEN J. SWEENEY ---------------------- Stephen J. Sweeney SJS/cab Attachments (2) Accepted /s/ RA LEDGETT - ----------------------- Dated: 5/4/87 -2- ALTERNATIVE VESTING SCHEDULE ---------------------------- PERCENT OF FINAL 3-YEAR YEARS OF AVERAGE SALARY VESTED VESTING SERVICE FOR PENSION CALCULATION --------------- ----------------------- 1 3 2 6 3 9 4 12 5 15 6 18 7 21 8 24 9 27 10 30 11 33 12 36 13 39 14 42 15 45 16 48 17 51 18 54 19 57 20 or more 60 -3- EX-10.9 8 0008.txt CHANGE IN CONTROL AGREEMENT EXHIBIT 10.9 NSTAR Change in Control Agreement --------------------------- AGREEMENT, made this 11th day of May, 1999, by and between Thomas J. May ("Executive") and NSTAR (the "Company"). This Agreement shall become effective on the effective date (the "Effective Date") of the merger transaction between Commonwealth Energy System and BEC Energy pursuant to the Amended and Restated Agreement and Plan of Merger dated as of December 5, 1998 and amended and restated as of May 4, 1999 among BEC Energy, Commonwealth Energy System, the Company, BEC Acquisition, LLC and CES Acquisition, LLC. WITNESSETH WHEREAS, the Board of Trustees of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders for the Company to agree to provide benefits under the circumstances described below to Executive and other executives who are responsible for the policy-making functions of the Company and the overall viability of the Company's business; and WHEREAS, the Board recognizes that the possibility of a change of control of the Company is unsettling to such executives and desires to make arrangements at this time to help assure their continuing dedication to their duties to the Company and its shareholders, notwithstanding any attempts by outside parties to gain control of the Company; and WHEREAS, the Board believes it important, should the Company receive proposals from outside parties, to enable such executives, without being distracted by the uncertainties of their own employment situation, to perform their regular duties, and where appropriate to assess such proposals and advise the Board as to the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board determines to be appropriate; and WHEREAS, the Board also desires to demonstrate to the executives that the Company is concerned with their welfare and intends to provide that loyal executives are treated fairly; and WHEREAS, the Board wishes to assure the executives of fair severance should any of their employment terminate in specified circumstances following a change of control of the Company and to assure the executives of other benefits upon a change of control. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: 1. In the event that any individual, corporation, partnership, company, or other entity (a "Person"), which term shall include a "group" (within the meaning of section 13(d) of the Securities Exchange Act of 1934 (the "Act")), begins a tender or exchange offer, circulates a proxy to the Company's shareholders, or takes other steps to effect a "Change of Control" (as defined in Exhibit A attached hereto and made a part hereof), Executive agrees that he will not voluntarily leave the employ of the Company and will render the services contemplated in the recitals to this Agreement until such Person has terminated the efforts to effect a Change of Control or until a Change of Control has occurred. 2. If, within 36 months following a Change of Control (the "Post Change of Control Period") Executive's employment with the Company is terminated by the Company for any reason other than for "Cause" or "Disability" (as defined paragraph 4 below), or as a result of Executive's death, or Executive terminates such employment for Good Reason (as defined in paragraph 5 below): (1) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to the sum of (i) the Executive's annual base salary ("Annual Base Salary") through the date of such termination of employment to the extent not theretofore paid, (ii) a prorated portion of the target award payable under the Company's Executive Annual Incentive Compensation Plan, or any comparable or successor plan (the "Annual Plan") determined by calculating the product of (A) the target bonus award payable for the fiscal year in which the date of termination occurs under the Annual Plan, times (B) a fraction, the numerator of which is the number of days in the current fiscal year through the date of termination of employment, and the denominator of which is 365, (iii) a prorated portion of the target award payable under the Company's Performance Share Plan, or any comparable or successor plan (the "Long-Term Plan") for the performance period ending on the last day of the fiscal year during which the date of termination of employment occurs determined by calculating the product of (A) the target award payable for such performance period and (B) a fraction, the numerator of which is the number of days in the current performance period through the date of termination, and the denominator of which is the actual number of days in the performance period (provided that if any awards are expressed in shares of common stock rather than cash, the Company will pay the cash equivalent of such awards based on the closing price per share as reported in the Wall Street Journal (Eastern Edition) New York Stock Exchange Composite Transactions determined on the date prior to the date of the Change of Control or the average per share price for the 10 trading days preceding the date of the Change of Control (whichever is higher)) and (iv) any compensation for the fiscal year in which the date of termination occurs previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid; and (2) any stock, stock option or cash awards granted to the Executive by the Company that would have become vested upon continued employment by the Executive -2- shall immediately vest in full notwithstanding any provision to the contrary of such grant and shall remain exercisable until the earlier of the fifth anniversary of such termination and the latest date on which such grant could have been exercised; and (3) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to three times: (A) the amount of the Executive's Annual Base Salary at the rate in effect immediately prior to the date of termination or at the rate in effect immediately prior to the Change of Control, whichever is higher, and (B) the amount of the actual bonus paid to the Executive under the Annual Plan and the Long-Term Plan for the most recently completed fiscal year ended before the Change of Control, or the target bonus payable under the Annual Plan and Long-Term Plan for the fiscal year during which the termination of employment occurs, whichever is higher (provided that if any awards are expressed in shares of common stock rather than cash, the Company will pay the cash equivalent of such awards based on the closing price per share as reported in the Wall Street Journal (Eastern Edition) New York Stock Exchange Composite Transactions determined on the date prior to the date of the Change of Control or the average per share price for the 10 trading days preceding the date of the Change of Control (whichever is higher)); and (4) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to the full balance standing to his credit with the Company under any and all deferred compensation plans or arrangements and the lump-sum actuarial equivalent of the Executive's accrued benefit under any supplement retirement plan or arrangement (the sum of the amounts described in subsections (a) and (d) shall be hereinafter referred to as the "Accrued Obligations"); and (5) an amount equal to the excess of (i) the lump-sum actuarial equivalent of the accrued benefit under (a) the Company's qualified defined benefit Retirement Plan (the "Retirement Plan") (utilizing actuarial assumptions no less favorable to the Executive than those in effect under the Retirement Plan immediately prior to the date of the Change of Control), and (b) any supplemental retirement plan of the Company in which the Executive participates (the "SERP") which the Executive would receive if the Executive's employment continued for three years after the date of termination assuming for these purposes that all accrued benefits are fully vested, and further assuming that the Executive's annual compensation for purposes of determining benefits under the Retirement Plan and SERP ("Covered Compensation") in each of the three years is at least equal to the higher of Executive's annual rate of Covered Compensation for the most recently completed fiscal year ending prior to the date of the Change of Control or the year in which the Change of Control occurs, over (ii) the lump-sum actuarial equivalent of the Executive's actual accrued benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the date of termination; and -3- (6) Executive, together with his dependents, will continue following such termination of employment to participate fully at the Company's expense in all welfare benefit plans, programs, practices and policies, including without limitation, life, medical, disability, dental, accidental death and travel insurance plans, maintained or sponsored by the Company immediately prior to the Change of Control, or receive substantially the equivalent coverage (or the full value thereof in cash) from the Company, until the longer of the third anniversary of such termination or any longer period as may be provided by the terms of the appropriate plan, program, practice or policy, provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for any retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the date of termination and to have retired on the last day of such period; and (7) to the extent not theretofore paid or provided for, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy, practice, contract or agreement of the Company ("Other Benefits"); and (8) the Company will promptly reimburse Executive for any and all legal fees and expenses (including, without limitation, stenographer fees, printing costs, etc.) incurred by him as a result of such termination of employment, including without limitation all fees and expenses incurred to enforce the provisions of this Agreement or contesting or disputing that the termination of his employment is for Cause or other than for Good Reason (regardless of the outcome thereof). Notwithstanding anything herein to the contrary, to the extent that any payment or benefit provided for herein is required to be paid or vested at any earlier date under the terms of any plan, agreement or arrangement, such plan, agreement or arrangement shall control. 3. Death, Disability, Cause, Other Than For Good Reason. (1) Death. If the Executive's employment shall terminate during the Post Change of Control Period by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of death. -4- (2) Disability. If the Executive's employment is terminated during the Post Change of Control Period by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the date of termination of employment. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative. If the Company determines in good faith that the Disability of the Executive has occurred during the Post Change of Control Period, it may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that, within the 30 days of such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. (3) Cause. If the Executive's employment shall be terminated for Cause (as defined in Section 4 below) during the Post Change of Control Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay the Executive (A) his Annual Base Salary through the date of termination, (B) the amount of any compensation previously deferred by the Executive, and (C) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Post Change of Control Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive other than for Accrued Obligations and the timely payment or provisions of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of date of the termination of employment. 4. "Cause" means only: (a) commission of a felony or gross neglect of duty by the Executive which is intended to result in substantial personal enrichment of the Executive at the expense of the Company, (b) conviction of a crime involving moral turpitude, or (c) willful failure by the Executive of his duties to the Company which failure is deliberate on the Executive's part, results in material injury to the Company, and continues for more than 30 days after written notice given to the Executive pursuant to a two-thirds vote of all of the members of the Board at a meeting called and held for such purpose (after reasonable notice to Executive) and at which meeting the Executive and his counsel were given an opportunity to be heard, such vote to set forth in reasonable detail the nature of the failure. For purposes of this definition of Cause, no act or omission shall be considered to have been "willful" unless it was not in good faith and the Executive had knowledge at the time that the act or omission was not in the best interest of the Company. Any act, or failure to act, based on authority given pursuant to a -5- resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or another senior officer of the Company or based on the advice of counsel of the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interest of the Company. 5. Executive shall be deemed to have voluntarily terminated his employment for Good Reason if the Executive leaves the employ of the Company for any reason following: (1) The assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities immediately prior to the Change of Control; or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or (2) Any reduction in the Executive's rate of Annual Base Salary for any fiscal year to less than 100% of the rate of Annual Base Salary paid to him in the completed fiscal year immediately preceding the Change of Control, or reduction in Executive's total cash and stock compensation opportunities, including salary and incentives, for any fiscal year to less than 100% of the total cash and stock compensation opportunities made available to him in the completed fiscal year immediately preceding the Change of Control (for this purpose, such opportunities shall be deemed reduced if the objective standards by which the Executive's incentive compensation measured become more stringent or the amount of such compensation is materially reduced on a discretionary basis from the amount that would be payable solely by reference to the objective standards); or (3) Failure of the Company to continue in effect any retirement, life, medical, dental, disability, accidental death or travel insurance plan, in which Executive was participating immediately prior to the Change of Control unless the Company provides Executive with a plan or plans that provide substantially similar benefits, or the taking of any action by the Company that would adversely effect Executive's participation in or materially reduce Executive's benefits under any of such plans or deprive Executive of any material fringe benefit enjoyed by Executive immediately prior to the Change of Control other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or (4) The Company requires Executive to be based at any office or location outside the Greater Boston Metropolitan Area or the Company requires the Executive to -6- travel on Company business to a substantially greater extent than required immediately prior to the date of Change of Control; or (5) Any purported termination by the Company of the Executive's employment otherwise than is expressly permitted by this Agreement; or (6) Any failure by the Company to comply with and satisfy Section 8 of this Agreement. For purposes of this Section 5, any good faith determination of Good Reason made by the Executive shall be conclusive. 6. If any payment or benefit received by Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by the Executive with respect to such excise tax), the Company will pay to Executive an additional amount in cash (the "Additional Amount") equal to the amount necessary to cause the aggregate payments and benefits received by Executive, including such Additional Amount (net of all federal, state, and local income taxes and all taxes payable as a result of the application of Sections 28OG and 4999 of the Code and including any interest and penalties with respect to such taxes) to be equal to the aggregate payments and benefits Executive would have received, excluding such Additional Amount (net of all federal, state and local income taxes) as if Sections 28OG and 4999 of the Code (and any successor provisions thereto) had not been enacted into law. Following the termination of Executive's employment, Executive may submit to the Company a written opinion (the "Opinion") of a nationally recognized accounting firm, employment consulting firm, or law firm selected by Executive setting forth a statement and a calculation of the Additional Amount. The determination of such firm concerning the extent of the Additional Amount (which determination need not be free from doubt), shall be final and binding on both Executive and the Company. The Company will pay to Executive the Additional Amount not later than 10 days after such firm has rendered the Opinion. The Company agrees to pay the fees and expenses of such firm in preparing and rendering the Opinion. If, following the payment to Executive of the Additional Amount, Executive's liability for the excise tax imposed by Section 4999 of the Code on the payments and benefits received by Executive is finally determined (at such time as the Internal Revenue Service is unable to make any further adjustment to the amount of such liability) to be less than the amount thereof set forth in the Opinion, Executive shall reimburse the Company, without interest, in an amount equal to the amount by which the Additional Amount should be reduced to reflect such decrease in the actual excise tax liability. The calculation of such reimbursement shall be made by a nationally recognized accounting firm, an employment consulting firm, or a law firm selected by Executive, -7- whose determination shall be binding on Executive and the Company and whose fees and expenses therefore shall be paid by the Company. 7. In the case of any dispute under this Agreement, Executive may initiate binding arbitration in Boston, Massachusetts, before the American Arbitration Association by serving a notice to arbitrate upon the Company or, at Executive's election, institute judicial proceedings, in either case within 90 days of the effective date of his termination or, if later, his receipt of notice of termination, or such longer period as may be reasonably necessary for Executive to take such action if illness or incapacity should impair his taking such action within the 90-day period. The Company shall not have the right to initiate binding arbitration, and agrees that upon the initiation of binding arbitration by Executive pursuant to this paragraph 7 the Company shall cause to be dismissed any judicial proceedings it has brought against Executive relating to this Agreement. The Company authorizes Executive from time to time to retain counsel of his choice to represent Executive in connection with any and all actions, proceedings, and/or arbitration, whether by or against the Company or any trustee, officer, shareholder, or other person affiliated with the Company, which may affect Executive's rights under this Agreement. The Company agrees (i) to pay the fees and expenses of such counsel, (ii) to pay the cost of such arbitration and/or judicial proceeding, and (iii) to pay interest to Executive on all amounts owed to Executive under this Agreement during any period of time that such amounts are withheld pending arbitration and/or judicial proceedings. Such interest will be at the base rate as announced from time to time by BankBoston, N.A. In addition, notwithstanding any existing prior attorney-client relationship between the Company and counsel retained by Executive, the Company irrevocably consents to Executive entering into an attorney-client relationship with such counsel and agrees that a confidential relationship shall exist between Executive and such counsel. 8. If the Company is at any time before or after a Change of Control merged or consolidated into or with any other corporation or other entity (whether or not the Company is the surviving entity), or if substantially all of the assets thereof are transferred to another corporation or other entity, the provisions of this Agreement will be binding upon and inure to the benefit of the corporation or other entity resulting from such merger or consolidation or the acquirer of such assets (the "Successor Entity"), and this paragraph 8 will apply in the event of any subsequent merger or consolidation or transfer of assets. The Company will require any such Successor Entity to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such transaction had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any Successor Entity which assumes and agrees to perform this Agreement by operation of law or otherwise. In the event of any merger, consolidation, or sale of assets described above, nothing contained in this Agreement will detract from or otherwise limit Executive's right to or privilege of participation in any stock option or purchase plan or any bonus, profit sharing, pension, group insurance, hospitalization, or other incentive or benefit plan or arrangement which may be or -8- become applicable to executives of the corporation resulting from such merger or consolidation or the corporation acquiring such assets of the Company. In the event of any merger, consolidation, or sale of assets described above, references to the Company in this Agreement shall unless the context suggests otherwise be deemed to include the entity resulting from such merger or consolidation or the acquirer of such assets of the Company. 9. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with the last paragraph of Section 14 of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the effective date of the Disability, as the case may be. 10. All payments required to be made by the Company hereunder to Executive or his dependents, beneficiaries, or estate will be subject to the withholding of such amounts relating to tax and/or other payroll deductions as may be required by law. 11. There shall be no requirement on the part of the Executive to seek other employment or otherwise mitigate damages in order to be entitled to the full amount of any payments and benefits to which Executive is entitled under this Agreement, and the amount of such payments and benefits shall not be reduced by any compensation or benefits received by Executive from other employment. 12. Nothing contained in this Agreement shall be construed as a contract of employment between the Company and the Executive, or as a right of the Executive to continue in the employ of the Company, or as a limitation of the right of the Company to discharge the -9- Executive with or without Cause; provided that the Executive shall have the right to receive upon termination of his employment the payments and benefits provided in this Agreement and shall not be deemed to have waived any rights he may have either at law or in equity in respect of such discharge. 13. No amendment, change, or modification of this Agreement may be made except in writing, signed by both parties. 14. This Agreement shall terminate on the third anniversary of the Effective Date, provided, however, that commencing on the date one year after the Effective Date, and on each annual anniversary of such date (each such date hereinafter referred to as a "Renewal Date"), unless previously terminated, the term of this Agreement shall be automatically extended so as to terminate three years from such Renewal Date, unless at least sixty days prior to the Renewal Date the Company shall give notice to the Executive that the term of this Agreement shall not be so extended. This Agreement shall not apply to a Change of Control which takes place after the termination of this Agreement. Payments made by the Company pursuant to this Agreement shall be in lieu of severance payments, if any, which might otherwise be available to Executive under any severance plan, policy, program or arrangement generally applicable to the employees of the Company. If for any reason Executive receives severance payments (other than under this Agreement) upon the termination of his employment with the Company, the amount of such payments shall be deducted from the amount paid under this Agreement. The purpose of this provision is solely to avert a duplication of benefits; neither this provision nor the provisions of any other agreement shall be interpreted to reduce the amount payable to Executive below the amount that would otherwise have been payable under this Agreement. The provisions of this Agreement shall be binding upon and shall inure to the benefit of Executive, his executors, administrators, legal representatives, and assigns, and the Company and its successors. The validity, interpretation, and effect of this Agreement shall be governed by the laws of The Commonwealth of Massachusetts. Any ambiguities in this Agreement shall be construed in favor of the Executive. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. The Company shall have no right of set-off or counterclaims, in respect of any claim, debt, or obligation, against any payments to Executive, his dependents, beneficiaries, or estate provided for in this Agreement. No right or interest to or in any payments shall be assignable by the Executive; provided, however, that this provision shall not preclude him from designating one or more beneficiaries to -10- receive any amount that may be payable after his death and shall not preclude the legal representative of his estate from assigning any right hereunder to the person or persons entitled thereto under his will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his estate. The term "beneficiaries" as used in this Agreement shall mean a beneficiary or beneficiaries so designated to receive any such amount, or if no beneficiary has been so designated, the legal representative of the Executive's estate. No right, benefit, or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt, or obligation, or to execution, attachment, levy, or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void, and of no effect. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Thomas J. May NSTAR 800 Boylston Street Boston, MA 02199 If to the Company: NSTAR 800 Boylston Street Boston, MA 02199 Attention: General Counsel or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. 15. Upon the Effective Date, this Agreement will supercede and replace the Change in Control Agreement dated as of July 8, 1996 by and between the Executive and Boston Edison Company. IN WITNESS WHEREOF, NSTAR and Executive have each caused this Agreement to be duly executed and delivered as of the date set forth above. NSTAR By: /s/ R. D. Wright ------------------ Name: R. D. Wright Title: President /s/ Thomas J. May ------------------ Thomas J. May -11- EXHIBIT A Change of Control. For the purposes of this Agreement, a "Change of ----------------- Control" shall mean: (1) The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of trustees (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Exhibit A; or (2) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a trustee subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and outstanding Company Voting -12- Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. -13- EX-10.10 9 0009.txt NSTAR CHANGE IN CONTROL AGREEMENT EXHIBIT 10.10 NSTAR Change in Control Agreement --------------------------- AGREEMENT, made this 11th day of May, 1999, by and between Russell D. Wright ("Executive") and NSTAR (the "Company"). This Agreement shall become effective on the effective date (the "Effective Date") of the merger transaction between Commonwealth Energy System and BEC Energy pursuant to the Amended and Restated Agreement and Plan of Merger dated as of December 5, 1998 and amended and restated as of May 4, 1999 among BEC Energy, Commonwealth Energy System, the Company, BEC Acquisition, LLC and CES Acquisition, LLC. WITNESSETH WHEREAS, the Board of Trustees of the Company (the "Board") has determined that it is in the best interests of the Company and its shareholders for the Company to agree to provide benefits under the circumstances described below to Executive and other executives who are responsible for the policy-making functions of the Company and the overall viability of the Company's business; and WHEREAS, the Board recognizes that the possibility of a change of control of the Company is unsettling to such executives and desires to make arrangements at this time to help assure their continuing dedication to their duties to the Company and its shareholders, notwithstanding any attempts by outside parties to gain control of the Company; and WHEREAS, the Board believes it important, should the Company receive proposals from outside parties, to enable such executives, without being distracted by the uncertainties of their own employment situation, to perform their regular duties, and where appropriate to assess such proposals and advise the Board as to the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board determines to be appropriate; and WHEREAS, the Board also desires to demonstrate to the executives that the Company is concerned with their welfare and intends to provide that loyal executives are treated fairly; and WHEREAS, the Board wishes to assure the executives of fair severance should any of their employment terminate in specified circumstances following a change of control of the Company and to assure the executives of other benefits upon a change of control. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: 1. In the event that any individual, corporation, partnership, company, or other entity (a "Person"), which term shall include a "group" (within the meaning of section 13(d) of the Securities Exchange Act of 1934 (the "Act")), begins a tender or exchange offer, circulates a proxy to the Company's shareholders, or takes other steps to effect a "Change of Control" (as defined in Exhibit A attached hereto and made a part hereof), Executive agrees that he will not voluntarily leave the employ of the Company and will render the services contemplated in the recitals to this Agreement until such Person has terminated the efforts to effect a Change of Control or until a Change of Control has occurred. 2. If, within 36 months following a Change of Control (the "Post Change of Control Period") Executive's employment with the Company is terminated by the Company for any reason other than for "Cause" or "Disability" (as defined paragraph 4 below), or as a result of Executive's death, or Executive terminates such employment for Good Reason (as defined in paragraph 5 below): (1) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to the sum of (i) the Executive's annual base salary ("Annual Base Salary") through the date of such termination of employment to the extent not theretofore paid, (ii) a prorated portion of the target award payable under the Company's Executive Annual Incentive Compensation Plan, or any comparable or successor plan (the "Annual Plan") determined by calculating the product of (A) the target bonus award payable for the fiscal year in which the date of termination occurs under the Annual Plan, times (B) a fraction, the numerator of which is the number of days in the current fiscal year through the date of termination of employment, and the denominator of which is 365, (iii) a prorated portion of the target award payable under the Company's Performance Share Plan, or any comparable or successor plan (the "Long-Term Plan") for the performance period ending on the last day of the fiscal year during which the date of termination of employment occurs determined by calculating the product of (A) the target award payable for such performance period and (B) a fraction, the numerator of which is the number of days in the current performance period through the date of termination, and the denominator of which is the actual number of days in the performance period (provided that if any awards are expressed in shares of common stock rather than cash, the Company will pay the cash equivalent of such awards based on the closing price per share as reported in the Wall Street Journal (Eastern Edition) New York Stock Exchange Composite Transactions determined on the date prior to the date of the Change of Control or the average per share price for the 10 trading days preceding the date of the Change of Control (whichever is higher)) and (iv) any compensation for the fiscal year in which the date of termination occurs previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid; and (2) any stock, stock option or cash awards granted to the Executive by the Company that would have become vested upon continued employment by the Executive -2- shall immediately vest in full notwithstanding any provision to the contrary of such grant and shall remain exercisable until the earlier of the fifth anniversary of such termination and the latest date on which such grant could have been exercised; and (3) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to three times: (A) the amount of the Executive's Annual Base Salary at the rate in effect immediately prior to the date of termination or at the rate in effect immediately prior to the Change of Control, whichever is higher, and (B) the amount of the actual bonus paid to the Executive under the Annual Plan and the Long-Term Plan for the most recently completed fiscal year ended before the Change of Control, or the target bonus payable under the Annual Plan and Long-Term Plan for the fiscal year during which the termination of employment occurs, whichever is higher (provided that if any awards are expressed in shares of common stock rather than cash, the Company will pay the cash equivalent of such awards based on the closing price per share as reported in the Wall Street Journal (Eastern Edition) New York Stock Exchange Composite Transactions determined on the date prior to the date of the Change of Control or the average per share price for the 10 trading days preceding the date of the Change of Control (whichever is higher)); and (4) the Company will pay to Executive within 30 days of such termination of employment a lump-sum cash payment equal to the full balance standing to his credit with the Company under any and all deferred compensation plans or arrangements and the lump-sum actuarial equivalent of the Executive's accrued benefit under any supplement retirement plan or arrangement (the sum of the amounts described in subsections (a) and (d) shall be hereinafter referred to as the "Accrued Obligations"); and (5) an amount equal to the excess of (i) the lump-sum actuarial equivalent of the accrued benefit under (a) the Company's qualified defined benefit Retirement Plan (the "Retirement Plan") (utilizing actuarial assumptions no less favorable to the Executive than those in effect under the Retirement Plan immediately prior to the date of the Change of Control), and (b) any supplemental retirement plan of the Company in which the Executive participates (the "SERP") which the Executive would receive if the Executive's employment continued for three years after the date of termination assuming for these purposes that all accrued benefits are fully vested, and further assuming that the Executive's annual compensation for purposes of determining benefits under the Retirement Plan and SERP ("Covered Compensation") in each of the three years is at least equal to the higher of Executive's annual rate of Covered Compensation for the most recently completed fiscal year ending prior to the date of the Change of Control or the year in which the Change of Control occurs, over (ii) the lump-sum actuarial equivalent of the Executive's actual accrued benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the date of termination; and -3- (6) Executive, together with his dependents, will continue following such termination of employment to participate fully at the Company's expense in all welfare benefit plans, programs, practices and policies, including without limitation, life, medical, disability, dental, accidental death and travel insurance plans, maintained or sponsored by the Company immediately prior to the Change of Control, or receive substantially the equivalent coverage (or the full value thereof in cash) from the Company, until the longer of the third anniversary of such termination or any longer period as may be provided by the terms of the appropriate plan, program, practice or policy, provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer-provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for any retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the date of termination and to have retired on the last day of such period; and (7) to the extent not theretofore paid or provided for, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy, practice, contract or agreement of the Company ("Other Benefits"); and (8) the Company will promptly reimburse Executive for any and all legal fees and expenses (including, without limitation, stenographer fees, printing costs, etc.) incurred by him as a result of such termination of employment, including without limitation all fees and expenses incurred to enforce the provisions of this Agreement or contesting or disputing that the termination of his employment is for Cause or other than for Good Reason (regardless of the outcome thereof). Notwithstanding anything herein to the contrary, to the extent that any payment or benefit provided for herein is required to be paid or vested at any earlier date under the terms of any plan, agreement or arrangement, such plan, agreement or arrangement shall control. 3. Death, Disability, Cause, Other Than For Good Reason. (1) Death. If the Executive's employment shall terminate during the Post Change of Control Period by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of death. -4- (2) Disability. If the Executive's employment is terminated during the Post Change of Control Period by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the date of termination of employment. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative. If the Company determines in good faith that the Disability of the Executive has occurred during the Post Change of Control Period, it may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that, within the 30 days of such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. (3) Cause. If the Executive's employment shall be terminated for Cause (as defined in Section 4 below) during the Post Change of Control Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay the Executive (A) his Annual Base Salary through the date of termination, (B) the amount of any compensation previously deferred by the Executive, and (C) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Post Change of Control Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive other than for Accrued Obligations and the timely payment or provisions of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of date of the termination of employment. 4. "Cause" means only: (a) commission of a felony or gross neglect of duty by the Executive which is intended to result in substantial personal enrichment of the Executive at the expense of the Company, (b) conviction of a crime involving moral turpitude, or (c) willful failure by the Executive of his duties to the Company which failure is deliberate on the Executive's part, results in material injury to the Company, and continues for more than 30 days after written notice given to the Executive pursuant to a two-thirds vote of all of the members of the Board at a meeting called and held for such purpose (after reasonable notice to Executive) and at which meeting the Executive and his counsel were given an opportunity to be heard, such vote to set forth in reasonable detail the nature of the failure. For purposes of this definition of Cause, no act or omission shall be considered to have been "willful" unless it was not in good faith and the Executive had knowledge at the time that the act or omission was not in the best interest of the Company. Any act, or failure to act, based on authority given pursuant to a -5- resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or another senior officer of the Company or based on the advice of counsel of the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interest of the Company. 5. Executive shall be deemed to have voluntarily terminated his employment for Good Reason if the Executive leaves the employ of the Company for any reason following: (1) The assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities immediately prior to the Change of Control; or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or (2) Any reduction in the Executive's rate of Annual Base Salary for any fiscal year to less than 100% of the rate of Annual Base Salary paid to him in the completed fiscal year immediately preceding the Change of Control, or reduction in Executive's total cash and stock compensation opportunities, including salary and incentives, for any fiscal year to less than 100% of the total cash and stock compensation opportunities made available to him in the completed fiscal year immediately preceding the Change of Control (for this purpose, such opportunities shall be deemed reduced if the objective standards by which the Executive's incentive compensation measured become more stringent or the amount of such compensation is materially reduced on a discretionary basis from the amount that would be payable solely by reference to the objective standards); or (3) Failure of the Company to continue in effect any retirement, life, medical, dental, disability, accidental death or travel insurance plan, in which Executive was participating immediately prior to the Change of Control unless the Company provides Executive with a plan or plans that provide substantially similar benefits, or the taking of any action by the Company that would adversely effect Executive's participation in or materially reduce Executive's benefits under any of such plans or deprive Executive of any material fringe benefit enjoyed by Executive immediately prior to the Change of Control other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; or (4) The Company requires Executive to be based at any office or location outside the Greater Boston Metropolitan Area or the Company requires the Executive to travel on Company business to a substantially greater extent than required immediately prior to the date of Change of Control; or -6- (5) Any purported termination by the Company of the Executive's employment otherwise than is expressly permitted by this Agreement; or (6) Any failure by the Company to comply with and satisfy Section 8 of this Agreement. For purposes of this Section 5, any good faith determination of Good Reason made by the Executive shall be conclusive. 6. If any payment or benefit received by Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by the Executive with respect to such excise tax), the Company will pay to Executive an additional amount in cash (the "Additional Amount") equal to the amount necessary to cause the aggregate payments and benefits received by Executive, including such Additional Amount (net of all federal, state, and local income taxes and all taxes payable as a result of the application of Sections 28OG and 4999 of the Code and including any interest and penalties with respect to such taxes) to be equal to the aggregate payments and benefits Executive would have received, excluding such Additional Amount (net of all federal, state and local income taxes) as if Sections 28OG and 4999 of the Code (and any successor provisions thereto) had not been enacted into law. Following the termination of Executive's employment, Executive may submit to the Company a written opinion (the "Opinion") of a nationally recognized accounting firm, employment consulting firm, or law firm selected by Executive setting forth a statement and a calculation of the Additional Amount. The determination of such firm concerning the extent of the Additional Amount (which determination need not be free from doubt), shall be final and binding on both Executive and the Company. The Company will pay to Executive the Additional Amount not later than 10 days after such firm has rendered the Opinion. The Company agrees to pay the fees and expenses of such firm in preparing and rendering the Opinion. If, following the payment to Executive of the Additional Amount, Executive's liability for the excise tax imposed by Section 4999 of the Code on the payments and benefits received by Executive is finally determined (at such time as the Internal Revenue Service is unable to make any further adjustment to the amount of such liability) to be less than the amount thereof set forth in the Opinion, Executive shall reimburse the Company, without interest, in an amount equal to the amount by which the Additional Amount should be reduced to reflect such decrease in the actual excise tax liability. The calculation of such reimbursement shall be made by a nationally recognized accounting firm, an employment consulting firm, or a law firm selected by Executive, whose determination shall be binding on Executive and the Company and whose fees and expenses therefore shall be paid by the Company. -7- 7. In the case of any dispute under this Agreement, Executive may initiate binding arbitration in Boston, Massachusetts, before the American Arbitration Association by serving a notice to arbitrate upon the Company or, at Executive's election, institute judicial proceedings, in either case within 90 days of the effective date of his termination or, if later, his receipt of notice of termination, or such longer period as may be reasonably necessary for Executive to take such action if illness or incapacity should impair his taking such action within the 90-day period. The Company shall not have the right to initiate binding arbitration, and agrees that upon the initiation of binding arbitration by Executive pursuant to this paragraph 7 the Company shall cause to be dismissed any judicial proceedings it has brought against Executive relating to this Agreement. The Company authorizes Executive from time to time to retain counsel of his choice to represent Executive in connection with any and all actions, proceedings, and/or arbitration, whether by or against the Company or any trustee, officer, shareholder, or other person affiliated with the Company, which may affect Executive's rights under this Agreement. The Company agrees (i) to pay the fees and expenses of such counsel, (ii) to pay the cost of such arbitration and/or judicial proceeding, and (iii) to pay interest to Executive on all amounts owed to Executive under this Agreement during any period of time that such amounts are withheld pending arbitration and/or judicial proceedings. Such interest will be at the base rate as announced from time to time by BankBoston, N.A. In addition, notwithstanding any existing prior attorney-client relationship between the Company and counsel retained by Executive, the Company irrevocably consents to Executive entering into an attorney-client relationship with such counsel and agrees that a confidential relationship shall exist between Executive and such counsel. 8. If the Company is at any time before or after a Change of Control merged or consolidated into or with any other corporation or other entity (whether or not the Company is the surviving entity), or if substantially all of the assets thereof are transferred to another corporation or other entity, the provisions of this Agreement will be binding upon and inure to the benefit of the corporation or other entity resulting from such merger or consolidation or the acquirer of such assets (the "Successor Entity"), and this paragraph 8 will apply in the event of any subsequent merger or consolidation or transfer of assets. The Company will require any such Successor Entity to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such transaction had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any Successor Entity which assumes and agrees to perform this Agreement by operation of law or otherwise. In the event of any merger, consolidation, or sale of assets described above, nothing contained in this Agreement will detract from or otherwise limit Executive's right to or privilege of participation in any stock option or purchase plan or any bonus, profit sharing, pension, group insurance, hospitalization, or other incentive or benefit plan or arrangement which may be or become applicable to executives of the corporation resulting from such merger or consolidation or the corporation acquiring such assets of the Company. -8- In the event of any merger, consolidation, or sale of assets described above, references to the Company in this Agreement shall unless the context suggests otherwise be deemed to include the entity resulting from such merger or consolidation or the acquirer of such assets of the Company. 9. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with the last paragraph of Section 14 of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the effective date of the Disability, as the case may be. 10. All payments required to be made by the Company hereunder to Executive or his dependents, beneficiaries, or estate will be subject to the withholding of such amounts relating to tax and/or other payroll deductions as may be required by law. 11. There shall be no requirement on the part of the Executive to seek other employment or otherwise mitigate damages in order to be entitled to the full amount of any payments and benefits to which Executive is entitled under this Agreement, and the amount of such payments and benefits shall not be reduced by any compensation or benefits received by Executive from other employment. 12. Nothing contained in this Agreement shall be construed as a contract of employment between the Company and the Executive, or as a right of the Executive to continue in the employ of the Company, or as a limitation of the right of the Company to discharge the -9- Executive with or without Cause; provided that the Executive shall have the right to receive upon termination of his employment the payments and benefits provided in this Agreement and shall not be deemed to have waived any rights he may have either at law or in equity in respect of such discharge. 13. No amendment, change, or modification of this Agreement may be made except in writing, signed by both parties. 14. This Agreement shall terminate on the third anniversary of the Effective Date, provided, however, that commencing on the date one year after the Effective Date, and on each annual anniversary of such date (each such date hereinafter referred to as a "Renewal Date"), unless previously terminated, the term of this Agreement shall be automatically extended so as to terminate three years from such Renewal Date, unless at least sixty days prior to the Renewal Date the Company shall give notice to the Executive that the term of this Agreement shall not be so extended. This Agreement shall not apply to a Change of Control which takes place after the termination of this Agreement. Payments made by the Company pursuant to this Agreement shall be in lieu of severance payments, if any, which might otherwise be available to Executive under any severance plan, policy, program or arrangement generally applicable to the employees of the Company. If for any reason Executive receives severance payments (other than under this Agreement) upon the termination of his employment with the Company, the amount of such payments shall be deducted from the amount paid under this Agreement. The purpose of this provision is solely to avert a duplication of benefits; neither this provision nor the provisions of any other agreement shall be interpreted to reduce the amount payable to Executive below the amount that would otherwise have been payable under this Agreement. The provisions of this Agreement shall be binding upon and shall inure to the benefit of Executive, his executors, administrators, legal representatives, and assigns, and the Company and its successors. The validity, interpretation, and effect of this Agreement shall be governed by the laws of The Commonwealth of Massachusetts. Any ambiguities in this Agreement shall be construed in favor of the Executive. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. The Company shall have no right of set-off or counterclaims, in respect of any claim, debt, or obligation, against any payments to Executive, his dependents, beneficiaries, or estate provided for in this Agreement. No right or interest to or in any payments shall be assignable by the Executive; provided, however, that this provision shall not preclude him from designating one or more beneficiaries to -10- receive any amount that may be payable after his death and shall not preclude the legal representative of his estate from assigning any right hereunder to the person or persons entitled thereto under his will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his estate. The term "beneficiaries" as used in this Agreement shall mean a beneficiary or beneficiaries so designated to receive any such amount, or if no beneficiary has been so designated, the legal representative of the Executive's estate. No right, benefit, or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt, or obligation, or to execution, attachment, levy, or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void, and of no effect. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: Russell D. Wright COMEnergy One Main Street P.O. Box 9150 Cambridge, MA 02142-9150 If to the Company: NSTAR 800 Boylston Street Boston, MA 02199 Attention: General Counsel or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. IN WITNESS WHEREOF, NSTAR and Executive have each caused this Agreement to be duly executed and delivered as of the date set forth above. NSTAR By: /s/ Thomas J. May ----------------- Name: Thomas J. May Title: Chairman and CEO /s/ R. D. Wright ---------------- Russell D. Wright -11- EXHIBIT A Change of Control. For the purposes of this Agreement, a "Change of Control" shall mean: (1) The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of trustees (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Exhibit A; or (2) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a trustee subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the trustees then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and outstanding Company Voting -12- Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. -13- EX-10.11 10 0010.txt NSTAR DEFERRED COMPENSATION PLAN EXHIBIT 10.11 NSTAR DEFERRED COMPENSATION PLAN (RESTATED EFFECTIVE AUGUST 25, 1999) 1. PURPOSE AND EFFECTIVE DATE The purpose of this Plan is to provide an arrangement whereby eligible executives of NSTAR and its affiliates can elect to defer receipt of designated percentages or amounts of their salary and incentive awards. This Plan Document constitutes an amendment, restatement and continuation of the Boston Edison Company Deferred Compensation Plan (the "Edison Deferred Compensation Plan"), which was last restated effective January 1, 1999. This document also replaces the following plans previously maintained by Commonwealth Energy System ("CES") for its executives, each of which were terminated by CES effective as of August 25, 1999: The Commonwealth Energy System Long Term Incentive Plan (the "CESLTIP"); The Commonwealth Energy System Deferred Compensation Plan (the "CES Deferred Compensation Plan"); The executive salary continuation portion of the Executive Salary Continuation and Excess Benefit Plan For Employees of Commonwealth Energy System and Subsidiary Companies (the "CES Salary Continuation Benefit"). This restated Plan is effective August 25, 1999 (the "Effective Date"). No benefits shall be payable under said terminated CES Plans on or after the Effective Date to any Participant under this Plan or his or her beneficiary. The Plan is intended to be "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of sections 201(2), 301(a)(3) and 401(a)(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and shall be administered in a manner consistent with that intent. 2. DEFINITIONS (a) "Base Salary" means the Participant's annualized Salary in effect on January 1 of a year from which the Participant defers compensation. (b) "Change of Control" has the meaning set forth in Appendix A. (c) "Code" means the Internal Revenue Code of 1986 as amended from time to time. (d) "Committee" means the Executive Personnel Committee of the Company. (e) "Company" means NSTAR. (f) "Deferral Account" means the deferral account described in section 6. (g) "Disability" means a disability as defined for purposes of the Company's long-term disability insurance plan. For purposes of Section 7(c), Disability shall be deemed to occur upon the expiration of thirty (30) months from the commencement of the Participant's condition of disability. (h) "Incentive Award" means, for any calendar year, such amount or amounts as are payable to a Participant under any incentive award or bonus program provided by the Company or its affiliate which is payable in cash or Shares. (i) "Participant" means an executive who participates in the Plan. (j) "Plan" means the NSTAR Deferred Compensation Plan as set forth herein and as from time to time amended. -2- (k) "Plan Administrator" means the Committee or other person or persons authorized to administer the Plan in accordance with Section 9. (l) "Retirement" means termination of employment from the Company after either (i) attaining age 55, or (ii) completing 20 years of employment with the Company or its affiliate.. (m) "Salary" means the fixed basic compensation of a Participant from the Company or its affiliate excluding any special compensation such as overtime, bonus payments, disability insurance benefits, severance pay or other similar distributions, and Company or affiliate contributions under any employee benefit plan; provided, that Salary shall include amounts that would have been received by the Participant from the Company or its successor as fixed basic compensation but for an election under section 401(k) or section 125 of the Code or a deferral election under this Plan. (n) "Salary Increase" means the amount, if any, by which a Participant's Salary for any year may be increased over the Base Salary amount in effect on January 1 of such year. (o) "Shares" mean shares of the Company. 3. ELIGIBILITY Such employees of the Company or its affiliates as are selected by the Company shall be eligible to become Participants in the Plan provided they complete such forms as the Plan Administrator may require. 4. ELECTIVE DEFERRALS A Participant may elect to defer such portion of his or her Base Salary, Salary Increase or Incentive Award otherwise payable in or for a calendar year as the Plan Administrator may -3- prescribe prior to the start of such calendar year. The Plan Administrator may limit the amount or percentage of Base Salary, Salary Increase or Incentive Award that a Participant may defer hereunder. 5. DEFERRAL ELECTIONS A Participant's election of deferral under Section 4 shall be in the form prescribed by the Plan Administrator and shall be subject to such terms and conditions as the Plan Administrator may prescribe. The election of deferral must be filed prior to the first day of the "Deferral Period" as hereinafter defined. Each election shall specify the percentage or amount of the Participant's Base Salary, Salary Increase or Incentive Award to be credited to his or her Deferral Account instead of being paid currently to the Participant, and the payment period (including a single sum payment if so elected) for the distribution in respect of such deferral. Each election shall be binding with respect to the Base Salary, Salary Increase and Incentive Award for such period (not less than one year) as the Plan Administrator shall specify (the "Deferral Period") and shall be irrevocable for the calendar year or years to which it applies. Notwithstanding the foregoing, an employee who becomes a Participant during the calendar year may make an election of deferral for the balance of such calendar year provided he or she makes such election within 30 days of the date he or she becomes a Participant. Short-term disability payments shall be treated for purposes of deferral hereunder as Base Salary; provided, that if within forty-five (45) days following the commencement of such Disability the Participant so elects, short- term disability payments in respect of the seventh month following the commencement of the Participant's Disability, and subsequent months, shall be paid currently and not deferred. Long-term disability benefits may not be deferred under this Plan. -4- 6. DEFERRAL ACCOUNT The Plan Administrator shall maintain a Deferral Account on behalf of each Participant as follows: (a) Opening Balance. (1) The Edison Deferred Compensation Plan. Each Participant who deferred amounts under the Edison Deferred Compensation Plan prior to the Effective Date shall have an opening balance in his or her Deferral Account under the Plan on the Effective Date equal to the value of his or her deferral account under the Edison Deferred Compensation Plan as of the Effective Date. (2) CES Deferred Compensation Plan, CESLTIP and CES Salary Continuation Benefit. Each Participant who prior to the Effective Date deferred amounts under the CES Deferred Compensation Plan and/or elected to waive his or her right to receive awards under the CESLTIP and/or had a CES Salary Continuation Benefit shall have an opening balance in his or her Deferral Account under the Plan on the Effective Date equal to the sum of (i) the value of his or her deferral account under the CES Deferred Compensation Plan as of the Effective Date, plus (ii) the value of his or her waived awards under the CESLTIP as of the Effective Date, plus (iii) the value of his or her CES Salary Continuation Benefit as of the Effective Date. The credits described in this subparagraph (2) shall be in lieu of amounts previously payable under the aforesaid CES Plans and each Participant receiving such credit expressly agrees to waive any claim he or she may have for payment of benefits under said CES Plans. (b) Deferrals. For each deferral election made by the Participant in respect of periods on and after the Effective Date, the Plan Administrator shall credit to the Participant's Deferral -5- Account the amounts of Base Salary, Salary Increase or Incentive Award, as applicable, which the Participant has elected to defer under the Plan. In each case, credits shall be made as of the dates the Salary, Salary Increase or Incentive Award would have been payable if not deferred. (c) Investment Measurements. Subject to paragraph (d) below, from time to time the Company will establish investment measurements to be used to adjust the balance of each Participant's Deferral Account. Such investment measurements may be changed from time to time by the Company. The Company may establish rules and procedures to permit Participants to select investments for their respective Deferral Accounts from among available investment measurements. From time to time, as determined by the Plan Administrator, each Participant's Deferral Account will be adjusted to reflect such investment measurements. (d) Shares. A Participant who elects to defer an Incentive Award which is payable in Shares shall have the value of such deferred award determined with reference to the number of whole Shares which could be purchased with said amount in the open market as promptly as possible following the effective date of such election. Any dividends on such Shares will be reinvested or deemed reinvested in such Shares. Such number of Shares (and the value thereof) shall be credited from time to time to the Participant's Deferral Account. The Company may, but shall not be required to, purchase Shares to satisfy its obligation to Participants under this paragraph. If such purchase of Shares is made, the Company may, in its discretion and subject to such limitations as it may determine, permit a Participant to exercise voting rights with respect to such Shares as are allocated to his account. 7. COMMENCEMENT OF DISTRIBUTIONS; PAYMENT PERIODS (a) Inservice Distributions. At the time the Participant makes an election of deferral under Section 4, and subject to the conditions of this Section, a Participant may also elect to -6- receive a single sum payment of all or a specified portion of the amount attributable to such deferral on a fixed date prior to the Participant's Retirement, Disability, or other termination of employment (hereinafter referred to as the "initial fixed date"). Such initial fixed date must be at least five years after the date of such deferral. In addition, at least two years prior to the initial fixed date, a Participant may elect to defer payment of such amount to a later fixed date (hereinafter referred to as the "subsequent fixed date") which must be at least three years after the initial fixed date. Furthermore, at least two years prior to the subsequent fixed date, a Participant may elect to defer payment of such amount until his or her Retirement, Disability, or other termination of employment. The rules and procedures for such elections will be promulgated by the Plan Administrator. All elections under this Section 7(a) require the consent of the Company to become effective. (b) Special one-time inservice distribution. In addition to the elections described in paragraph (a) above, a Participant may request a special one-time inservice distribution of part or all of his or her Deferral Account for the sole purpose of contributing such amount to a charity selected by the Participant which is exempt from federal income tax under section 501(c)(3) of the Code. Such request must be made in writing to the Plan Administrator at least six months prior to the requested distribution date and requires the consent of the Plan Administrator to become effective. (c) Retirement or Disability. Upon the Participant's Retirement or Disability, the Participant shall be entitled to receive the balance in his or her Deferral Account. The Deferral Account shall be payable as the Participant shall have specified in his or her election of deferral from among the options prescribed by the Plan Administrator provided, however, if requested by the Participant prior to his or her Retirement Date, the Plan Administrator may in its sole -7- discretion pay the Participant the entire balance of his or her Deferral Account in a single sum. Payment shall be made (or if paid other than in a single sum, shall commence) on the first day of the calendar quarter following Retirement or Disability or as soon as practicable thereafter. Notwithstanding the foregoing provisions of this paragraph, in the case of a Participant whose Retirement date is prior to his or her attainment of age 65, such Participant may elect to defer commencement of payment of part or all of his or her Deferral Account until he or she attains age 65. Any such election to defer commencement of payment beyond the Participant's Retirement date must be made in writing to the Plan Administrator at least six months prior to the Retirement date and requires the consent of the Plan Administrator to become effective. (d) Termination of Employment. If the Participant ceases to be an employee of the Company and its affiliates for reasons other than death, Disability or Retirement, the balance in the Participant's Deferral Account (determined as of the last day of the month immediately preceding payment) shall be paid to the Participant in a single sum on the first day of the calendar quarter following the date he or she so ceases to be an employee or as soon as practicable thereafter. (e) Death. If the Participant dies prior to the commencement of payment of his or her Deferral Account as described in Section 7(c), the Participant's designated beneficiary or beneficiaries shall be entitled to receive the balance in the Participant's Deferral Account as of the date of death. Payment shall be made in a single sum on the first day of the second month following the month in which the Participant dies or as soon as practicable thereafter. If the Participant dies after payment of his or her Deferral Account has commenced to be paid in installments under Section 7(c) but prior to the exhaustion of such Account, payment of the remaining balance of such Account (adjusted as provided in Section 7(c)) shall continue to the -8- Participant's designated beneficiary or beneficiaries over the installment period selected by the Participant. Designation of a beneficiary or beneficiaries for purposes of the Plan shall be made on a form prescribed or approved by the Plan Administrator. (f) Form of Distributions. All distributions under the Plan shall be paid in cash, except for amounts credited under Section 6(d) which shall be paid in Shares. 8. EMERGENCY BENEFIT If a Participant suffers a financial emergency, upon the written request of the Participant, the Plan Administrator in its sole discretion may distribute that portion of the Participant's Deferral Account, if any, which it determines to be necessary to meet the immediate financial emergency. A financial emergency shall include major uninsured medical expense, major uninsured casualty or property losses, and such other financial emergencies as the Plan Administrator may, in its discretion, determine, provided that the Participant demonstrates to the Plan Administrator's satisfaction that he or she lacks available resources to meet the emergency. Any such distribution shall reduce the balance in the Participant's Deferral Account available for distribution in accordance with Section 7. 9. ADMINISTRATION OF THE PLAN For purposes of prescribing the forms and conditions for deferral elections under Section 5 and inservice distributions under Section 7(a) and 7(b) (or other forms required to administer the Plan), and for purposes of Section 6, the functions of the Plan Administrator shall be performed by the Chief Financial Officer of the Company or his or her delegates. For purposes of Section 8, the functions of the Plan Administrator shall be carried out by a committee (acting by the vote or consent of a majority of its members) consisting of the Vice President of Human Resources, the Chief Financial Officer and the Treasurer of the Company; provided, that any -9- determination under Section 8 with respect to any of those officers shall be made without his or her participation on such committee. All other administrative and interpretative functions of the Plan Administrator under the Plan shall be vested in the Committee. The Plan Administrator shall have full discretion to administer the Plan in all respects. A decision by the Plan Administrator shall be final, conclusive and binding on all Participants and any person claiming under or through any Participant. The Plan Administrator shall exercise its functions hereunder in such manner as it deems appropriate and may, in its discretion, waive the application of any rule to any Participant. The Plan Administrator shall have no responsibility to exercise its discretion in a uniform manner among similarly situated Participants, and no decision with respect to any Participant shall give any other Participant the right to have the same decision applied to him or her. -10- 10. NATURE OF CLAIM FOR PAYMENTS Except as herein provided, the Company and its affiliates shall not be required to set aside or segregate any assets of any kind to meet any of its obligations hereunder, and all obligations of the Company or its affiliates hereunder shall be reflected by book entries only. The Participant shall have no rights on account of this Plan in or to any specific assets of the Company or its affiliates. Any rights that the Participant may have on account of this Plan shall be those of a general, unsecured creditor of the Company or its affiliates. However, the Company or its affiliate may establish a trust or trusts of which the Company or its affiliate is treated as the owner under Subpart E of Subchapter J, Chapter 1 of the Code (a "grantor trust"), and may from time to time deposit funds in such grantor trust or trusts to facilitate payment of the benefits provided under the Plan. In the event the Company or its affiliate establishes such a grantor trust or trusts with respect to the Plan and at the time of a Change of Control, any such trust (i) has not been terminated or revoked and (ii) is not "fully funded" (as determined in its sole discretion by a majority of the individuals who were members of the Committee immediately prior to a Change of Control), the Company or its affiliate shall within ten days of such Change of Control deposit in such grantor trust or trusts assets sufficient to cause the trust or trusts to be "fully funded" as of the date of the deposit (as determined in its sole discretion by a majority of the individuals who were members of the Committee prior to a Change of Control). 11. RIGHTS ARE NON-ASSIGNABLE Neither the Participant nor any beneficiary nor any other person shall have any right to assign or otherwise alienate the right to receive payments hereunder, in whole or in part, which payments are expressly agreed to be non- assignable and non-transferable, whether voluntarily or involuntarily. -11- 12. TAXES If the Company or its affiliate is required to withhold taxes from payments under the Plan, the amounts payable to Participants shall be reduced by the tax so withheld. To determine the amount of tax to withhold, in the case of payments in Shares, such Shares will be valued at the average of that day's high and low price on the day of distribution as reported in the Wall Street Journal. 13. TERMINATION; AMENDMENT The Plan shall continue in effect until terminated by action of the Company or the Committee. Upon termination of the Plan, no deferral of Salary, Salary Increase or Incentive Awards thereafter paid or payable to a Participant shall be made and no individual not a Participant as of the date of termination shall become a Participant thereafter. If, at the time of termination, there is any Participant or beneficiary of a Participant who is or will be entitled to a payment hereunder, the Plan Administrator shall elect either (a) to make payments to such Participants or beneficiaries in the normal course as if the Plan had continued in effect, or (b) to pay to such Participants or beneficiaries the balance in the Participant's Deferral Account in a single sum payment. The Company or the Committee may at any time and from time to time amend the Plan in any manner; provided that no amendment or termination shall reduce the amounts previously credited to the Deferral Account of any Participant or his or her beneficiary without his or her prior written consent; and provided further, that no amendment or termination following a Change of Control shall eliminate or reduce the Company's or its affiliates' obligations to deposit assets in the grantor trust or trusts as described in Section 10. Furthermore, following a Change of Control, this Section 13 may not be amended. -12- 14. EMPLOYMENT RIGHTS Nothing in this Plan shall give any Participant any right to be employed or to continue employment by the Company or an affiliate. IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its officer hereunto duly authorized this 4th day of August, 2000. NSTAR By: /s/ Thomas J. May ----------------- -13- Appendix A ---------- "Change of Control" For the purposes of this Plan, a "Change of Control" shall mean: 1. The acquisition by any Person of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding common shares (or shares of common stock) of the Parent (the "Outstanding Parent Common Shares") or (ii) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of trustees (or directors) (the "Outstanding Parent Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Parent, (ii) any acquisition by the Parent or an affiliate of the Parent, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent, the Company or affiliate of the Parent or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Appendix A; or 2. Individuals who, as of the date hereof, constitute the Board of Trustees of the Parent (the "Incumbent Board") cease for any reason to constitute at least a majority of such board; provided, however, that any individual becoming a trustee (or director) subsequent to the date hereof whose election, or nomination for election by the Parent's shareholders, was approved by a vote of at least a majority of the trustees (or directors) then comprising the Incumbent Board shall be -14- considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees (or directors) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than such board; or 3. Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the then outstanding common shares (or shares of common stock) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of trustees (or directors), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Parent or all or substantially all of the Parent's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities, as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or -15- any employee benefit plan (or related trust) of the Parent or the Company or such entity resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding common shares or shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of trustees (or board of directors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Trustees of the Parent, providing for such Business Combination; or 4. Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent. For purposes of this Appendix A, the term "Parent" shall mean NSTAR, or, if any entity shall own directly or indirectly through one or more subsidiaries, more than 50% of the outstanding common shares of NSTAR, such entity, and (ii) the term "Person" shall mean any individual, corporation, partnership, company, limited liability company, trust or other entity, which term shall include a "group" within the meaning of Section 13(d) of the Securities Act of 1934, as amended. -16- EX-10.12 11 0011.txt 1997 SHARE INCENTIVE AGREEMENT EXHIBIT 10.12 NSTAR 1997 SHARE INCENTIVE PLAN 1. PURPOSE The purpose of this 1997 Share Incentive Plan (the "Plan") is to advance the interests of NSTAR (the "Company") and its affiliates by enhancing their ability (a) to attract and retain employees who are in a position to make contributions to the success of the Company and its affiliates; (b) to reward employees for such contributions; and (c) to encourage employees to take into account the long-term interests of the Company and its affiliates through ownership of common shares of, and other interests in the Company ("Common Shares"). The Plan is intended to accomplish these goals by enabling the Company to grant awards ("Awards") to eligible employees. Awards may be in the form of Share Options (as described in Section 6), Shock Appreciation Rights (as described in Section 7), Restricted Stock Awards (as described in Section 8), Deferred Stock Awards (as described in Section 9), Performance Unit Awards (as described in Section 10), Dividend Equivalent Awards (as described in Section 11), and Other Share-Based Awards (as described in Section 12). 2. ADMINISTRATION The Plan will be administered by the Executive Personnel Committee of the Board of Trustees of the Company, excluding any member who would not be (i) an "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder, or (ii) a non- employee director as defined in Rule 16b-3(b)(3) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (the "Committee"). The Committee will have full discretionary authority, not inconsistent with the express provisions of the Plan, to administer the Plan in all respects, including without limitation, authority (a) to grant Awards to such eligible employees as the Committee may select ("Participants"); (b) to determine the type of Awards to be granted and the times of grants; (c) to determine the number of Common Shares to be covered by any Award; (d) to determine the terms and conditions of any Award, which terms and conditions may differ among individual Awards and Participants; (e) to prescribe the form or forms of instruments evidencing Awards and any other instruments required under the Plan and to change such forms from time to time; (f) to adopt, amend and rescind rules and regulations for the administration of the Plan; (g) to interpret the Plan and to decide any questions and settle all controversies and disputes that may arise in connection with the Plan; and (h) to waive compliance by a Participant with any obligation to be performed by him under an Award, except that the Committee may not, (i) in the case of an incentive stock option (as described in Section 6), take any action without consent of the Participant which would cause such option to lose its status as an "incentive stock option" ("ISO") within the meaning of section 422 of the Code, or (ii) in the case of an Award intended to qualify as "performance-based compensation" 1 within the meaning of Section 162(m)(4)(C) of the Code, increase the amount of compensation payable under the Award to the extent that such increase would cause the Award to lose its qualification as such performance-based compensation. Such determinations and actions of the Committee shall be conclusive and shall bind all parties. The Committee may delegate to senior officers of the Company who are also trustees of the Company (including, without limitation, the Chief Executive Officer and/or President) its duties under the Plan subject to conditions and limitations as the Committee may prescribe, except that only the Committee may designate, and make grants of Awards to, Participants (i) who are subject to Section 16 of the Exchange Act or any successor statute, including, without limitation, decisions on timing, amount and pricing of Awards, or (ii) whose compensation is covered by Section 162(m) of the Code. 3. EFFECTIVE DATE AND TERM OF PLAN The Plan became effective on the date on which it was approved by the stockholders of Boston Edison Company. No Award may be granted under the Plan after the completion of ten years from the date on which the Plan was adopted by the Board of Directors of Boston Edison Company, but Awards previously granted may extend beyond that date. 4. SHARES SUBJECT TO THE PLAN (a) Number of Shares. Subject to adjustment as provided in Section 15, the aggregate number of Common Shares that may be delivered under the Plan is 2,000,000, including shares issued in lieu of or upon reinvestment of dividends arising from awards. Common Shares may be issued up to this maximum pursuant to any type or types of Awards, including ISOs. For purposes of this limitation, Awards and Common Shares which are forfeited or reacquired by the Company, and Awards which are satisfied or otherwise terminated without the issuance of Common Shares, will not be counted. (b) Special Limitations Applicable to Certain Awards. Subject to adjustment as provided in Section 15 to the extent such adjustment is consistent with the continued satisfaction by Awards of the requirements of Section 162(m)(4)(C) of the Code, (i) the maximum number of Common Shares for which Options and SARs may be awarded under the Plan to any Participant in any calendar year is in each case 100,000 shares, and (ii) the maximum number of Common Shares with respect to which Restricted Stock Awards and Awards intended to qualify as "performance-based compensation" under Section 162(m)(4)(C) of the Code may be granted to any Participant in any calendar year is in each case the equivalent of 25,000 shares. For purposes of the preceding sentence, the regrant of a canceled Option or SAR, or the repricing of an Option or SAR, shall be treated as a separate Award to the extent required under Section 162(m)(4)(C) of the Code. The per-individual Award limitations described in this paragraph are intended to enable certain Awards under the Plan to qualify for the performance-based compensation exemption rules set forth under Section 162(m)(4)(C) of the Code and shall be subject to amendment or revision to the extent (but only to the extent) consistent with such rules. 2 (c) Shares to be Delivered. Shares delivered under the Plan will be authorized but unissued Common Shares or, if the Committee so decides in its sole discretion, previously issued Common Shares acquired by the Company in the open market or in private transactions, or Common Shares held in treasury. No fractional Common Shares will be delivered under the Plan. 5. ELIGIBILITY Employees eligible to become Participants shall be those key employees of the Company and its affiliates who, in the opinion of the Committee, are in a position to make a contribution to the success of the Company or its affiliates. Members of the Committee will not be eligible to become Participants. 6. STOCK OPTIONS Stock Options granted under the Plan ("Options") may be either ISOs or non- qualified stock options ("NSOs"). Except to the extent expressly designated as an ISO (or to the extent it does not qualify as an ISO even if so designated), each Option will be an NSO. No term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority granted to the Committee under the Plan be exercised, so as to disqualify the Plan or, without the consent of the optionee, any ISO, under Section 422 of the Code. The documents evidencing ISOs will contain such provisions as are required of ISOs under the applicable provisions of the Code. Options granted under the Plan will be subject to the following terms and conditions and will contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee deems desirable: (a) Exercise Price. The exercise price of each Option will be determined by the Committee, but may not be, in the case of an ISO, less than 100% (110%, in the case of an ISO granted to a ten-percent shareholder) of the fair market value per share of Common Shares at the time the Option is granted. For this purpose, "ten-percent shareholder" means any employee who at the time of grant owns directly, or is deemed to own by reason of the attribution rules in section 424(d) of the Code, Common Shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of any of its parent or affiliates. (b) Duration of Options. An Option will be exercisable during such period or periods as the Committee may specify. The latest date on which an Option may be exercised will be the date which is ten years (five years, in the case of an ISO granted to a ten-percent shareholder) from the date the Option was granted or such earlier date as may be specified by the Committee at the time the Option is granted. 3 (c) Exercise of Options. (1) Options will be exercisable at such future time or times, whether or not in installments, as determined by the Committee at or after the grant date. The Committee may at any time accelerate the exercisability of all or any portion of any Option. (2) Any exercise of an Option must be by written notice to the Company, accompanied by (i) the document evidencing the Option (the "Option Certificate") and any other documents required by the Committee and (ii) payment in accordance with Section 6(d) below for the number of Common Shares for which the Option is exercised. (d) Payment for and Delivery of Common Shares. Common Shares purchased upon exercise of an Option shall be paid for as follows: (1) in cash or by certified check, bank draft or money order payable to the order of the Company, or (2) if so permitted by the Option Certificate or otherwise determined by the Committee, (i) through the delivery of Common Shares (held for at least six months, or such other period as the Committee may specify) having a fair market value on the last business day preceding the date of exercise equal to the purchase price, or (ii) by a combination of cash and Common Shares as provided in clauses (1) and (2)(i) above, or (iii) by delivery of a promissory note of the Participant to the Company, in the case of an ISO, payable on such terms as are specified in the Option Certificate, and in the case of an NSO, payable on such terms as are specified in the Option Certificate or as are otherwise specified by the Committee, or by a combination of cash (or cash and Common Shares) and the Participant's promissory note; provided, however, that if the Common Shares are delivered upon exercise of the Option is an original issue of authorized Common Shares, at least so much of the exercise price as represents the par value of such Common Shares must be paid in cash if the Committee determines that such cash payment is required by law. (e) Nontransferability of Options. Except as otherwise determined by the Committee or specified in the Option Certificate, no Option may be transferred other than by will or by the laws of descent and distribution, and during a Participant's lifetime an Option may be exercised only by him or her. (f) Death or Disability. Except as otherwise determined by the Committee, if a Participant's employment with the Company and its affiliates terminates by reason of death or total and permanent disability, each Option held by the Participant will become fully exercisable and will remain exercisable after the date of such termination for a period of two years in the case of death and one year in the case of total and permanent disability (but in no event later than the date the option would have expired in all events under Section 6(b)). In the case of a deceased Participant, such Option may be exercised within such time limits by his executor or administrator, or by the person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution. 4 (g) Other Termination of Employment. Except as otherwise determined by the Committee, if a Participant's employment with the Company and its affiliates terminates for any reason other than death or total and permanent disability, all Options held by the Participant that are not then exercisable shall terminate. Options that are exercisable on the date of termination will continue to be exercisable for a period of three months (but in no event later than the date the option would have expired in all events under Section 6(b)) unless the employee has admitted to, or been convicted of, any act of fraud, theft or dishonesty arising in the course of, or in connection with, his employment with the Company and its affiliates, in which case the Option will terminate immediately and in full, all except as otherwise determined by the Committee. Except as otherwise determined by the Committee, after completion of that three-month period, such Options shall terminate to the extent not previously exercised, expired or terminated. 7. STOCK APPRECIATION RIGHTS (a) Nature of Stock Appreciation Right. A Stock Appreciation Right ("SAR") is an Award entitling the recipient to receive an amount in cash or Common Shares or a combination thereof having a value equal to the excess of the fair market value of a share of Common Shares on the date of exercise over the fair market value of a share of Common Shares on the date of grant (or over the Option exercise price, if the SAR was granted in tandem with an Option), multiplied by the number of shares with respect to which the SAR has been exercised, with the Committee having the right to determine the form of payment. (b) Grant of SARs. SARs may be granted in tandem with, or independently of, Options granted under the Plan. In the case of an SAR granted in tandem with an NSO, such SAR may be granted either at or after the time of the grant of such Option. In the case of an SAR granted in tandem with an ISO, such SAR may be granted only at the time of the grant of the Option. SARs will be evidenced by such written agreement as is deemed appropriate by the Committee. An SAR or applicable portion thereof granted in tandem with an Option will terminate and no longer be exercisable upon the termination or exercise of such Option, except that an SAR granted with respect to less than the full number of shares covered by an Option will not be reduced until the exercise or termination of the related Option exceeds the number of shares not covered by the SAR. (c) Terms and Conditions of SARs. SARs will be subject to such terms and conditions as are determined from time to time by the Committee, subject, in the case of SARs granted in tandem with Options, to the following: (1) SARs will be exercisable only at such time or times and to the extent that the related Option is exercisable. (2) Upon the exercise of an SAR, the applicable portion of any related Option must be surrendered. 5 (3) SARs will be transferable only with the related Option. Except as otherwise determined by the Committee, all SARs will be exercisable during the Participant's lifetime only by the Participant or his legal representative. (4) An SAR granted in tandem with an Option may be exercised only when the market price of the Common Shares subject to the Option exceeds the exercise price of such Option. The provisions of Sections 6(f) and 6(g) relating to the exercisability and termination of Options shall also apply to SARs, whether or not granted in tandem with Options. Any exercise of an SAR must be by written notice to the Company, accompanied by the document evidencing the SAR and any other documents required by the Committee. (d) Discretionary Payments. Notwithstanding that an Option at the time of exercise shall not be accompanied by a related SAR, if the market price of the shares subject to such Option exceeds the exercise price of such Option at the time of its exercise, the Committee may, in its discretion, cancel such Option, in which event the Company shall pay to the person exercising such Option an amount equal to the difference between the fair market value of the Common Shares to have been purchased pursuant to such exercise of such Option (determined on the date the Option is canceled) and the aggregate consideration to have been paid by such person upon such exercise. Such payment shall be by check or in Common Shares having a fair market value (determined on the date the payment is to be made) equal to the amount of such payments or any combination thereof, as determined by the Committee. The Committee may exercise its discretion under the first sentence of this paragraph (d) only in the event of a written request of the person exercising the option, which request shall not be binding on the Committee. 8. RESTRICTED STOCK (a) Nature of Restricted Stock Award. A Restricted Stock Award ("Restricted Stock Award") is an Award entitling the recipient to acquire Common Shares ("Restricted Stock") for a purchase price (which may be zero), subject to such conditions, including the restrictions specified in Section 8(d) below, as the Committee may impose at the time of grant. The Committee may also condition such acquisition on the attainment of specified performance goals as described in Section 16(f) below. (b) Restricted Stock Award Agreement. A Participant who is granted a Restricted Stock Award will have no rights with respect to such Award unless the Participant accepts the Award within 60 days (or such shorter period as the Committee may specify) following the Award date by making payment to the Company by certified or bank check or other instrument acceptable to 6 the Committee in an amount equal to the specified purchase price, if any, of the shares covered by the Award and by executing and delivering to the Company an agreement (a "Restricted Stock Award Agreement") in such form as the Committee determines. (c) Rights as a Shareholder. Upon complying with Section 8(b) above, a Participant will have all the rights of a shareholder with respect to the Restricted Stock awarded to him including voting and dividend rights, subject to the restrictions described in this Section 8 and subject to any other conditions contained in the Restricted Stock Award Agreement. Unless the Committee otherwise determines, certificates evidencing shares of Restricted Stock will remain in the possession of the Company until such shares are free of any restrictions under the Plan. (d) Restriction. Except as otherwise determined by the Committee, shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of, except as specifically provided herein. If a Participant ceases for any reason to be employed by the Company or its affiliates other than due to death or total and permanent disability, shares of Restricted Stock held by such Participant shall be resold to the Company at their purchase price, or forfeited to the Company if the purchase price was zero, except as specifically set forth herein or otherwise determined by the Committee. Shares of Restricted Stock resold to the Company shall have the status of authorized but unissued Common Shares. (1) The Committee will specify in the Restricted Stock Award Agreement the date or dates (which may depend upon or be related to the attainment of performance goals and other conditions) on which the nontransferability of the Restricted Stock and the obligation of the Participant to resell such Stock to the Company will lapse. The Committee may at any time accelerate such date or dates or waive such performance goals and other conditions. (2) Unless otherwise determined by the Committee or specified in the Restricted Stock Award Agreement, if the Participant's employment terminates because of death or total and permanent disability, all restrictions on shares of Restricted Stock held by the Participant will lapse. (e) Notice of Election. Any Participant making an election under Section 83(b) of the Code with respect to a Restricted Stock Award must provide a copy thereof to the Company within 30 days of the filing of such election with the Internal Revenue Service. (f) Dividends. Dividends paid on shares of Restricted Stock shall be either paid at the dividend payment date or deferred for payment to such date as determined by the Committee, in cash or in unrestricted Common Shares having a fair market value equal to the amount of such dividends. Shares distributed in connection with a stock split or dividend in shares of stock, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such shares of Restricted Stock or other property has been distributed. 7 9. DEFERRED STOCK AWARDS. (a) Nature of Deferred Stock Award. A Deferred Stock Award ("Deferred Stock Award") is an award entitling the recipient to acquire Common Shares ("Deferred Stock") without payment in one or more installments at a future date or dates, all as determined by the Committee. The Committee may condition such acquisition on the attainment of specified performance goals as described in Section 16(f) below. (b) Deferred Stock Award Agreement. A Participant who is granted a Deferred Stock Award shall have no rights with respect to such Award unless within 60 days of the grant of such Award or such shorter period as the Committee may specify, the Participant shall have accepted the Award by executing and delivering to the Company an agreement (a "Deferred Stock Award Agreement") in such form as the Committee determines. (c) Restrictions on Transfer. Except as otherwise determined by the Committee, Deferred Stock Awards and all rights with respect to such Awards may not be sold, assigned, transferred, pledged, or otherwise encumbered, and shall be exercisable during the Participant's lifetime only by the Participant or the Participant's legal representative. (d) Rights as a Shareholder. A Participant receiving a Deferred Stock Award will have rights of a shareholder only as to shares of Deferred Stock actually received by the Participant under the Plan and not with respect to shares subject to the Award but not actually received by the Participant. A Participant shall be entitled to receive a share certificate for shares of Deferred Stock only upon satisfaction of all conditions therefor specified in the Deferred Stock Award Agreement. (e) Termination. Except as otherwise determined by the Committee, a Participant's rights in all Deferred Stock Awards shall automatically terminate upon the termination of such Participant's employment by the Company and its affiliates for any reason (including death). (f) Acceleration, Waiver, Etc. At any time prior to the termination of a Participant's employment, the Committee may in its discretion accelerate, waive, or, subject to Section 16, amend any or all of the restrictions or conditions imposed under any Deferred Stock Award. (g) Payments in Respect of Deferred Stock. Without limiting the right of the Committee to specify different terms, the Deferred Stock Award Agreement may either make no provisions for, or may require or permit the immediate payment, deferral, or investment of amounts equal to, or less than, any cash dividends which would have been payable on the Deferred Stock had such stock been outstanding, all as determined by the Committee in its sole discretion. 8 10. PERFORMANCE UNIT AWARDS. (a) Nature of Performance Units Awards. A Performance Unit Award ("Performance Unit Award") is an award entitling the recipient to acquire cash or Common Shares, or a combination of cash and Common Shares, upon the attainment of specified performance goals as described in Section 16(f) below. The Committee in its sole discretion shall determine whether and to whom Performance Unit Awards shall be made, the performance goals applicable under each such Award, the periods during which performance is to be measured and all other limitations and conditions applicable to each such Award. Performance Unit Awards may be awarded independent of or in connection with the granting of any other Award under the Plan. (b) Performance Unit Award Agreement. A Participant shall have no rights with respect to a Performance Unit Award unless within 60 days of the grant of such Award or such shorter period as the Committee may specify, the Participant shall have accepted the Award by executing and delivering to the Company a Performance Unit Award Agreement. (c) Restrictions on Transfer. Except as otherwise determined by the Committee, Performance Unit Awards and all rights with respect to such Awards may not be sold, assigned, transferred, pledged, or otherwise encumbered, and if exercisable over a specified period, shall be exercisable during the Participant's lifetime only by the Participant or the Participant's legal representative. (d) Rights as a Shareholder. A Participant receiving a Performance Unit Award will have rights of a shareholder only as to Common Shares actually received by the Participant under the Plan and not with respect to shares subject to the Award but not actually received by the Participant. A Participant shall be entitled to receive a stock certificate evidencing the acquisition of Common Shares under a Performance Unit Award only upon satisfaction of all conditions therefor specified in the Performance Unit Award Agreement. (e) Termination. Except as otherwise determined by the Committee, a Participant's rights in all Performance Unit Awards shall automatically terminate upon the termination of such Participant's employment by the Company and its affiliates for any reason (including death). (f) Acceleration, Waiver, Etc. At any time prior to the termination of a Participant's employment, the Committee may in its discretion accelerate, waive, or, subject to Section 16, amend any or all of the restrictions or conditions imposed under any Performance Unit Award. (g) Exercise. The Committee in its sole discretion shall establish procedures to be followed in exercising any Performance Unit Award, which procedures shall be set forth in the Performance Unit Award Agreement. The Committee may at any time provide that payment under a Performance Unit Award shall be made, upon satisfaction of the applicable performance goals, without exercise by the Participant. Except as otherwise specified by the Committee, a Performance Unit granted in tandem with an Option may be exercised only while the Option is exercisable, and the exercise of a Performance Unit granted in tandem with any other Award shall reduce the number of shares subject to the related award on such basis as is specified in the Performance Unit Award Agreement. 9 11. DIVIDEND EQUIVALENT AWARDS. (a) Nature of Dividend Equivalent Awards. A Dividend Equivalent Award ("Dividend Equivalent Award") is an Award entitling the Participant to receive cash, Common Shares, or other property equal in value to dividends paid with respect to a specified number of Common Shares. Dividend Equivalent Awards may be awarded on a free-standing basis or in connection with another Award, and may be paid currently or on a deferred basis. The Committee may provide at the date of grant or thereafter that the Dividend Equivalent Award shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Common Shares or such other investment vehicles as the Committee may specify; provided, however, that Dividend Equivalent Awards (other than free- standing Dividend Equivalent Awards) shall be subject to all conditions and restrictions of the underlying Awards to which they relate. The Committee may also condition such Award on the attainment of specified performance goals as described in Section 16(f) below. (b) Dividend Equivalent Award Agreement. A Participant who is granted a Dividend Equivalent Award shall have no rights with respect to such Award unless within 60 days of the grant of such Award or such shorter period as the Committee may specify, the Participant shall have accepted the Award by executing and delivering to the Company an agreement (a "Dividend Equivalent Award Agreement") in such form as the Committee determines. (c) Restrictions on Transfer. Except as otherwise determined by the Committee, Dividend Equivalent Awards and all rights with respect to such Awards may not be sold, assigned, transferred, pledged, or otherwise encumbered. (d) Rights as a Shareholder. A Participant receiving a Dividend Equivalent Award will have rights of a shareholder only as to Common Shares actually received by the Participant under the Plan and not with respect to shares subject to the Award but not actually received by the Participant. (e) Termination. Except as otherwise determined by the Committee, a Participant's rights in all Dividend Equivalent Awards shall automatically terminate upon the termination of such Participant's employment by the Company and its affiliates for any reason (including death). (f) Acceleration, Waiver, Etc. At any time prior to the Participant's termination of employment, the Committee may in its discretion accelerate, waive, or, subject to Section 16 of the Exchange Act, amend any or all of the restrictions or conditions imposed under any Dividend Equivalent Award. 12. OTHER STOCK-BASED AWARDS. (a) Nature of Awards. The Committee may grant other Awards under which Common Shares are or may in the future be acquired ("Other Stock-Based Awards"). Such awards may 10 include, without limitation, debt securities convertible into or exchangeable for Common Shares upon such conditions, including attainment of performance goals, as the Committee shall determine. Subject to the purchase price limitations in paragraph (b) below, such convertible or exchangeable securities may have such terms and conditions as the Committee may determine at the time of grant. However, no convertible or exchangeable debt shall be issued unless the Committee shall have provided (by Company right of repurchase, right to require conversion or exchange, or other means deemed appropriate by the Committee) a means of avoiding any right of the holders of such debt to prevent a Company transaction by reason of covenants in such debt. The Committee may also condition such Awards on the attainment of specified performance goals as described in Section 16(f) below. (b) Purchase Price; Form of Payment. The Committee may determine the consideration, if any, payable upon the issuance or exercise of an Other Stock- Based Award. The Committee may permit payment by certified check or bank check or other instrument acceptable to the Committee or by surrender of other Common Shares (excluding shares then subject to restrictions under the Plan). (c) Forfeiture of Awards; Repurchase of Shares; Acceleration or Waiver of Restrictions. The Committee may determine the conditions under which an Other Stock-Based Award shall be forfeited or, in the case of an Award involving a payment by the recipient, the conditions under which the Company may or must repurchase such Award or related Common Shares. At any time the Committee may in its sole discretion accelerate, waive, or, subject to Section 16 of the Exchange Act, amend any or all of the limitations or conditions imposed under any Other Stock-Based Award. (d) Other Stock-Based Award Agreements. A Participant shall have no rights with respect to any Other Stock-Based Award unless within 60 days after the grant of such Award (or such shorter period as the Committee may specify) the Participant shall have accepted the Award by executing and delivering to the Company an agreement (an "Other Stock-Based Award Agreement") in such form as the Committee determines. (e) Restrictions on Transfer. Except as otherwise determined by the Committee, Other Stock-Based Awards may not be sold, assigned, transferred, pledged, or encumbered nor shall any Other Stock-Based Award be transferred other than by will or by the laws of descent and distribution or be exercisable during the Participant's lifetime by other than the Participant or the Participant's legal representative. (f) Rights as a Shareholder. A recipient of any Other Stock-Based Award will have rights of a shareholder only at the time and to the extent, if any, specified in the Other Stock-Based Award Agreement or otherwise determined by the Committee. (g) Deemed Dividend Payments; Deferrals. Without limiting the right of the Committee to specify different terms, an Other Stock-Based Award Agreement may require or permit the immediate payment, waiver, deferral, or investment of dividends or deemed dividends payable or deemed payable on Common Shares subject to the Award. 11 13. SUPPLEMENTAL GRANTS (a) Loans. The Company may in its sole discretion make a loan to the recipient of an Award hereunder, either on or after the date of grant of such Award. Such loans may be made either in connection with the exercise of a Stock Option, an SAR or an Other Stock-Based Award, in connection with the purchase of shares under any Award, or in connection with the payment of any federal, state and local income tax in respect of income recognized under any Award. The Committee shall have full authority to decide whether to make a loan hereunder if it determines that the making of such loan is in the best interest of the Company, and to determine the amount, term, and provisions of any such loan, including the interest rate (which may be zero) charged in respect of any such loan, whether the loan is to be secured or unsecured, the terms on which the loan is to be repaid and the conditions, if any, under which it may be forgiven. However, no loan hereunder shall provide or reimburse to the borrower the amount used by him for the payment of the par value of any Common Shares issued, have a term (including extensions) exceeding ten years in duration, or be in an amount exceeding the total exercise or purchase price paid by the borrower under an Award or for related Common Shares under the Plan plus an amount equal to the cash payment permitted in the following paragraph. (b) Cash Grants. The Committee may at any time authorize a cash payment, in respect of the grant or exercise of an Award under the Plan (or the lapse or waiver of restrictions under an Award) which shall not exceed the amount which would be required in order to pay in full any federal, state and local income tax due as a result of income recognized by the recipient under both the Award and such cash payment, in each case assuming that such income is taxed at the regular maximum marginal rate applicable to individuals under the Code as in effect at the time such income is includable in the recipient's income. Subject to the foregoing, the Committee shall have complete authority to decide whether to make such cash payments in any case, to make provision for such payments either simultaneously with or after the grant of the associated Award and to determine the amount of each such payment. 14. CHANGE OF CONTROL Notwithstanding any other provision of this Plan, in the event of a Change of Control of the Company as defined in Exhibit A hereto (a) each outstanding Award held by each Participant the exercisability of which is restricted or limited will immediately become fully exercisable; and (b) restrictions and conditions on each outstanding Award subject to such restrictions and conditions held by each Participant will immediately lapse or be deemed waived. 15. CHANGES IN COMPANY; SUBSTITUTE AWARDS (a) Changes in Capital Stock. In the event of a share dividend, share split or combination of shares, recapitalization or other change in the Company's capital shares, the number and kind of shares, securities of the Company or other consideration issued or issuable in respect of Awards 12 then outstanding or subsequently granted under the Plan, the maximum number of shares or securities that may be delivered under the Plan, the purchase price and other relevant provisions will be appropriately adjusted by the Committee, whose determination shall be binding on all persons. The Committee may also adjust the number of shares, securities or other consideration issued or issuable in respect of outstanding Awards, the exercise price of outstanding Awards and the other terms of outstanding Awards, and may make adjustments in the terms and conditions of, and the criteria and performance objectives included in, Awards, to take into consideration material changes in accounting practices or principles, consolidations or mergers (except those described in Section 15(b) below), acquisitions or dispositions of shares or property or any other event if it is determined by the Committee that such adjustment is appropriate to avoid distortion in the operation of the Plan. Adjustments under this paragraph will be made only to the extent they are consistent with the requirements for ISOs or under Section 162(m)(4)(C) of the Code. (b) Merger, Etc. Subject to Section 14, in the event of a dissolution or liquidation of the Company or a merger or consolidation in which the Company is not the surviving corporation or its outstanding shares are converted into securities of another corporation or exchanged for other consideration, all Awards granted hereunder will terminate, but during a period commencing 20 days prior to the effective date of any such dissolution or liquidation (or 20 days prior to any earlier related sale of substantially all the assets of the Company) or of any such merger or consolidation, subject to the effectiveness of such dissolution, liquidation, sale, merger or consolidation (1) all Awards outstanding hereunder the exercisability of which is restricted or limited will become immediately exercisable, and (2) all restrictions and conditions on all Awards subject to such restrictions and conditions will immediately lapse or be deemed waived; provided, however, that, unless the event will give rise to a Change of Control or it is anticipated that a Change of Control will coincide with or follow the event, the Committee may instead arrange that the successor or surviving corporation, if any, grant replacement or substitute Awards on terms and conditions as the Committee considers appropriate in the circumstances. (c) Substitute Awards. The Company may grant Awards under the Plan in substitution for stock or share and stock based awards held by employees of another corporation who concurrently become employees of the Company or its affiliate as the result of a merger or consolidation of the employing corporation with the Company or its affiliate or the acquisition by the Company or a affiliate of property or stock of the employing corporation. The Committee may direct that the substitute Awards be granted on such terms and conditions as the Committee considers appropriate. The shares which may be delivered under such substitute Awards will be in addition to the maximum number of shares provided for in Section 4(a) only to the extent that the substitute Awards are both (1) granted to persons whose relationship to the Company does not make (and is not expected to make) them subject to Section 16(b) of the Exchange Act and (2) are granted in substitution for awards issued under a plan approved, to the extent then required under Rule 16b-3 (or any successor rule under the Exchange Act), by the shareholders of the entity which issued such predecessor awards. 13 16. GENERAL PROVISIONS (a) No Distribution; Compliance with Legal Requirements, Etc. The Committee may require each person acquiring Common Shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the Common Shares without a view to distribution thereof. The Company will not be obligated to deliver any Common Shares pursuant to an Award (1) until, in the opinion of the Company's counsel, all applicable federal and state laws and regulations have been complied with, including, if required, the receipt of all necessary approvals from the Massachusetts Department of Telecommunications and Energy, and (2) if the outstanding Common Shares is at the time listed on any stock exchange, until the shares to be delivered have been listed or authorized to be listed on such exchange upon official notice of issuance, and (3) until all other legal matters in connection with the issuance and delivery of such shares have been approved by the Company's counsel. If the sale of Common Shares has not been registered under the Securities Act of 1933, as amended, the Company may require such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act and may require that the certificates evidencing such Common Shares bear an appropriate legend restricting transfer. Notwithstanding any provision of the Plan, the Company will be under no obligation to deliver Common Shares to an estate of a deceased Participant, or to the person or persons to whom the Award has been transferred by the Participant's will or the applicable laws of descent and distribution, until the Company is satisfied as to the authority of such person or persons. (b) Tax Withholding, Etc. Each Participant will, no later than the date as of which the value of an Award or of any Common Shares or other amounts received hereunder first becomes includable in gross income for federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, all federal, state and local taxes required by law to be withheld with respect to such income. The Company and its affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. The Committee may provide, in respect of any transfer of Common Shares under an Award, that if and to the extent withholding of any federal, state or local tax is required, the Participant may elect in such manner as the Committee prescribes, to have the Company hold back from the transfer Common Shares having a value calculated to satisfy such withholding obligation, or to deliver to the Company previously owned shares of equal value. Notwithstanding the foregoing, in the case of a Participant subject to the restrictions of Section 16(b) of the Exchange Act no such election shall be effective unless made in compliance with any applicable requirements of Rule 16b-3(e) or any successor rule under such Act. (c) Continuance of Employment. For purposes of the Plan, employment of a Participant will not be considered terminated (1) in the case of sick leave or other bona fide leave of absence 14 approved for purposes of the Plan by the Committee, so long as the Participant's right to re-employment is guaranteed either by statute or by contract, or (2) in the case of a transfer to the employment of a corporation (or a parent or affiliate corporation of such corporation) issuing or assuming an option in a transaction to which section 424(a) of the Code would apply. (d) Fair Market Value. For purposes of the Plan, in general, "fair market value" of a share of Common Shares on any date means the closing price on such date as reflected in the New York Stock Exchange Composite Index. If, however, the Committee determines that a different meaning is in any circumstance necessary in order to comply with applicable law, such different meaning will apply in that circumstance. (e) Employment Rights. Neither the adoption of the Plan nor the grant of Awards will confer upon any employee any right to continued employment with the Company or any affiliate or affect in any way the right of the Company or any affiliate to terminate the employment of an employee at any time. Except as specifically provided by the Committee in any particular case, the loss of existing or potential profit in Awards granted under this Plan shall not constitute an element of damages in the event of termination of the employment of an employee even if the termination is in violation of an obligation of the Company to the employee by contract or otherwise. (f) Awards Subject to Performance Conditions. The Committee may, at the time any Award described in the Plan is granted, impose the condition (in addition to any conditions specified or authorized in any other provisions of the Plan), that performance goals must be met prior to the Participant's realization of any vesting, payment or benefit under the Award. Performance goals may be related to personal performance, corporate performance, departmental performance, or any other category of performance established by the Committee. The Committee will determine the performance goals, the period or periods during which performance is to be measured, and all other terms and conditions applicable to the Award. If necessary in order to qualify an Award for the performance based remuneration exception described in Section 162(m)(4)(C) of the Code and the regulations thereunder, the Committee shall in writing preestablish one or more specific, objectively determinable performance goal or goals (based solely on one or more qualified performance criteria) no later than ninety (90) days after the commencement of the period to which the performance relates (or in any such other time as is required to satisfy the conditions of Section 162(m)(4)(C) of the Code and the regulations thereunder). For purposes of the preceding sentence, a qualified performance criterion is any of the following: (i) earnings per share, (ii) individual performance objectives, (iii) net income, (iv) proforma net income, (v) return on designated assets, (vi) return on revenues, or (vii) satisfaction of Company-wide or departmental based objectives. 17. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION. Neither adoption of the Plan nor the grant of Awards to a Participant shall affect the Company's right to grant to such Participant awards that are not subject to the Plan, to issue Common 15 Shares to such Participant as a bonus or otherwise, or to adopt other plans or arrangements under which Common Shares may be issued to employees. The Committee may at any time discontinue granting Awards under the Plan. With the consent of the Participant, the Committee may at any time cancel an existing Award in whole or in part and grant the Participant another Award for such number of Common Shares as the Committee specifies, subject to Section 4(b). The Committee may at any time or times amend the Plan or any outstanding Award for the purpose of satisfying the requirements of any changes in applicable laws or regulations or for any other purpose which may at the time be permitted by law; and may at any time terminate the Plan as to any further grants of Awards; provided, however, that (except to the extent expressly required or permitted herein) no such amendment shall, without the approval of the shareholders of the Company, (a) increase the maximum number of shares available for delivery under the Plan, (b) change the group of employees eligible to receive Awards under the Plan, (c) reduce the price at which ISOs may be granted, (d) extend the time within which Awards may be granted, or (e) amend the provisions of this Section 17, and no such amendment shall adversely affect the rights of any Participant (without his consent) under any Award previously granted. As adopted by the Board of Directors of Boston Edison Company: January 23, 1997 As approved by the Shareholders of Boston Edison Company: May 15, 1997 As amended: April 22, 1998 As amended: June 30, 1999 Assumed by NSTAR effective: August 28, 2000 16 APPENDIX A Change of Control. For the purposes of this Agreement, a "Change of Control" shall mean: a. The acquisition by any Person of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding common shares (or shares of common stock) of Parent (the "Outstanding Parent Common Shares") or (ii) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of trustees (or directors) (the "Outstanding Parent Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Parent, (ii) any acquisition by the Parent or any affiliate of Parent, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent, the Company or any affiliate of Parent or (iv) any acquisition by any Person pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Exhibit A; or b. Individuals who, as of the date hereof, constitute the Board of Trustees of the Parent (the "Incumbent Board") cease for any reason to constitute at least a majority of such board; provided, however, that any individual becoming a trustee (or director) subsequent to the date hereof whose election, or nomination for election by the Parent's shareholders, was approved by a vote of at least a majority of the trustees (or directors) then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of trustees (or directors) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than such board; or c. Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the then outstanding common shares (or shares of common stock) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of trustees (or directors), as the case may be, of the entity resulting from such Business Combination (including, without limitation, a entity which as a result of such transaction owns the Parent or all or substantially all of the Parent's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Parent Common Shares and Outstanding Parent Voting Securities, 17 as the case may be, (ii) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Parent or the Company or such entity resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding common shares or shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of trustees (or board of directors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Trustees of the Parent, providing for such Business Combination; or d. Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent. For purposes of this Appendix A, the term "Parent" shall mean NSTAR, or, if any entity shall own, directly or indirectly through one or more subsidiaries, more than 50% of the outstanding common shares of NSTAR, such entity. 18 -----END PRIVACY-ENHANCED MESSAGE-----