EXHIBIT (10)(u)
NEW ENGLAND ELECTRIC COMPANIES'
INCENTIVE SHARE PLAN
Adopted February 27, 1990
Effective January 1, 1990
Amended February 8, 1991
Amended January 1, 1994
TABLE OF CONTENTS
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Page
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I. PURPOSE 1
II. DEFINITIONS
2.01 Annual Incentive Award 1
2.02 Benefits Committee 1
2.03 Cash Bonus 1
2.04 Change in Control 2
2.05 Company 3
2.06 Compensation Committee 3
2.07 Continuing Directors 3
2.08 Hardship 4
2.09 ICP-I 4
2.10 ICP-I Category A Participant 4
2.11 ICP-I Category B Participant 4
2.12 ICP-II 4
2.13 Management Committee 5
2.14 Matching Percentage 5
2.15 New England Electric Company
Management Incentive Plan 5
2.16 New England Electric System 6
2.17 NEES Board 6
2.18 Participant 6
2.19 Performance Based Bonus Plan 6
2.20 Plan 6
2.21 Plan Year 6
2.22 Restricted Shares 7
2.23 Shares 7
2.24 System 7
2.25 Trustee 7
III. ADMINISTRATION
3.01 Administration and Interpretation 7
3.02 Amendment or Termination 7
IV. ANNUAL INCENTIVE AWARD
4.01 Calculation of Award 8
4.02 Purchase of Restricted Shares 8
4.03 Timing of Purchase 8
4.04 Distribution of Restricted Shares 8
V. RESTRICTED SHARES
5.01 Assignment and Alienability 9
5.02 Death or Disability 9
5.03 Change of Control 9
5.04 Hardship 9
5.05 Voting, Tender, Dividend Rights 9
5.06 Purchase of Shares from System 9
VI. GENERAL PROVISIONS
6.01 Other Benefit Plan 11
6.02 Future Employment 11
6.03 Headings 11
6.04 Gender and Number 11
6.05 Governing Law 11
Signature 11
NEW ENGLAND ELECTRIC COMPANIES'
INCENTIVE SHARE PLAN
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I. PURPOSE
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The purpose of the Incentive Share Plan (the Plan) is to
achieve and maintain a high level of corporate performance and
continue the identification of interest between management and
shareholders by making it possible for those selected executives
and individuals whose efforts and responsibilities have a direct
and major influence on corporate performance to earn significant
compensation, in the form of restricted shares, measured by the
individual's achievements under other NEES company incentive
compensation or bonus plans.
II. DEFINITIONS
2.01 Annual Incentive Share Award means the award
referred to in Article IV.
2.02 Benefits Committee means the committee established
in accordance with New England Electric System Companies' Final
Average Pay Pension Plan I.
2.03 Cash Bonus means the total cash bonus awarded a
Participant for a Plan Year under a New England Electric Company
Management Incentive Plan, including amounts awarded upon a
Change in Control.
2.04 Change in Control occurs when:
(i) any person, firm, corporation, organization, or
association of persons or organizations acting in
concert (excluding any qualified employee benefit
plan of the System) acquires more than 20% of the
outstanding Shares, whether in whole or in part,
by means of an offer made publicly to the holders
of all or substantially all of the outstanding
Shares to acquire Shares for cash, other
property, or a combination thereof or by any
other means, unless the transaction is consented
to by vote of a majority of the Continuing
Directors;
(ii) New England Electric System transfers all or a
substantial part of its assets to another person,
firm, corporation, organization, or association
of persons or organizations acting in concert
(excluding a subsidiary controlled by New England
Electric System itself), unless the transaction
is consented to by vote of a majority of the
Continuing Directors.
(iii) New England Electric System consolidates or
merges with or into any person, firm,
corporation, organization, or association of
persons or organizations, unless the transaction
is consented to by vote of a majority of the
Continuing Directors; or
(iv) during any period of 24 consecutive months,
individuals who at the beginning of such 24-month
period were directors of New England Electric
System shall cease to constitute a majority of
the NEES Board, unless (a) the remaining
directors who were directors at the beginning of
such period and (b) any other directors whose
election was approved in advance by directors
representing a majority of the directors then in
office who were directors at the beginning of
such period constitute a majority of the NEES
Board.
2.05 Company means any New England Electric System Company
that has an employee(s) who participates in the Plan.
2.06 Compensation Committee means the compensation
committee of the NEES Board.
2.07 Continuing Directors means, as of the date of
determination, any director who was a member of the NEES Board as
of January 1, 1990, or who was recommended for his/her initial
term of office by a majority of the Continuing Directors in
office at the time of such recommendation, but excludes any
director who, together with his/her affiliates, is the beneficial
owner of 20% or more of the outstanding Shares (excluding
securities beneficially owned by reason of being a trustee of any
employee benefit plan of the System).
2.08 Hardship means a circumstance where the Benefits
Committee determines that the Participant is suffering from a
serious financial emergency resulting from circumstances beyond
the Participant's control.
2.09 ICP-I means New England Electric System Companies'
Incentive Compensation Plan, as amended from time to time.
2.10 ICP-I Category A Participant means those participants
designated as such pursuant to ICP-I, as amended from time to
time.
2.11 ICP-I Category B Participant means those participants
designated as such pursuant to ICP-I, as amended from time to
time.
2.12 ICP-II means New England Electric System Companies'
Incentive Compensation Plan II, as amended from to time.
2.13 Management Committee means the Management Committee
consisting of the Chairman and the President of New England
Electric System.
2.14 Matching Percentage means:
60% if the Participant is a participant in New England
Electric Companies' Senior Incentive Compensation Plan;
50% if the Participant is an ICP-I Category A
Participant;
45% if the Participant is an ICP-I Category B
Participant;
45% if the Participant is a participant in ICP-II; or
45% if the Participant is a participant in the
Performance Based Bonus Plan.
2.15 New England Electric Company Management Incentive
Plan means any or all of the following plans as in effect from
time to time: New England Electric Companies' Senior Incentive
Compensation Plan; ICP-I; ICP-II; and Performance Based Bonus
Plan.
2.16 New England Electric System means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of The
Commonwealth of Massachusetts. Any agreement, obligation, or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, or agent thereof assumes or shall
be held to any liability therefor.
2.17 NEES Board means board of directors of New England
Electric System.
2.18 Participant means any individual who is a participant
in a New England Electric Company Management Incentive Plan.
2.19 Performance Based Bonus Plan means New England
Electric Companies' Performance Based Bonus Plan, as amended from
time to time.
2.20 Plan means the New England Electric Companies'
Incentive Share Plan, as amended from time to time.
2.21 Plan Year means a calendar year.
2.22 Restricted Shares means Shares issued under the Plan
subject to the restrictions found in Article V.
2.23 Shares means common shares of New England Electric
System.
2.24 System means the New England Electric System holding
company system.
2.25 Trustee means any bank or other financial institution
so designated by the Management Committee.
III. ADMINISTRATION
3.01 The Plan shall be administered by the Management
Committee. Interpretations of the Plan by the Management
Committee shall be final and binding on all parties; provided,
however, any interpretations which would substantially increase
the benefits under the Plan of any member of the Management
Committee shall be referred to the Compensation Committee.
3.02 The Compensation Committee may amend or terminate the
Plan at any time; provided, however, that no such action shall
affect any right or obligation with respect to any Annual
Incentive Share Award previously granted; and provided, further,
the provisions of Sections 2.04, 2.07, and 5.03 may not be
amended without the written consent of any Participant affected.
IV. ANNUAL INCENTIVE SHARE AWARD
4.01 Each Participant's Annual Incentive Share Award shall
be determined by multiplying the Participant's Cash Bonus by the
applicable Matching Percentage.
4.02 The Annual Incentive Share Award provided by the
Companies shall be used to purchase Shares in the Participant's
name which shall be subject to the restrictions found in Article
V. The number of Shares purchased shall be rounded up for any
award amounts not sufficient to purchase a whole Share.
4.03 Purchase of Shares under the Plan shall take place as
soon as practicable following the end of the Plan Year for which
the Annual Incentive Share Award applies.
4.04 Restricted Shares shall be distributed to
Participants within a reasonable time after purchase is
completed.
V. RESTRICTED SHARES
5.01 All Shares awarded under the Plan which are subject
to this Article shall not be commuted, sold, assigned,
transferred, or otherwise conveyed, whether voluntarily or
involuntarily, for a period of five years from issuance.
5.02 In the event of a Participant's death or disability,
any and all restrictions on Restricted Shares shall lapse.
5.03 In the event of a Change of Control, any and all
restrictions on Restricted Shares shall lapse.
5.04 In the event of Hardship, the Benefits Committee may
authorize a removal of restrictions on the number of Restricted
Shares necessary to alleviate the Hardship.
5.05 Participants hold all voting, tender offer, exchange
offer, and dividend rights to Restricted Shares.
5.06 Shares awarded may, at the option of the Compensation
Committee, be either newly issued or purchased on the open
market.
If Shares are purchased on the open market, the Management
Committee may require each Company to deposit cash in a trust as
needed to buy the requisite number of Shares for awards as they
are determined. The Trustee will invest the cash in Shares as
soon as practicable. Any Shares purchased by the Trustee shall
be held until all awards have been invested in Shares. Share
awards shall be allocated and distributed to Participants as soon
as practicable after completion of all purchases. Any awards
held in trust shall be held for the exclusive benefit of the
Participants.
The price of Shares, whether purchased from the System or
on the open market, will be computed on the basis of the average
of high and low prices on the New York Stock Exchange - Composite
Transactions as reported in The Wall Street Journal for the five
consecutive trading days ending on the last trading day prior to
the fifteenth day of January following the Plan Year for which
the award applies, or the date of Change in Control, if
applicable. If there is no trading in Shares on the New York
Stock Exchange for a substantial amount of time during the
five-day period, or if publication by The Wall Street Journal of
reports of Share transactions for any day in the five-day period
does not take place or is subject to reporting error, the value
of Shares shall be determined by the System on the basis of such
market quotations or other method as the System shall deem
appropriate.
The price of Shares purchased on the open market shall not
include commissions. To the extent Shares held by the Trustee
earn cash dividends, said dividends shall be allocated and
distributed to Participants on a pro-rata basis.
VI. GENERAL PROVISIONS
6.01 Awards or other distributions issued under the Plan
will not be used in determining a Participant's benefit under any
group insurance plan or any incentive program.
6.02 Neither the Plan nor the making of awards hereunder
shall be construed to create any obligation to continue the Plan
or to give any present or future employee any right to continued
employment.
6.03 The headings of articles and sections of the Plan are
for convenience of reference only.
6.04 Unless the context requires otherwise, the singular
shall include the plural; the masculine gender shall include the
feminine; and such words as "herein", "hereinafter", "hereof",
and "hereunder" shall refer to this instrument as a whole and not
merely to the subdivisions in which such words appear.
6.05 Except as otherwise required by law, the Plan and all
matters arising thereunder shall be governed by the laws of The
Commonwealth of Massachusetts.
Date: January 3, 1994 /s/ John W. Rowe
Pursuant to Vote dated October 7,
1993 by the Compensation Committee