Exhibit 10(w)
NEW ENGLAND ELECTRIC COMPANIES'
INCENTIVE SHARE PLAN
Adopted February 27, 1990
Effective January 1, 1990
Amended February 8, 1991
Amended January 1, 1994
Amended February 21, 1994
Amended February 22, 1995
Amended February 26, 1996
Amended February 24, 1997
TABLE OF CONTENTS
-----------------
Page
----
I. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . .1
II. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . .1
2.01 Annual Incentive Share Award . . . . . . . . .1
2.02 Beneficial Owner . . . . . . . . . . . . . . .1
2.03 Benefits Committee . . . . . . . . . . . . . .2
2.04 Cash Bonus . . . . . . . . . . . . . . . . . .2
2.05 Change in Control. . . . . . . . . . . . . . .2
2.06 Company. . . . . . . . . . . . . . . . . . . .3
2.07 Compensation Committee . . . . . . . . . . . .4
2.08 Continuing Directors . . . . . . . . . . . . .4
2.09 Hardship . . . . . . . . . . . . . . . . . . .4
2.10 ICP-I. . . . . . . . . . . . . . . . . . . . .4
2.11 ICP-I Category A Participant . . . . . . . . .5
2.12 ICP-I Category B Participant . . . . . . . . .5
2.13 ICP-II . . . . . . . . . . . . . . . . . . . .5
2.14 A Major Transaction. . . . . . . . . . . . . .5
2.15 Management Committee . . . . . . . . . . . . .6
2.16 Matching Percentage. . . . . . . . . . . . . .7
2.17 New England Electric Company Management
Incentive Plan . . . . . . . . . . . . . . . .7
2.18 New England Electric System. . . . . . . . . .8
2.19 NEES Board . . . . . . . . . . . . . . . . . .8
2.20 Participant. . . . . . . . . . . . . . . . . .8
2.21 Incentive Compensation Plan III. . . . . . . .9
2.22 Person . . . . . . . . . . . . . . . . . . . .9
2.23 Plan . . . . . . . . . . . . . . . . . . . . .9
2.24 Plan Year. . . . . . . . . . . . . . . . . . .9
2.25 Restricted Shares. . . . . . . . . . . . . . 10
2.26 Shares . . . . . . . . . . . . . . . . . . . 10
2.27 System . . . . . . . . . . . . . . . . . . . 10
2.28 Trustee. . . . . . . . . . . . . . . . . . . 10
III. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . 10
3.01 Administration and Interpretation. . . . . . 10
3.02 Amendment or Termination.. . . . . . . . . . 11
IV. ANNUAL INCENTIVE SHARE AWARD . . . . . . . . . . . . . . 11
4.01 Calculation of Award.. . . . . . . . . . . . 11
4.02 Purchase of Shares.. . . . . . . . . . . . . 11
4.03 Timing of Purchase.. . . . . . . . . . . . . 13
4.04 Distribution of Shares.. . . . . . . . . . . 13
4.05 Change in Control. . . . . . . . . . . . . 13
V. RESTRICTED SHARES. . . . . . . . . . . . . . . . . . . . 14
5.01 Assignment and Alienability. . . . . . . . . 14
5.01A Restriction on Shares to Officers. . . . . . 14
5.02 Death or Disability. . . . . . . . . . . . . 15
5.03 Change of Control. . . . . . . . . . . . . . 15
5.04 Hardship.. . . . . . . . . . . . . . . . . . 15
5.05 Voting, Tender, Dividend Rights. . . . . . . 15
5.06 Deferral of Receipt of Shares. . . . . . . . 15
VI. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 16
6.01 Other Benefit Plan.. . . . . . . . . . . . . 16
6.02 Future Employment. . . . . . . . . . . . . . 16
6.03 Headings. . . . . . . . . . . . . . . . . . 16
6.04 Gender and Number. . . . . . . . . . . . . . 16
6.05 Governing Law. . . . . . . . . . . . . . . . 17
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
NEW ENGLAND ELECTRIC COMPANIES'
INCENTIVE SHARE PLAN
--------------------
I. PURPOSE
-------
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 Beneficial Owner shall have the meaning defined in
Rule 13d-3 under the Exchange Act.
2.03 Benefits Committee means the committee established in
accordance with New England Electric System Companies' Final
Average Pay Pension Plan I.
2.04 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 or a Major Transaction.
2.05 Change in Control occurs when the conditions set
forth in either of the following paragraphs shall have been
satisfied:
(i) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of New
England Electric System (not including in the
securities beneficially owned by such Person
any securities acquired directly from New
England Electric System or its affiliates)
representing 20% or more of the combined voting
power of New England Electric System's then
outstanding securities; or
(ii) during any period of not more than two
consecutive years on or after January 1, 1995,
individuals who at the beginning of such period
constitute the NEES Board and any new director
(other than a director designated by a Person
who has entered into an agreement with New
England Electric System to effect a transaction
described in clause (i) of this paragraph)
whose election by the NEES Board or nomination
for election by New England Electric System's
shareholders was approved or recommended by a
vote of at least two-thirds of the directors
then still in office who either were directors
at the beginning of the period or whose
election or nomination for election was
previously so approved or recommended cease for
any reason to constitute a majority of the NEES
Board.
2.06 Company means any New England Electric System Company
that has an employee(s) who participates in the Plan.
2.07 Compensation Committee means the compensation
committee of the NEES Board.
2.08 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).
2.09 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.
2.10 ICP-I means New England Electric System Companies'
Incentive Compensation Plan, as amended from time to time.
2.11 ICP-I Category A Participant means those participants
designated as such pursuant to ICP-I, as amended from time to
time.
2.12 ICP-I Category B Participant means those participants
designated as such pursuant to ICP-I, as amended from time to
time.
2.13 ICP-II means New England Electric System Companies'
Incentive Compensation Plan II, as amended from to time.
2.14 A Major Transaction shall be deemed to have occurred
if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(a) the shareholders of New England Electric System
approve a merger or consolidation with any
corporation or business trust, other than (i) a
merger or consolidation which would result in the
individuals who prior to such merger or consolidation
constitute the NEES Board constituting at least two-
thirds of the board of directors of New England
Electric System or the surviving or succeeding entity
immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement
a recapitalization (or similar trasaction) in which
no Person acquires more than 20% of the combined
voting power of New England Electric System's then
outstanding securities;
(b) the shareholders of New England Electric System
approve a plan of complete liquidation thereof; or
(c) the shareholder of New England Electric System
approve an agreement for the sale or disposition of
all or substantially all of New England Electric
System's assets, other than a sale or disposition
which would result in the individuals who prior to
such sale or disposition constitute the NEES Board
constituting at least two-thirds of the board of
directors of the Person purchasing such assets
immediately after such sale or disposition.
2.15 Management Committee means the Management Committee
established in accordance with the New England Electric System
Companies' Incentive Compensation Plan I.
2.16 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 an ICP-I Category C
Participant;
45% if the Participant is a participant in ICP-II; or
33% if the Participant is a participant in ICP-III.
2.17 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 ICP-III.
2.18 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.
2.19 NEES Board means board of directors of New England
Electric System.
2.20 Participant means any individual who is a participant
in a New England Electric Company Management Incentive Plan.
2.21 Incentive Compensation Plan III means New England
Electric Companies' Incentive Compensation Plan III, as amended
from time to time.
2.22 Person shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (i)
New England Electric System or any subsidiary thereof, (ii) a
trustee or other fiduciary holding securities under an employee
benefit plan of New England Electric System or any subsidiary
thereof, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of New England
Electric System in substantially the same proportions as their
ownership of shares of New England Electric System.
2.23 Plan means the New England Electric Companies'
Incentive Share Plan, as amended from time to time.
2.24 Plan Year means a calendar year.
2.25 Restricted Shares means Shares issued under the Plan
subject to the restrictions found in Article V.
2.26 Shares means common shares of New England Electric
System.
2.27 System means the New England Electric System holding
company system.
2.28 Trustee means any bank or other financial institution
so designated by the Management Committee.
III. ADMINISTRATION
--------------
3.01 Administration and Interpretation. 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 Amendment or Termination. 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 2.05, 2.08, and
5.03 may not be amended without the written consent of any
Participant affected.
IV. ANNUAL INCENTIVE SHARE AWARD
----------------------------
4.01 Calculation of Award. Each Participant's Annual
Incentive Share Award shall be determined by multiplying the
Participant's Cash Bonus by the applicable Matching Percentage.
4.02 Purchase of Shares. The Annual Incentive Share Award
provided by the Companies shall be used to purchase Shares in the
Participant's name. The number of Shares purchased shall be
rounded up for any award amounts not sufficient to purchase a
whole Share. 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.
4.03 Timing of Purchase. 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 Distribution of Shares. Shares shall be distributed
to Participants within a reasonable time after purchase is
completed.
4.05 Change in Control. In the event of a Change in
Control or of a Major Transaction, each Participant will receive,
within 30 days, a cash payment calculated in accordance with
Section 4.01. If the Change in Control or Major Transaction
occurs prior to the determination and payment of the
Participant's Cash Bonus for the Prior Year, the Participant will
also receive within 30 days a cash payment calculated in
accordance with Section 4.01 for that year. No further benefits
in either Shares or cash will be payable for this Plan.
V. RESTRICTED SHARES
-----------------
5.01 Assignment and Alienability. All Shares awarded
under the Plan, in respect of performance prior to 1995, shall
not be commuted, sold, assigned, transferred, or otherwise
conveyed, whether voluntarily or involuntarily, for a period of
five years from issuance.
5.01A Restriction on Shares to Officers. All Shares
awarded under the Plan to officers of New England Electric
System, in respect of performance in 1996 and thereafter, shall
not be commuted, sold, assigned, transferred, or otherwise
conveyed, whether voluntarily or involuntarily, for a period of
five years from issuance; provided, however, said Shares may be
deferred to the New England Electric Companies' Deferred
Compensation Plan.
5.02 Death or Disability. In the event of a Participant's
death or disability, any and all restrictions on Restricted
Shares shall lapse.
5.03 Change of Control. In the event of a Change of
Control or a Major Transaction, any and all restrictions on
Restricted Shares shall lapse.
5.04 Hardship. 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 Voting, Tender, Dividend Rights. Participants hold
all voting, tender offer, exchange offer, and dividend rights to
Restricted Shares.
5.06 Deferral of Receipt of Shares. Anything in this Plan
to the contrary notwithstanding, a Participant may elect to defer
receipt of an Annual Incentive Share Award and the related Shares
by means of a separate agreement with the Participant's Company.
Thereafter, the Participant's right to an incentive share award
or shares deferred thereunder shall be governed solely by the
terms of such other agreement.
VI. GENERAL PROVISIONS
------------------
6.01 Other Benefit Plan. 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 Future Employment. 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 Headings. The headings of articles and sections of
the Plan are for convenience of reference only.
6.04 Gender and Number. 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 Governing Law. Except as otherwise required by law,
the Plan and all matters arising thereunder shall be governed by
the laws of The Commonwealth of Massachusetts.
SIGNATURE February 24, 1997 s/George M. Sage
Date: ______________________ _________________________________
Pursuant to Votes dated February
21, 1994, February 22, 1995,
February 26, 1996, and February
24, 1997, by the Compensation
Committee