NEW ENGLAND ELECTRIC COMPANIES
EXECUTIVE RETIREES HEALTH AND LIFE INSURANCE PLAN
Established January 1, 1990
Amended and Restated January 1, 1996
NEW ENGLAND ELECTRIC SYSTEM
EXECUTIVE RETIREES HEALTH AND LIFE INSURANCE PLAN
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I - INTRODUCTION
1.01. Purpose of Plan. . . . . . . . . . . . . . . . . . . . . . . 1
1.02. Plan Status. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - DEFINITIONS
2.01. Executive Employee.. . . . . . . . . . . . . . . . . . . . . 2
2.02. Eligible Employee. . . . . . . . . . . . . . . . . . . . . . 2
2.03. NEES Companies Retirees Health and Life Insurance Plan.. . . 2
2.04. Participant. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.05. Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.06. Plan Date. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III - PARTICIPATION
3.01. Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . 2
3.02. Commencement of Participation. . . . . . . . . . . . . . . . 3
3.03. Cessation of Participation.. . . . . . . . . . . . . . . . . 3
3.04. Reinstatement of Former Participant. . . . . . . . . . . . . 3
ARTICLE IV - HEALTHCARE COVERAGE AND CONTRIBUTION
4.01. Coverage.. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.02. Description of Benefits. . . . . . . . . . . . . . . . . . . 4
4.03. Participant Contribution.. . . . . . . . . . . . . . . . . . 5
4.04. Employer Contribution. . . . . . . . . . . . . . . . . . . . 5
ARTICLE V - LIFE INSURANCE COVERAGE
5.01. Coverage.. . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE VI - FUNDING
6.01. Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.02 Limitation of Employer Liability.. . . . . . . . . . . . . . 6
ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN
7.01. Amendment and Termination of Plan. . . . . . . . . . . . . . 6
ARTICLE VIII - MISCELLANEOUS
8.01. Incorporation of Provisions by Reference.. . . . . . . . . . 7
8.02. Forfeiture of Benefits.. . . . . . . . . . . . . . . . . . . 7
EXECUTIVE RETIREES HEALTH AND LIFE INSURANCE PLAN
ARTICLE I - INTRODUCTION
1.01. Purpose of Plan. The purpose of this amended and restated Plan
is to (1) provide postretirement health care benefits under the Medical
Contracts and Medigap Contracts maintained by the Employers for certain
retired Executive Employees and their Eligible Dependents (2) to provide
reimbursement of Medicare Part B premiums to eligible Executive Employees and
their Spouses, and (3) to provide life insurance coverage to eligible
Executive Employees, as more fully described herein.
1.02. Plan Status. This written Plan document is intended to comply
with all relevant provisions of the Code and ERISA and is to be interrupted in
a manner consistent with the requirements of such laws including, but not
limited to, Sections 601 through 609 of ERISA and Section 4980B of the Code.
The Plan shall consist of this document, the Medical Contracts, the Medigap
Contracts, the Insurance Contracts, and the plan document for the NEES
Companies Retirees Health and Life Insurance Plan. The provisions of the
Medical Contracts that are applicable to retired Employees, the provisions of
the Medigap Contracts, the provisions of the Life Insurance Contracts, and
applicable provision of the NEES Companies Retiree Health and Life Insurance
Plan, are incorporated by reference into this Plan document.
ARTICLE II - DEFINITIONS
The definitions contained in the NEES Companies Retirees Health and Life
Insurance Plan I, as amended from time to time, are hereby incorporated by
reference into this Plan. In addition, the following terms have the meanings
set forth below unless otherwise required by the context. In the event of a
conflict between a definition found in the NEES Companies Retirees Health and
Life Insurance Plan and one contained in this Plan, the definition found in
this Plan shall control.
2.01. Executive Employee means any person, in the employ of an
Employer, who qualified for participation in the New England Electric
Companies Executive Supplemental Retirement Plan I on December 31, 1995, and
who on the date of his or her termination of employment is qualified for
participation in the New England Electric Companies Executive Supplemental
Retirement Plan I.
2.02. Eligible Employee means an Executive Employee who meets the
eligibility criteria set forth under Section 3.01(a) or (b).
2.03. NEES Companies Retirees Health and Life Insurance Plan means the
New England Electric System Companies Retirees Health and Life Insurance Plan
I, as amended from time to time.
2.04. Participant means any individual who participates in the Plan in
accordance with Article III.
2.05. Plan means the New England Electric Companies Executive Retirees
Health and Life Insurance Plan as set forth herein, together with any and all
amendments hereto.
2.06. Plan Date means January 1, 1994.
ARTICLE III - PARTICIPATION
3.01. Eligibility.
(a) A retired Executive Employee who, as of the Plan Date, was
receiving benefits under the Plan shall continue to participate in the
Plan, for purposes of receiving postretirement health care and life
insurance benefits, beginning on the Plan Date.
(b) An Executive Employee who, on or after the Plan Date, has a
termination of employment, and, at the time is at least age 50 shall be
eligible to participate in the Plan, for purposes of receiving
postretirement health care and life insurance benefits, commencing at
Retirement.
(c) An Eligible Dependent will be eligible to participate in this
Plan, for purposes of receiving health care benefits, upon the Eligible
Employee's death.
3.02. Commencement of Participation. An individual will become a
Participant on the later of: (a) the Plan Date or (b) the first day of the
month following the date he or she becomes an Eligible Employee.
3.03. Cessation of Participation. A Participant will cease to be a
Participant as of the earlier of:
(a) the date on which the Plan terminates; or
(b) the date on which the Participant ceases to be eligible to
participate under Section 3.01.
3.04. Reinstatement of Former Participant. A former Participant who
is rehired by an Employer will become a Participant again if and when he or
she meets the eligibility requirements of Section 3.01 and shall receive
postretirement medical benefits in an amount no less than those the
Participant was receiving immediately prior to discontinuing participation in
the Plan.
ARTICLE IV - HEALTHCARE COVERAGE AND CONTRIBUTION
4.01. Coverage. A Participant's postretirement health care coverage
under this Plan shall be as follows:
(a) If a Participant is under age 65, such Participant will be
covered by the Medical Contract coverage he or she was enrolled in
immediately before his or her termination of employment (or if the
Participant becomes eligible under Section 3.01(c), such Participant will
be covered by the Medical Contract coverage the Participant was enrolled
in before such Eligible Employee's death) or such other Medical Contract
coverage as may be elected by the Participant pursuant to the annual open
enrollment procedure for active Employees.
(b) If a Participant is age 65 or older, in addition to Medicare
coverage to which he or she is entitled, the Participant will also be
covered by the Medigap Contract coverage elected by such Participant and
will receive such Medicare Part B premium reimbursement as described in
Section 4.03 hereof.
To the extent permitted under the provisions of the Medical Contracts and
the Medigap Contracts, a Participant may also elect coverage under such
contracts for Eligible Dependents. Notwithstanding the foregoing, with
respect to an Eligible Employee and/or Eligible Dependent, no postretirement
medical benefits will be provided under this Plan prior to the earlier of (i)
the Eligible Employee's Retirement or (ii) the Eligible Employee's death.
4.02. Description of Benefits. The Medicare Part B premium
reimbursement benefit is described in Section 4.03 hereof. The types and
amounts of postretirement benefits available under each Medical Contract and
Medigap Contract, the requirements for participating in such contracts, and
the other terms and conditions of coverage and benefits under such contracts
are as set forth in the respective contracts and in any documents that
constitute (or are incorporated by reference) in such contracts. The
postretirement benefit descriptions in such contracts, as in effect from time
to time, are hereby incorporated by reference into this Plan.
4.03. Participant Contribution. The Participant shall not make any
monthly contribution and shall receive full reimbursement of the monthly
Medicare Part B premiums for such Participant and, if applicable, Spouse.
If a Participant became eligible under Section 3.01(c), the Eligible
Dependent Participant shall not make any monthly contribution and shall
receive full reimbursement of the monthly Medicare Part B premium.
4.04. Employer Contribution. The respective Employers shall pay, on a
monthly basis, the full cost of postretirement medical coverage provided under
the Medical Contracts and the Medigap Contracts, and (ii) the applicable
Medicare Part B premium reimbursement.
ARTICLE V - LIFE INSURANCE COVERAGE
5.01. Coverage. If the Participant is not provided life insurance
pursuant to an agreement with his or her Employer, the Participant will, upon
Retirement, receive basic life insurance coverage in the amount provided by
the Employer (exclusive of any individual life insurance program provided
under contract with an Employer) immediately prior to his or her termination
of employment, which amount shall be reduced 2% a month until it reaches the
greater of:
(i) $7,500; or
(ii) 25% of the amount of coverage provided by the Participant's
Employer to the Participant upon the earlier to occur of the Participant
attaining age 65 or the Participant's last day of employment prior to
Retirement.
ARTICLE VI - FUNDING
6.01. Funding. The Employers may, in their sole discretion, establish
any form of funding method(s) for the Plan including, but not limited to, the
payment of postretirement benefits from an Employer's general assets or
purchasing one or more group insurance contracts or HMO contracts to provide
for all or a portion of the postretirement benefits provided under the Plan
(excluding reimbursement of Medicare Part B premiums).
6.02 Limitation of Employer Liability. With respect to any prepaid
or any insured portion of the Plan, liability for providing postretirement
benefits under such portion of the Plan and the applicable prepaid or insured
Medical Contracts, Medigap Contracts, or Life Insurance Contracts shall be
solely that of the insurance company, Blue Cross - Blue Shield organization,
or health maintenance organization issuing the applicable prepaid or insured
Medical Contracts, Medigap Contracts, or Life Insurance Contracts. The
respective Employers shall have no liability for any postretirement benefits
due, or alleged to be due, under any such applicable prepaid or insured
Medical Contract, Medigap Contract, or Life Insurance Contract.
ARTICLE VII - AMENDMENT AND TERMINATION OF PLAN
7.01. Amendment and Termination of Plan. The power to amend the terms
of this Plan document, in whole or in part, or to terminate the Plan shall be
vested in the Compensation Committee of the Board, which shall have the sole
discretion to make all amendments to the terms of this Plan document
(including, but not limited to, the time for and amounts of Participant
contributions), or to terminate the Plan; provided, however, no amendment or
discontinuance in any manner adverse to a Participant or an Executive Employee
with respect to benefits offered under the Plan may be made for three years
following a Change in Control or a Major Transaction.
ARTICLE VIII - MISCELLANEOUS
8.01. Incorporation of Provisions by Reference. All of the
provisions contained in Article VI, Administration of Plan, and Article IX,
Miscellaneous Provisions, of the NEES Companies Retirees Health and Life
Insurance Plan, as amended from time to time, are hereby incorporated into
this Plan by reference.
8.02. Forfeiture of Benefits. A Participant will forfeit his or her
future benefits under the Plan at the time that a forfeiture of benefits under
the New England Electric Companies Executive Supplemental Retirement Plan I
occurs.
/s/ George M. Sage
______________________________________
Chairman of the Compensation Committee