-11-
Exhibit 10.4
NSTAR
TRUSTEES' DEFERRED PLAN
(Restated Effective August 25, 1999)
1. Background and Effective Date
This Plan provides an arrangement whereby Outside Trustees
can (i) elect to defer receipt of designated percentages or
amounts of their retainers and fees, and (ii) receive additional
deferred amounts from the Company. This Plan document
constitutes an amendment, restatement and continuation of the
Boston Edison Company Directors' Deferred Fee Plan (the "Edison
Directors' Deferred Fee Plan"). This document also replaces the
following plans previously maintained by Commonwealth Energy
System ("CES") for its trustees, each of which was terminated by
CES effective as of August 25, 1999: The Deferred Compensation
Plan for Trustees of Commonwealth Energy System (the "CES
Trustees' Deferred Plan"); The Commonwealth Energy System
Retirement Plan for Trustees (the "CES Trustees' Retirement
Plan"); and The Commonwealth Energy System Restricted Stock Plan
for Trustees (the "CES Trustees' Restricted Stock Plan"). 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. This amended Plan is effective as of
August 25, 1999 (the "Effective Date").
2. Definitions
(a)"Board of Trustees" means the board of trustees of the
Company.
(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) "Company" means NSTAR.
(e) "Company Credit Account" means the Company credit
account described in Section 7.
(f) "Deferral Account" means the deferral account described
in Section 6.
(g) "Outside Trustee" means a member of the Board of
Trustees who is not an employee of the Company or any
of its affiliates.
(h) "Participant" means an Outside Trustee who participates
in the Plan.
(i) "Plan" means NSTAR Trustees' Deferred Plan as set forth
herein and as from time to time amended.
(j) "Plan Administrator" means the Board of Trustees or
other person or persons authorized to administer the
Plan in accordance with Section 10.
(k) "Retirement" means the cessation of a Participant's
service as a member of the Board of Trustees for any
reason other than death.
(l) "Shares" means common shares of the Company.
3. Eligibility
An Outside Trustee shall be eligible to participate in the
Plan provided he or she completes such forms as the Plan
Administrator may require.
4. Elective Deferrals
A Participant may elect to defer all or any portion of his or
her retainers or other fees otherwise payable by the Company in
or for a calendar year, subject to such minimum deferral amounts
as the Plan Administrator may prescribe prior to the start of
such calendar year.
5. Deferral Elections
A Participant's election of deferral under Section 4 shall be
in such form and subject to such terms and conditions as the Plan
Administrator shall 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 retainers or other fees to be
credited to his or her Deferral Account instead of being paid
currently to the Participant, and the payment period (including a
single lump-sum payment if so elected) for the distribution in
respect of such deferral. Each election shall be binding with
respect to the retainers and other fees 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
Outside Trustee 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.
6. Deferral Account
The Plan Administrator shall maintain a Deferral Account on
the books and records of the Company for each Participant as
follows:
(a) Opening Balance.
(1) Edison Directors' Deferred Fee Plan. Each
Participant who deferred retainers or fees under the Edison
Directors' Deferred Fee 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 Directors'
Deferred Fee Plan as of the Effective Date.
(2) CES Trustees' Deferred Plan, CES Trustees'
Restricted Stock Plan and CES Trustees' Retirement Plan.
Each Participant who, prior to the Effective Date, (a)
deferred retainers or fees under the CES Trustees' Deferred
Plan, (b) was a Participant in the CES Trustees' Restricted
Stock Plan and irrevocably elected to waive his or her
rights to receive CES shares under the CES Trustees'
Restricted Stock Plan as of the Effective Date, and/or (c)
who was entitled to a retirement benefit under the CES
Trustees' Retirement Plan shall have an opening balance in
his or her Deferral Account under the Plan on the Effective
Date equal to sum of (i) the value of his or her deferral
account under the CES Trustees' Deferred Plan as of the
Effective Date, plus (ii) the value of such waived CES
shares as of the Effective Date increased by 5 percent, plus
(iii) the lump sum actuarial equivalent present value of his
or her retirement benefit under the CES Trustees' Retirement
Plan determined by the Company in its sole discretion 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 credits expressly agrees to waive any claim
he or she may have for payment of benefits under said CES
Plans.
(b) Deferrals. The Plan Administrator shall credit to a
Participant's Deferral Account the amounts of retainers or other
fees, as applicable, which the Participant has elected to defer
under the Plan. In each case credits shall be made as of the
dates the retainers or other fees would have been payable if not
deferred.
(c) Investment Measurements. 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 Plan Administrator may establish rules and procedures to
permit Participants to select notational 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.
7. Company Credit Account
The Plan Administrator shall maintain a Company Credit
Account on the books and records of the Company for each
Participant as follows:
(a) Opening Balance. Edison Directors' Deferred Fee Plan.
Each Participant for whom company credits were made under the
Edison Directors' Deferred Fee Plan prior to the Effective Date
shall have an opening balance in his or her Company Credit
Account under the Plan on the Effective Date equal to the value
of his or her company credit account under the Edison Directors'
Deferred Fee Plan as of the Effective Date.
(b) Company Credits. As of each April 1 and October 1,
provided the Participant is an Outside Director on such date, the
Plan Administrator will credit to the Participant's Company
Credit Account the amount of $10,000, or such other amount as the
Company shall determine.
(c) Investment Measurement. The sole investment
measurement for determining the value of the Participant's
Company Credit Account shall be the value of Shares which could
be purchased (or which are purchased) with Company credits as
soon as possible following the date of such credits. Any
dividends on such Shares will be reinvested or deemed reinvested
in such Shares. In such manner and at such time as the Plan
Administrator shall determine, each Participant's Company Credit
Account will be adjusted to reflect such investment measurement.
The Company may, but shall not be required to, purchase Shares to
satisfy its obligations to Participants under this paragraph. If
such Shares are purchased, 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 Shares
allocated to his or her Company Credit Account.
8. 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
receive a single sum payment from his or her Deferral Account of
all or a specified portion of the amount attributable to such
deferral on a fixed date prior to the Participant's Retirement
(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. The rules
and procedures for such elections will be promulgated by the Plan
Administrator. All elections under this Section 8(a) require the
consent of the Plan Administrator to become effective. No
portion of a Participant's Company Credit Account may be paid
under this Section 8(a).
(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 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. Upon the Participant's Retirement, the
Participant shall be entitled to receive the balance in each of
his or her Deferral Accounts and his or her Company Credit
Account. The Participant's Deferral Account shall be payable as
the Participant shall have specified in his or her election of
deferral from among the lump sum and installment options
prescribed by the Plan Administrator and, if payment is made
other than in an immediate lump sum, shall be adjusted to reflect
the investment measurements in such manner as the Plan
Administrator shall prescribe. The Participant's Company Credit
Account shall be payable in a lump sum only. Payment of the
Participant's Company Credit Account shall be in the form of
Shares (plus cash for any fractional shares). Payment of
Deferral Accounts and Company Credit Accounts shall be made or
commence on the first day of the calendar quarter following
Retirement or as soon as practicable thereafter.
(d) Deferral of Benefit Commencement. Notwithstanding
paragraph (c), 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 or Company Credit Account, or both, 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. Such a Participant who is
permitted to defer commencement of payment may also elect,
subject to the consent of the Plan Administrator, to waive his or
her right to receive a specified number of Shares credited to his
or her Company Credit Account, in which case a number of Shares
equal to the number of such waived Shares will be credited to his
or her Deferral Account. Such Shares credited to his or her
Deferral Account will be subject to the investment measurement
rules described in Section 6(c) and will be payable in a single
sum.
(e) Death. If the Participant dies at any time prior to
attaining age 65 prior to the payment or commencement of payment
of his or her Deferral Account or Company Credit Account as
described in Section 8(c), the Participant's designated
beneficiary or beneficiaries shall be entitled to receive the
balance in the Participant's Deferral Account and Company Credit
Account as of the date of death. Payments shall be made in a
lump sum on the first day of the second month following the month
in which the Participant dies or as soon as practicable
thereafter. Payment of a Participant's Company Credit Account
shall be in the form of Shares (plus cash for any fractional
shares). If the Participant dies after payment of his or her
Deferral Account has commenced to be paid in installments but
prior to the exhaustion of such Account, payment of the remaining
balance of such Account (adjusted as provided in Section 8(c))
shall continue to the 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 and in a manner
prescribed or approved by the Plan Administrator. If no
beneficiary has been designated, payment due under this Section
will be made to the Participant's estate.
9. 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 sole
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 8. No
portion of a Participant's Company Credit Account may be paid
under this Section 9.
10. Administration of the Plan
For purposes of prescribing the forms and conditions for
deferral elections under Section 5 and inservice distributions
under Section 8(a) and (b) (or other forms required to administer
the Plan), and for purposes of Sections 6 and 7, the functions of
the Plan Administrator shall be performed by the Chief Financial
Officer of the Company in his or her sole discretion or by his or
her delegates. All other administrative and interpretative
functions under the Plan shall be vested in the sole discretion
of the Board of Trustees. A decision by the Plan Administrator
or the Board of Trustees shall be final, conclusive and binding
on all Participants and any person claiming under or through any
Participant. The Plan Administrator and the Board of Trustees
shall each 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. Neither the Plan
Administrator nor the Board of Trustees shall have any
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. The Plan
Administrator and the Board of Trustees shall each have all
powers necessary or appropriate to discharge its duties and
responsibilities under the Plan.
11. Nature of Claim for Payments
Except as herein provided, the Company 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
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. Any rights that the Participant may have
on account of this Plan shall be those of a general, unsecured
creditor of the Company. However, the Company may establish a
trust of which the Company 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 (which funds shall be in the
form of Shares with respect to a Participant's Company Credit
Account) in such trust to facilitate payment of the benefits
provided under the Plan. In the event the Company establishes
such a grantor trust with respect to the Plan and, at the time of
a Change of Control, 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 Board of Trustees immediately prior to a Change of Control),
the Company shall within ten days of such Change of Control
deposit in such grantor trust assets sufficient to cause the
trust 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 Board of Trustees immediately
prior to a Change of Control).
12. 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.
13. Termination; Amendment
The Plan shall continue in effect until terminated by action
of the Board of Trustees. Upon termination of the Plan, no
deferral of retainers or other fees thereafter paid or payable to
a Participant shall be made, no additional Company credits shall
be made to the Participant's Company Credit Account, 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 in its sole discretion 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
Participants' Deferral Accounts and Company Credit Account in a
single sum payment.
The Board of Trustees may at any time and from time to time
amend the Plan in any manner; provided that no such amendment or
termination shall reduce the amounts previously credited to the
Deferral Account or Company Credit Account of any Participant
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 obligation to deposit
assets in the grantor trust as described in Section 11.
Furthermore, following a Change of Control, this Section 13 may
not be amended.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its officer hereunto duly authorized this 20th day of
October, 2000.
NSTAR
By: /s/ Thomas J. May
Appendix A to
NSTAR Trustees' Deferred Plan
"Change of Control"
For the purposes of this Plan, 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 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
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, 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 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, 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.