Common use of Determination of Number of Unit Delivered Shares Upon Satisfaction of Performance Criteria Clause in Contracts

Determination of Number of Unit Delivered Shares Upon Satisfaction of Performance Criteria. Notwithstanding anything to the contrary in this Agreement, Unit Delivered Shares and related Deferred Dividend Shares will only become deliverable by the Company in respect of vested Performance Share Units and only upon satisfaction of the achievement of certain EPS growth and Relative TSR levels as described below (the “Performance Criteria”) during the period beginning on January 1, 2008 and ending on December 31, 2010 (the “Performance Period”). The number of Unit Delivered Shares in respect of each vested Performance Share Unit, if any, shall be determined in accordance with Annex A hereto (the “Performance Plan Matrix”). Each cell of the Performance Plan Matrix sets forth in percentage terms the number common shares related to each vested Performance Share Unit that will become Unit Delivered Shares for each performance level. Performance Share Units are originally awarded on the basis of one Performance Share Unit to one Unit Delivered Share, subject to adjustment depending on the level of achievement set forth in the Performance Plan Matrix. Performance between points outlined on the matrix will be interpolated on a straight-line basis. By way of example only, at 100% achievement, each vested Performance Share Unit shall represent the right to receive one Delivered Share (1 x 100%); at 150% achievement, each vested Performance Share Unit shall represent the right to receive 1.5 Delivered Shares (1 x 150%); at 72% achievement, each vested Performance Share Unit shall represent the right to receive 0.72 of a Delivered Share (1 x 72%); and at zero percent achievement, the holder will not be entitled to receive any Unit Delivered Shares in respect of any vested Performance Share Unit (1 x 0%). (a) EPS Growth shall mean the average yearly percentage change in the Company’s EPS over the Performance Period as set forth in the Performance Plan Matrix. “EPS” shall mean diluted earnings per share calculated in accordance with GAAP and as reported in the Company’s Form 10-K for the applicable year, as adjusted. EPS growth shall be calculated by averaging the percentage growth in EPS for each of the years ended December 31 in the Performance Period. EPS growth for each twelve month period shall be calculated by subtracting EPS for the twelve months ended December 31 for the prior year from EPS for the twelve months ended December 31 for the current year and dividing the resulting difference in EPS by the EPS for the twelve months ended December 31 for the prior year. The calculation for EPS shall be adjusted automatically for the following items to the extent reflected on the Company’s audited financial statements (provided that no adjustment shall be made to the extent of any offsetting rate regulated recovery mechanism related to such items): (i) any impact resulting from changes in accounting principles, (ii) any impact from discontinued operations and business combinations or mergers and acquisitions transactions, (iii) any impact from an extraordinary item as defined by GAAP, and (iv) the potential adverse impact of NSTAR’s uncertain tax position related to its RCN tax deduction.

Determination of Number of Unit Delivered Shares Upon Satisfaction of Performance Criteria. Notwithstanding anything to the contrary in this Agreement, Unit Delivered Shares and related Deferred Dividend Shares shares of the Company’s common stock underlying the Performance Share Award 1 Insert the target number. 2 Insert the maximum number. will only become deliverable by the Company in respect of vested Performance Share Units and only upon satisfaction of the achievement of certain EPS growth relative ROIC and Relative TSR EBT Growth levels as described below (the “Performance Criteria”) during the period beginning on January 1, 2008 and ending on December 31, 2010 (the “Performance Period”). , as compared to the ROIC and EBT Growth of the companies listed in Annex A attached hereto (the “Peer Companies”) for the same period.3 The number of Unit Delivered Shares and Deferred Dividend Shares in respect of each vested Performance Share Unit, if any, shall be determined in accordance with Annex A B hereto (the “Performance Unit Plan Matrix”). Each cell of the Performance Unit Plan Matrix sets forth in percentage terms the number of the Company’s common shares related to each vested Performance Share Unit that will become Unit Delivered Shares for each performance level. Performance Share Units are originally awarded on the basis of one [ * ] Performance Share Unit to one [ * ] Unit Delivered Share, subject to adjustment depending on the level of achievement set forth in the Performance Unit Plan Matrix. Performance between points outlined on the matrix will be interpolated on a straight-line [ * ] basis. By way of example only, at 100[ * ]% achievement, each vested Performance Share Unit shall represent the right to receive one [ * ] Delivered Share (1 [ * ] x 100[ * ]%); at 150[ * ]% achievement, each vested Performance Share Unit shall represent the right to receive 1.5 [ * ] Unit Delivered Shares (1 [ * ] x 150[ * ]%); ) at 72[ * ]% achievement, each vested Performance Share Unit shall represent the right to receive 0.72 [ * ] of a Delivered Share (1 [ * ] x 72[ * ]%); and at zero [ * ] percent achievement, the holder will not be entitled to receive any Unit Delivered Shares [ * ] in respect of any [ * ] vested Performance Share Unit (1 [ * ] x 0[ * ]%). (a1) EPS Growth ROIC for the Company shall mean be measured against ROIC for the average yearly percentage change in the Company’s EPS over the Performance Period Peer Companies as set forth in the Performance Unit Plan Matrix. “EPSROIC” for the Company and each Peer Company shall mean diluted earnings per share a fraction where the numerator is cumulative NOPAT over the Performance Period and the denominator is Average Invested Capital (calculated as the average of capital for 2007, 2008, 2009 and 2010), in each case calculated in accordance with GAAP and generally accepted accounting principles (“GAAP”). “NOPAT” is defined as reported in the Company’s Form 10-K for the applicable year, operating income minus Cash Tax Paid. “Cash Tax Paid” is defined as adjusted. EPS growth shall be calculated by averaging the percentage growth in EPS for each of the years ended December 31 in the Performance Period. EPS growth for each twelve month period shall be calculated by subtracting EPS for the twelve months ended December 31 for the prior year from EPS for the twelve months ended December 31 for the current year and dividing the resulting difference in EPS by the EPS for the twelve months ended December 31 for the prior year. The calculation for EPS shall be adjusted automatically for the following items to the extent income taxes as reflected on the Company’s audited financial statements (provided income statement minus deferred taxes as reflected on the cash flow statement. “Average Invested Capital” is defined as the average of the beginning and ending Invested Capital during the year. “Invested Capital” is defined as capital lease obligations, plus short and long term debt plus total stockholders equity minus an amount equal to cash and cash equivalents. Invested Capital shall exclude investment amounts associated with aircraft acquisition until the first time that no adjustment such aircraft is flown under a customer contract at which time all amounts accrued with respect to such aircraft shall be made to considered in the extent of any offsetting rate regulated recovery mechanism related to Average Invested Capital calculation from such items): (i) any impact resulting from changes in accounting principles, (ii) any impact from discontinued operations and business combinations or mergers and acquisitions transactions, (iii) any impact from an extraordinary item as defined by GAAP, and (iv) the potential adverse impact of NSTAR’s uncertain tax position related to its RCN tax deductiondate.