Northeast
Utilities System
Memo
September 17, 2001
TO: Xxxxxx X. Xxxxx
FROM: Xxxxxxx X. Xxxxxx
SUBJECT: Supplemental Compensation Arrangement
This memorandum agreement documents a compensation arrangement between
Northeast Utilities Service Company (the Company) and Xxxxxx X. Xxxxx,
an officer of the Company ("Executive"), as approved on September 11,
2001, by the Compensation Committee of the Board of Trustees of Northeast
Utilities. It will become effective when signed by both parties below.
1. Amount of Compensation: $500,000, as adjusted to reflect investment
performance. No compensation will be paid under this agreement until
the Time of Payment indicated in paragraph (4) below.
2. Risk of Forfeiture: One-third of the amount set forth in paragraph (1)
above will become nonforfeitable and will vest on each of June 28, 2002,
June 28, 2003, and June 28, 2004. Accretions attributable to investment
performance of such amount will vest on the same schedule. Notwithstanding
the foregoing, all unvested amounts will become nonforfeitable and
vest upon the occurrence of a Change of Control or upon involuntary
termination without cause, each as defined in the Employment Agreement
between the Company and the Executive; otherwise, all unvested amounts will
be forfeited upon separation from the service of Northeast Utilities and its
subsidiaries.
3. Investment Performance: Prior to payment, the amount set forth in
paragraph (1) above will vary according to investment performance until
payment as follows:
A. It will be increased at an annual rate of 6.9 percent to reflect interest
for the period June 28, 2001 through June 30, 2001.
B. It will be increased at an annual rate of 6.5 percent to reflect interest
for the period from July 1, 2001 through the effective date of this
agreement.
C. It will vary from the effective date until the date of payment or
forfeiture according to the investment allocation chosen by Executive
for Executive's account in the Northeast Utilities Deferred Compensation
Plan for Executives.
4. Time of Payment (Choose one):
X Payment of vested amounts (including amounts resulting from
investment performance as described in paragraph (3) above)
will be made in cash promptly following each vesting.
Payment of vested amounts (including amounts resulting from
investment performance as described in paragraph (3) above)
will be made in ______ annual cash payments commencing
within one month following Executive's separation from the
service of Northeast Utilities and/or its subsidiaries.
5. General: The parties' obligations with respect to this compensation will be
governed by the terms and conditions of Executive's Employment Agreement
with the Company. The Company will administer its obligations with respect
to this compensation through the vice president in charge of the Human
Resources department.
NORTHEAST UTILITIES SERVICE COMPANY
By /s/ Xxxxxxx X. Xxxxxx
Its Chairman, President and CEO
Date:
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
Date: 9/24/01
