Northeast
Utilities System
Memo
September 5, 2001
TO: Xxxx X. Xxxxxxxx
FROM: Xxxxxxx X. Xxxxxx
SUBJECT: Supplemental Compensation Arrangement
This memorandum agreement documents a compensation arrangement
between Northeast Utilities Service Company (the Company) and
Xxxx X. Xxxxxxxx, an officer of the Company ("Executive"), as
approved on June 28, 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: $520,000, 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 & CEO
Date: 9/5/01
EXECUTIVE
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Date: 9/6/01
