Exhibit 10.2.1
NSTAR
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
(Amended and Restated Effective
January 1, 2008)
INTRODUCTION
The NSTAR Supplemental Executive
Retirement Plan (the “Plan”) is maintained by NSTAR
(the “Company”) for the benefit of certain key
executive employees of NSTAR and its affiliates through
supplemental retirement payments. The Plan consists of two parts:
Part A, which is the NSTAR 409A Supplemental Executive
Retirement Plan (the “409A Plan”), and Part B,
which is the NSTAR Supplemental Executive Retirement Plan as
restated effective August 25, 1999 and as in effect on
October 3, 2004 (the “Grandfathered Plan”). The
benefits payable under the Plan shall consist of the accrued
benefits calculated in accordance with the terms of the 409A Plan,
together with and in addition to the accrued benefits, calculated
as of December 31, 2004, in accordance with the terms of the
Grandfathered Plan. The effective date of this restated Plan is
January 1, 2008.
The 409A Plan is intended to comply
with the requirements of section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”) and guidance issued
thereunder and shall be interpreted and administered in a manner
consistent with such requirements. For the avoidance of doubt, the
terms of the 409A Plan shall apply to benefits accrued on or after
January 1, 2005 and benefits accrued but not vested as of
December 31, 2004 under the Grandfathered Plan. The terms of
the 409A Plan are set forth as Part A.
All benefits accrued and vested as
of December 31, 2004 (the “Grandfathered Benefit
Amount”) shall be grandfathered for purposes of Code section
409A and shall be governed by the NSTAR Supplemental Executive
Retirement Plan as it was in effect on October 3, 2004. The
Grandfathered Plan is frozen as of December 31, 2004. No
additional benefit shall accrue under the Grandfathered Plan after
December 31, 2004 and no individual not a Participant as of
December 31, 2004 shall thereafter become a Participant in the
Grandfathered Plan. The Grandfathered Plan has not been amended or
modified in any way since October 3, 2004, and a copy of the
Grandfathered Plan as it was in effect on October 3, 2004 is
attached as Part B. Also attached is an Appendix to the
Grandfathered Plan (Part B) which memorializes the methodology for
calculating, in accordance with applicable provisions of the
Grandfathered Plan, the Grandfathered Benefit Amount credited to
each Participant under the Grandfathered Plan.
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PART A
NSTAR 409A SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
SECTION 1. ADMINISTRATION
The Executive Personnel Committee
(the “EPC”) and the Retirement Committee (the
“RC”), each as defined in the NSTAR Pension Plan, will
be responsible under the 409A Plan for carrying out their
respective administrative and other duties as set forth in the 409A
Plan. In addition, the EPC has the full discretionary power and
authority to interpret the 409A Plan, settle all disputes which may
arise in connection with the 409A Plan, and establish any claims
procedures required by the Employee Retirement Income Security Act
of 1974, as amended from time to time (“ERISA”). The
decisions, interpretations and determinations made by the EPC or
the RC relating to the 409A Plan will be final and conclusive on
all persons.
The Company agrees to indemnify and
to defend to the fullest possible extent permitted by law any
member of the EPC and the RC (including any person who formerly
served as a member of the EPC or the RC) against all liabilities,
damages, costs and expenses (including attorneys’ fees and
amounts paid in settlement of any claims approved by the Company)
occasioned by any act or omission to act in connection with the
409A Plan.
SECTION 2.
PARTICIPANTS
Participants in the 409A Plan will
be those key executive employees of the Company and its affiliates
selected from time to time by the EPC to participate in Plan
benefits.
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SECTION 3. BENEFITS
(a) Full Benefit
. Each Participant who attains his
or her Full Benefit Age (as hereinafter defined) while an employee
of the Company or its affiliates and who thereafter has a
Separation from Service will receive a benefit calculated as of the
first day of the month following such Separation from Service,
expressed as an annual single life annuity benefit, equal to the
excess (if any) of (A) over (B), minus (C), where:
(A) is the excess of (i) 60% of
his or her Highest Average Total Compensation ( as hereinafter
defined), over (ii) 50% of the Participant’s Primary
Social Security Benefit (as hereinafter defined), which excess is
then multiplied by a fraction the numerator of which is his or her
Full Years of Continuous Service (as hereinafter defined) at the
time of his or her Separation from Service (which in no event shall
exceed 20) and the denominator of which is 20;
(B) is the sum of the annual single
life annuity benefits which the Participant would be entitled to
receive as of the first day of the month following such Separation
from Service from the NSTAR Pension Plan (as from time to time
amended) and the NSTAR Excess Benefit Plan (as from time to time
amended) (the “Excess Plan”), irrespective of the
actual time and form of payment of the benefits from such Plans;
and
(C) is the annual single life
annuity benefit, if any, which the Participant would be entitled to
receive as of the first day of the month following such Separation
from Service from the Grandfathered Plan, irrespective of the
actual time and form of payment of the Grandfathered Benefit
Amount.
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(b) Reduced Benefit.
Each Participant who attains age 55
while an employee of the Company or its affiliates, who completes
five Full Years of Continuous Service and who thereafter has a
Separation from Service prior to his Full Benefit Age will receive
a reduced benefit expressed as an annual single life annuity
benefit calculated as of the first day of the month following such
Separation from Service, in the same manner as described in
Section 3(a) above for a full benefit, except that for
purposes of Section 3(a), the amount in (A) above shall
be reduced by a percentage equal to .41666% multiplied by the
aggregate number of months between the Participant’s
Separation from Service and his or her Full Benefit Age. A
Participant who has not attained age 55 or who has not completed
five Full Years of Continuous Service, but who has entered into a
change in control agreement with the Company and whose age plus the
number of any additional years of service credited to him under
said change in control agreement for purposes of the 409A Plan is
50 or more, will be considered to have an accrued benefit under the
409A Plan for purposes of said change in control agreement, based
upon his or her number of Full Years of Continuous Service and
calculated and reduced as of his or her Separation from Service in
the same manner as described in the preceding provisions of this
Section 3(b).
(c) Form of Benefits.
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(i)
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Participants
in the Excess Plan . With
respect to any individual who is a Participant in the Excess Plan,
the annual benefit, expressed as a single life annuity, payable to
such Participant under Section 3(a) or 3(b) above will be paid
in the same form of payment as is elected by the Participant
pursuant to the Excess Plan and, with respect to a Participant who
elects an optional form of annuity, determined pursuant to the
Excess Plan.
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(ii)
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Participants
Not in the Excess Plan .
With respect to any individual who is not a Participant in the
Excess Plan, the annual benefit, expressed as a single life
annuity, payable to such Participant under Section 3(a) or
(b) above will be paid as a Single Sum.
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(d) Timing of Payment.
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(i)
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Participants
in the Excess Plan . With
respect to any individual who is a Participant in the Excess Plan,
the benefit payable under 3(a) or 3(b) above shall be paid at the
same time as the benefit under the Excess Plan.
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(ii)
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Participants
Not in the Excess Plan .
With respect to any individual who is not a Participant in the
Excess Plan, the benefit payable under Section 3(a) or
(b) above will be paid on the first day of the seventh
calendar month after the date of the Participant’s Separation
from Service.
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(iii)
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Adjustment
for Delayed Payment . The
benefit described in Section 3(a) or (b) above is
calculated as of the first day of the month following Separation
from Service. The Single Sum form of payment shall be increased
with interest to the delayed payment date. For forms of payment
other than Single Sum, the missed monthly payments shall be
accumulated with interest and paid in a single sum at the payment
date. For all purposes, interest is determined using the interest
rate defined by the RC for use in determining the actuarial
equivalent lump sum value.
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(e) Benefit
Definitions. For purposes
of the 409A Plan, the following terms have the following
meanings:
(1) Highest Average Total Compensation means
the average of the Participant’s Total Compensation (as
hereinafter defined) for the 36 consecutive months in which the
Participant had the highest Total Compensation.
(2) Single Sum means a single payment amount
determined pursuant to Section 3(a) or (b) above (as
applicable) but using the actuarial equivalent lump sum value of
each of the amounts described in Section 3(a)(A), (B) and
(C), as set forth in Appendix A.
(3) Full Benefit Age means, for each
Participant, age 62 or such other age as the EPC has determined in
writing with respect to that Participant.
(4) Primary Social Security Benefit means the
“Primary Social Security Benefit,” as defined under the
NSTAR Pension Plan (as from time to time amended), as determined by
the RC.
(5) Total Compensation means, for any
calendar month, the Participant’s base compensation and
annual bonus payments paid to the Participant during such calendar
month by the Company or its affiliate, plus any amounts that would
have been paid to the Participant during the calendar month by the
Company or its affiliate as base compensation or annual bonus but
for a salary reduction agreement in effect during such month under
the NSTAR Deferred Compensation Plan, as from time to time amended,
or pursuant to Sections 125 or 401(k) of the Code.
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(6) Spousal Joint and Survivor Annuity means,
for purposes of determining death benefits under Section 4, an
annuity of actuarial equivalent value to a single life annuity (as
determined by the RC with reference to such actuarial factors as it
shall select from time to time), under which the Participant
receives a reduced benefit during his or her lifetime, and
following the Participant’s death, 50% of such reduced
benefit is paid for the life of the person who was the
Participant’s spouse on the date benefits commenced to the
Participant.
(7) Full Years of Continuous Service means,
for each Participant, the Participant’s number of full years
of continuous service with the Company and its affiliates,
beginning with the date on which the individual becomes a
Participant in the Plan, credited to the Participant for purposes
of the Plan by the EPC, plus such other periods, if any, as the EPC
shall determine.
(8) Separation from Service means separation
from service with the Company and its affiliates within the meaning
of Treasury Regulation §1.409A-1(h). A Participant on medical
leave for a period of more than twenty nine (29) months shall
be deemed to have a Separation from Service on the day following
the end of the 29th month of medical leave. For purposes of this
paragraph, a medical leave is a leave of absence due to a medically
determined physical or mental impairment that can be expected to
result in death or to last for a continuous period of at least six
months, where such impairment causes the employee to be unable to
perform the duties of his or her position of employment or any
substantially similar position of employment.
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SECTION 4. DEATH BENEFIT
(a) Amount of Pre-Retirement
Death Benefits . In the case of a Participant who dies after
attaining age 55 and completing five Full Years of Continuous
Service, but prior to his or her S
