Exhibit 10.6.1
NSTAR
DEFERRED COMPENSATION
PLAN
(Effective January 1,
2008)
INTRODUCTION
The purpose of the NSTAR Deferred
Compensation Plan (the “Plan”) is to provide an
arrangement whereby eligible executives of NSTAR and its affiliates
can elect to defer receipt of designated percentages or amounts of
their salary and incentive awards. This Plan consists of two parts:
the NSTAR 409A Deferred Compensation Plan (the “409A
Plan”) and the NSTAR Deferred Compensation Plan as in effect
on October 3, 2004 (the “Grandfathered Plan”) This
restatement of the Plan is effective as of January 1, 2008
(the “Effective Date”).
The Plan is intended to be “a
plan which is unfunded and is maintained by an employer primarily
for the purpose of providing deferred compensation for a select
group of management or highly compensated employees” within
the meaning of sections 201(2), 301(a)(3) and 401(a)(3) of the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and shall be administered in a manner
consistent with that intent.
The 409A Plan is intended to comply
with the requirements of Code section 409A 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 amounts deferred on or after
January 1, 2005 and amounts deferred but not vested as of
December 31, 2004 under the NSTAR Deferred Compensation Plan
(as in effect on October 3, 2004). The terms of the 409A Plan
are set forth at Part A.
All amounts deferred and vested
prior to January 1, 2005 shall be grandfathered for purposes
of Code section 409A and shall be governed by the Grandfathered
Plan. The Grandfathered Plan is frozen as of December 31, 2004
and no deferrals of Salary, Salary Increases or Incentive Awards
thereafter paid or payable to a Participant shall be made after
December 31, 2004 under the Grandfathered Plan 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
after October 3, 2004, and a copy of the Grandfathered Plan as
it was in effect on October 3, 2004 is attached at Part
B.
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PART A
NSTAR 409A DEFERRED COMPENSATION
PLAN
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NSTAR 409A Deferred Compensation
Plan
(a) “Base Salary” means
the Participant’s annualized Salary in effect on
January 1 of a year from which the Participant defers
compensation. Short-term disability payments shall be treated for
purposes of deferral hereunder as Base Salary. Long-term disability
benefits may not be deferred under this 409A Plan.
(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) “Committee” means
the Executive Personnel Committee of the Company.
(e) “Company” means
NSTAR.
(f) “Deferral Account”
means the deferral account described in Section 6.
(g) “Disability” means
that the Participant is (1) unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months or (2) receiving income replacement
benefits for a period of not less than 3 months under the
Company’s long-term disability insurance plan by reason of
any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a
continuous period of not less than 12 months. A Participant shall
be deemed to have a Disability if he or she is determined to be
totally disabled by the Social Security Administration.
(h) “Incentive Award”
means, for any calendar year, such amount or amounts as are payable
to a Participant under any incentive award or bonus program
provided by the Company or its affiliate which is payable in cash
or Shares.
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(i) “Participant” means
an executive who participates in the 409A Plan.
(j) “409A Plan” means
the NSTAR 409A Deferred Compensation Plan as set forth in Tab A
herein and as from time to time amended.
(k) “Plan Administrator”
means the Committee or other person or persons authorized to
administer the 409A Plan in accordance with
Section 8.
(l) “Retirement” means
Separation from Service with the Company after either
(i) attaining age 55, or (ii) completing 20 years of
employment with the Company or its affiliates.
(m) “Salary” means the
fixed basic compensation of a Participant from the Company or its
affiliate excluding any special compensation such as overtime,
bonus payments, disability insurance benefits, severance pay or
other similar distributions, and Company or affiliate contributions
under any employee benefit plan; provided, that Salary shall
include amounts that would have been received by the Participant
from the Company or an affiliate as fixed basic compensation but
for an election under section 401(k) or section 125 of the Code or
a deferral election under this 409A Plan.
(n) “Salary Increase”
means the amount, if any, by which a Participant’s Salary for
any year may be increased over the Base Salary amount in effect on
January 1 of such year.
(o) “Separation from
Service” means a termination of employment with the Company
and its affiliates, determined in accordance with Code section
409A(a)(2)(A)(i) and the regulations thereunder.
(p) “Shares” means
shares of the Company.
Such employees of the Company or its
affiliates as are selected by the Company shall be eligible to
become Participants in the 409A Plan. Notwithstanding the
foregoing, an eligible employee shall not become a Participant in
the Plan until he or she completes such forms as the Plan
Administrator may require.
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A Participant may elect to defer
such portion of his or her Base Salary, Salary Increase or
Incentive Award otherwise payable for services performed in a
calendar year as the Plan Administrator may prescribe prior to the
start of such calendar year. The Plan Administrator may limit the
amount or percentage of Base Salary, Salary Increase or Incentive
Award that a Participant may defer hereunder.
(a) Initial Election . A
Participant’s election of deferral under Section 3 shall
be in the form prescribed by the Plan Administrator and shall be
subject to such terms and conditions as the Plan Administrator may
prescribe. A Participant may elect to defer compensation for
services performed during a taxable year (the “service
year”) only if the election of deferral is filed not later
than the close of the taxable year preceding the service year. In
the case of Incentive Awards, the election of deferral must be
filed not later than the close of the taxable year which ends one
year prior to the taxable year in which the Incentive Award will be
granted. Each election shall specify the percentage or amount of
the Participant’s Base Salary, Salary Increase or Incentive
Award to be credited to his or her Deferral Account instead of
being paid currently to the Participant. Each election shall be
irrevocable for the calendar year or years to which it applies.
Notwithstanding the foregoing, an employee who becomes eligible to
participate in the Plan during the calendar year may make an
election of deferral for the balance of such calendar year (with
respect to amounts paid to the Participant for services to be
performed after his or her election) provided he or she makes such
election within 30 days of the date he or she becomes eligible to
participate in the Plan, in accordance with Code section 409A. A
Participant’s deferral election for the calendar year shall
terminate if a Participant obtains a payment due to unforeseeable
emergency (in accordance with Section 7) or a hardship
distribution under the NSTAR Savings Plan.
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(b) Election As To Form of
Distribution . A Participant’s initial election of
deferral described in paragraph (a) above shall specify the
form of payment for the distribution in respect of such deferral
and all subsequent deferrals, which the Participant shall select
from among the lump sum and installment options prescribed by the
Plan Administrator. A Participant may subsequently change his or
her election as to the form of distribution in accordance with
rules and procedures established by the Plan Administrator;
provided, however, that (i) such election change shall not
take effect until 12 months after the date on which the election
change is made and (ii) payment will be deferred for a period
of not less than five years from the date on which such payment
would otherwise have been made, in accordance with Treas. Reg.
§1.409A-2(b)(1).
(c) Transition Rule for 2007
. Notwithstanding any provision herein to the contrary, the Plan
Administrator may establish special rules and procedures to permit
Participants with an Account under the Plan (as in effect prior to
January 1, 2008) and whose distribution date or dates with
respect to such Account would fall after December 31, 2007 to
elect, in a manner consistent with transition guidance under
Section 409A, a new form and time of distribution (commencing
not earlier than 2008), subject to such limitations and
restrictions as the Plan Administrator may impose. This
Section 4(c) shall be effective as of January 1,
2007.
(d) Transition Rule for 2008
. Notwithstanding any provision herein to the contrary, the Plan
Administrator may establish special rules and procedures to permit
Participants with an Account under the Plan and whose distribution
date or dates with respect to such Account would fall after
December 31, 2008 to elect, in a manner consistent with
transition guidance under Section 409A, a new form and time of
distribution (commencing not earlier than 2009), subject to such
limitations and restrictions as the Plan Administrator may
impose.
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The Plan Administrator shall
maintain a Deferral Account on behalf of each Participant as
follows:
(a) Deferrals . For each
deferral election made by the Participant in respect of periods on
and after the Effective Date, the Plan Administrator shall credit
to the Participant’s Deferral Account the amounts of Base
Salary, Salary Increase or Incentive Award, as applicable, which
the Participant has elected to defer under the 409A Plan. In each
case, credits shall be made as of the dates the Salary, Salary
Increase or Incentive Award would have been payable if not
deferred.
(b) Investment Measurements .
Subject to paragraph (c) below, 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 Company may establish rules and procedures to permit
Participants to select notional 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.
(c) Shares . A Participant
who elects to defer an Incentive Award which is payable in Shares
shall have the value of such deferred award determined with
reference to the number of whole Shares which could be purchased
with said amount in the open market as promptly as possible
following the effective date of such election. Any dividends on
such Shares will be reinvested or deemed reinvested in such Shares.
Such number of Shares (and the value thereof) shall be credited
from time to time to the
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Participant’s Deferral Account. The
Company may, but shall not be required to, purchase Shares to
satisfy its obligation to Participants under this paragraph. If
such purchase of Shares is made, the Company may, in its discretion
and subject to such limitations as it may determine, permit a
Participant to exercise voting rights with re
