COMPENSATION DISCUSSION AND ANALYSIS
|
common
shares equal to one to one and one half times base salary.
|
|
|
|
|
Executive Officer
|
|
Base Salary
Multiple
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
6
|
|
Executive Vice Presidents
|
|
|
3
|
|
Operating Company Presidents/Senior Vice Presidents
|
|
|
2
|
|
Vice Presidents
|
|
|
1-1.5
|
|
|
|
|
|
|
We
require that our officers attain these ownership levels within five years. All of our officers, including the
Named
Executive Officers, have satisfied the share ownership guidelines or are expected to satisfy them within the applicable timeframe. Common shares, whether held of record, in street name, or in
individual 401(k) accounts, and RSUs satisfy the guideline requirements to hold 100% of the net shares. Unexercised stock options and unvested performance shares do not count toward the ownership
guidelines. In addition to the share ownership guidelines noted above, all officers must hold all the shares awarded under the Company's incentive compensation plan until the share ownership
guidelines have been met.
Retirement Benefits
The Company provides a qualified defined benefit pension program for certain officers, which is a final average pay program subject to tax
code limits. Because of such limits, we also maintain a supplemental non-qualified pension program. Benefits are based on base salary and certain incentive payments, which is consistent with the goal
of providing a retirement benefit that replaces a percentage of pre-retirement income. The supplemental program compensates for benefits barred by tax code limits, and generally provides (together
with the qualified pension program) benefits equal to approximately 60% of pre-retirement compensation (subject to certain reductions) for Messrs. Judge, Lembo and Schweiger, and approximately
50% of such compensation for Mr. Butler. The supplemental program has been discontinued for newly-elected officers.
As
set forth in on pages 43 and 44 of this CD&A, Mr. Judge and Mr. Lembo were elected to the positions of President and Chief Executive Officer and Executive Vice President and
Chief Financial Officer respectively in 2016, such that 2017 was the first year that each served in his new position. Each had a resulting substantial increase in the actuarial, formula-based present
values of his pension benefit due to the increase in their base pay and annual bonus. This increase is disclosed in the Change in Pension Value and Non-Qualified Deferred Earnings column of the
Summary Compensation Table. These accounting-based increases, while representing for Mr. Judge and Mr. Lembo a substantial portion of their 2017 total compensation disclosed in the SEC
Total column of the Summary Compensation Table, resulted in no actual 2017 W-2 earnings for either of them.
For
certain participants, the benefits payable under the Supplemental Non-Qualified Pension Program
(Program)
differ from those described above. Mr. Olivier's employment agreement provides retirement benefits similar to those of a previous employer instead of the supplemental program benefits
described above. Under this agreement, he will receive a pension based on a prescribed formula if he meets certain eligibility requirements. The Program benefit payable to Mr. Schweiger is
fully vested and is further reduced by benefits he is entitled to receive under previous employers' retirement plans.
Also
see the narrative accompanying the "Pension Benefits" table and accompanying notes for more detail on the above program.
401(k) Benefits
The Company offers a qualified 401(k) program for all employees, including executives, subject to tax code limits. After applying these
limits, the program provides a match of 50% of the first 8% of eligible base salary, up to a maximum of $10,800 per year for Messrs. Judge, Lembo and Schweiger. For Messrs. Olivier and
Butler, we provide a match of 100% of the first 3% of eligible base salary, up to a maximum of $8,100 per year.
Deferred Compensation
The Company offers a non-qualified deferred compensation program for our executives. In 2017, the program allowed deferral of up to 100% of
base salary, annual incentives and long-term incentive awards. The program allows participants to select investment measures for deferrals based on an array of deemed investment options (including
certain mutual funds and publicly traded securities).
See
the Non-Qualified Deferred Compensation Table and accompanying notes for additional details on the above program.
2018 Proxy Statement
47
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
|
Perquisites
The Company provides executives with limited financial planning, vehicle leasing and access to tickets to sporting
events.
The current level of perquisites does not factor into decisions on total compensation.
We
maintain contractual agreements with all of our Named Executive Officers that provide for potential compensation in the event of certain terminations, including termination following a Change in
Control. We believe these agreements are necessary to attract and retain high quality executives and to ensure executive focus on Company business during the period leading up to a potential Change in
Control. The agreements are "double-trigger" agreements that provide executives with compensation in the event of a Change in Control followed by termination of employment due to one or
more
of the events set forth in the agreements, while still providing an incentive to remain employed with the Company for the transition period that follows.
Under
the agreements, certain compensation is generally payable if, during the applicable change in control period, the executive is involuntarily terminated (other than for cause) or terminates
employment for "good reason." These agreements are described more fully in the Tables following this CD&A under "Payments Upon Termination."
Tax and Accounting Considerations
|
The
Company's Incentive Plan permits annual incentive and performance share awards that were intended to qualify as performance-based compensation under the recently repealed Section 162(m) of
the Internal Revenue Code. The Company is aware of the changes in the Internal Revenue Code that impact tax deductibility of incentive compensation. The Company believes that the availability of a tax
deduction for forms of compensation is secondary to the goal of providing market-based compensation to attract and retain highly qualified executives. The Committee believes it is in the
Company's
best interests to retain discretion to make compensation awards, whether or not deductible.
The
Company has adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718,
Compensation Stock Compensation
. In general,
the Company and the Committee do not consider accounting considerations in
structuring compensation arrangements.
Equity
awards noted in the compensation tables are made annually at the February meeting of the Compensation Committee (subject to further approval by all of the independent members of the Board of
Trustees of the Chief Executive Officer's award) when the Committee also determines base salary, annual and
long-term
incentive compensation targets and annual incentive awards. The date of this meeting is chosen at least a year in advance, and therefore awards are not coordinated with the release of
material non-public information.
48
2018 Proxy Statement
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
|
Compensation Committee Report
|
The
Compensation Committee of the Board of Trustees has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based
on this review and discussion, the Compensation Committee has recommended to the Board of Trustees that the Compensation Discussion and Analysis be included in
the 2018 proxy statement and our 2017 Annual Report on Form 10-K.
The
Compensation Committee
Charles
K. Gifford, Chair
John S. Clarkeson
Sanford Cloud, Jr.
James S. DiStasio
John Y. Kim
William C. Van Faasen
Dennis R. Wraase
February 20, 2018
2018 Proxy Statement
49
Table of Contents
SUMMARY COMPENSATION TABLE
|
The table below summarizes the total compensation paid or earned by our principal executive officer (Mr. Judge), principal financial officer
(Mr. Lembo) and the three other most highly compensated executive officers in 2017, determined in accordance with the applicable SEC disclosure rules (collectively, the Named Executive
Officers). As explained in the footnotes below, the amounts reflect the economic benefit to each Named
Executive Officer of the compensation item paid or accrued on behalf of the Named Executive Officers for the fiscal year ended December 31, 2017 in
accordance with such rules. All salaries, annual incentive amounts and long-term incentive amounts shown for each Named Executive Officer were paid for all services rendered to the Company and its
subsidiaries, in all its capacities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
(2)
|
|
Stock
Awards
(3)
|
|
Non-Equity
Incentive Plan
(4)
|
|
Change in
Pension Value
and Non-Qualified
Deferred
Earnings
(5)
|
|
All Other
Compensation
(6)
|
|
SEC Total
|
|
Adjusted
SEC Total
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
|
2017
|
|
$
|
1,230,694
|
|
$
|
5,504,904
|
|
$
|
2,285,000
|
|
$
|
6,869,854
|
|
$
|
25,009
|
|
$
|
15,915,461
|
|
$
|
9,045,607
|
|
Chairman, President and
|
|
|
2016
|
|
|
959,690
|
|
|
1,382,021
|
|
|
2,200,000
|
|
|
1,616,742
|
|
|
24,809
|
|
|
6,183,262
|
|
|
4,566,520
|
|
Chief Executive Officer
|
|
|
2015
|
|
|
605,650
|
|
|
1,135,526
|
|
|
690,000
|
|
|
895,929
|
|
|
20,672
|
|
|
3,347,777
|
|
|
2,451,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip J. Lembo
(1)
|
|
|
2017
|
|
|
613,847
|
|
|
1,314,086
|
|
|
700,000
|
|
|
1,246,325
|
|
|
21,485
|
|
|
3,895,743
|
|
|
2,649,418
|
|
Executive Vice President and
|
|
|
2016
|
|
|
439,208
|
|
|
212,300
|
|
|
600,000
|
|
|
543,133
|
|
|
21,285
|
|
|
1,815,926
|
|
|
1,272,793
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leon J. Olivier
|
|
|
2017
|
|
|
678,270
|
|
|
1,428,841
|
|
|
775,000
|
|
|
397,791
|
|
|
14,464
|
|
|
3,294,366
|
|
|
2,896,575
|
|
Executive Vice President-
|
|
|
2016
|
|
|
654,832
|
|
|
1,451,444
|
|
|
725,000
|
|
|
389,011
|
|
|
14,034
|
|
|
3,234,320
|
|
|
2,845,309
|
|
Enterprise Energy Strategy
|
|
|
2015
|
|
|
635,766
|
|
|
1,193,461
|
|
|
680,000
|
|
|
423,029
|
|
|
13,134
|
|
|
2,945,390
|
|
|
2,522,361
|
|
and Business Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Werner J. Schweiger
|
|
|
2017
|
|
|
634,078
|
|
|
1,334,961
|
|
|
775,000
|
|
|
1,225,581
|
|
|
21,418
|
|
|
3,991,038
|
|
|
2,765,457
|
|
Executive Vice President and
|
|
|
2016
|
|
|
592,108
|
|
|
1,359,110
|
|
|
700,000
|
|
|
1,156,328
|
|
|
21,135
|
|
|
3,828,681
|
|
|
2,672,353
|
|
Chief Operating Officer
|
|
|
2015
|
|
|
600,000
|
|
|
1,123,939
|
|
|
680,000
|
|
|
746,734
|
|
|
21,135
|
|
|
3,171,808
|
|
|
2,425,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory B. Butler
(1)
|
|
|
2017
|
|
|
597,886
|
|
|
1,032,562
|
|
|
625,000
|
|
|
1,670,745
|
|
|
15,361
|
|
|
3,941,554
|
|
|
2,270,809
|
|
Executive Vice President and
|
|
|
2016
|
|
|
514,494
|
|
|
896,978
|
|
|
575,000
|
|
|
539,638
|
|
|
12,886
|
|
|
2,538,996
|
|
|
1,999,358
|
|
General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Mr. Lembo
and Mr. Butler did not meet the requirements for inclusion in the Summary Compensation Table and were not a Named Executive Officer for 2015.
-
(2)
-
Includes
amounts deferred in 2017 under the deferred compensation program for Mr. Olivier of $135,654. For more information, see the Executive Contributions
in the last Fiscal Year column of the Non-Qualified Deferred Compensation Plans Table.
-
(3)
-
Reflects
the aggregate grant date fair value of restricted share units (RSUs) and performance shares granted in each fiscal year, calculated in accordance with FASB
ASC Topic 718.
-
-
RSUs
were granted to each Named Executive Officer as long-term compensation, which vest in equal annual installments over three years.
-
-
In
2017, each of the Named Executive Officers was granted performance shares as long-term incentive compensation. These performance shares will vest
based on the extent to which the two performance conditions described in the CD&A are achieved as of December 31, 2019. The grant date fair values for the performance shares, assuming
achievement of the highest level of both performance conditions, are as follows: Mr. Judge: $4,151,239; Mr. Lembo: $990,950; Mr. Olivier: $1,077,487; Mr. Schweiger:
$1,006,692; Mr. Butler: $778,653.
-
-
Holders
of RSUs and performance shares are eligible to receive dividend equivalent units on outstanding awards to the same extent that dividends are
declared and paid on our common shares. Dividend equivalent units are accounted for as additional common shares that accrue and are distributed simultaneously with the common shares issued upon
vesting of the underlying RSUs and performance shares.
-
-
Mr. Judge
was elected President and Chief Executive Officer of the Company on April 6, 2016 upon the retirement of Thomas J. May.
Mr. Judge had previously served as Executive Vice President and Chief Financial Officer of the Company until his election as President and Chief Executive Officer. Mr. Lembo was elected
Executive Vice President and Chief Financial Officer of the Company on May 4, 2016, having previously served as Vice President and Treasurer. Thus, 2017 was the first year during which the
Committee made long term incentive program stock awards to Mr. Judge and Mr. Lembo in their new positions of President and Chief Executive Officer and Executive Vice President and Chief
Financial Officer, respectively.
-
(4)
-
Includes
payments to the Named Executive Officers under the 2017 Annual Incentive Program (Mr. Judge: $2,285,000, Mr. Lembo: $700,000;
Mr. Olivier: $775,000; Mr. Schweiger: $775,000; and Mr. Butler: $625,000).
-
(5)
-
Includes
the actuarial increase in the present value from December 31, 2016 to December 31, 2017, of the Named Executive Officers' accumulated benefits
under all of our defined benefit pension program and agreements, determined using interest rate and mortality rate assumptions consistent with those appearing in the footnotes to our Annual Report on
Form 10-K for the fiscal year ended December 31, 2017. The substantial actuarial increase in Mr. Judge's benefit in 2017 resulted from the increase in base pay and annual
incentive following his promotion in 2016 to Chief Executive
50
2018 Proxy Statement
Table of Contents
Officer.
The change in interest rates also impacted the amount of actuarial increase. The Named Executive Officer may not be fully vested in such amounts. More information on this topic is set forth
in the Pension Benefits table. There were no above-market earnings in deferred compensation value during 2017, as the terms of the Deferred Compensation Plan provide for market-based investments,
including Eversource common shares. Mr. Judge and Mr. Lembo were elected to the positions of President and Chief Executive Officer and Executive Vice President and Chief Financial
Officer, respectively, in 2016, such that 2017 was the first year that each served in his new position. Each had a resulting substantial increase in the actuarial, formula-based present value of his
pension benefit due to the increase in their base pay and annual bonus. These accounting-based increases, while representing for Mr. Judge and Mr. Lembo a substantial portion of their
2017 total compensation disclosed in the SEC Total above, resulted in no actual 2017 W-2 earnings for either of them.
-
(6)
-
Includes
matching contributions allocated by us to the accounts of Named Executive Officers under the 401k Plan as follows: $10,800 for each of Messrs. Judge,
Lembo and Schweiger, and $8,100 for each of Messrs. Olivier and Butler. For Mr. Judge, the value shown includes financial planning services valued at $5,000 and $9,209 paid by the
Company for a Company-leased vehicle. For Mr. Lembo, the value shown includes financial planning services valued at $5,000 and $5,685 paid by the Company for a Company-leased vehicle. For
Mr. Schweiger, the value shown includes financial planning services valued at $5,000 and $5,618 paid by the Company for a Company-leased vehicle. None of the other Named Executive Officers
received perquisites valued in the aggregate in excess of $10,000.
-
(7)
-
The
amounts in the Adjusted SEC Total column reflect an adjustment to the total compensation reported in the column marked SEC Total. The Adjusted SEC Total
subtracts the actuarial change in pension value disclosed in the column titled "Change in Pension Value and Non-Qualified Deferred Earnings" as further described in footnote 5 above in order to
reflect compensation earned during the year by the executive without consideration of pension benefit impacts. The amounts in this column differ substantially from, and are not a substitute for, the
amounts noted in the SEC Total.
2018 Proxy Statement
51
Table of Contents
GRANTS OF PLAN-BASED AWARDS DURING 2017
|
The
Grants of Plan-Based Awards Table provides information on the range of potential payouts under all incentive plan awards during the fiscal year ended December 31, 2017. The table also
discloses the
underlying equity awards and the grant date for equity-based awards. We have not granted any stock options since 2002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(1)
|
|
|
|
|
|
|
|
|
|
All Other Stock
Awards: Number
of Shares of
Stock or Units
(#)
(2)
|
|
Grant Date
Fair Value
of Stock and
Option Awards
($)
(3)
|
|
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
($)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
(4)
|
|
|
02/03/17
|
|
$
|
714,000
|
|
$
|
1,428,000
|
|
$
|
2,856,000
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
Long-Term Incentive
(5)
|
|
|
02/03/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,259
|
|
|
96,518
|
|
|
48,259
|
|
|
5,504,904
|
|
Philip J. Lembo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
(4)
|
|
|
02/03/17
|
|
|
236,500
|
|
|
473,000
|
|
|
946,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive
(5)
|
|
|
02/03/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,520
|
|
|
23,040
|
|
|
11,520
|
|
|
1,314,086
|
|
Leon J. Olivier
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
(4)
|
|
|
02/03/17
|
|
|
257,000
|
|
|
514,000
|
|
|
1,028,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive
(5)
|
|
|
02/03/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,526
|
|
|
25,052
|
|
|
12,526
|
|
|
1,428,841
|
|
Werner J. Schweiger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
(4)
|
|
|
02/03/17
|
|
|
240,000
|
|
|
480,000
|
|
|
960,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive
(5)
|
|
|
02/03/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,703
|
|
|
23,406
|
|
|
11,703
|
|
|
1,334,961
|
|
Gregory B. Butler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
(4)
|
|
|
02/03/17
|
|
|
195,000
|
|
|
390,000
|
|
|
780,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive
(5)
|
|
|
02/03/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,052
|
|
|
18,104
|
|
|
9,052
|
|
|
1,032,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Reflects
the number of performance shares granted to each of the Named Executive Officers on February 3, 2017 under the 2017 - 2019 Long-Term
Incentive Program. Performance shares were granted subject to a three-year Performance Period that ends on December 31, 2019. At the end of the Performance Period, common shares will be awarded
based on actual performance results as a percentage of target, subject to reduction for applicable payroll withholding taxes. Holders of performance shares are eligible to receive dividend equivalent
units on outstanding performance shares awarded to them to the same extent that dividends are declared and paid on our common shares. Dividend equivalent units are accounted for as additional common
shares that accrue and are distributed simultaneously with the common shares underlying the performance shares. The Annual Incentive Program does not include an equity component.
-
(2)
-
Reflects
the number of RSUs granted to each of the Named Executive Officers on February 3, 2017 under the 2017 - 2019 Long-Term Incentive
Program. RSUs vest in equal installments on February 2, 2018, 2019 and 2020. We will distribute common shares with respect to vested RSUs on a one-for-one basis following vesting, after
reduction for applicable payroll withholding taxes. Holders of RSUs are eligible to receive dividend equivalent units on outstanding RSUs awarded to them to the same extent that dividends are declared
and paid on our common shares. Dividend equivalent units are accounted for as additional common shares that accrue and are distributed simultaneously with the common shares distributed in respect of
the underlying RSUs.
-
(3)
-
Reflects
the grant date fair value, determined in accordance with FASB ASC Topic 718, of RSUs and performance shares granted to the Named Executive Officers on
February 3, 2017 under the 2017 - 2019 Long-Term Incentive Program.
-
(4)
-
The
threshold payment under the Annual Incentive Program is 50% of target. The actual payments in 2018 for performance in 2017 are set forth in the Non-Equity
Incentive Plan column of the Summary Compensation Table.
-
(5)
-
Reflects
the range of potential payouts, if any, pursuant to performance share awards under the 2017 - 2019 Long-Term Incentive Program, as described
in the CD&A.
52
2018 Proxy Statement
Table of Contents
OUTSTANDING EQUITY GRANTS AT DECEMBER 31, 2017
|
The following table sets forth RSU and performance share grants outstanding at the end of our fiscal year
ended December 31, 2017 for each of the Named Executive Officers. There are no outstanding options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
(1)
|
|
Name
|
|
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)
(2)
|
|
Market Value
of Shares
or Units of
Stock That
Have Not
Vested
($)
(3)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested
(#)
(4)
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested
($)
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
|
61,901
|
|
|
3,910,906
|
|
|
73,351
|
|
|
4,634,346
|
|
Philip J. Lembo
|
|
|
13,818
|
|
|
873,019
|
|
|
15,719
|
|
|
993,112
|
|
Leon J. Olivier
|
|
|
25,649
|
|
|
1,620,487
|
|
|
37,680
|
|
|
2,380,605
|
|
Werner J. Schweiger
|
|
|
24,010
|
|
|
1,516,957
|
|
|
35,317
|
|
|
2,231,300
|
|
Gregory B. Butler
|
|
|
17,399
|
|
|
1,099,253
|
|
|
25,227
|
|
|
1,593,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Awards
and market values of awards appearing in the table and the accompanying notes have been rounded to whole units.
-
(2)
-
A
total of 62,432 unvested RSUs vested after January 1 and on or before February 2, 2018 (Mr. Judge: 24,450; Mr. Lembo: 5,240;
Mr. Olivier: 12,560; Mr. Schweiger: 11,773; and Mr. Butler: 8,409). A total of 48,341 unvested RSUs will vest on February 2, 2019 (Mr. Judge: 20,855;
Mr. Lembo: 4,616; Mr. Olivier: 8,781; Mr. Schweiger: 8,213; and Mr. Butler: 5,877). A total of 32,003 unvested RSUs will vest on February 2, 2020 (Mr. Judge:
16,595; Mr. Lembo: 3,962, Mr. Olivier: 4,308; Mr. Schweiger: 4,024; Mr. Butler: 3,114).
-
(3)
-
The
market value of RSUs is determined by multiplying the number of RSUs by $63.18, the closing price per common share on December 29, 2017, the last trading
day of the year.
-
(4)
-
Reflects
the target payout level for performance shares granted under the 2015 - 2017 Program, the 2016 - 2018 Program and the
2017 - 2019 Program.
-
-
The
performance period for the 2015 - 2017 Program ended on December 31, 2017. Payouts under that program are set forth in the CD&A
under the "Results of the 2015 - 2017 Performance Share Program."
-
-
The
performance shares payout for 2016 - 2018 Program and the 2017 - 2019 Program will be based on actual performance results
as a percentage of target, subject to reduction for applicable payroll withholding taxes. As described more fully under "Performance Shares" in the CD&A and footnote (1) to the Grants of
Plan-Based Awards table, performance shares will vest following a three-year performance period based on the extent to which the two performance conditions are achieved. Under the
2016 - 2018 Program, a total of 49,014 unearned performance shares (including accrued dividend equivalents) will vest based on the extent to which the two performance conditions
described in the CD&A are achieved as of December 31, 2018. Assuming achievement of these conditions at a target level of performance, the amount of the awards would be as follows:
(Mr. Judge: 12,776; Mr. Lembo: 1,963; Mr. Olivier: 13,418; Mr. Schweiger: 12,565 and Mr. Butler: 8,292). Under the 2017 - 2019 Program, a total of
96,005 unearned performance shares (including accrued dividend equivalents) will vest based on the extent to which the two performance conditions described in the CD&A are achieved as of
December 31, 2019, assuming achievement of these conditions at a target level of performance: (Mr. Judge: 49,786; Mr. Lembo: 11,885; Mr. Olivier: 12,922;
Mr. Schweiger: 12,073 and Mr. Butler: 9,339).
-
(5)
-
The
market value is determined by multiplying the number of performance shares in the adjacent column by $63.18, the closing price of Eversource Energy common shares
on December 29, 2017, the last trading day of the year.
2018 Proxy Statement
53
Table of Contents
OPTION EXERCISES AND STOCK VESTED IN 2017
|
The
following table reports amounts realized on equity compensation during the fiscal year ended December 31, 2017. The Stock Awards columns report the vesting of
RSU and performance share grants to the Named Executive Officers in 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares
Acquired
on Exercise
(#)
|
|
Value Realized
on Exercise
(1)
|
|
Number of
Shares
Acquired on
Vesting
(#)
(2)
|
|
Value Realized
on Vesting
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
|
|
|
$
|
|
|
|
24,892
|
|
$
|
1,395,241
|
|
Philip J. Lembo
|
|
|
|
|
|
|
|
|
4,164
|
|
|
233,432
|
|
Leon J. Olivier
|
|
|
|
|
|
|
|
|
26,112
|
|
|
1,463,651
|
|
Werner J. Schweiger
|
|
|
124,640
|
|
|
4,380,089
|
|
|
19,631
|
|
|
1,100,165
|
|
Gregory B. Butler
|
|
|
|
|
|
|
|
|
17,116
|
|
|
959,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Represents
the amounts realized upon option exercises, which is the difference between the option exercise price and the market price at the time of exercise.
-
(2)
-
Includes
RSUs and performance shares granted to our Named Executive Officers under our long-term incentive programs, including dividend reinvestments, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2014
Program
|
|
2015
Program
|
|
2016
Program
|
|
2017
Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
|
17,278
|
|
|
3,486
|
|
|
4,128
|
|
|
|
|
Philip J. Lembo
|
|
|
2,926
|
|
|
605
|
|
|
633
|
|
|
|
|
Leon J. Olivier
|
|
|
18,114
|
|
|
3,663
|
|
|
4,335
|
|
|
|
|
Werner J. Schweiger
|
|
|
12,122
|
|
|
3,450
|
|
|
4,060
|
|
|
|
|
Gregory B. Butler
|
|
|
11,983
|
|
|
2,454
|
|
|
2,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In
all cases, we reduce the distribution of common shares by that number of shares valued in an amount sufficient to satisfy tax withholding obligations.
-
(3)
-
Values
realized on vesting of RSUs granted under the 2014 - 2016, 2015 - 2017 and 2016 - 2018 Programs were based on $55.95
per share, the closing price of Eversource Energy common shares on February 14, 2017. Values realized on vesting of performance shares granted under the 2014 - 2016 Program were
based on $56.15 per share, the closing price of Eversource Energy common shares on February 17, 2017.
The
Pension Benefits Table shows the estimated present value of accumulated retirement benefits payable to each Named Executive Officer upon retirement based on the assumptions described below. The
table distinguishes between benefits available under the qualified pension program, the supplemental pension program, and any additional benefits available under contractual agreements. See the
narrative above in the CD&A under the caption "Other- Retirement Benefits" and "Contractual Agreements" for more detail on benefits under these plans and our agreements.
The
values shown in the Pension Benefits Table for Messrs. Judge, Lembo and Schweiger were calculated as of December 31, 2017 based on benefit payments in the form of a lump sum. For
Mr. Olivier, we assumed a lump sum payment of his special retirement benefits under his agreement, and payment of his qualified pension
program benefit as a life annuity with a one-third spousal contingent annuitant option (the typical payment form under that Plan). For Mr. Butler, we
assumed a payment of benefits in the form of a contingent annuitant option. Such earned pension program benefit value could otherwise have changed because of the reduction in mortality factors and
potentially rising interest rates.
The
values shown in this Table for the Named Executive Officers were based on benefit payments on the actual ages or the earliest possible ages for retirement with unreduced benefits for the Named
Executive Officers: Mr. Judge: age 60, Mr. Lembo, age 62, Mr. Olivier: age 65, Mr. Schweiger: age 55 and Mr. Butler: age 62.
In
addition, we determined benefits under the qualified pension program using tax code limits in effect on
54
2018 Proxy Statement
Table of Contents
December 31, 2017. For Messrs. Judge, Lembo, and Schweiger, the values shown reflect actual 2017 salary and annual incentives earned in 2016 but
paid in 2017 (per applicable supplemental program rules). For Mr. Butler, the values shown reflect actual 2017 salary and annual incentives earned in 2016 but paid in 2017 (per applicable
supplemental program rules). Mr. Olivier's benefit was calculated as is set forth in the footnote (1) below.
We
determined the present value of benefits at retirement age using the discount rate within a range of 3.56% to 3.68% under ACS 715-30 pension accounting for the 2018 fiscal year end measurement as
of December 31, 2017. This present value assumes no
pre-retirement mortality, turnover or disability. However, for postretirement period beginning at retirement age, we used the 2017 IRS lump sum mortality table
for Mr. Judge, Mr. Lembo and Mr. Schweiger. We used the RP2014 Employee Table Projected Generationally with Scale MP2017 for Mr. Butler, (the 1983 Group Annuity Mortality
Table for Mr. Olivier per his agreement). This new mortality table (as published by the Society of Actuaries in 2014) and projection scale were used by the Eversource Pension Plan for year-end
2017 financial disclosure. Additional assumptions appear in the footnotes to our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number
of Years
Credited
Service (#)
|
|
Present
Value of
Accumulated
Benefits
|
|
During Last
Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
Retirement Plan
|
|
|
40.33
|
|
$
|
2,718,021
|
|
$
|
|
|
|
|
Supplemental Plan
|
|
|
20.00
|
|
|
8,420,744
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
40.33
|
|
|
7,904,098
|
|
|
|
|
Philip J. Lembo
|
|
Retirement Plan
|
|
|
8.75
|
|
|
1,201,331
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
8.75
|
|
|
2,489,455
|
|
|
|
|
Leon J. Olivier (1)
|
|
Retirement Plan
|
|
|
18.83
|
|
|
838,851
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
16.33
|
|
|
6,436,118
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
31.27
|
|
|
1,207,823
|
|
|
105,966
|
|
Werner J. Schweiger
|
|
Retirement Plan
|
|
|
15.83
|
|
|
500,881
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
15.83
|
|
|
1,902,091
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
15.00
|
|
|
6,082,675
|
|
|
|
|
Gregory B. Butler
|
|
Retirement Plan
|
|
|
21.00
|
|
|
1,115,793
|
|
|
|
|
|
|
Supplemental Plan
|
|
|
21.00
|
|
|
3,972,477
|
|
|
|
|
|
|
Target
|
|
|
21.00
|
|
|
2,988,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Mr. Olivier
was employed with Northeast Nuclear Energy Company, one of our subsidiaries, from October of 1998 through March of 2001. In connection with this
employment, he received a retirement benefit that provided credit for service with his previous employer, Boston Edison Company. The benefit, which commenced upon Mr. Olivier's
55th birthday, provides an annuity of $105,966 per year. The present value of future payments under this benefit was calculated using the actuarial assumptions currently used by the pension
program. Mr. Olivier was rehired by us in September 2001. Mr. Olivier's current employment agreement provides for certain supplemental pension benefits in lieu of benefits under the
supplemental program equal to three percent of final average compensation for each of his first 15 years of service since September 10, 2001, plus one percent of final average
compensation for each of the second 15 years of service. Alternatively, if Mr. Olivier voluntarily terminates his employment with us, he is eligible to receive upon retirement a lump sum
payment of $2,050,000. These benefits will be offset by the value of any benefits he receives from the pension program. Amounts reported in the table assume the termination of his employment with our
consent on December 31, 2017, and payment of the lump sum benefit of $6,436,118 offset by pension program benefits.
2018 Proxy Statement
55
Table of Contents
NONQUALIFIED DEFERRED COMPENSATION IN 2017
|
See
the narrative above in the CD&A under the caption "Elements of 2017 Compensation Other Deferred
Compensation"
for more detail on our non-qualified deferred compensation program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
(1)
|
|
Registrant
Contributions
in Last FY
|
|
Aggregate
Earnings in
in Last FY
|
|
Aggregate
Withdrawals/
Distributions
|
|
Aggregate
Balance at
Last FYE
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
$
|
|
|
$
|
|
|
$
|
868,753
|
|
$
|
|
|
$
|
5,693,348
|
|
Philip J. Lembo
|
|
|
|
|
|
|
|
|
195,092
|
|
|
|
|
|
1,370,466
|
|
Leon J. Olivier
|
|
|
570,654
|
|
|
|
|
|
1,073,542
|
|
|
|
|
|
4,884,489
|
|
Werner J. Schweiger
|
|
|
|
|
|
|
|
|
2,344,596
|
|
|
|
|
|
17,228,164
|
|
Gregory B. Butler
|
|
|
|
|
|
|
|
|
3,038
|
|
|
|
|
|
20,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Includes
deferrals in 2017 under our deferred compensation program by Mr. Olivier of $570,654. Named Executive Officers who participate in this program are
provided with a variety of investment opportunities, which the individual can modify and reallocate under the program terms. Contributions by the Named Executive Officer are vested at all times. The
amounts reported in this column for each Named Executive Officer are reflected as compensation to such Named Executive Officer in the Summary Compensation Table.
-
(2)
-
Includes
the total market value of deferred compensation program balances at December 31, 2017, plus the value of vested RSUs or other awards for which the
distribution of common shares is currently deferred, based on $63.18, the closing price of our common shares on December 29, 2017, the last trading day of the year. The aggregate balances
reflect a significant level of earnings on previously earned and deferred compensation.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
The
discussion and tables below show compensation payable to each Named Executive Officer who is still an employee of the Company, in the event of: (i) voluntary termination;
(ii) involuntary not-for-cause termination; (iii) termination in the event of death or disability; and (iv) termination following a change in control. No amounts are payable in
the event of a termination for cause. The amounts shown assume that each termination was effective as of December 31, 2017, the last business day of the fiscal year.
Generally,
a "change in control" means a change in ownership or control effected through (i) the acquisition of 30% or more of the combined voting power of common shares or other voting
securities (20% for Messrs. Butler and Olivier, excluding certain defined transactions); (ii) the acquisition of more than 50% of our common shares, excluding certain defined
transactions (for Messrs. Judge, Lembo and Schweiger); (iii) a change in the majority of the Board of Trustees, unless approved by a majority of the incumbent Trustees;
(iv) certain reorganizations, mergers or consolidations where substantially all of the persons who were the beneficial owners of the outstanding
common shares immediately prior to such business combination do not beneficially own more than 50% (75% for Mr. Olivier) of the voting power of the resulting business entity (excluding in
certain cases defined transactions); and (v) complete liquidation or dissolution of the Company, or a sale or disposition of all or substantially all of the
assets of the Company other than, for Mr. Butler, to an entity with respect to which following completion of the transaction more than 50% (75% for
Mr. Olivier) of common shares or other voting securities is then owned by all or substantially all of the persons who were the beneficial owners of common shares and other voting securities
immediately prior to such transaction.
In
the event of a change in control, the Named Executive Officers are generally entitled to receive compensation and benefits following either involuntary termination of employment without "cause" or
voluntary termination of employment for "good reason" within the applicable period (generally two years following a change in control). The Committee believes that termination for good reason is
conceptually the same as termination "without cause" and, in the absence of this provision, potential acquirers would have an incentive to constructively terminate executives to avoid paying
severance. Termination for "cause" generally means termination due to a felony or certain other convictions; fraud, embezzlement, or theft in the course of employment; intentional, wrongful damage to
Company property; gross misconduct or gross negligence in the course of employment or gross neglect of duties harmful to the Company; or a material breach of obligations under the agreement. "Good
reason" for termination generally exists after assignment of duties inconsistent with executive's position, a material reduction in compensation or benefits, a transfer more
56
2018 Proxy Statement
Table of Contents
than 50 miles from the executive's pre-change in control principal business location (or for Messrs. Judge, Lembo and Schweiger, an involuntary transfer
outside the Greater Boston Metropolitan Area), or requiring business travel to a substantially greater extent than required prior to the change in control.
The
summaries above do not purport to be complete and are qualified in their entirety by the actual terms and provisions of the agreements and plans, copies of which have been filed as exhibits to our
Annual Report on Form 10-K for the year ended December 31, 2017.
Payments Upon Termination
|
Regardless
of the manner in which the employment of a Named Executive Officer terminates, the executive is entitled to receive certain amounts earned during the executive's term of
employment. Such amounts include:
-
-
Vested RSUs and certain other vested awards;
-
-
Amounts contributed and any vested matching contributions under the deferred compensation program;
-
-
Pay for unused vacation; and
-
-
Amounts accrued and vested under the pension/supplemental and 401k programs (except in the event of a termination for cause under the
supplemental program).
The
following table describes additional compensation payable to the Named Executive Officers in the event of voluntary termination, involuntary termination not for cause, termination in the event of
death or disability and termination following a change in control. No benefits are provided in the event of termination for cause. See the section above captioned "Pension Benefits in 2017" for
information about the pension program, supplemental program and other benefits, and the section captioned "Nonqualified Deferred Compensation in 2017."
2018 Proxy Statement
57
Table of Contents
POST EMPLOYMENT COMPENSATION PAYMENTS UPON TERMINATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Payments
|
|
Voluntary
Termination
|
|
Involuntary
Termination
Not for Cause
|
|
Termination
Upon Death
or Disability
|
|
Termination
Following a
Change in
Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
|
|
Annual Incentives
(1)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
1,428,000
|
|
|
|
Performance Shares
(2)
|
|
|
2,260,474
|
|
|
2,260,474
|
|
|
2,260,474
|
|
|
4,634,346
|
|
|
|
RSUs
(3)
|
|
|
1,421,180
|
|
|
1,421,180
|
|
|
1,421,180
|
|
|
3,910,906
|
|
|
|
Special Retirement Benefit
(4)
|
|
|
|
|
|
|
|
|
|
|
|
12,618,115
|
|
|
|
Health and Welfare Benefits
(5)
|
|
|
|
|
|
|
|
|
|
|
|
92,049
|
|
|
|
Perquisites
(6)
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
Excise Tax and Gross-ups
(7)
|
|
|
|
|
|
|
|
|
|
|
|
9,235,719
|
|
|
|
Separation Payment for Liquidated Damages
(8)
|
|
|
|
|
|
|
|
|
|
|
|
10,326,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,681,655
|
|
$
|
3,681,655
|
|
$
|
3,681,655
|
|
$
|
42,260,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip J. Lembo
|
|
Annual Incentives
(1)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
473,000
|
|
|
|
Performance Shares
(2)
|
|
|
449,108
|
|
|
449,108
|
|
|
449,108
|
|
|
993,112
|
|
|
|
RSUs
(3)
|
|
|
304,596
|
|
|
304,596
|
|
|
304,596
|
|
|
873,019
|
|
|
|
Special Retirement Benefit
(4)
|
|
|
|
|
|
|
|
|
|
|
|
2,615,100
|
|
|
|
Health and Welfare Benefits
(5)
|
|
|
|
|
|
|
|
|
|
|
|
40,296
|
|
|
|
Perquisites
(6)
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
Separation Payment for Liquidated Damages
(8)
|
|
|
|
|
|
|
|
|
|
|
|
2,460,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
753,704
|
|
$
|
753,704
|
|
$
|
753,704
|
|
$
|
7,464,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leon J. Olivier
|
|
Annual Incentives
(1)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
514,000
|
|
|
|
Performance Shares
(2)
|
|
|
2,380,605
|
|
|
2,380,605
|
|
|
2,380,605
|
|
|
2,380,605
|
|
|
|
RSUs
(3)
|
|
|
1,620,487
|
|
|
1,620,487
|
|
|
1,620,487
|
|
|
1,620,487
|
|
|
|
Health and Welfare Benefits
(5)
|
|
|
|
|
|
|
|
|
|
|
|
37,520
|
|
|
|
Perquisites
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separation Payment for Liquidated Damages
(8)
|
|
|
|
|
|
|
|
|
|
|
|
1,198,750
|
|
|
|
Separation Payment for Non-Compete Agreement
(9)
|
|
|
|
|
|
|
|
|
|
|
|
1,198,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,001,092
|
|
$
|
4,001,092
|
|
$
|
4,001,092
|
|
$
|
6,950,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Werner J. Schweiger
|
|
Annual Incentives
(1)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
480,000
|
|
|
|
Performance Shares
(2)
|
|
|
1,458,259
|
|
|
1,458,259
|
|
|
1,458,259
|
|
|
2,231,300
|
|
|
|
RSUs
(3)
|
|
|
684,308
|
|
|
684,308
|
|
|
684,308
|
|
|
1,516,957
|
|
|
|
Special Retirement Benefit
(4)
|
|
|
|
|
|
|
|
|
|
|
|
2,180,720
|
|
|
|
Health and Welfare Benefits
(5)
|
|
|
|
|
|
|
|
|
|
|
|
82,475
|
|
|
|
Perquisites
(6)
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
Separation Payment for Liquidated Damages
(8)
|
|
|
|
|
|
|
|
|
|
|
|
4,020,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,142,567
|
|
$
|
2,142,567
|
|
$
|
2,142,567
|
|
$
|
10,526,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory B. Butler
|
|
Annual Incentives
(1)
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
390,000
|
|
|
|
Performance Shares
(2)
|
|
|
1,025,640
|
|
|
1,025,640
|
|
|
1,025,640
|
|
|
1,593,835
|
|
|
|
RSUs
(3)
|
|
|
488,756
|
|
|
488,756
|
|
|
488,756
|
|
|
1,099,253
|
|
|
|
Special Retirement Benefit
(4)
|
|
|
|
|
|
4,803,710
|
|
|
|
|
|
5,236,764
|
|
|
|
Health and Welfare Benefits
(5)
|
|
|
|
|
|
22,399
|
|
|
|
|
|
33,599
|
|
|
|
Perquisites
(6)
|
|
|
|
|
|
10,000
|
|
|
|
|
|
15,000
|
|
|
|
Excise Tax and Gross-Ups
(7)
|
|
|
|
|
|
|
|
|
|
|
|
2,188,796
|
|
|
|
Separation Payment for Liquidated Damages
(8)
|
|
|
|
|
|
990,000
|
|
|
|
|
|
1,980,000
|
|
|
|
Separation Payment for Non-Compete Agreement
(9)
|
|
|
|
|
|
990,000
|
|
|
|
|
|
990,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,514,396
|
|
$
|
8,330,505
|
|
$
|
1,514,396
|
|
$
|
13,527,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
For
Termination Following a Change in Control: Represents target 2017 annual incentive awards as described in the Grants of Plan Based Awards Table.
-
(2)
-
For
Voluntary Termination and Termination Not For Cause, and Termination Upon Death or Disability: Mr. Olivier, represents 100 percent of the
performance share awards under each of the 2015 - 2017 Long-Term Incentive Program, the 2016 - 2018 Long-Term Incentive Program
58
2018 Proxy Statement
Table of Contents
and
the 2017 - 2019 Long-Term Incentive Plan. For Messrs. Judge, Lembo, Schweiger and Butler, represents 100 percent of the performance share awards under the
2015 - 2017 Long-Term Incentive Program, 67 percent of the performance share awards under the 2016 - 2018 Long-Term Incentive Program and 33 percent of the
performance share awards under the 2017 - 2019 Long-Term Incentive Program. For all, the values were calculated by multiplying the number of RSUs by $63.18, the closing price of our
common shares on December 29, 2017, the last trading day of
the year. For Termination Following a Change in Control: Represents 100 percent of the performance share awards under each of the three Programs noted in the previous two sentences.
-
(3)
-
For
Voluntary Termination and Termination Not For Cause, and Termination Upon Death or Disability: Represents values of RSUs granted under our long-term incentive
programs that, at year-end 2017, were unvested under applicable vesting schedules. Under these programs, RSUs vest pro rata based on credited service years and age at termination, and time worked
during the vesting period. For all, the values were calculated by multiplying the number of RSUs by $63.18, the closing price of our common shares on December 29, 2017, the
last
trading day of the year. For Termination Following a Change in Control: Represents values of all RSUs granted under our long-term incentive programs that, at year-end 2017, were unvested under
applicable vesting schedules, all of which vest in full.
-
(4)
-
The
amount noted in the Involuntary Termination, Not for Cause column, represents for Mr. Butler actuarial present values at year-end 2017 of amounts payable
(two years of service) solely under an employment agreement upon termination, which are in addition to amounts due under the pension plan. For Termination Following a Change in Control: Represents
actuarial present values at year-end 2017 of amounts payable solely under employment agreements upon termination (which are in addition to amounts due under the pension program). For
Messrs. Butler, Judge and Schweiger, pension benefits were calculated by adding three years of service (two years for Mr. Lembo). A lump sum of this benefit value is payable to
Messrs. Judge, Lembo and Schweiger. Pension amounts shown in the table are present values at year-end 2017 of benefits payable upon termination as described with respect to the Pension Benefits
Table above.
-
(5)
-
The
amount noted in the Involuntary Termination, Not for Cause column, represents for Mr. Butler the value of two years' employer contributions toward active
health, long-term disability, and life insurance benefits, plus a payment to offset any taxes thereon. For Termination Following a Change in Control: Represents estimated Company cost at year-end 2017
(estimated by our consultants) of providing post-employment health and welfare benefits beyond those available to non-executives upon involuntary termination. The amounts shown in the table for
Messrs. Judge and Schweiger represent the value of three years (two years for Mr. Lembo) continued health and welfare plan participation. The amounts shown in the table for
Mr. Butler represent the value of three years' employer contributions toward active health, long-term disability, and life insurance benefits, plus a payment to offset any taxes on the value of
these benefits, less the value of one year retiree health coverage at retiree rates. The amounts reported in the table for Mr. Olivier represent the value of two years' employer contributions
toward active health benefits, plus a payment to offset any taxes on the value of these benefits, less the value of two years retiree health coverage at retiree rates.
-
(6)
-
The
amount noted in the Involuntary Termination, Not for Cause column, represents for Mr. Butler the cost of reimbursing Mr. Butler for two years
financial planning and tax preparation fees. For Termination Following a Change in Control: Represents Company cost of reimbursing for financial planning and tax preparation fees for three years for
Messrs. Judge, Schweiger and Butler (two years for Mr. Lembo).
-
(7)
-
For
Termination Following a Change in Control: Represents payments made to offset costs associated with certain excise taxes under Section 280G of the
Internal Revenue Code. Executives may be subject to certain excise taxes under Section 280G if they receive payments and benefits related to a Termination Following a Change in Control that
exceed specified Internal Revenue Service limits. Contractual agreements with the above executives provide for a grossed-up reimbursement of these excise taxes. The amounts in the table are based on
the Section 280G excise tax rate of 20%, the statutory federal income tax withholding rate of 35%, the applicable state income tax rate, and the Medicare tax rate of 1.45%.
-
(8)
-
The
amount noted in the Involuntary Termination, Not for Cause column, represents for Mr. Butler a severance payment (two-times the sum of base salary plus
relevant annual incentive award) in addition to any non-compete agreement payment described above. For Termination Following a Change in Control: Represents severance payments in addition to any
non-compete agreement payments described in the prior note. For Messrs. Judge and Schweiger, this payment equals three-times the sum of base salary plus relevant annual incentive award
(two-times the sum for Messrs. Lembo and Butler, and one-times the sum for Mr. Olivier.) These payments do not replace, offset or otherwise affect the calculation or payment of the
annual incentive awards.
-
(9)
-
For
Involuntary Termination, Not For Cause and Termination Following a Change in Control: Represents payments made under agreements or Company programs to
Mr. Butler and Mr. Olivier (and for Mr. Butler alone, for Involuntary Termination, Not For Cause) as consideration for agreement not to compete with the Company following
termination of employment, equal to the sum of base salary plus relevant annual incentive award. These payments do not replace, offset or otherwise affect the calculation or payment of the annual
incentive awards.
2018 Proxy Statement
59
Table of Contents
Our CEO to median employee pay ratio is calculated pursuant to the requirements of Item 402(u) of Regulation S-K. We identified the median
employee by reviewing the 2017 total cash compensation of all full-time employees, excluding our CEO, who were employed by the Company and its subsidiaries on December 31, 2017. In our
assessment of median employee compensation, we annualized pay for those employees who commenced work during 2017. Otherwise, we did not make any assumptions, adjustments, or estimates with respect to
total cash compensation, and we did not annualize the compensation for any full-time employees who were not employed by the Company at the end of 2017. We believe the use of total cash compensation
for all
employees is a consistently applied compensation measure, as the Company does not widely distribute annual equity awards to employees.
After
identifying the median employee based on total cash compensation, we calculated the annual total compensation for such employee using the same methodology we use for our named executive officers
as set forth in the 2017 Summary Compensation Table.
Mr. Judge
had 2017 annual total compensation of $15,915,461, as reflected in the Summary Compensation Table appearing on page 50. Our median employee's annual total compensation for 2017
was $124,959. Our 2017 CEO to median employee pay ratio is 127 to 1.
60
2018 Proxy Statement
Table of Contents
Item 2: Advisory Vote on Executive Compensation
|
We
are asking shareholders to vote on an advisory proposal to approve the compensation of our Named Executive Officers, (commonly known as Say-on-Pay), as disclosed in the CD&A, compensation tables
and narrative discussion in this proxy statement. The Board of Trustees has taken and will continue to take the results of the
advisory vote into consideration when making future decisions regarding the compensation of our Named Executive Officers.
The
fundamental objective of our Executive Compensation Program is to motivate executives and key employees to support our strategy of investing in and operating businesses that benefit our
shareholders, customers, employees, and communities. We strive to provide executives with base salary, performance-based annual incentive compensation opportunities, and long-term incentive
compensation opportunities that are competitive with the market and that align pay with performance. We believe that based upon our strong financial and operating performance in 2017 that such
alignment exists. Shareholders are encouraged to read the CD&A, compensation tables and narrative discussion in this proxy statement.
Our
2017 Executive Compensation Program included the following material elements:
-
-
Base Salary
-
-
Annual Incentive Program
-
-
Long-Term Incentive Programs
-
-
Nonqualified Deferred Compensation
-
-
Supplemental Executive Retirement Plan
-
-
Certain Officer perquisites
-
-
Employment Agreements
The
Executive Compensation Program also features share ownership guidelines and a holding period requirement to emphasize the importance of share ownership, along with policies that call for the
clawback of compensation under the circumstances described in this proxy statement and that prohibit the pledging or hedging of our common shares.
The
compensation of our Named Executive Officers during 2017 was consistent with the following positive overall financial and operational performance
results:
-
-
Our 2017 earnings were $3.11 per share, a 5.1% increase over 2016 results.
-
-
Our total shareholder return in 2017 was 18%, and over the longer term, our stock performance continues to outperform the industry. This marks
the eighth time in nine years that Eversource has achieved a double-digit total shareholder return, an achievement that only two other companies within the Edison Electric Institute (EEI) index of 43
utility companies have accomplished.
-
-
We increased our 2017 dividend to $1.90 per share, a 6.7% increase over 2016, continuing to outperform the EEI Index companies.
-
-
We improved our Standard & Poor's (S&P) Credit Rating of "A" to "A+"; our S&P A+ Credit Rating remains the highest electric and gas
utility holding company credit rating in the industry.
-
-
Our overall electric system reliability performance in 2017 was in the first quartile of the industry.
-
-
We achieved several positive regulatory outcomes in each of the three states in which Eversource provides service. This included the completed
divestiture of our New Hampshire fossil generation assets, a positive Massachusetts rate review and resolution of a long-standing dispute with Massachusetts Water Resources Authority.
-
-
We exceeded our established targets in safety performance and response to gas service calls. Our safety performance, which is measured by days
away or restricted time, was its best ever, and we exceeded our gas emergency response rate target.
-
-
We exceeded the target of having 37% of new hires and promotions within the supervisor and above management group be women or people of color.
-
-
We became the only electric and gas utility in the country to add a water utility as an additional line of business through the purchase of
Aquarion Water Company.
We
achieved very positive financial, operational, and strategic results in 2017, and as a result, the Compensation Committee provided base pay increases and incentive awards to the executive officers,
including the Named Executive Officers, reflecting our performance.
The
affirmative vote of a majority of votes cast at the meeting is required to approve the advisory proposal. This means that the number of shares voted "FOR" the item must exceed the number voted
"AGAINST." You
2018 Proxy Statement
61
Table of Contents
ITEM 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
|
may
vote either "FOR" or "AGAINST" the item or you may abstain from voting. Abstentions and broker non-votes will have no effect on the outcome of the vote as they do not count as votes cast.
The
Compensation Committee and the Board of Trustees believe that our Executive Compensation Program is effective in implementing our compensation
philosophy and in achieving its goals. We are requesting your non-binding vote on the following resolution:
"RESOLVED,
that the compensation paid to the Company's Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the
Compensation Discussion and Analysis, the compensation tables and related material disclosed in this proxy statement, is hereby APPROVED."
The Board of Trustees recommends that Shareholders vote FOR this Item.
62
2018 Proxy Statement
Table of Contents
Item 3: Approval of the 2018 Eversource Energy Incentive Plan
|
We
are asking shareholders to approve the 2018 Eversource Incentive Plan (the 2018 Plan). Our Board of Trustees and our Compensation Committee approved the 2018 Plan, subject to shareholder approval.
The 2018 Plan will not become effective unless and until it is approved by our shareholders. The material features of the 2018 Plan are described under "Summary of the 2018 Plan" below.
Our
Board believes that the 2018 Plan will continue to promote the interests of our shareholders and is consistent with principles of good corporate and compensation governance, including the
following:
-
-
No Liberal Share-Recycling.
Shares underlying stock options and other awards delivered under the 2018 Plan will not be recycled into the share pool if they are withheld in satisfaction of tax withholding
obligations or the exercise or purchase price of an award.
-
-
Limitations on Awards.
The 2018
Plan limits the amount of cash and equity awards that may be paid or granted to plan participants, both in total and by type of grant, and also limits the total compensation that may be paid or
granted to our Trustees in any calendar year.
-
-
Performance Awards.
Under the
2018 Plan, we will continue to grant performance-based awards.
-
-
Single Plan.
The Plan governs
both annual cash incentive awards and long-term cash and equity awards.
-
-
No Discounted Stock Options or
SARs.
All stock options and Stock Appreciation Rights (SARs) granted under the 2018 Plan must have a per share exercise price or base value that
is not less than the fair market value of the underlying shares on the date of grant.
-
-
No Repricing.
Other than in
connection with certain corporate transactions or changes to our capital structure, the 2018 Plan prohibits the repricing of stock options or SARs without obtaining shareholder approval.
-
-
Restrictions on Dividends and Dividend
Equivalents.
The 2018 Plan prohibits participants from receiving current dividends that are paid before the underlying award vests.
-
-
No Single-Trigger Vesting upon a Change in
Control.
The 2018 Plan does not provide for the automatic acceleration of equity awards in connection with a change in control.
-
-
Minimum Vesting Provisions.
The
2018 Plan includes a limit of five percent of the total number of shares that can be issued under equity awards that are scheduled to vest sooner than one year from the date of grant.
-
-
Clawback.
The 2018 Plan provides
for the clawback of awards under certain circumstances not limited to restatements of financial statements due to fraud or misconduct.
Reasons for Seeking Shareholder Approval
|
Our
Board believes that both annual cash and long-term incentive awards have been, and will continue to be, a critical part of our total compensation program. They allow us to
attract and retain the key talent needed to effectively compete in our industry, incentivize superior results and long-term value creation, and align the interests of our employees with those of our
shareholders.
Our
three-year (2015-2017) stock compensation average burn rate the number of shares granted in each year divided by the weighted average of our common shares outstanding at year
end, was 0.39%. We believe that our historical burn rate is reasonable in our industry. We will continue to monitor our equity use in future years to ensure our burn rate is within competitive market
norms. Based on a review of our historic burn rate, current and proposed plan features, and the equity plan guidelines established by proxy advisory firms, the Compensation Committee's independent
compensation consultant, Pay Governance, supported, and our Compensation Committee and Board approved, the 2018 Plan and the share pool authorized under it, as described below. We expect that this
share pool will last for approximately six to eight years.
The
2018 Plan has been designed to continue to grant performance-based compensation under the former Section 162(m) of the Code, which made such compensation exempt from the deduction
limitations under Section 162(m). Section 162(m) generally provided that compensation paid by a publicly-held company to its "covered employees" (the chief executive officer and the
three other named executive officers other than the chief financial officer) was not deductible by the company for U.S. federal income tax purposes for any taxable year to the extent it exceeded
$1 million. This limitation did not apply to compensation that qualified as exempt performance-based compensation by meeting certain requirements under former
2018 Proxy Statement
63
Table of Contents
ITEM 3: APPROVAL OF THE 2018 EVERSOURCE ENERGY INCENTIVE PLAN
|
Section 162(m),
including the requirement that the material terms of the related performance goals be disclosed to and approved by the company's shareholders no less frequently than every five
years.
This
exception was repealed in the tax reform legislation signed into law on December 22, 2017. As a result, it is uncertain whether compensation that is intended to be structured as
performance-based compensation will be deductible. In making its previous executive compensation decisions, our Compensation Committee endeavored to maximize the deductibility of compensation under
former Section 162(m) to the extent practicable, while maintaining competitive compensation. Our Compensation Committee believes it is important to continue to make a substantial amount of
executive compensation performance-based, and also to continue to have authority to provide compensation that is not exempt from any limits on deductibility.
The
following table provides information regarding the number of shares subject to outstanding awards under the 2009 Eversource Incentive Plan (the 2009 Plan) as of March 6, 2018, and the
proposed number of shares that may be issued under the 2018 Plan. No future awards will be granted under the 2009 Plan. If the 2018 Plan is approved by shareholders, it will be the only plan under
which we will grant equity awards. No other equity grants have been made except under the 2009 Plan and its predecessor plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
(as of 3/6/18)
|
|
|
|
As a Percentage of
Shares Outstanding
(316,885,808 shares
as of 3/6/18)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Stock Options Outstanding
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Exercise Price
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Remaining Term (in years)
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares Subject to Other Outstanding Awards (with performance share awards measured at target performance)
|
|
|
|
|
1,208,943
|
|
|
|
|
0.38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposed Shares Available for Future Awards under 2018 Plan
|
|
|
|
|
3,200,000
|
|
|
|
|
1.01%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shares Outstanding Under Existing Equity Awards and Proposed to be Reserved for Issuance under 2018 Plan
|
|
|
|
|
4,408,943
|
|
|
|
|
1.39%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
|
|
|
316,885,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following is a brief summary of the material features of the 2018 Plan. A copy of the 2018 Plan is attached as
Appendix A
to this proxy statement, and we urge shareholders to read it in its entirety. The following summary is qualified in its entirety by reference to the full text of the 2018 Plan.
Administration.
The 2018 Plan is administered by our Compensation Committee, which has the discretionary authority to interpret the 2018 Plan, determine
eligibility for and grant awards, determine, modify or waive the terms and conditions of any award, determine the form of settlement of awards, prescribe forms, rules and procedures for awards, and
otherwise do all things necessary or desirable to carry out the purposes of the 2018 Plan. Determinations of our Compensation Committee under the 2018 Plan will be conclusive and bind all parties. Our
Board may perform any of the functions of our Compensation Committee under the 2018 Plan, and our Compensation Committee may delegate any of its duties, powers, and responsibilities as it may
determine, subject to laws or regulations and the terms of the Committee's charter. As used in this summary, the term "Compensation Committee" refers to our Board, our Compensation Committee, or its
authorized delegates, as applicable.
Annual Cash Incentive Awards
|
Terms.
Each employee classified as a Vice President or higher is eligible to receive an annual incentive award under the 2018 Plan. Annual performance goals are
set by our Compensation Committee, which form the basis for determining the annual incentive awards. Our Compensation Committee directs management to communicate to each employee described above the
target and the percentages of the annual cash incentive award that the employee is eligible to receive. Further information with respect to annual incentive awards granted to our named executive
officers during 2017 is set forth in this proxy statement in the section captioned "2017 Annual Incentive Program."
Long-Term Incentive Awards
|
Eligibility.
The Compensation Committee shall select participants from among key employees of the Company and its subsidiaries. Non-employee members of our Board
of Trustees are also eligible to participate in the 2018 Plan. All stock compensation paid to Trustees is provided under the Plan. As of March 6, 2018, we had approximately 8,000 employees and
12 non-employee Trustees.
64
2018 Proxy Statement
Table of Contents
ITEM 3: APPROVAL OF THE 2018 EVERSOURCE ENERGY INCENTIVE PLAN
|
Authorized Shares.
Subject to adjustment as described below, the maximum number of our common shares that may be delivered in satisfaction of awards under the 2018
Plan is 3,200,000. For purposes of the share pool:
-
-
All shares covering a SAR, any portion of which is settled in stock, will reduce the share pool.
-
-
Shares withheld in satisfaction of tax withholding obligations or the exercise of purchase price of an award will not return to the share pool.
-
-
The share pool will not be reduced to the extent any portion of an award is settled in cash or property other than shares.
-
-
If an award expires or is terminated or cancelled without having been exercised or settled in full, or if shares acquired pursuant to an award
subject to forfeiture or repurchase are forfeited or repurchased by the Company without the issuance of shares, the shares allocable to the terminated portion of such award or such forfeited or
repurchased shares will return to the share pool.
-
-
Shares issued under awards granted by another company and assumed or substituted for by the Company will not reduce the share pool.
Shares
that may be delivered under the 2018 Plan may be authorized but unissued shares or treasury shares. The closing price of our common shares as reported on the NYSE on March 6, 2018 was
$56.68 per share.
Individual Limits.
The maximum number of shares underlying stock options and the maximum number of shares underlying stock appreciation rights that may be granted
to any person in any calendar year is 500,000 shares. The maximum number of shares subject to other equity awards that may be granted to any person in any calendar year is 400,000 shares. The maximum
amount that may be paid to any person in any calendar year with respect to annual cash incentive awards is $4,000,000, and with respect to long-term cash awards (cash-denominated awards that have a
performance period of greater than 12 months) is $4,000,000. In addition, the maximum value of all compensation that may be paid or granted to any member of our Board of Trustees who is not an
employee in respect of his or her service as a Trustee, whether paid or granted in the form of cash or equity awards, or both, in any calendar year is $750,000 (valuing any equity awards based on the
grant date fair value of such awards in accordance with applicable accounting rules).
Types of Awards.
The 2018 Plan provides for the grant of stock options, SARs, RSUs, restricted stock awards (RSAs), performance awards, other awards convertible
into or otherwise based on our common shares and
annual
and long-term cash awards. Dividends or dividend equivalents may also be provided in connection with awards (except for stock options or SARs) under the 2018 Plan, but shall not be paid unless
and until the underlying award vests.
-
-
RSUs and RSAs.
Our Compensation
Committee may grant awards of RSUs or RSAs. An RSU is an unfunded and unsecured promise, denominated in shares, to deliver shares or cash measured by the value of shares in the future, subject to the
satisfaction of specified performance or service vesting conditions. An RSA is a common share subject to restrictions requiring that shares be redelivered or offered for sale to us if specified
service or performance-based conditions are not satisfied.
-
-
Performance Awards.
Our
Compensation Committee may grant performance awards, which are described in this Summary and in the 2018 Plan.
-
-
Stock Options and SARs.
Our
Compensation Committee may grant stock options, including incentive stock options (ISOs) and stock options not intended to be ISOs (NSOs), and SARs. A stock option is a right entitling the holder to
acquire our common shares upon payment of the applicable exercise price. A SAR is a right entitling the holder upon exercise to receive an amount (payable in cash or shares or other property of
equivalent value) equal to the excess of the fair market value of the shares subject to the right over the base value from which appreciation is measured. The exercise price of each stock option, and
the base value of each SAR, granted under the 2018 Plan shall be no less than 100% of the fair market value of a common share on the date of grant (110% in the case of certain ISOs). Other than
adjustments in connection with certain corporate transactions or changes to our capital structure as described below, stock options and SARs granted under the 2018 Plan may not be amended to reduce
the exercise price or base value or cancelled in exchange for stock options or SARs with a lower exercise price or base value, nor may any consideration be paid upon the cancellation of any stock
option or SAR that has a per share exercise price or base value greater than the fair market value of a share of our common shares on the date of such cancellation, in each case, without shareholder
approval. The expiration date of each stock option and SAR granted under the 2018 Plan shall be ten years from the date of grant, or such earlier time as our Compensation Committee may determine.
-
-
Other Awards.
Our Compensation
Committee may grant other awards convertible into or otherwise based on shares, together with long-term cash awards, subject to such terms and conditions as it may determine.
2018 Proxy Statement
65
Table of Contents
ITEM 3: APPROVAL OF THE 2018 EVERSOURCE ENERGY INCENTIVE PLAN
|
Vesting; Terms of Awards.
Our Compensation Committee determines the terms of all awards granted under the 2018 Plan and may impose such restrictions or conditions
to vesting as it deems appropriate, including requiring the achievement of performance criteria. No portion of any grant of any equity award may be scheduled to vest prior to the date that is one year
following the date such award is granted, except that we may grant awards that provide for the issuance of an aggregate of up to five percent of our common shares reserved for issuance under the 2018
Plan to participants, including members of our Board of Trustees, without regard to this minimum vesting provision. Our Compensation Committee may accelerate the vesting or exercisability of awards.
Transferability of Awards.
Awards, other than ISOs, may not be transferred other than by will or by the laws of descent and distribution, except that our
Compensation Committee may permit the gratuitous, not for value transfer of awards, subject to applicable laws and other limitations that it may impose.
Performance Criteria.
The 2018 Plan provides for grants of performance awards subject to "performance criteria." Performance criteria with respect to those awards
that are intended to qualify as performance-based compensation are limited to objectively determinable measures of performance relating to any, or any combination of, the following (measured either
absolutely or comparatively and on a consolidated or other basis) as follows: cash flow; cash flow from operations; earnings (including, but not limited to, earnings before interest, taxes,
depreciation and amortization or operating earnings); earnings per share, diluted or basic; earnings per share from continuing operations; net asset turnover; inventory turnover; capital expenditures;
debt; debt reduction; credit rating; working capital; return on investment; return on sales; net or gross sales; market share; economic value added; cost of capital; change in assets; expense
reduction levels; unit volume; productivity; delivery performance; service levels; operating performance; customer satisfaction; diversity of new hires and/or promotions; environmental, social and
corporate governance objectives and the return on such objectives; safety record; stock price; return on equity; total shareholder return; return on capital; return on assets or net assets; revenue;
income or net income; operating income or net operating income; operating profit or net operating profit; gross margin, operating margin or profit margin; and completion of acquisitions, divestitures,
business expansion, product diversification, new or expanded market penetration and other non-financial operating and management performance objectives, or other strategic business criteria consisting
of one or more
objectives
based on satisfaction of specified goals, geographic business expansion goals or cost targets. Our Compensation Committee may establish one or more of the applicable performance criteria
which may be adjusted in an objectively determinable manner to reflect events (for example, acquisitions or dispositions) occurring during the applicable performance period that affect the applicable
performance criteria.
Effect of Termination of Employment.
Unless an award agreement expressly provides otherwise, immediately upon the termination of a participant's employment or
service, unvested awards will be forfeited and awards requiring exercise will cease to be exercisable, except that stock options and SARs held by a participant will generally remain exercisable for
three months following cessation of employment, and one year if cessation is due to death of the participant, except in event of cessation of employment for cause.
Effects of Certain Transactions.
Unless an award agreement expressly provides otherwise, in the event of a corporate change in control or any other consolidation,
merger, or similar transaction in which the Company is not the surviving corporation, a sale of all or substantially all of the Company's assets, or a dissolution or liquidation of the
Company:
-
-
If there is an acquiring or surviving entity, our Compensation Committee will provide for the assumption, substitution, or continuation of some
or all awards;
-
-
If at any time within two years after a change in control the participant's employment is terminated without cause or the participant resigns
under certain circumstances as noted in the Plan, any awards that are assumed, substituted for, or continued in connection with such transaction will vest in full;
-
-
Our Compensation Committee may provide for a payout or acceleration of some or all awards on such payment and other terms and conditions as it
may determine; and
-
-
Awards that are not assumed, substituted for, or continued, if any, will generally terminate upon the consummation of the transaction.
Adjustment Provisions.
In the event of a stock dividend or similar distribution, stock split or combination of shares (including a reverse stock split),
recapitalization, or other change in our capital structure, our Compensation Committee shall make appropriate adjustments to the maximum number of shares that may be delivered under the 2018 Plan; the
individual award limits; the number and kind of securities subject to, and, if applicable, the exercise price or base value of,
66
2018 Proxy Statement
Table of Contents
ITEM 3: APPROVAL OF THE 2018 EVERSOURCE ENERGY INCENTIVE PLAN
|
outstanding
awards; and any other provisions affected by such event. Our Compensation Committee may make similar adjustments for other events if it determines adjustments are appropriate to avoid
distortion in the operation of the 2018 Plan.
Clawback.
Our Compensation Committee may require the forfeiture and disgorgement of awards and the proceeds from the exercise or other disposition of awards or
common shares acquired under awards in the event of certain financial restatements involving fraud or misconduct, a willful violation of a material provision of our code of conduct or any material
policy of the Company, a willful material violation of certain employee covenants, or to the extent required by law or stock exchange listing standards or pursuant to any applicable Company clawback
policy.
The
2018 Plan was approved by our Compensation Committee and Board of Trustees effective February 7, 2018. No awards will be granted after the tenth anniversary of Board approval. Awards
described in the table set forth below are subject to approval of the 2018 Plan by shareholders at the 2018 Annual Meeting of Shareholders. Our Compensation Committee may at any time amend, suspend,
or terminate the 2018 Plan or any portion thereof, subject to such shareholder approval as our Compensation Committee determines necessary or advisable, except that no such amendment, suspension, or
termination will materially and adversely affect the rights of a participant under a previously granted award (without the participant's consent) and no amendment will effectuate a change for which
shareholder approval is required without obtaining such approval.
Certain Federal Income Tax Consequences
|
The
following is a summary of certain U.S. federal income tax consequences associated with certain awards granted under the 2018 Plan. The summary does not purport to cover federal
employment tax or other U.S. federal tax consequences that may be associated with the 2018 Plan, nor does it cover state, local, or non-U.S. taxes, except as may be specifically noted.
Stock Options (NSOs).
In general, a participant has no taxable income upon the grant of a stock option but realizes income in connection with the exercise of the
NSO in an amount equal to the excess (at the time of exercise) of the fair market value of the shares acquired upon exercise over the exercise price. A corresponding deduction is generally available
to the Company. Upon a subsequent sale or exchange of the shares, any recognized gain or loss is treated as a capital gain or loss for which the Company is not entitled to a deduction.
ISOs.
In general, a participant realizes no taxable income upon the grant or exercise of an ISO. However, the exercise of an ISO may result in an alternative
minimum tax liability to the participant. Generally, a disposition of shares purchased pursuant to an ISO within two years from the date of grant or within one year after exercise produces ordinary
income to the participant (and generally a deduction to the Company) equal to the value of the shares at the time of exercise less the exercise price. Any additional gain recognized in the disposition
is treated as a capital gain for which the Company is not entitled to a deduction. If the participant does not dispose of the shares until after the expiration of these one- and two-year holding
periods, any gain or loss recognized upon a subsequent sale of shares purchased pursuant to an ISO is treated as a long-term capital gain or loss for which the Company is not entitled to a deduction.
SARs.
The grant of a SAR does not itself result in taxable income, nor does taxable income result merely because a SAR becomes exercisable. In general, a
participant who exercises a SAR for common shares or receives payment upon exercise of a SAR will have ordinary income equal to the amount of any cash and the fair market value of any shares received.
A corresponding deduction is generally available to the Company.
RSAs.
A participant who is awarded or purchases shares subject to a substantial risk of forfeiture generally does not have income until the risk of forfeiture
lapses. When the risk of forfeiture lapses, the participant has ordinary income equal to the excess of the fair market value of the shares at that time over the purchase price, if any, and a
corresponding deduction is generally available to the Company. However, a participant may make an election under Section 83(b) of the Internal Revenue Code to be taxed on restricted shares when
they are acquired rather than later, when the substantial risk of forfeiture lapses. A participant who makes an effective 83(b) election will realize ordinary income equal to the fair market value of
the shares as of the time of acquisition less any price paid for the shares. A corresponding deduction will generally be available to the Company. If a participant makes an effective 83(b) election,
no additional income results by reason of the lapsing of the restrictions.
RSUs.
The grant of an RSU does not itself generally result in taxable income. Instead, the participant is generally taxed upon vesting and settlement (and a
corresponding deduction is generally available to the Company), unless he or she has made a proper election to defer receipt of the shares (or cash if the award is cash settled) under
Section 409A of the Internal Revenue
2018 Proxy Statement
67
Table of Contents
ITEM 3: APPROVAL OF THE 2018 EVERSOURCE ENERGY INCENTIVE PLAN
|
Code.
If the shares delivered are restricted for tax purposes, the participant will instead be subject to the rules described above for restricted shares.
For
purposes of determining capital gain or loss on a sale of shares awarded under the 2018 Plan, the holding period for the shares begins when the participant recognizes taxable income with respect
to the transfer of such shares. The participant's tax basis in the shares equals the amount paid for the shares plus any income realized with respect to the transfer. However, if a participant makes
an effective 83(b) election and later forfeits the shares, the tax loss realized as a result of the forfeiture is limited to the excess of what the participant paid for the shares (if anything) over
the amount (if any) realized in connection with the forfeiture.
Certain Change in Control Payments.
Under Section 280G of the Code, the vesting or accelerated exercisability of options or the vesting and payments of
other awards in connection with a termination following a change in control of a company may be required to be valued and taken into account in determining whether participants have received
compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income
recognized by reason of the grant, vesting, or exercise of awards may be subject to an additional 20% federal tax and may be non-deductible to the Company.
The
following table sets forth RSUs and performance share awards that were approved by the Compensation Committee (and by the Board of Trustees for Mr. Judge) to the persons
and groups named below under the 2018 Plan on February 7, 2018, subject to receiving the requisite approval of shareholders of this Item 3. To the extent shareholders approve the 2018
Plan, such RSUs and performance share awards will vest only if the conditions set forth in the award agreements are satisfied.
Should
such shareholder approval of the 2018 Plan not be obtained, then the grants under the 2018 Plan will be rescinded.
|
|
|
|
|
|
|
|
|
|
|
|
Name and Position
|
|
|
|
RSUs/Performance
Share Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James J. Judge
Chairman, President and
Chief Executive Officer
|
|
|
|
|
97,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philip J. Lembo
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
21,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leon J. Olivier
Executive Vice President,
Enterprise Energy Strategy
and Business Development
|
|
|
|
|
22,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Werner J. Schweiger
Executive Vice President and
Chief Operating Officer
|
|
|
|
|
21,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory B. Butler
Executive Vice President and
General Counsel
|
|
|
|
|
16,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trustee Group
|
|
|
|
|
26,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Group
|
|
|
|
|
136,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Executive Employee Group
|
|
|
|
|
78,000
|
|
|
|
|
|
|
|
|
|
|
|
|
The
affirmative vote of a majority of votes cast at the meeting is required to approve the proposal. This means that the number of shares voted "FOR" the item must exceed the number voted "AGAINST."
You may vote either "FOR" or "AGAINST" the item or you may abstain from voting. Abstentions and broker non-votes will have no effect on the outcome of the vote as they do not count as votes cast.
The Board of Trustees recommends that the Shareholders vote FOR this Item.
68
2018 Proxy Statement
Table of Contents
Item 4: Ratification of the Selection of the Independent Registered Public Accounting Firm
|
The
Audit Committee selected the independent registered public accounting firm of Deloitte & Touche LLP to serve as the independent registered public accounting firm of Eversource Energy
and its subsidiaries for fiscal year 2018. In 2017, 96% of shares voted were voted to approve the selection of Deloitte & Touche LLP. Pursuant to the recommendation of the Audit
Committee, the Board of Trustees recommends that shareholders ratify the selection of Deloitte & Touche LLP to conduct an audit of Eversource Energy for 2018. The Board is submitting the
selection of Deloitte & Touche LLP to our shareholders for ratification as a matter of good corporate practice. Whether or not the selection of Deloitte & Touche LLP is
ratified by our shareholders, the Audit Committee may,
in its discretion, change the selection at any time during the year if it determines that such change would be in the best interests of the Company and its shareholders. This is consistent with the
responsibilities of the Audit Committee as outlined in its charter.
The
Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company's financial
statements. Deloitte & Touche LLP has served as Eversource Energy's independent registered public accounting firm continuously since 2002. The Audit Committee is responsible for the
audit fee negotiations associated with the retention of Deloitte & Touche LLP. In order to ensure continuing independence, the Audit Committee
periodically
considers whether there should be a regular rotation of the firm. Further, in conjunction with the mandated rotation of the firm's lead engagement partner, the Audit Committee and its
Chair will continue to be directly involved in the selection of Deloitte & Touche LLP's new lead engagement partner. The members of the Audit Committee and the Board believe the
continued retention of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm is in the best interests of Eversource Energy and its subsidiaries.
Representatives
of Deloitte & Touche LLP are expected to be present at the Annual Meeting. They will have the opportunity to make a statement, if they desire to do so, and to respond to
appropriate questions raised by shareholders at the meeting.
The
affirmative vote of a majority of those votes cast at the meeting is required to ratify the selection of Deloitte & Touche LLP. This means that the number of shares voted "FOR" the
item must exceed the number voted "AGAINST." You may vote either "FOR" or "AGAINST" the item or abstain from voting. Abstentions will have no effect on the outcome of the vote because an abstention
does not count as a vote cast.
The Board of Trustees recommends that Shareholders vote FOR this Item.
Relationship With Principal Independent Registered Public Accounting Firm
|
Fees Billed by Principal Independent Registered Public Accounting Firm.
|
The
aggregate fees billed to the Company and its subsidiaries by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, the Deloitte Entities), for the years ended December 31, 2017 and 2016 totaled $4,533,922 and $4,336,626, respectively. In addition, affiliates
of Deloitte & Touche LLP as noted below provide other accounting services to the Company. Fees consisted of the following:
The
aggregate fees billed to the Company and its subsidiaries by Deloitte & Touche LLP for audit services rendered for the years ended December 31, 2017 and 2016
totaled $4,243,000 and $3,988,000, respectively. The audit fees were incurred for audits of consolidated financial statements of Eversource Energy and its subsidiaries, reviews of financial statements
included in the Combined Quarterly Reports on Form 10-Q of Eversource Energy and its subsidiaries, and other costs. The fees also included audits of internal controls over financial reporting
as of December 31, 2017 and 2016.
2018 Proxy Statement
69
Table of Contents
ITEM 4: RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
The
aggregate fees billed to the Company and its subsidiaries by the Deloitte Entities for audit related services rendered for the years ended December 31, 2017 and 2016
totaled $283,000 and $346,000,
respectively. The audit related fees were incurred for procedures performed in the ordinary course of business in support of certain regulatory filings, comfort letters, consents, and other costs
related to registration statements and financings.
There
were no tax fees for the years ended December 31, 2017 and 2016.
The
aggregate fees billed to the Company and its subsidiaries by the Deloitte Entities for services other than the services described above for the years ended December 31,
2017 and 2016 totaled $7,922 and $2,626, respectively. These fees were for the review of benefit payment calculations in 2017 and a license for access to an accounting standards research tool in both
2017 and 2016.
The
Audit Committee pre-approves all auditing services and permitted audit related or other services (including the fees and terms thereof) to be performed for us by our independent registered public
accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934, which are approved by the Audit Committee
prior to the completion of the audit. The Audit Committee may form and delegate its authority to subcommittees consisting of one or more members when appropriate, including the authority to grant
pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals are presented to the full Audit Committee at its next scheduled meeting.
During 2017, all services described above were pre-approved by the Audit Committee or its Chair.
The
Audit Committee has considered whether the provision by the Deloitte Entities of the non-audit services described above was allowed under Rule 2-01(c)(4) of Regulation S-X and was
compatible with maintaining the independence of the registered public accountants and has concluded that the Deloitte Entities were and are independent of us in all respects.
Report of the Audit Committee
|
The
Audit Committee of the Board of Trustees is comprised of the six Trustees named below. The Board has determined that each member of the Audit Committee is independent as required by the listing
standards of the NYSE and the SEC's audit committee independence rules. The primary function of the Audit Committee is to assist the Board of Trustees in its oversight responsibilities with respect to
the integrity of the Company's financial statements, the performance of the Company's internal audit function, the qualifications, independence and performance of the Company's independent registered
public accounting firm, Deloitte & Touche LLP, and the compliance by the Company with legal and regulatory requirements. As part of its overall responsibilities, the Audit Committee also
reviews the Company's significant accounting policies, management judgments and accounting estimates, financial risks, earnings releases, financial statements and systems of internal control. The
Audit Committee is solely responsible for oversight of the relationship of the Company with our independent registered public accounting firm on behalf of the Board
of
Trustees. As part of these responsibilities, during 2017, the Audit Committee:
-
-
Received the written disclosures and the letter from Deloitte & Touche LLP as required by applicable requirements of the Public
Company Accounting Oversight Board (PCAOB) regarding Deloitte & Touche's communications with the Audit Committee concerning independence, and the Audit Committee has further discussed with
Deloitte & Touche LLP the firm's independence from the Company as required by the SEC's independence rules, Rule 2-01 of Regulation S-X;
-
-
Discussed with Deloitte & Touche LLP the matters required to be discussed by Auditing Standard No. 16, Communications with
Audit Committees, as adopted by the PCAOB; and
-
-
Reviewed and discussed with management the audited consolidated financial statements of Eversource Energy for the years ended
December 31, 2017 and 2016.
70
2018 Proxy Statement
Table of Contents
ITEM 4: RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
Management
is responsible for the Company's financial statements, the overall reporting process and the system of internal control over financial reporting. Deloitte & Touche LLP, as our
independent registered public accounting firm, is responsible for conducting annual audits and quarterly reviews of the Company's financial statements and expressing an opinion as to the conformity,
in all material respects, of the annual financial statements with generally accepted accounting principles in the United States and expressing an opinion on the effectiveness of our internal control
over financial reporting as of the end of the fiscal year.
In
performing their oversight responsibility, the Audit Committee, whose members are all financially literate and whose Chair is an audit committee financial expert as defined by SEC rules, rely
without independent verification on the information provided to them, and on the representations made by management and Deloitte & Touche LLP.
Based
upon the review and discussions described in this report, the Audit Committee recommended to the Board of Trustees that the audited consolidated financial statements be included in Eversource
Energy's Annual
Report
on Form 10-K for the year ended December 31, 2017 for filing with the SEC.
The
Audit Committee has directed the preparation of this report and has approved its content and submission to shareholders.
Respectfully
submitted,
Francis
A. Doyle (Chair)
John S. Clarkeson
John Y. Kim
Kenneth R. Leibler
William C. Van Faasen
Frederica M. Williams
February 20,
2018
2018 Proxy Statement
71
Table of Contents
The
Board of Trustees knows of no matters other than those presented in this proxy statement to come before the meeting. However, if any other matters properly come before the meeting, the persons
named in the enclosed proxy will vote in their discretion with respect to such other matters.
If
you would like us to consider including a proposal in our proxy statement for the 2019 Annual Meeting of Shareholders, your proposal must be received by the Secretary's office no later than
November 23, 2018, and must satisfy the conditions established by the SEC. Written notice of proposals of shareholders to be considered at the 2019 Annual Meeting without inclusion in next
year's proxy statement must be received on or before February 6, 2019. If a notice is received after February 6, 2019, then the notice will be considered untimely and the proxies held by
management may provide the discretion to vote against such proposal, even though the proposal is not discussed in the proxy statement. Eversource Energy considers these dates to be reasonable
deadlines for submission of proposals before we begin to print and mail our proxy materials for
the 2019 Annual Meeting of Shareholders. Proposals should be addressed to:
Richard
J. Morrison
Secretary
Eversource Energy
800 Boylston Street, 17
th
Floor
Boston, Massachusetts 02199-7050
2017 Annual Report and
Annual Report on Form 10-K
|
The
Company's Annual Report for the year ended December 31, 2017, including financial statements, was mailed with this proxy statement or made available to shareholders on the Internet. We will
mail a copy of the 2017 Annual Report to any shareholder upon request. We will provide shareholders with a copy of our Annual Report on Form 10-K for the year ended December 31, 2017,
filed with the Securities and Exchange Commission on February 23, 2018, including the financial statements and schedules thereto, without charge, upon receipt of a written request sent to the
Secretary at the address set forth above.
72
2018 Proxy Statement
Table of Contents
Questions and Answers About the Annual Meeting and Voting
|
-
Q:
-
WHAT AM I VOTING ON?
-
A:
-
The
Board of Trustees of Eversource Energy is asking you to vote on four separate items, as summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
Item
|
|
Board
Recommendation
|
|
Vote
Required
|
|
Effect of
Abstentions
|
|
Effect of
Broker
Non-Votes
|
|
Discussion
Beginning
on Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Election of Trustees
(Item 1)
|
|
FOR
All Nominees
|
|
Majority of all common shares issued and outstanding
|
|
Against
|
|
Against
|
|
|
6
|
|
Advisory vote on
executive compensation
(Item 2)
|
|
FOR
|
|
Majority of votes cast
|
|
No effect
|
|
No effect
|
|
|
61
|
|
Approve the 2018 Eversource
Energy Incentive Plan
(Item 3)
|
|
FOR
|
|
Majority of votes cast
|
|
No effect
|
|
No effect
|
|
|
63
|
|
Ratify Deloitte & Touche LLP as
Independent Registered Public
Accounting Firm
(Item 4)
|
|
FOR
|
|
Majority of votes cast
|
|
No effect
|
|
Not applicable
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Q:
-
WILL ANY OTHER MATTERS BE VOTED ON AT THE ANNUAL MEETING?
-
A:
-
We
do not expect any other matters to be considered at the Annual Meeting. However, if a matter not described in this proxy statement is properly brought before the
Annual Meeting by a shareholder, the individuals designated as proxies will vote on the matter in accordance with their judgment of what is in the best interests of Eversource Energy.
-
Q:
-
WHO IS ENTITLED TO VOTE?
-
A:
-
You
are entitled to vote at the Annual Meeting if you held common shares on the record date, March 6, 2018. As of the record date, 316,885,808 common
shares were outstanding and entitled to vote. You are entitled to one vote on each Item to be voted on at the Annual Meeting for each common share that you held on the record date.
-
Q:
-
HOW DO I VOTE?
-
A:
-
If
you hold common shares registered directly in your name, you are considered to be the "Shareholder of Record," and the printed proxy materials or Notice of
Internet Availability of Proxy Materials have been sent directly to you by the Company.
The
Notice of Internet Availability of Proxy Materials also includes instructions for requesting printed proxy materials by mail. If you requested
and
received a paper proxy card, you may vote by mail by completing, signing and dating the proxy card and returning it in the pre-addressed, postage-prepaid envelope included with the proxy card. You
can vote in any one of the following ways:
-
-
You can vote using the Internet.
Follow the instructions in the Notice of
Internet Availability of Proxy Materials or on the proxy card. The Internet procedures are designed to authenticate a shareholder's identity to allow shareholders to vote their shares and confirm that
their instructions have been properly recorded.
-
-
Internet voting facilities for shareholders of record are available 24 hours a day and will close at 11:59 p.m. Eastern Time on
May 1, 2018. You may access this proxy statement and related materials by going to
www.envisionreports.com/ES
.
-
-
You may vote by telephone.
Follow the instructions on the Notice of
Internet Availability of Proxy Materials or on the proxy card that you received in the mail. Voting by telephone is available 24 hours a day and will close at 11:59 p.m. Eastern Time on
May 1, 2018.
-
-
You may vote by mail.
If you received a paper proxy card, you can vote by
mail by completing, signing and dating the proxy card and returning it in the pre-addressed, postage-prepaid envelope accompanying the proxy card. Proxy cards submitted by mail must be received by the
time of the Annual Meeting in order for your shares to be voted.
2018 Proxy Statement
73
Table of Contents
-
-
You may vote in person at the Annual Meeting by delivering your completed proxy card in person at the Annual Meeting or by completing a ballot
available upon request at the meeting.
If
you hold common shares through a brokerage firm, bank, other financial intermediary or nominee (known as shares held in "street name"), you should receive instructions directly from that person or
entity that you must follow in order to vote your common shares. You may vote by mail by requesting a voting instruction form in accordance with the instructions received from your broker or other
agent. Complete, sign and date the voting instruction form provided by the broker or other agent and return it in the pre-addressed, postage-prepaid envelope provided to you. You will also be able to
vote these shares by Internet or telephone. Regardless of how you choose to vote, your vote is important, and we encourage you to vote promptly.
-
Q:
-
AS A PARTICIPANT IN THE EVERSOURCE 401(k) PLAN, HOW DO I VOTE MY SHARES HELD IN MY PLAN ACCOUNT?
-
A:
-
If
you are a participant in the Eversource 401(k) Plan, you may vote the common shares held in your plan account by voting through the Internet or by telephone by
following the instructions on the Notice of Internet Availability of Proxy Materials that you received in the mail. Internet voting and voting by telephone is available 24 hours a day and will
close for plan participants at 11:59 p.m. Eastern Time on April 29, 2018.
The
Notice of Internet Availability of Proxy Materials also includes instructions for requesting printed proxy materials by mail. If you requested and received a paper proxy card, you may vote by mail
by completing, signing and dating the proxy card and returning it in the pre-addressed, postage-prepaid envelope included with the proxy card.
Whether
you vote through the Internet, by telephone or by returning a proxy card in the mail, the plan trustee will vote the common shares held in your plan account in accordance with your
instructions. If you do not provide the plan trustee with instructions by 11:59 p.m. Eastern Time on April 29, 2018, the common shares in your
Eversource 401(k) Plan account will be voted by the plan trustee in the same proportion as the votes cast by participants in the plan.
-
Q:
-
WHAT CONSTITUTES A QUORUM AND HOW ARE VOTES COUNTED?
-
A:
-
To
conduct business at the Annual Meeting, a quorum consisting of a majority of all common shares issued and outstanding and entitled to vote must be present in
person or represented by proxy.
Representatives
of Computershare Investor Services (Computershare), the Company's Registrar and Transfer Agent, will count the votes. In determining whether we have a quorum, Computershare counts all
properly submitted proxies and ballots as present and entitled to vote. Because the election of each Trustee requires the affirmative vote of at least a majority of the common shares outstanding and
entitled to vote at the Annual Meeting, broker non-votes, votes against and abstentions with respect to a particular Trustee nominee will have the same effect as a vote against such Trustee nominee.
Broker non-votes, abstentions and votes against are not considered votes cast and will not affect the advisory Say-on-Pay item or the item to approve the adoption of our 2018 Plan. Abstentions are not
considered votes cast and will not be counted for or against the item to ratify the selection of Deloitte & Touche LLP.
-
Q:
-
WHAT ARE BROKER NON-VOTES?
-
A:
-
Broker
non-votes occur when brokers holding shares on behalf of beneficial owners do not receive voting instructions from the beneficial holders. If a broker does not
have instructions and is barred by law or applicable rules from exercising its discretionary voting authority in the particular matter, then the shares will not be voted on the matter, resulting in a
"broker non-vote." For our Annual Meeting, this means that absent voting instructions, brokers are not permitted to vote on the election of Trustees, the non-binding advisory "Say-on-Pay" item or the
approval of our 2018 Plan. If your shares are held by a broker and you wish to vote on those items, you should complete the voting instruction card you receive from the broker or request one from the
broker as necessary. You will also be able to vote these shares by Internet or telephone. A broker may vote on the ratification of the selection of our independent registered public accounting firm if
the shareholder does not give instructions.
74
2018 Proxy Statement
Table of Contents
-
Q:
-
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS OR PROXY
CARD?
-
A:
-
If
you receive more than one Notice of Internet Availability of Proxy Materials and proxy card, then you have multiple accounts in which you own common shares. Please
follow all instructions to ensure that all of your shares are voted. In addition, for your convenience and to reduce costs, we recommend that you contact your broker, bank or our transfer agent to
consolidate as many accounts as possible under a single name and address. If you have any questions concerning common shares you hold in your name, including address changes, name changes, requests to
transfer shares and similar issues, you may contact our transfer agent, Computershare Investor Services, by mail at P. O. Box 43078, Providence, Rhode Island 02940-3078, by
telephone at (800) 999-7269, or on the Internet at
www.computershare.com
.
-
Q:
-
HOW CAN I CHANGE MY VOTE?
-
A:
-
Your
presence at the Annual Meeting will not automatically revoke your proxy. You may, however, revoke a proxy and change your vote at any time before the polls close
at the Annual Meeting by:
-
-
Delivering either a written notice of revocation of the proxy or a duly executed proxy bearing a later date to:
If
you are a participant in the Eversource 401(k) Plan, you may revoke your proxy card and change your vote by re-voting on the Internet or by telephone until 11:59 p.m. Eastern Time on
April 29, 2018.
-
Q:
-
WHO PAYS THE COST OF SOLICITING THE PROXIES REQUESTED?
-
A:
-
Eversource
Energy will bear the cost of soliciting proxies on behalf of the Board of Trustees. In
addition
to the use of the mails, proxies may be solicited by telephone or electronic mail by officers or employees of Eversource Energy or its service company affiliate, Eversource Energy Service
Company, who will not be specially compensated for such activities, and by employees of Computershare, our transfer agent and registrar. We have also retained D.F.
King & Co., Inc., a professional proxy soliciting firm, to assist in the solicitation of proxies for a fee of $9,500, plus reimbursement of certain out-of-pocket expenses. We will
request persons, firms and other companies holding common shares in their names or in the name of their nominees, which are beneficially owned by others as of March 6, 2018, to send proxy
materials to and obtain voting instructions from the beneficial owners, and we will reimburse those holders for any reasonable expenses that they incur.
-
Q:
-
HOW CAN I OBTAIN ELECTRONIC ACCESS TO PROXY MATERIALS INSTEAD OF RECEIVING PAPER COPIES BY MAIL?
-
A:
-
This
proxy statement and our 2017 Annual Report are available on our website at
www.eversource.com
in the Investor
section. You may elect to enroll in "electronic access" to receive future proxy statements and annual reports electronically instead of receiving paper copies in the mail. If you are a shareholder of
record, you can choose this option and save the Company the cost of producing and mailing these documents by visiting
www.computershare.com/investor
and
following the instructions. You will need to login to your account or create a login to verify your identity. If your common shares are held by a brokerage firm, bank, other financial intermediary or
nominee (i.e., held in "street name"), and you wish to enroll in electronic access, you should contact your brokerage firm, bank or nominee directly.
If
you choose to receive future proxy statements and annual reports electronically, each year we will timely notify you when these documents become available. Your choice to receive these documents
electronically will remain in effect until you instruct us otherwise. You can request paper copies of these documents, free of charge, from us by writing to the Secretary at the address previously
noted on this page.
2018 Proxy Statement
75
Table of Contents
APPENDIX A
2018 EVERSOURCE ENERGY
INCENTIVE PLAN
1.
PURPOSE
The
purpose of the 2018 Eversource Energy Incentive Plan (the Plan) is to attract and retain employees of the Company, to provide an incentive for Participants to generate shareholder
value by contributing to the appreciation of shares of Company Stock, to enable Participants to share in the
growth of the Company through the grant of Awards, and to provide non-employee Trustees with Equity Awards.
2.
DEFINED TERMS
Exhibit A
, which is incorporated by reference, defines the terms used in the Plan and includes certain operational rules related to
those terms.
3.
ADMINISTRATION
The
Plan shall be administered by the Compensation Committee. The Board may in any instance perform any of the Plan functions of the Compensation Committee, and the Compensation
Committee may delegate such of its Plan duties, powers and responsibilities as it may determine to any other person, including the grant of Awards, in accordance with applicable legal requirements and
the Compensation Committee's charter. References to the Compensation Committee in this Plan shall include the Board or the person or persons so delegated to the extent of such delegation, as
applicable.
The
Compensation Committee shall select the persons eligible to receive Awards and shall determine the terms and conditions of the Awards. The Compensation Committee has discretionary
authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award;
determine the form of settlement of Awards (whether in cash, shares of Stock, other property or a combination thereof); prescribe forms, rules and procedures; and otherwise do all things necessary or
desirable to carry out the purposes of the Plan. Determinations of the Compensation Committee made under the Plan will be conclusive and will bind all parties.
4.
ELIGIBILITY FOR ANNUAL CASH INCENTIVE AWARDS
Each
employee of the Company employed in a position classified as a Vice President or higher (an Executive Employee) shall be eligible to receive an Annual Cash Incentive Award under the
Plan. As soon as practicable after the start of each fiscal year, but in any event within 90 days thereafter, the Compensation Committee shall set performance goals for the Company, which shall
be the basis for determining the Annual Cash Incentive Award to be paid to each Executive Employee for such fiscal year, unless otherwise determined by the Compensation Committee. The Compensation
Committee shall communicate to each Executive Employee the target and the percentages (including minimums and maximums) of the Annual Cash Incentive Award that such employee is eligible to receive.
The Compensation Committee may permit an Executive Employee to defer an Annual Cash Incentive Award in accordance with such procedures as the Compensation Committee may from time to time specify,
subject to compliance with Section 409A.
The
Compensation Committee shall certify and announce the Annual Incentive Awards that will be paid by the Company to each Executive Employee as soon as practicable following the final
determination of the Company's financial results for the relevant fiscal year. Payment of an Annual Incentive Award that an Executive Employee has not expressly deferred shall be made in cash after
the end of the relevant fiscal year but not later than two and one-half months after the end of such fiscal year, only if the employment of the Executive Employee has not been terminated prior to the
date that
A-1
Table of Contents
payment
is due, except as otherwise specifically provided in a written agreement between the Company and the Executive Employee. The Compensation Committee may provide for complete or partial
exceptions to this requirement if an Executive Employee's employment terminates on account of his or her Retirement, death or Disability, or is terminated by the Company without Cause or in connection
with a Change in Control.
5.
ELIGIBILITY AND PARTICIPATION FOR EQUITY AWARDS
The
Compensation Committee shall select Participants from among key Employees of the Company and its subsidiaries, it being understood that no Employee whose terms and conditions of
employment are subject to negotiation with a collective bargaining agent will be eligible to receive an Equity Award under the Plan until the agreement between the Company and such collective
bargaining agent with respect to the Employee provides for eligibility to participate in the Plan. Eligibility for ISOs is limited to individuals described in the first sentence of this
Section 5 who are employees of the Company or of a "parent corporation" or "subsidiary corporation" of the Company as those terms are defined in Section 424 of the Code. Eligibility for
Stock Options, other than ISOs and SARs, is limited to individuals described in the first sentence of this Section 5 who are providing direct services on the date of grant of the Award to the
Company or to a subsidiary of the Company that would be described in the first sentence of Section 1.409A-1(b)(5)(iii)(E) of the Treasury Regulations. Non-employee Trustees shall also
participate in the Plan through Stock Awards made as a component of Trustee compensation.
6.
LIMITS ON GRANTS AND COMPENSATION UNDER THE PLAN
(a)
Number of Shares
.
Subject to
adjustment as provided in Section 8(b), the maximum number of shares of Company Stock that may be issued in satisfaction of Equity Awards under the Plan on and after the Effective Date shall be
3,200,000 shares. For purposes of this Section 6(a), the number of shares of Company Stock issued in satisfaction of Equity Awards will be determined (i) by including shares of Company
Stock withheld by the Company in payment of the exercise price or purchase price of the Award or in satisfaction of tax withholding requirements with respect to the Award, (ii) by including the
full number of shares covered by a SAR any portion of which is settled in Company Stock (and not
only the number of shares of Company Stock delivered in settlement), and (iii) by excluding any shares of Company Stock underlying Awards settled in cash or property (other than Company Stock)
or that expire, become unexercisable, terminate or are forfeited to or repurchased by the Company without the issuance of Company Stock. For the avoidance of doubt, the number of shares of Company
Stock available for delivery under the Plan will not be increased by any shares of Company Stock delivered under the Plan that are subsequently repurchased using proceeds directly attributable to
Stock Option exercises. The limits set forth in this Section 6(a) will be construed to comply with Section 422.
(b)
Substitute Awards
.
The Compensation
Committee may grant Substitute Awards under the Plan in substitution for equity awards of an acquired company. To the extent consistent with the requirements of Section 422 and the regulations
thereunder and other applicable legal requirements (including applicable stock exchange requirements), Company Stock issued under Substitute Awards will be in addition to and will not reduce the
number of shares available for Awards under the Plan set forth in Section 6(a), but, notwithstanding anything in Section 6(a) to the contrary, if any Substitute Award is settled in cash
or expires, becomes unexercisable, terminates or is forfeited to or repurchased by the Company without the issuance of Company Stock, the shares of Company Stock previously subject to such Award will
not be available for future grants under the Plan. The Compensation Committee will determine the extent to which the terms and conditions of the Plan apply to Substitute Awards, if at all.
A-2
Table of Contents
(c)
Type of Shares
.
Shares of Company
Stock delivered by the Company under the Plan may be authorized but unissued shares of Company Stock or previously issued shares of Company Stock acquired by the Company.
(d)
Individual Limits
.
(1)
The following additional limits apply to Awards of the specified type granted or, in the case of Cash Awards, payable to
any person in any calendar year.
-
(A)
-
Stock Options: 500,000 shares of Company Stock.
-
(B)
-
SARs: 500,000 shares of Company Stock.
-
(C)
-
Long term Incentive Cash Awards: $4,000,000
-
(D)
-
Annual Cash Incentive Awards: $4,000,000
-
(E)
-
Equity Awards (other than Stock Options or SARS): 400,000 shares of Company Stock.
In
applying the foregoing limits, (i) all Awards of the specified type granted to the same person in the same calendar year are aggregated and made subject to one limit;
(ii) the limits applicable to Stock Options and SARs refer to the number of shares of Company Stock underlying those Awards; (iii) the share limits under clause (E) refer to the
maximum number of shares of Company Stock that may be delivered, or the value of which could be paid in cash or other property, under an Award or Awards of the type specified in clause (E),
assuming a maximum payout; (iv) Awards other than Annual Cash Incentive Awards or Long Term Incentive Cash Awards that are settled in cash count against the applicable share limit under
clauses (A), (B) or (E), as applicable, and not against the dollar limit under clause (C) and (D); and (v) the dollar limit under clauses (C) and (D) refers
to the maximum dollar amount payable under an Annual Cash Incentive Award or Long Term Incentive Cash Award, as applicable, assuming a maximum payout.
(2)
Notwithstanding the foregoing limits, the aggregate value of all compensation granted or paid to any non-employee Trustee
with respect to any calendar year in respect of his or her service as Trustee, including Awards granted under the Plan and cash fees or other compensation paid to the non-employee Trustee for his or
her services as a Trustee, including service on committees of the Board during such calendar year, shall not exceed $750,000 in the aggregate, calculating the value of any Equity Awards based on the
grant date fair value of such awards in accordance with the Accounting Rules.
7.
RULES APPLICABLE TO AWARDS
(a)
All Awards.
(1)
Awards
.
Awards under the Plan may
consist of any or a combination of the following: Stock Options, SARs, Restricted Stock, Stock Units, including Restricted Stock Units, Performance Awards, Cash Awards and other awards that are
convertible into or otherwise based on Common Stock (each, an Award, and, collectively, Awards).
(2)
Award Provisions
.
By accepting (or,
under such rules as the Compensation Committee may prescribe, being deemed to have accepted) an Award, the Participant will be deemed to have agreed to the terms of the Award and the Plan.
Notwithstanding any provision of this Plan to the contrary, Substitute Awards may contain terms and conditions that are different from the terms and conditions specified herein, as determined by the
Compensation Committee. The Compensation Committee shall determine the terms of all Awards, subject to the limitations
A-3
Table of Contents
provided
herein. Awards under a particular section of the Plan need not be uniform as among the Participants.
(3)
Term of Plan
.
No Awards may be made
after 10 years from the Date of Adoption, but previously granted Awards may continue beyond that date in accordance with their terms.
(4)
Transferability
.
Neither ISOs nor,
except as the Compensation Committee otherwise expressly provides in accordance with the third sentence of this Section 7(a)(4), other Awards, may be transferred other than by will or by the
laws of descent and distribution. During a Participant's lifetime, ISOs and, except as the Compensation Committee otherwise expressly provides in accordance with the third sentence of this
Section 7(a)(4), SARs and NSOs, may be exercised only by the Participant. The Compensation Committee may permit the gratuitous transfer (
i.e.
,
transfer not for value) of Awards other than ISOs, subject to applicable securities and other laws and such limitations as the Compensation Committee may impose.
(5)
Vesting
.
The Compensation Committee
shall determine the time or times at which an Award vests or becomes exercisable or any restrictions on such Award lapse and the terms on which an Award remains outstanding;
provided, however
, that no
portion of any grant of an Equity Award may be scheduled by its terms to vest prior to the date that is one year following
the date the Equity Award is granted;
provided also, however
, that Equity Awards that by the terms of a grant are scheduled to result in the issuance
(as determined in accordance with the rules set forth in Section 6(a)) of an aggregate of up to five percent of the shares of Company Stock reserved for issuance under Section 6(a) may
be granted to eligible persons (including Trustees) without regard to the minimum vesting provisions of this Section 7(a). Without limiting the foregoing, the Compensation Committee may at any
time accelerate the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax or other consequences resulting from such acceleration. Unless the Compensation
Committee expressly provides otherwise, however, the following rules will apply if a Participant's Employment ceases:
(A)
Except as provided in (B) and (C) below, immediately upon the cessation of the Participant's Employment,
each Stock Option and SAR that is then held by the Participant or by the Participant's permitted transferees, if any, will cease to be exercisable and will terminate, and all other Awards that are
then held by the Participant or by the Participant's permitted transferees, if any, to the extent not already vested will be forfeited.
(B)
Subject to (C) and (D) below, all Stock Options and SARs held by the Participant or the Participant's
permitted transferees, if any, immediately prior to the cessation of the Participant's Employment, to the extent then exercisable, will remain exercisable for the lesser of (i) a period of
three months or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 7(a)(5), and will thereupon
immediately terminate.
(C)
Subject to (D) below, all Stock Options and SARs held by a Participant or the Participant's permitted transferees,
if any, immediately prior to the Participant's death, to the extent then exercisable, will remain exercisable for the lesser of (i) the one year period ending with the first anniversary of the
Participant's death or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this Section 7(a)(5), and will thereupon
immediately terminate.
(D)
All Equity Awards (whether or not vested or exercisable) held by a Participant or the Participant's permitted
transferees, if any, immediately prior to the cessation of the Participant's Employment, will immediately terminate upon such cessation of Employment if the termination is for Cause or occurs in
circumstances that in the determination of the Compensation Committee would have constituted grounds for the Participant's Employment to be terminated for Cause.
A-4
Table of Contents
(6)
Recovery of Compensation
. Upon written demand of the
Company, the Compensation Committee may require the forfeiture and disgorgement to the Company of outstanding Awards and the proceeds from the exercise or disposition of Awards or Company Stock
acquired under Awards, with interest and other related earnings, if payment of the Award was predicated on the achievement of certain financial results that were subsequently the subject of a material
restatement of the financial statements of the Company, in the judgment of the Board, and if the Participant engaged in fraud or misconduct that caused or partially caused the need for the material
restatement, and a lower payment would have been made to the Participant based on the restated financial results. In the event the Participant fails to make prompt reimbursement of any such Award or
amounts previously paid or delivered, as applicable, the Company may, to the extent permitted by applicable law, deduct the amount required to be reimbursed from the Participant's compensation
otherwise due from the Company;
provided
,
however
, that the Company will not seek to recover upon Awards
paid more than three years prior to the date
the applicable restatement is disclosed. In addition, the Compensation Committee may require forfeiture and disgorgement to the Company of outstanding Awards and the proceeds or amounts with respect
to the exercise, settlement, payment or disposition of Awards or Company Stock acquired under Awards, with interest and other related earnings, (i) to the extent required by law or applicable
stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended (the Exchange Act), (ii) pursuant to any applicable
Company clawback or recoupment policy, as in effect from time to time, or (iii) in connection with a willful violation by the Participant of a material provision of the code of business conduct
of the Company or any of its subsidiaries, any material policy of the Company or any of its subsidiaries, or any material provision set forth in an employment agreement occurring within three years
following payment of an Award, each, as in effect from time to time, and all as may be determined by the Compensation Committee. Each Participant, by accepting or being deemed to have accepted an
Award under the Plan, agrees to cooperate fully with the Compensation Committee, and to cause any and all permitted transferees of the Participant to cooperate fully with the Compensation Committee to
effectuate any forfeiture or disgorgement required hereunder. Neither the Compensation Committee nor the Company nor any other person, other than the Participant and his or her permitted transferees,
if any, will be responsible for any adverse tax or other consequences to a Participant or his or her permitted transferees, if any, that may arise in connection with this Section 7(a)(6).
(7)
Taxes
.
The delivery, vesting and
retention of Company Stock, cash or other property under an Award are conditioned upon full satisfaction by the Participant of all tax withholding requirements with respect to the Award. The
Compensation Committee shall prescribe such rules for the withholding of taxes with respect to any Award as it deems necessary. The Company may hold back shares of Company Stock from an Equity Award
or permit a Participant to tender previously owned shares of Company Stock in satisfaction of tax withholding requirements (but not in excess of the maximum withholding amount consistent with the
award being subject to equity accounting treatment under the Accounting Rules).
(8)
Dividend Equivalents
.
The
Compensation Committee may provide for the payment of amounts (on terms and subject to conditions established by the Compensation Committee) in lieu of cash dividends or other cash distributions with
respect to Company Stock subject to an Award whether or not the holder of such Award is otherwise entitled to share in the actual dividend or distribution in respect of such Award;
provided, however
,
that (a) dividends or dividend equivalents relating to an Award that, at the dividend payment date, remain subject to a risk
of forfeiture (whether service-based or performance-based) shall be subject to the same risk of forfeiture as applies to the underlying Award and (b) no dividends or dividend equivalents shall
be payable with respect to Options or SARs. Any entitlement to dividend equivalents or similar entitlements will be established and administered either consistent with an exemption from, or in
compliance with, the requirements of Section 409A. Dividends or dividend equivalent amounts payable in respect of Awards that are subject to restrictions may be subject to such additional
limits or restrictions as the Compensation Committee may impose.
A-5
Table of Contents
(9)
Rights
Limited
.
Nothing in the Plan may be construed as giving any person the right to be granted an Award or to continued employment or service
with the Company or any of its subsidiaries, or any rights as a shareholder except as to shares of Company Stock actually issued under the Plan. The loss of existing or potential profit in Awards will
not constitute an element of damages in the event of termination of Employment for any reason, even if the termination is in violation of an obligation of the Company or any of its subsidiaries to the
Participant.
(10)
Performance- based Compensation Tax Exception.
In the case
of any Performance Award (other than a Stock Option or SAR) intended to qualify for any performance-based compensation exception that might now or in the future be contained in any law or regulation,
the Compensation Committee shall establish the Performance Criterion (or Criteria) applicable to the Award within the time period required under such law or regulation, and the grant, vesting or
payment, as the case may be, of the Award will be conditioned upon the satisfaction of the Performance Criterion (or Criteria) as certified by the Compensation Committee, unless otherwise determined
by the Compensation Committee.
(11)
Coordination with Other
Plans
.
Awards under the Plan may be granted in tandem with, or in satisfaction of or substitution for, other Awards under the Plan or
awards made under other
compensatory plans or programs of the Company or any of its subsidiaries. For example, but without limiting the generality of the foregoing, awards under other compensatory plans or programs of the
Company or any of its subsidiaries may be settled in Company Stock under the Plan if the Compensation Committee so determines, in which case the shares delivered will be treated as awarded under the
Plan (and will reduce the number of shares thereafter available under the Plan in accordance with the rules set forth in Section 6). In any case where an award is made under another plan or
program of the Company or any of its subsidiaries and is intended to qualify for any performance-based compensation exception under law or regulation, and such award is settled by the delivery of
Company Stock or another Award under the Plan, the limitations under both the other plan or program and under the Plan will be applied to the Plan as necessary (as determined by the Compensation
Committee) to preserve the availability of any performance-based compensation exception with respect thereto.
(12)
Section 409A
.
(A)
Without limiting the generality of Section 12(B) hereof, each Award will contain such terms as the Compensation
Committee determines and will be construed and administered such that the Award either qualifies for an exemption from the requirements of Section 409A, or satisfies such requirements.
(B)
Notwithstanding any provision of this Plan or any Award agreement to the contrary, the Compensation Committee may
unilaterally amend, modify or terminate the Plan or any outstanding Award, including but not limited to changing the form of the Award, if the Compensation Committee determines that such amendment,
modification or termination is necessary or advisable to avoid the imposition of an additional tax, interest or penalty under Section 409A.
(C)
If a Participant is deemed on the date of the Participant's termination of Employment to be a "specified employee" within
the meaning of that term under Section 409A(a)(2)(B), then, with regard to any payment that is considered nonqualified deferred compensation under Section 409A, to the extent applicable,
payable on account of a "separation from service", such payment will be made or provided on the date that is the earlier of (i) the expiration of the six-month period measured from the date of
such "separation from service" and (ii) the date of the Participant's death (the Delay Period). Upon the expiration of the Delay Period, all payments delayed pursuant to this
Section 7(a)(12) (whether they would have otherwise been payable in a single lump sum or in
A-6
Table of Contents
installments
in the absence of such delay) will be paid on the first business day following the expiration of the Delay Period in a lump sum and any remaining payments due under the Award will be paid
in accordance with the normal payment dates specified for them in the applicable Award agreement.
(D)
For purposes of Section 409A, each payment made under this Plan will be treated as a separate payment.
(E)
With regard to any payment considered to be nonqualified deferred compensation under Section 409A, to the extent
applicable, that is payable upon a Change in Control of the Company or other similar event, to avoid the imposition of an additional tax, interest or penalty under Section 409A, no amount will
be payable unless such change in control constitutes a "change in control event" within the meaning of Section 1.409A-3(i)(5) of the Treasury Regulations.
(b)
Stock Options and SARs
.
(1)
Time and Manner of Exercise
.
Unless
the Compensation Committee expressly provides otherwise, no Stock Option or SAR will be deemed to have been exercised until the Company receives notice of exercise in a form acceptable to the
Compensation Committee that is signed by the appropriate person and accompanied by any payment required under the Award. Any attempt to exercise a Stock Option or SAR by any person other than the
Participant will not be given effect unless the Compensation Committee has received such evidence as it may require that the person exercising the Award has the right to do so.
(2)
Exercise Price
.
The exercise price
(or the base value from which appreciation is to be measured) of each Award requiring exercise must be no less than 100% (in the case of an ISO granted to a 10-percent shareholder within the meaning
of subsection (b)(6) of Section 422, 110%) of the Fair Market Value of the Company Stock subject to the Award, determined as of the date of grant, or such higher amount as the
Compensation Committee may determine in connection with the grant.
(3)
Payment of Exercise Price
.
Where the
exercise of an Award is to be accompanied by payment, payment of the exercise price must be by cash or check acceptable to the Compensation Committee or, if so permitted by the Compensation Committee
and if legally permissible, (i) through the delivery of previously acquired unrestricted shares of Company Stock, or the withholding of shares of Company
Stock otherwise deliverable upon exercise, in either case that have a Fair Market Value equal to the exercise price, (ii) through a broker-assisted cashless exercise program acceptable to the
Compensation Committee, (iii) by other means acceptable to the Compensation Committee, or (iv) by any combination of the foregoing permissible forms of payment. The delivery of
previously acquired shares in payment of the exercise price under clause (b)(3) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership,
subject to such rules as the Compensation Committee may prescribe.
(4)
Maximum Term
.
The maximum term of
Stock Options and SARs must not exceed 10 years from the date of grant (or five years from the date of grant in the case of an ISO granted to a 10-percent shareholder described in
Section 7(b)(2) above).
(5)
No Repricing
.
Except in connection
with a corporate transaction involving the Company (which term includes, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares) or as otherwise contemplated by Section 8 below, the Company may not, without obtaining shareholder approval,
(A) amend the terms of outstanding Stock Options or SARs to reduce the exercise price or base value of such Stock Options or SARs, (B) cancel
A-7
Table of Contents
outstanding
Stock Options or SARs in exchange for Stock Options or SARs with an exercise price or base value that is less than the exercise price or base value of the original Stock Options or SARs,
or (C) cancel outstanding Stock Options or SARs that have an exercise price or base value greater than the Fair Market Value of a share of Company Stock on the date of such cancellation in
exchange for cash or other consideration.
8.
EFFECT OF CERTAIN TRANSACTIONS
(a)
Except as otherwise expressly provided in an Award agreement, Company plan, or other individual agreement, or by the
Compensation Committee, the following provisions will apply in the event of a Corporate Transaction or a Change in Control:
(1)
Assumption or Substitution
.
If the
Corporate Transaction or Change in Control is one in which there is an acquiring or surviving entity, the Compensation Committee shall provide for either (A) the assumption or continuation of
all outstanding Awards or any portion thereof or (B) the grant of new awards in substitution therefor by the acquiror or survivor or an affiliate of the acquiror or survivor.
(2)
Cash-Out of Awards
.
Subject to
Section 8(a)(6) below, the Compensation Committee may alternatively or also provide for payment (a "cash-out"), with respect to some or all Awards or any portion thereof, equal in the case of
each affected Equity Award or portion thereof to the excess, if any, of (A) the Fair Market Value of one share of Company Stock times the number of shares of Company Stock subject to the Equity
Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Equity Award or such portion (in the case of a SAR, the aggregate base value above which appreciation
is measured), in each case on such payment terms (which need not be the same as the terms of payment to holders of Company Stock) and other terms, and subject to such conditions, as the Compensation
Committee determines;
provided, however
, for the avoidance of doubt, that if the exercise or purchase price (or base value) of an Equity Award is equal
to or greater than the Fair Market Value of one share of Company Stock, the Equity Award may be cancelled with no payment due hereunder or otherwise in respect of such Equity Award.
(3)
Acceleration of Certain
Awards
.
Subject to Section 8(a)(6) below, the Compensation Committee may provide that any Equity Award requiring exercise will
become exercisable, in full or in part, and/or that the delivery of any shares of Company Stock remaining deliverable under any outstanding Award of Company Stock Units (including Restricted Stock
Units and Performance Awards to the extent consisting of Company Stock Units) will be accelerated, in full or in part, in each case on a basis that gives the holder of the Award a reasonable
opportunity, as determined by the Compensation Committee, following exercise of the Award or the delivery of the shares, as the case may be, to participate as a shareholder in the Corporate
Transaction or Change in Control.
(4)
Termination of Awards upon Consummation of a Corporate Transaction or Change in
Control
.
Except as the Compensation Committee may otherwise determine in any case, each Award will automatically terminate (and in the case
of outstanding shares of Restricted Stock, will automatically be forfeited) immediately upon consummation of the Corporate Transaction or a Change in Control, other than (A) any Award that is
assumed or substituted pursuant to Section 8(a)(1) above, and (B) any Cash Award that by its terms, or as a result of action taken by the Compensation Committee, continues following the
Corporate Transaction or Change in Control.
(5)
Involuntary Employment
Action
.
Except as otherwise provided in an Award agreement or an individual agreement, if at any time within two (2) years after the
effective date of a Change in Control there is an Involuntary Employment Action with respect to a Participant, each then
A-8
Table of Contents
outstanding
Equity Award assumed, substituted or continued under Section 8(a)(1) and held by such Participant (or a permitted transferee of such person), to the extent then outstanding, shall,
upon the occurrence of such Involuntary Employment Action, automatically accelerate so that each such Award shall become fully vested or exercisable, as applicable, immediately prior to such
Involuntary Employment Action. Upon the occurrence of an Involuntary Employment Action with respect to a Participant, any outstanding Options or SARs held by such Participant (and a permitted
transferee of such person) shall be exercisable for one (1) year following the Involuntary Employment Action or, if earlier, within the originally prescribed term of the Option or SAR.
(6)
Additional Limitations
.
Any share of
Company Stock and any cash or other property delivered pursuant to Section 8(a)(2) or Section 8(a)(3) above with respect to an Equity Award may, in the discretion of the Compensation
Committee, contain such restrictions, if any, as the Compensation Committee deems appropriate to reflect any performance or other vesting conditions to which the Award was subject and that did not
lapse (and were not satisfied) in connection with a Corporate Transaction or a Change in Control. For purposes of the immediately preceding sentence, a cash-out under Section 8(a)(2) above or
an acceleration under Section 8(a)(3) above will not, in and of itself, be treated as the lapsing (or satisfaction) of a performance or other vesting condition. In the case of Restricted Stock
that does not vest and is not forfeited in connection with the Corporate Transaction or Change in Control, the Compensation Committee may require that any amounts delivered, exchanged or otherwise
paid in respect of such Company Stock in connection with the Corporate Transaction or Change in Control be placed in escrow or otherwise made subject to such restrictions as the Compensation Committee
deems appropriate to carry out the intent of the Plan.
(b)
Changes in and Distributions with Respect to Company
Stock
.
(1)
Basic Adjustment Provisions
.
In the
event of a stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Company's capital structure that constitutes an equity
restructuring within the meaning of the Accounting Rules, the Compensation Committee shall make appropriate adjustments to the maximum number of shares of Company Stock specified in
Section 6(a) that may be issued under the Plan and to the maximum share limits described in Section 6(d), and shall make appropriate adjustments to the number and kind of shares of stock
or securities underlying Equity Awards then outstanding or subsequently granted, any exercise or purchase prices (or base values) relating to Equity Awards and any other provision of Awards affected
by such change.
(2)
Certain Other Adjustments
.
The
Compensation Committee may also make adjustments of the type described in Section 8(b)(1) above to take into account distributions to shareholders other than those
provided for in Section 8(a) and 8(b)(1), or any other event, if the Compensation Committee determines that adjustments are appropriate to avoid distortion in the operation of the Plan.
(3)
Continuing Application of Plan
Terms
.
References in the Plan to shares of Company Stock will be construed to include any stock or securities resulting from an adjustment
pursuant to this Section 8.
9.
LEGAL CONDITIONS ON DELIVERY OF COMPANY STOCK
The
Company will not be obligated to deliver any shares of Company Stock pursuant to the Plan or to remove any restriction from shares of Company Stock previously delivered under the
Plan until: (i) the Company is satisfied that any legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding
Company Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon
official notice of issuance; and
A-9
Table of Contents
(iii) all
conditions of the Award have been satisfied or waived. The Company may require, as a condition to the exercise of an Award or the delivery of shares of Company Stock under an Award,
such representations or agreements as counsel for the Company may consider appropriate to avoid violation of the Securities Act of 1933, as amended, or any applicable state or non-U.S. securities law.
Any Company Stock required to be issued to Participants under the Plan will be evidenced in such manner as the Compensation Committee may deem appropriate, including book-entry registration or
delivery of stock certificates. In the event that the Compensation Committee determines that stock certificates will be issued to Participants under the Plan, the Compensation Committee may require
that certificates evidencing Company Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Company Stock, and the Company may hold the
certificates pending lapse of the applicable restrictions.
10.
AMENDMENT AND TERMINATION
The
Compensation Committee may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the
Plan as to any future grants of Awards;
provided, however
, that except as otherwise expressly provided in the Plan, the Compensation Committee may not,
without the Participant's consent, alter the terms of an Award so as to affect materially and adversely the Participant's rights under the Award, unless the Compensation Committee expressly reserved
the right to do so at the time the Award was granted. Any amendments to the Plan will be conditioned upon shareholder approval to the extent, if any, such
approval is required by law (including the Code) or applicable stock exchange requirements, as determined by the Compensation Committee.
11.
MISCELLANEOUS
(a)
Waiver of Jury Trial
.
By accepting
or being deemed to have accepted an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any
Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action,
proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing
waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the
terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding
arbitration as a condition of receiving an Award hereunder.
(b)
Limitation of
Liability
.
Notwithstanding anything to the contrary in the Plan, neither the Company, nor any of its subsidiaries, nor the Compensation
Committee, nor any person acting on behalf of the Company, any of its subsidiaries, or the Compensation Committee, will be liable to any Participant, to any permitted transferee, to the estate or
beneficiary of any Participant or any permitted transferee, or to any other holder of an Award by reason of any acceleration of income, or any additional tax (including any interest and penalties),
asserted by reason of the failure of an Award to satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code, or otherwise asserted with
respect to the Award.
(c)
Funding of the Plan
.
This Plan shall
be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Awards under this Plan. In no event
shall interest be paid or accrued on any Award, including unpaid installments of Awards.
A-10
Table of Contents
(d)
Disclaimer of Liability
.
The
Declaration of Trust of the Company provides that no shareholder of the Company shall be held to any liability whatever for the payment of any sum of money, or for damages or otherwise under any
contract, obligation or undertaking made, entered into or issued by the Board or by any officer, agent or representative elected or appointed by the Board, and no such contract,
obligation or undertaking shall be enforceable against the Board or any of them in their or his or her individual capacities or capacity and all such contracts, obligations and undertakings shall be
enforceable only against the Board as such contract, obligation or undertaking shall look only to the trust estate for the payment or satisfaction thereof.
12.
ESTABLISHMENT OF SUB-PLANS
The
Compensation Committee may at any time and from time to time establish one or more sub-plans under the Plan (for local-law compliance purposes or other administrative reasons
determined by the Compensation Committee) by adopting supplements to the Plan containing, in each case, such limitations on the Compensation Committee's discretion under the Plan, and such additional
terms and conditions, as the Compensation Committee deems necessary or desirable. Each supplement so established will be deemed to be part of the Plan but will apply only to Participants within the
group to which the supplement applies, as determined by the Compensation Committee.
13.
GOVERNING LAW
(a)
Certain Requirements of Corporate
Law
.
Equity Awards will be granted and administered consistent with the requirements of applicable Massachusetts law relating to the
issuance of stock and the consideration to be received therefor, and with the applicable requirements of the stock exchanges or other trading systems on which the Company Stock is listed or entered
for trading, in each case as determined by the Compensation Committee.
(b)
Other Matters
.
Except as otherwise
provided by the express terms of an Award agreement, under a sub-plan described in Section 12 or as provided in Section 13(a) above, the domestic substantive laws of the Commonwealth of
Massachusetts govern the provisions of the Plan and of Awards under the Plan and all claims or disputes arising out of or based upon the Plan or any Award under the Plan or relating to the subject
matter hereof or thereof without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
(c)
Jurisdiction
.
By accepting an Award,
each Participant will be deemed to (a) have submitted irrevocably and unconditionally to the jurisdiction of the federal and state courts located within the geographic boundaries of the United
States District Court for the District of Massachusetts for the purpose of any suit, action or other proceeding arising out of or based upon the Plan or any Award; (b) agree not to commence any
suit, action or other proceeding arising out of or based upon the Plan or an Award, except in the federal and state courts located within the geographic boundaries of the United States District Court
for the District of Massachusetts; and (c) waive, and agree not to assert, by way of motion as a defense or otherwise, in any such suit, action or proceeding, any claim that he or she is not
subject personally to the jurisdiction of the above-named courts that his or her property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an
inconvenient
forum, that the venue of the suit, action or proceeding is improper or that the Plan or an Award or the subject matter thereof may not be enforced in or by such court.
A-11
Table of Contents
EXHIBIT A
Definition of Terms
The following terms, when used in the Plan, have the meanings and are subject to the provisions set forth below:
"Accounting Rules":
Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor provision.
"Annual Cash Incentive Award":
An Award denominated in cash that has a performance period of one (1) year.
"Board":
The Board of Trustees of the Company.
"Cash Award":
An Award denominated in cash, including an Annual Cash Incentive Award and a Long-Term Incentive Cash Award.
"Cause":
Unless otherwise defined in any then effective agreement between a Participant and the Company or its predecessors, "Cause"
means, except to
the extent specified otherwise by the Committee acting on behalf of the Company, the Participant's conviction of a felony; in the reasonable determination of the Compensation Committee, the
Participant's commission of an act of fraud, embezzlement, or theft in connection with the Participant's duties in the course of the Participant's employment with the Company; acts or omissions
causing intentional, wrongful damage to the property of the Company or intentional and wrongful disclosure of confidential information of the Company, or engaging in gross misconduct or gross
negligence in the course of the Participant's employment with the Company, or the Participant's material breach of his or her obligations under any written agreement with the Company if such breach
shall not have been remedied within 30 days after receiving written notice from the Compensation Committee specifying the details thereof. For purposes of this Plan, an act or omission on the
part of a Participant shall be deemed "intentional" only if it was not due primarily to an error in judgment or negligence and was done by Participant not in good faith and without reasonable belief
that the act or omission was in the best interest of the Company. In the event a Participant's employment or service is terminated for Cause, in addition to the immediate termination of all Grants,
the Participant shall automatically forfeit all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of
the Exercise Price paid by the Participant for such shares.
"Change in Control":
Unless otherwise defined in any then effective agreement between a Participant and the Company or its predecessors,
(i) an event in which any person or entity, is or becomes the
"beneficial owner" (as defined in Section 13(d) of the Exchange Act), together with all affiliates and associates (as such terms are used in Rule 12b-2 under the Exchange Act) of such
person or entity, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding securities; (ii) the consummation
of the merger or consolidation of the Company with any other company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger; or (iii) at any time the Trustees as of the Date of Adoption or Trustees nominated by the Board do
not constitute a majority of the Board (or, if applicable, the board of directors of a successor to the Company), provided, however, that any individual becoming a Trustee subsequent to the Effective
Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the Trustees then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose
A-12
Table of Contents
initial
assumption of office occurs as a result of actual or threatened election contest with respect to the election or removal of Trustees or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.
Notwithstanding
the foregoing, in any case where the occurrence of a Change in Control could affect the vesting of or payment under an Award subject to the requirements of
Section 409A, to the extent required to comply with Section 409A, the term "Change in Control" shall mean an occurrence that both (i) satisfies the requirements set forth above in
this definition and (ii) is a "change in control event" as that term is defined in the regulations under Section 409A.
"Code":
The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any successor statute as from time to
time in effect.
"Compensation Committee":
The Compensation Committee of the Board.
"Company":
Eversource Energy, a Massachusetts voluntary association.
"Corporate Transaction":
Means any of: (i) a consolidation, merger or similar transaction or series of related transactions,
including a sale
or other disposition of stock, in which the Company (or an Affiliate) is not the surviving entity or which results in the acquisition of all or substantially all of the then outstanding Company Stock
by a single person or entity or by a group of persons and/or entities acting in concert; (ii) a sale or transfer of all or substantially all of the Company's assets or (iii) a
dissolution or liquidation of the Company. Where a Corporate Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) as determined by
the Compensation Committee, the Corporate Transaction shall be deemed to have occurred upon consummation of the tender offer.
Notwithstanding
the foregoing, in any case where the occurrence of a Corporate Transaction could affect the vesting of or payment under an Award subject to the requirements of
Section 409A, to the extent required to comply with Section 409A, the term "Corporate Transaction" shall mean an occurrence that both (a) satisfies the requirements set forth
above in this definition and (b) is a "change in control event" as that term is defined in the regulations under Section 409A.
"Date of Adoption":
The date the Plan was approved by the Company's Board.
"Disability:
A Participant's being determined to be disabled within the meaning of the long-term disability plan or program that is a
part of the
Eversource Energy Service Company Flexible Benefits Plan (or any successor plan or program).
"Employee":
Any person who is employed by the Company or any of its subsidiaries.
"Employment":
A Participant's employment or other service relationship with the Company or any of its subsidiaries. Employment will be
deemed to
continue, unless the Compensation Committee expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 5 to
the Company or any of its subsidiaries. If a Participant's employment or other service relationship is with any subsidiary of the Company and that entity ceases to be a subsidiary of the Company, the
Participant's Employment will be deemed to have terminated when the entity ceases to be a subsidiary of the Company, unless the Participant transfers Employment to the Company or any of its remaining
subsidiaries. Notwithstanding the foregoing, in construing the
provisions of any Award relating to the payment of "nonqualified deferred compensation" (subject to Section 409A) upon a termination or cessation of Employment, references to termination or
cessation of employment, separation from service, retirement, or similar or correlative terms will be construed to require a "separation from service" (as that term is defined in
Section 1.409A-1(h) of the Treasury Regulations) from the Company and from all other corporations and trades or businesses, if any, that would be treated as a single "service recipient" with
the Company under Section 1.409A-1(h)(3) of the
A-13
Table of Contents
Treasury
Regulations. The Company may, but need not, elect in writing, subject to the applicable limitations under Section 409A, any of the special elective rules prescribed in
Section 1.409A-1(h) of the Treasury Regulations for purposes of determining whether a "separation from service" has occurred. Any such written election will be deemed a part of the Plan.
"Equity Award":
An Award other than a Cash Award.
"Fair Market Value":
As of a particular date, (i) the closing price for a share of Company Stock reported on the New York Stock
Exchange (or
any other national securities exchange on which the Company Stock is then listed) for that date or, if no closing price is reported for that date, the closing price on the immediately preceding date
on which a closing price was reported or (ii) in the event that the Company Stock is not traded on a national securities exchange, the fair market value of a share of Company Stock determined
by the Compensation Committee consistent with the rules of Section 422 and Section 409A to the extent applicable.
"ISO":
A Stock Option intended to be an "incentive stock option" within the meaning of Section 422. Each Stock Option granted
pursuant to the
Plan will be treated as providing by its terms that it is to be an NSO unless, as of the date of grant, it is expressly designated as an ISO.
"Long Term Incentive Cash Award":
An Award denominated in cash that has a performance period of greater than 12 months.
"Involuntary Employment Action":
As to a Participant means the involuntary termination of the Participant's employment with the Company
following a
Change in Control, as applicable, (i) by the Company other than for Cause or (ii) upon the occurrence of any of the following circumstances, without the Participant's consent:
(a) any adverse and/or material alteration and diminution in the Participant's authority, duties or responsibilities (other than a mere change in title or reporting relationship) as they
existed immediately prior to the Change in Control, as applicable, or as the same may be increased from time to time thereafter, (b) a reduction of the Participant's base salary or a reduction
in targeted bonus opportunity, in each case as in effect on the date prior to the Change in Control, as applicable, or as the same may be increased from time to time thereafter or
(c) relocation of the offices at which the Participant is employed which increases his or her daily commute by more than 50 miles,
however
, that
in any case the Participant notifies the Company in writing of the basis for his or her involuntary termination within ninety (90) days of the occurrence of the circumstances and the Company
does not cure such circumstances within thirty (30) days thereafter and the Participant terminates his or her employment within thirty (30) days thereafter.
"NSO":
A Stock Option that is not intended to be an "incentive stock option" within the meaning of Section 422.
"Participant":
Any eligible individual to whom an Award or Grant is made.
"Performance Award":
An Award subject to Performance Criteria. The Compensation Committee may grant Performance Awards that are intended
to qualify
for any performance-based compensation exception under applicable law or regulation now or in the future and Performance Awards that are not intended to so qualify.
"Performance Criteria":
Specified criteria, other than the mere continuation of Employment or the mere passage of time, the
satisfaction of which is
a condition for the grant, exercisability, vesting or full enjoyment of an Award. A Performance Criterion and any targets with respect thereto need not be based upon an increase, a positive or
improved result or avoidance of loss. For purposes of Awards that are intended to qualify for the performance-based compensation exception under applicable law or regulation, a Performance Criterion
will mean an objectively determinable measure or objectively determinable measures of performance relating to any, or any combination of, the following (measured
A-14
Table of Contents
either
absolutely or comparatively (including, without limitation, by reference to an index or indices or the performance of one or more companies) and determined either on a consolidated basis or, as
the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof and subject to such adjustments, if any, as the Committee specifies,
consistent with the requirements of applicable law or regulation): cash flow; cash flow from operations; earnings (including, but not limited to, earnings before interest, taxes, depreciation and
amortization or operating earnings); earnings per share, diluted or basic; earnings per share from continuing operations; net asset turnover; inventory turnover; capital expenditures; debt; debt
reduction; credit rating; working capital; return on investment; return on sales; net or gross sales; market share; economic value added; cost of capital; change in assets; expense reduction levels;
unit volume; productivity; delivery performance; service levels; operating performance; customer satisfaction; diversity of new hires and/or promotions; environmental, social and corporate governance
objectives and the return on such objectives; safety record; stock price; return on equity; total shareholder return; return on capital; return on assets or net assets; revenue; income or net income;
operating income or net operating income; operating profit or net operating profit; gross margin, operating margin or profit margin; and completion of acquisitions, divestitures, business expansion,
product diversification, new or expanded market penetration and other non-financial operating and management performance objectives, or other strategic business criteria consisting of one or more
objectives based on satisfaction of specified revenue goals, geographic business expansion goals or cost targets. To the extent consistent with the requirements for satisfying any performance-based
compensation exception under applicable law or regulation, or as otherwise determined by the Compensation Committee, the Compensation Committee may provide in the case of any Award intended to qualify
for such exception that one or more of the Performance Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect events (for example, but without limitation,
acquisitions or dispositions) occurring during the performance period that affect the applicable Performance Criterion or Criteria.
"Plan":
The 2018 Eversource Energy Incentive Plan, as from time to time amended and in effect.
"Restricted Stock":
Company Stock subject to restrictions requiring that it be redelivered or offered for sale to the Company if
specified service or
performance-based conditions are not satisfied.
"Restricted Stock Unit":
A Company Stock Unit that is, or as to which the delivery of Company Stock or cash in lieu of Stock is, subject
to the
satisfaction of specified performance, time or other vesting conditions.
"Retirement".
Termination of employment from the Company, other than for "Cause" on or after the earlier to occur of (x)
attainment of age 65,
(y) eligibility for pension payments under the Supplemental Executive Retirement Plan for Officers of the Company, or employment-related agreement with the Company, or (z) attainment of
age 55 after completing at least ten years of vesting service under the Company's 401k Plan.
"SAR":
A right entitling the holder upon exercise to receive an amount (payable in cash or in shares of Company Stock of equivalent
value) equal to
the excess of the Fair Market Value of the shares of Company Stock subject to the right over the base value from which appreciation under the SAR is to be measured.
"Section 409A":
Section 409A of the Code.
"Section 422":
Section 422 of the Code.
"Stock or Company Stock":
Common shares of the Company, par value $5.00 per share.
"Stock Option":
An option entitling the holder to acquire shares of Company Stock upon payment of the exercise price.
A-15
Table of Contents
"Stock Unit":
An unfunded and unsecured promise, denominated in shares of Company Stock, to deliver Company Stock or cash measured by
the value of
Company Stock in the future.
"Substitute Awards":
Equity Awards issued under the Plan in substitution for equity awards of an acquired company that are converted,
replaced or
adjusted in connection with the acquisition.
"Termination".
Termination of employment with the Company and any affiliate of the Company in all capacities, including as a common-law
employee and
independent contractor. Whether a Participant has had a Termination shall be determined by the Committee based on all relevant facts and circumstances with reference to Treasury Regulations
Section 1.409A-1(h) regarding a "separation from service" and the default provisions set forth in Regulations Sections 1.409A-1(h)(1)(ii) and 1.409A-1(n).
"Treasury Regulations".
The Internal Revenue Service's regulations relating to nonqualified deferred compensation plans.
"Trustee".
A member of the Board, and with respect to the compensation and benefits of a member of the Board who is also an Employee, a
non-employee
member of the Board.
A-16
MMMMMMMMMMMM . MMMMMMMMMMMMMMM C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 1, 2018 (11:59 p.m., Eastern Time, April 29, 2018 for participants in the Ever source 401k Plan). Vote by Internet Go to www.envisionreports.com/ES Or scan the QR code with your smartphone Follow the steps outlined on the secure website MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Vote by telephone Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Items The Board of Trustees recommends a vote FOR all nominees and FOR Items 2, 3, and 4. 1. Election of Trustees: + For Against Abstain For Against Abstain For Against Abstain 01 - Cotton M. Cleveland 02 - Sanford Cloud, Jr. 03 - James S. DiStasio 04 - Francis A. Doyle 05 - James J. Judge 06 - John Y. Kim 07 - Kenneth R. Leibler 08 - William C. Van Faasen 09 - Frederica M. Williams 10 - Dennis R. Wraase For Against Abstain 2. Consider an advisory proposal approving the compensation of our Named Executive Officers. 3. Approve the 2018 Ever source Energy Incentive Plan. 4. Ratify the selection of Deloitte & Touche LLP as the independent registered public accounting firm for 2018. MMMMMMMC 1234567890 J N T 4 7 4 1 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 1 P C F 3 6 02RROB MMMMMMMMM A Annual Meeting Proxy/Vote Authorization Card1234 5678 9012 345 X IMPORTANT ANNUAL MEETING INFORMATION
. You can access your account online. You can access your registered shareholder information on the following secure Internet site: http://www.computershare.com/investor. Step 1: Register (1st time users only) Click on Create Login and follow the instructions. Step 2: Log In (Returning users) Click Login and follow the instructions. Step 3: View your account details and perform multiple transactions, such as: View account balances View transaction history View payment history View common share quotes Change your address View electronic shareholder communications Buy or sell shares Check replacements If you are not an Internet user and wish to contact Ever source Energy, you may use one of the following methods: Call: 1-800-999-7269 Write: Ever source Energy, c/o Computershare, P.O. Box 43078, Providence, RI 02940-3078 Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The proxy statement and 2017 Annual Report to shareholders are available at www.envisionreports.com/ES. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proxy/Vote Authorization Form EVER SOURCE ENERGY + Annual Meeting of Shareholders May 2, 2018 Proxy/Vote Authorization Form is Solicited by the Board of Trustees of the Company The undersigned appoints James J. Judge, Sanford Cloud, Jr. and Gregory B. Butler, and each of them, proxies of the undersigned, with power to act without the other and full power of substitution, to act for and to vote all common shares of Ever source Energy that the undersigned would be entitled to cast if present in person at the 2018 Annual Meeting of Shareholders to be held on May 2, 2018, and at any postponement or adjournment thereof, upon the matters indicated on the reverse side of this card. This card also constitutes voting instructions for participants in the Ever source 401k Plan. The undersigned hereby directs the applicable trustee to vote all common shares credited to the undersigneds account at the Annual Meeting and any adjournment thereof. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, THE PROXIES WILL VOTE YOUR COMMON SHARES CONSISTENT WITH THE RECOMMENDATIONS OF OUR BOARD OF TRUSTEES. (Continued and to be marked, dated and signed, on the reverse side.) Non-Voting Items Change of Address Please print your new address below. Comments Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. Authorized Signatures This section must be completed for your vote to be counted. Date and Sign Below Please sign exactly as name(s) appears above. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. + C B
Eversource Energy (NYSE:ES)
Historical Stock Chart
From Mar 2024 to Apr 2024
Eversource Energy (NYSE:ES)
Historical Stock Chart
From Apr 2023 to Apr 2024
See More Message Board Posts