8-KMaterial Agreements

EVERSOURCE ENERGY 8-K Report, Material Agreement (Apr 6, 2005)

Filed April 6, 2005For Securities:ES

Summary

Eversource Energy, then known as Northeast Utilities, filed a Form 8-K on April 6, 2005, to report the entry into a material definitive contract. Specifically, the company entered into a new employment agreement with its Chairman, President, and CEO, Charles W. Shivery, effective March 31, 2005. This new agreement supersedes his previous one and outlines terms through December 31, 2006, with provisions for automatic renewal. The agreement details Mr. Shivery's compensation, including an annual base salary of at least $840,000, eligibility for retirement and welfare plans, and participation in both short-term and long-term incentive compensation programs with specified target and maximum opportunities relative to his base salary. It also addresses significant severance and change-of-control provisions designed to provide substantial financial and benefit continuation under various termination scenarios, including involuntary termination following a change in control.

Key Highlights

  • 1Northeast Utilities (now Eversource Energy) entered into a new employment agreement with CEO Charles W. Shivery, effective March 31, 2005.
  • 2The agreement has an initial term through December 31, 2006, with automatic one-year renewal provisions.
  • 3Mr. Shivery's annual base salary is set at a minimum of $840,000, subject to annual review.
  • 4The agreement includes participation in executive retirement, welfare, and significant short-term and long-term incentive compensation plans.
  • 5Robust change-of-control provisions are outlined, offering substantial severance packages (e.g., three times annual salary and benefits) upon involuntary termination following a change in control.
  • 6Severance packages for termination without cause (not change-of-control related) are also detailed, including two times annual salary and benefits.
  • 7The agreement contains a two-year non-compete clause within the company's defined service area after termination of employment.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the execution of a new material definitive contract, specifically an employment agreement between Northeast Utilities and its CEO, Charles W. Shivery.

The agreement sets a minimum annual base salary of $840,000, with opportunities to participate in short-term and long-term incentive compensation plans. His target opportunity is at least 100% of base salary for short-term and 250% for long-term incentives, with maximums at 200% and 500%, respectively. He also has eligibility for retirement and welfare benefits, including special retirement calculations.

In the event of an involuntary termination following a change in control, Mr. Shivery is eligible for a significant package, including a cash payment of three times his annual salary plus target short-term incentives, three years of continued employee benefits, accelerated vesting of pension benefits (with added service and age credits), accelerated vesting of equity awards, retiree health benefits, and a tax gross-up payment.

If Mr. Shivery is terminated without cause (and not due to a change of control) or if the agreement is not renewed, he is eligible for a cash payment of two times his annual salary plus target short-term incentives, two years of employee benefits, accelerated vesting of pension benefits (with added service and age credits), accelerated vesting of equity awards, and retiree health benefits, provided he executes a covenant not to sue.