8-KLeadership ChangesOther Events

EVERSOURCE ENERGY 8-K Report, Executive Changes (Dec 17, 2007)

Filed December 17, 2007For Securities:ES

Summary

This 8-K filing from Northeast Utilities (now Eversource Energy) on December 17, 2007, primarily concerns amendments to the company's Long-Term Incentive Programs (LTIPs). These changes were driven by new IRS regulations under Section 409A of the Internal Revenue Code, which govern deferred compensation. The amendments aim to ensure that compensation paid under the LTIPs complies with these new tax regulations. A significant change is the elimination of automatic deferred distribution of Northeast Utilities common shares upon the vesting of Restricted Stock Units (RSUs) granted under the 2004, 2005, and 2006 LTIPs. This change impacts how and when officers and trustees receive their awarded shares, with specific deadlines set for elections to continue deferred distributions.

Key Highlights

  • 1Amendments to Northeast Utilities Long-Term Incentive Programs (LTIPs) for 2004, 2005, 2006, and 2007 were approved on December 11, 2007.
  • 2The primary driver for these amendments is compliance with new IRS regulations under Section 409A regarding deferred compensation.
  • 3Automatic deferred distribution of NU common shares upon vesting of RSUs is eliminated for 2004, 2005, and 2006 LTIPs.
  • 4Officers must elect by December 31, 2007, to continue deferred distribution of RSUs vested prior to February 25, 2008.
  • 5RSUs scheduled to vest on or after February 25, 2008, will be distributed immediately upon vesting unless deferred.
  • 6The CEO's RSU grants under the 2005 and 2006 LTIPs are exempt from the elimination of automatic deferred distribution, continuing deferral until employment termination.
  • 7Automatic deferred distribution of RSUs for Board of Trustees members was also eliminated, with an opt-out provision for continued deferral until December 31, 2007.

Frequently Asked Questions

The amendments are primarily to ensure compliance with new final regulations issued by the Internal Revenue Service (IRS) under Section 409A of the Internal Revenue Code. These regulations impact the timing of distributions for deferred compensation, and the company is updating its programs to satisfy these requirements.

For RSUs granted under the 2004, 2005, and 2006 LTIPs, the automatic deferral of NU common shares upon vesting has been removed. This means that for vested RSUs where distribution is currently deferred, shares will be distributed on February 25, 2008. For RSUs vesting on or after February 25, 2008, shares will be distributed immediately upon vesting, unless participants make an election by December 31, 2007, to continue deferral.

Yes, the elimination of automatic deferred distribution does not apply to Restricted Stock Units (RSUs) granted to the Chief Executive Officer under the 2005 and 2006 LTIPs. For these specific grants, the distribution of NU common shares will continue to be deferred until the CEO's employment terminates.

Officers who wish to continue the deferred distribution of NU common shares upon vesting of RSUs granted under the 2004, 2005, and 2006 LTIPs must make an election to do so no later than December 31, 2007.