Exhibit 10.8.4

Deferred Common Share/Dividend Equivalent Award, Stock Option Grant, Option
Certificate

and Performance Share Award/Dividend Equivalent Award Agreement

Under the NSTAR 2007 Long Term Incentive Plan

Agreement entered into as of the 24th day of January, 2008 by and between NSTAR,
a Massachusetts business trust, (the “Company”) and Joseph R. Nolan, Jr., an
employee of the Company or one of its subsidiaries (the “Employee”) pursuant to
the NSTAR 2007 Long Term Incentive Plan (the “Plan”).

This Agreement evidences the award by the Company on January 24, 2008 to the
Employee of: 1) the grant of the right to receive 3,500 common shares of the
Company (“Common Shares “) on a deferred basis (the “Deferred Common Share
Award”), together with the right to receive such additional Common Shares, on a
deferred basis, equal in value to the dividends which would have been paid with
respect to the Common Shares underlying the Deferred Share Award, had such
Common Shares been issued to the Employee on January 24, 2008 (“Dividend
Equivalent Common Shares”); 2) the grant by the Company to the Employee of the
number of stock options set forth below; and 3) the grant of 3,500 Performance
Share Units (together with related Dividend Equivalent Common Shares), all such
grants hereby made under the terms and conditions set forth both in this
Agreement and the Plan.

 

1. Deferred Common Share and Related Dividend Equivalent Awards

a. Award of Deferred Common Shares and Dividend Equivalent Awards. Employee is
hereby awarded the right to receive, without payment, the following number of
Common Shares (plus the applicable number of Dividend Equivalent Common Shares)
on the following dates:

1,166.67 Common Shares to be delivered on January 24, 2009.

1,166.67 Common Shares to be delivered on January 24, 2010.

1,166.66 Common Shares to be delivered on January 24, 2011.

b. Termination of Employment. In the event of termination of the Employee’s
employment with the Company or its Subsidiaries by reason of the Employee’s
Disability (as defined below) or death, all of Employee’s rights in the Deferred
Common Share Award and the related Dividend Equivalent Common Shares shall
immediately and automatically vest and be deliverable to the Employee, or in the
event of death, to the Employee’s executor or administrator or the person or
persons to whom the awards are transferred by will or the applicable laws of
descent and distribution. For purposes of this Agreement, a termination of
employment shall be deemed to be by reason of “Disability” if (i) Employee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which

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can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) by reason of such impairment Employee
is receiving income replacement benefits for a period of not less than three
months under the Company’s Long Term Disability Plan. Upon any other termination
of employment of the Employee, the Employee’s rights in the Deferred Common
Share Award and the related Dividend Equivalent Common Shares shall immediately
and automatically terminate, and no Common Shares or Dividend Equivalent Common
Shares in respect of such Deferred Common Share Award not previously issued
shall thereafter be issued.

c. Change of Control. In the event of a Change of Control of the Company (as
defined in the Plan), all of Employee’s rights in the Deferred Common Share
Award and the related Dividend Equivalent Common Shares shall become immediately
and fully vested and Common Shares underlying the Deferred Common Share Award
and the related Dividend Equivalent Common Shares will be delivered in
connection with and immediately prior to such Change in Control of the Company.

 

2. Grant of Option

a. Grant of Options. Employee is further hereby awarded the grant of a
non-statutory option to purchase, in whole or in part, on the terms herein
provided, a total of 15,000 Common Shares at $32.45 per Common Share, which
amount is equal to the fair market value (as defined in the Plan) of the Common
Shares on the date of grant of this option. The latest date on which this
option, or any part thereof, may be exercised (the “Final Exercise Date”) is
January 24, 2018. The Option evidenced by this award is intended to be, and is
hereby designated, a non-statutory option, that is, an option that does not
qualify as an incentive stock option as defined in section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”).

The option granted hereunder will vest and be exercisable in the following
cumulative installments prior to the Final Exercise date:

5,000 Common Shares on and after January 24, 2009.

5,000 Common Shares on and after January 24, 2010.

5,000 Common Shares on and after January 24, 2011.

b. Termination of Employment. In the event of termination of the Employee’s
employment with the Company or its Subsidiaries by reason of the Employee’s
death or Disability, this option will become fully exercisable and will remain
exercisable for two years in the case of death and one year in the case of
Disability (but not later than the Final Exercise Date). Upon any other
termination of employment of the Employee, any portion of this option that is
not then exercisable will promptly expire and the remainder of this option will
remain exercisable for three months.

c. Change of Control. In the event of a Change of Control of the Company, this
option will become fully exercisable in full immediately prior to such Change of
Control.

 

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d. Exercise. Each election to exercise this option shall be in writing, signed
by the Employee or the Employee’s executor, administrator, or legally appointed
representative (in the event of the Employee’s incapacity) or the person or
persons to whom this option is transferred by will or the applicable laws of
descent and distribution, and received by the Company at its principal office,
accompanied by this certificate and payment in full as provided in the Plan.
Subject to the further terms and conditions provided in the Plan, the purchase
price may be paid as follows: (i) by delivery of cash, certified check, bank
draft or money order payable to the order of the Company; (ii) through a
broker-assisted exercise program acceptable to the Administrator; (iii) through
the delivery of Common Shares held for at least six months having a fair market
value on the last business day preceding exercise equal to the exercise price,
or (iv) through any combination of the foregoing. In the event that this Stock
Option is exercised by a person other than the Employee, the Company will be
under no obligation to deliver Common Shares hereunder unless and until it is
satisfied as to the authority of the person to exercise this option.

e. Non-Transferability of Option. This option is not transferable by the
Employee otherwise than by will or the laws of descent and distribution and is
exercisable during the Employee’s lifetime only by the Participant (or in the
event of the Employee’s incapacity, the person or persons legally appointed to
act on the Employee’s behalf).

 

3. Performance Share Unit Award and Related Deferred Dividend Shares

a. Award of Performance Share Units. The Employee is hereby awarded 3,500
Performance Share Units (“Performance Share Units”), which constitute the right
to receive, without payment, (i) Common Shares of the Company upon the
satisfaction of certain performance criteria as described in Section 3
(b) hereof (the “Unit Award”), and (ii) additional Common Shares on the same
basis as the Unit Award, equal in value to the dividends, if any, which would
have been paid with respect to the Common Shares actually delivered in respect
of the Unit Award as provided in Section 3 (b) (ii) hereof (the “Unit Delivered
Shares”) had such Unit Delivered Shares been issued to the Employee on
January 24, 2008 (the “Deferred Dividend Shares”), in each case subject to the
terms and conditions of the Plan and this Agreement. The Performance Share Units
are collectively referred to herein as the “Performance Share Award.” The
Performance Share Award is granted on January 24, 2008 (the “Date of Grant”).
Capitalized terms used herein and not defined shall have the meanings set forth
in the Plan. In the event of any conflict between this Agreement and the Plan,
the Plan shall control.

b. Vesting of Award; Delivery of Shares; Treatment upon Termination of
Employment

(i) Vesting Generally. Subject to the following provisions of this Section 3.b
and the other terms and conditions of this Agreement, the Performance Share
Units shall become vested (meaning that the Employee shall be entitled to
receive a certain number of Common Shares in respect of each Performance Share
Unit as determined pursuant to Section 3(b)(ii)) if, and only if, one of the
following conditions is satisfied: (i) the Employee remains continuously
employed by the

 

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Company or its subsidiaries from the date hereof until January 24, 2011, or
(ii) there is a termination of service or Retirement from Service of the
Employee pursuant to Section 3(b)(iv) or Section 3(b)(v), as further provided in
such Sections, or (iii) the conditions of Section 3(b)(vi) are satisfied on or
before January 24, 2011 and the Employee remains continuously employed by the
Company or its subsidiaries until the date such conditions are satisfied.

(ii) Determination of Number of Unit Delivered Shares Upon Satisfaction of
Performance Criteria. Notwithstanding anything to the contrary in this
Agreement, Unit Delivered Shares and related Deferred Dividend Shares will only
become deliverable by the Company in respect of vested Performance Share Units
and only upon satisfaction of the achievement of certain EPS growth and Relative
TSR levels as described below (the “Performance Criteria”) during the period
beginning on January 1, 2008 and ending on December 31, 2010 (the “Performance
Period”). The number of Unit Delivered Shares in respect of each vested
Performance Share Unit, if any, shall be determined in accordance with Annex A
hereto (the “Performance Plan Matrix”). Each cell of the Performance Plan Matrix
sets forth in percentage terms the number common shares related to each vested
Performance Share Unit that will become Unit Delivered Shares for each
performance level. Performance Share Units are originally awarded on the basis
of one Performance Share Unit to one Unit Delivered Share, subject to adjustment
depending on the level of achievement set forth in the Performance Plan Matrix.
Performance between points outlined on the matrix will be interpolated on a
straight-line basis. By way of example only, at 100% achievement, each vested
Performance Share Unit shall represent the right to receive one Delivered Share
(1 x 100%); at 150% achievement, each vested Performance Share Unit shall
represent the right to receive 1.5 Delivered Shares (1 x 150%); at 72%
achievement, each vested Performance Share Unit shall represent the right to
receive 0.72 of a Delivered Share (1 x 72%); and at zero percent achievement,
the holder will not be entitled to receive any Unit Delivered Shares in respect
of any vested Performance Share Unit (1 x 0%).

(a) EPS Growth shall mean the average yearly percentage change in the Company’s
EPS over the Performance Period as set forth in the Performance Plan Matrix.
“EPS” shall mean diluted earnings per share calculated in accordance with GAAP
and as reported in the Company’s Form 10-K for the applicable year, as adjusted.
EPS growth shall be calculated by averaging the percentage growth in EPS for
each of the years ended December 31 in the Performance Period. EPS growth for
each twelve month period shall be calculated by subtracting EPS for the twelve
months ended December 31 for the prior year from EPS for the twelve months ended
December 31 for the current year and dividing the resulting difference in EPS by
the EPS for the twelve months ended December 31 for the prior year. The
calculation for EPS shall be adjusted automatically for the following items to
the extent reflected on the Company’s audited financial statements (provided
that no adjustment shall be made to the extent of any offsetting rate regulated
recovery mechanism

 

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related to such items): (i) any impact resulting from changes in accounting
principles, (ii) any impact from discontinued operations and business
combinations or mergers and acquisitions transactions, (iii) any impact from an
extraordinary item as defined by GAAP, and (iv) the potential adverse impact of
NSTAR’s uncertain tax position related to its RCN tax deduction.

(b) “Relative TSR” shall mean the cumulative percentage change in the Company’s
total shareholder return on its common shares over the three-year Performance
Period as measured against the cumulative percentage change in total shareholder
return for the Edison Electric Institute (“EEI”) Index over such period and as
set forth in the Performance Plan Matrix. TSR for both the Company and the EEI
Index shall be determined and provided by EEI.

(iii) Delivery of Shares. Subject to the terms of this agreement, the Company
shall promptly deliver after the Determination Date to the Employee a
certificate or shall credit the Employee’s account so as to evidence the number
of Unit Delivered Shares and related Deferred Dividend Shares, if any, to which
the Employee is entitled hereunder, as calculated in accordance with Section 3
(b)(ii). For the purposes of this Agreement, the term “Determination Date” means
the date on which the Committee certifies (as required by Section 162(m) of the
Internal Revenue Code) whether and what level of the Performance Criteria have
been achieved. The Committee shall make such determination no later than
March 15, 2011.

(iv) Death or Disability. In the event of a termination of employment by reason
of the Employee’s death or Disability occurring after the date hereof but before
January 24, 2011, all Performance Share Units shall immediately and
automatically vest in full, but the appropriate number of Unit Delivered Shares
and Deferred Dividend Shares (calculated as provided in Section 3(b)(ii)) shall
not be payable until the completion of the Performance Period and the
Determination Date. Any former Employee (upon any Disability), or the estate of
an Employee (in the case of death) will continue to hold the vested portion of
the Performance Share Award not terminated upon the termination of employment
subject to the restrictions and all terms and conditions of this Agreement.

(v) Retirement. In the event of a Retirement from Service (as defined below) of
the Employee occurring after the date hereof but before January 24, 2011, the
portion of the Performance Share Award determined by dividing the number of days
from the date of retirement until the end of the Performance Period by the total
number of days in the Performance Period and multiplying the result by the total
number of Performance Share Units subject to the Performance Share Award, shall
immediately and automatically terminate. Any Performance Share Units that do not
so terminate shall immediately and automatically vest in full, but the
appropriate number of Unit Delivered Shares and Deferred Dividend Shares
(calculated as provided in Section 3(b)(ii)) shall not be payable until the

 

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completion of the Performance Period and the Determination Date. Any retired
Employee will continue to hold the vested portion of the Performance Share Award
not terminated upon the Retirement from Service subject to the restrictions and
all terms and conditions of this Agreement. “Retirement From Service” shall mean
termination of employment from the Company by the Employee after attaining age
55 and completing at least five years of employment with the Company or its
affiliates.

(vi) Change in Control. Notwithstanding any provision of this Section 3 to the
contrary, the Performance Share Award shall become immediately and fully vested
and Unit Delivered Shares and related Deferred Dividend Shares underlying the
Performance Share Award will be delivered in connection with and immediately
prior to a Change in Control of the Company on the basis of 100% achievement as
set forth on the Performance Plan Matrix.

(vii) Other Terminations of Employment. Except as provided for herein or in the
Plan, any termination of employment of the Employee occurring before January 24,
2011 (including a termination of employment initiated by the employee) and
before a Change in Control of the Company, shall result in the immediate and
automatic termination of the Performance Share Unit Award.

 

4. Transfer. The Common Shares underlying the Deferred Common Share Award and
the Performance Share Award when delivered upon the satisfaction of the
Performance Criteria may be sold, assigned, pledged, hypothecated, encumbered,
or transferred or disposed of in any other manner, in whole or in part, only in
compliance with the terms, conditions and restrictions as set forth in the
governing instruments of the Company, applicable federal and state securities
laws or any other applicable laws or regulations and the terms and conditions
hereof. Otherwise, the Deferred Common Share Award and the Performance Share
Award shall not be sold, assigned, pledged, hypothecated, encumbered, or
transferred or disposed of in any other manner, in whole or in part.

 

5. Tax Withholding.

This option may not be exercised, and no Common Shares underlying a Deferred
Share or Performance Share Award will be issued, until the Employee pays to the
Company an amount sufficient to allow the Company to satisfy its tax withholding
obligations. To this end, the Employee shall either:

(a) pay the Company the amount of tax to be withheld (including through payroll
withholding),

(b) deliver to the Company other Common Shares owned by the Employee prior to
such date having a fair market value, as determined by the Committee, not less
than the amount of the withholding tax due, which either have been owned by the
Employee for more than six (6) months or were not acquired, directly or
indirectly, from the Company,

 

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(c) make a payment to the Company consisting of a combination of cash and such
Common Shares, or

(d) request that the Company cause to be withheld a number of vested Common
Shares having a then fair market value sufficient to discharge minimum required
federal, state and local tax withholding (but no greater than such amount).

 

6. References

References herein to rights and obligations of the Employee shall apply, where
appropriate, to the Employee’s legal representative or estate without regard to
whether specific reference to such legal representative or estate is contained
in a particular provision of this Agreement.

 

7. Notices

Any notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently by
similar process give notice of:

If to the Company:

NSTAR

800 Boylston Street

Boston, MA 02199

Attention: General Counsel

If to the Employee:

Joseph R. Nolan, Jr.

11 Philip Road

Belmont, MA 02478

 

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8. Governing Law

This Agreement shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts, without giving effect to
principles of conflicts of laws of any jurisdiction which would cause the
application of law, other than the Commonwealth of Massachusetts, to be applied.

 

9. Other Terms and Conditions

It is understood and agreed that this Agreement is subject to the following
additional terms and conditions:

(a) Rights of a Stockholder. The Employee shall have no right to transfer,
pledge, hypothecate or otherwise encumber unvested and undelivered Common
Shares. Once Deferred Shares, Performance Share Units and Deferred Dividend
Shares vest and the Common Shares underlying those units or shares have been
delivered or credited, but not until such time and only with respect to the
Common Shares so delivered or credited, the Employee shall have the rights of a
stockholder, including, but not limited to, the right to vote and to receive
dividends.

(b) No Right to Continued Employment. Nothing in this Agreement shall confer
upon the Employee any right with respect to continuance of employment by the
Company nor interfere with the right of the Company to terminate the Employee’s
employment at any time.

This Agreement may be executed in two counterparts, each of which shall
constitute one and the same instrument.

 

10. Provisions of the Plan.

Capitalized terms used herein and not defined shall have the meanings set forth
in the Plan. This Agreement and the awards and grants set forth herein shall be
subject to and shall be governed by the terms set forth in the Plan, a copy of
which has been furnished to the Employee and which is incorporated by reference
into this Agreement. In the event of any conflict between this Agreement and the
Plan, the Plan shall control.

 

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IN WITNESS WHEREOF, the Company by its duly authorized official and the Employee
have each caused this Agreement to be executed as of the date set forth above.

 

NSTAR By:   /s/ TIMOTHY R. MANNING   Timothy R. Manning   Senior Vice
President-Human Resources   /s/ JOSEPH R. NOLAN, JR.   Joseph R. Nolan, Jr.  
Senior Vice President – Customer &   Corporate Relations

 

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Annex A

PERFORMANCE PLAN MATRIX

 

      3 Yr. Relative Total Shareholder Return  

3 Yr.

Average

EPS
Growth

    Below
20th
P     20th
P     30th
P     40th
P     50th
P     60th
P     70th
P     80th
P     90 th P
&
Higher                     9 %   80 %   100 %   110 %   120 %   130 %   140 %  
150 %   160 %   170 % 8 %   60 %   90 %   100 %   110 %   120 %   130 %   140 %
  150 %   160 % 7 %   40 %   80 %   90 %   100 %   110 %   120 %   130 %   140 %
  150 % 6 %   20 %   70 %   80 %   90 %   100 %   110 %   120 %   130 %   140 %
5 %   20 %   60 %   70 %   80 %   90 %   100 %   110 %   120 %   130 % 4 %   20
%   50 %   60 %   70 %   80 %   90 %   100 %   110 %   120 % 3 %   10 %   40 %  
50 %   60 %   70 %   80 %   90 %   100 %   110 % 2 %   10 %   30 %   40 %   50 %
  60 %   70 %   80 %   90 %   100 %                                            
              Below 2 %   0 %   0 %   0 %   0 %   0 %   0 %   0 %   0 %   0 %  
                                                       

 

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