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Exhibit 10.3

Northeast Utilities Incentive Plan

Amended, Restated and Adopted by Northeast 

Utilities Compensation Committee of the Board of

Trustees on February 13, 2007 as Approved by

Northeast Utilities Shareholders on May 8, 2007

Amended and Restated Effective

January 1, 2009

ARTICLE I

PURPOSE

The purpose of the Northeast Utilities Incentive Plan (the "Plan") is to provide (i) designated employees of the Company (as hereinafter defined in Article X) and (ii) non-employee members of the Board of Trustees (the "Board") of Northeast Utilities, a Massachusetts business trust, ("NU") with the opportunity to receive annual incentive compensation and grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted shares, restricted share units and performance units.  The Company believes that the Plan will assist it in recruiting talented employees who will contribute materially to the growth of the Company, thereby benefiting NU's shareholders and aligning the economic interests of the participants with those of the shareholders.

For purposes of the Plan, definitions appear in the Plan and as set forth in Article XIV. 

ARTICLE II

ADMINISTRATION

1.

Committee.  The Plan shall be administered and interpreted by the Board’s Compensation Committee, or the person or persons to which such committee delegates any of its functions under the Plan (the "Committee").  The Committee may consist of two or more persons appointed by the Board, all of whom shall be "outside directors" as defined under section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and related Treasury regulations and "non-employee directors" as defined under Rule 16b-3 under the Exchange Act.  Members of the Committee shall be "independent" as defined under the listing standards of the New York Stock Exchange.  However, the Board may ratify or approve any grants as it deems appropriate or as are submitted by the Committee.

2.

Committee Authority.  The Committee shall have the authority to amend or terminate the Plan as provided in Article XII.  The Committee shall have the sole authority to (

a

) establish, and review the Company’s and the Grantee’s, as defined below, performance against annual goals for purpose of the annual incentives to be distributed and determine the individuals to whom grants shall be made under the Plan, (

b

) determine the type, size and terms of the grants to be made to each such individual, (

c

) determine the time when the grants will be made and the duration of any applicable exercise or restriction period, including the criteria for exercisability and the acceleration of exercisability (

d

) establish such rules and regulations or take such action as it deems necessary or advisable for the proper administration of the Plan, including the delegation of day-to-day plan administration, and (

e

) deal with any other matters arising under the Plan.

3.

Committee Determinations.  The Committee shall have full power and authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion.  The Committee's interpretations of the Plan and all determinations made by the 

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Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any awards granted hereunder including, but not limited to, the Company, the Committee, the Board, the affected Participants, and their respective successors in interest.  All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.

ARTICLE III

ANNUAL INCENTIVE AWARDS

1.

Eligibility for Participation.  Each employee of the Company classified as a Vice President or higher (an "Executive Employee") shall be eligible to receive an annual incentive award (an "Award") under the Plan

2.

Annual Awards.

(a)

As soon as practicable after the start of each fiscal year of NU, but in any event within 90 days, the Committee shall set the Performance Goals for the Company which shall be the basis for determining the Awards to be paid to each Executive Employee for such fiscal year and the Committee shall communicate the target and the percentages (including minimums and maximums) for each Executive Employee applicable to each level of achievement against the target set.  In no event may an individual Award for an Executive Employee exceed $4,000,000.

(b)

The maximum amount of an Award for an Executive Employee shall be based upon the Company’s performance compared against the Performance Goals set for that fiscal year.  The actual amount of the Award for any Executive Employee shall be reduced, accordingly, by the Committee if the Executive Employee does not satisfy one or more individual financial or nonfinancial objectives set by the Committee for that Executive Employee as of the beginning of the relevant fiscal year.  Any such objectives for an Executive Employee shall be set by the Committee and announced to the affected Executive Employee no later than 90 days after the commencement of the relevant fiscal year of NU.

(c)

The Committee shall certify and announce the 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 Awards that an Executive Employee has not expressly deferred pursuant to Section 3 below shall

be made in cash, or in shares of Company Stock or Options, the value of which shall equal the amount to be distributed, all as determined by the Committee, 

after the end of the relevant fiscal year but not later than two and one-half months after

 the end of such fiscal year, provided that the Executive Employee has not separated from employment by the Company prior to the date that payment is due except as otherwise specifically provided in a contract between the Company and the Executive Employee.  The Committee may provide for complete or partial exceptions to this requirement if an Executive Employee’s employment terminated on account of Retirement, termination without Cause, death, Disability or a Change of Control.

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3.

Deferral of Annual Awards

.. The Committee may permit an Executive Employee to defer an Award in accordance with such procedures as the Committee may from time to time specify subject to the limitations set forth in Section 3 of Article XIII of this Plan.

   

ARTICLE IV

STOCK-BASED GRANTS

1.

Grants.  Grants under the Plan may consist of grants of incentive stock options ("Incentive Stock Options") or nonqualified stock options ("Nonqualified Stock Options")(Incentive Stock Options and Nonqualified Stock Options are collectively referred to as "Options"), restricted stock ("Restricted Stock"), restricted share units (Restricted Share Units" or "RSUs"), stock appreciation rights ("SARs"), and/or performance units ("Performance Units") (hereinafter collectively referred to as "Grants").  Grants may be awarded singly, in combination or in tandem with other Grants.  All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as are specified in writing by the Committee 

in program documents applicable to particular years and/or Grants and in

 individual 

grant instruments or amendments to the same (each a

 "Grant Instrument").  The Committee shall approve the form and provisions of each Grant Instrument.  Grants under a particular Section of the Plan need not be uniform as among the Grantees, as defined below.  

2.

Eligibility for Participation.

(a)

Eligible Persons.  All employees of the Company ("Employees"), including Employees who are officers or members of the Board, contractors of the Company ("Contractors"), and members of the Board who are not Employees ("Non-Employee Trustees") shall be eligible to receive Grants under the Plan.  Contractors shall be eligible to receive Grants only of Nonqualified Stock Options.  

(b)

Selection of Grantees.  The Committee shall select the Employees and Contractors to receive Grants and shall determine the number of shares of Company Stock subject to a particular Grant in such manner as the Committee determines.  Employees, Contractors and Non-Employee Trustees who receive Grants under this Plan shall hereinafter be referred to as "Grantees".

(c)

Collective Bargaining Employees.  Anything to the contrary in this Plan notwithstanding, no Employee whose terms and conditions of employment are subject to negotiation with a collective bargaining agent shall be eligible to receive Grants under this Plan until the agreement between the Company and such collective bargaining agent with respect to the Employee provides for participation in the Plan.

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3.

Granting of Options.

(a)

Number of Shares.  The Committee shall determine the number of shares of Company Stock that will be subject to each Grant of Options to Employees and Contractors subject to the overall limits of Article IX.

(b)

Type of Option and Price.  

(i)  The Committee may grant Incentive Stock Options that are intended to qualify as "incentive stock options" within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended so to qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein.  Incentive Stock Options may be granted only to Employees.  Nonqualified Stock Options may be granted to Employees, Contractors and Non-Employee Trustees.

(ii)

The purchase price (the "Exercise Price") of Company Stock subject to an Option shall be determined by the Committee and shall be equal to or greater than the Fair Market Value (as defined below) of a share of Company Stock on the date the Option is granted; provided, however, that an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any parent or subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair Market Value of Company Stock on the date of grant. The Committee may not modify the applicable Exercise Price after the date of Grant.

(iii)

If the Company Stock is publicly traded, then the Fair Market Value per share shall be the closing price of the Company Stock as reported in the Wall Street Journal as composite transactions for the relevant date (or the latest date for which such price was reported if such date is not a business day), or if not available, determined as follows: (

A

) if the principal trading market for the Company Stock is the New York Stock Exchange, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, (

B

) if the principal trading market for the Company Stock is a national securities exchange other than the New York Stock Exchange or is the NASDAQ National Market, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, or (

C

) if the Company Stock is not principally traded on such exchange or market, the mean between the last reported "bid" and "asked" prices of Company Stock on the relevant date, as reported on NASDAQ or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Committee determines.  If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or "bid" or "asked" quotations as set forth above, the Fair Market Value per share shall be as determined by the Committee 

in accordance with the requirements of Section 1.409A-1(b)(5)(iv)(B) of the Treasury Regulations

..

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(c)

Option Term.  The Committee shall determine the term of each Option.  The term of any Option shall not exceed ten years from the date of grant.  However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company, or any parent or subsidiary of the Company, may not have a term that exceeds five years from the date of grant.

(d)

Exercisability of Options.  Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument.  The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.

(e)

Termination of Employment, Retirement, Disability or Death.

(i)

Except as provided below, an Option may be exercised only while the Grantee is employed by, or providing service to, the Company as an Employee, a Contractor, or a member of the Board.  In the event that a Grantee ceases to be employed by, or provide service to, the Company then, unless the Committee deems otherwise, all outstanding Options will expire upon termination from employment or service with the Board for Cause, or any  other reason, including termination on account of "Retirement," "Disability," or death.  

(ii)

For purposes of this Plan and programs thereunder:

(A)

"Cause" shall mean, except to the extent specified otherwise by the Committee acting on behalf of the Company, (

x

) the Grantee’s conviction of a felony, (

y

) in the reasonable determination of the Committee, the Grantee’s (

I

) commission of an act of fraud, embezzlement, or theft in connection with the Grantee’s duties in the course of the Grantee’s employment with the Company, (

II

) 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 (

III

) engaging in gross misconduct or gross negligence in the course of the Grantee’s employment with the Company, or (

z

) the Grantee’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 Committee specifying the details thereof.  For purposes of this Program, an act or omission on the part of a Grantee shall be deemed "intentional" only if it was not due primarily to an error in judgment or negligence and was done by Grantee 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 Grantee's employment or service is terminated for cause, in addition to the immediate termination of all Grants, the Grantee 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 Grantee for such shares.

(B)

"Disability" shall mean a Grantee's being determined to be  disabled within the meaning of the long-term disability plan or program that is a part of 

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the Northeast Utilities Service Company Flexible Benefits Plan (or any successor plan or program, hereafter, the "LTD Program").

(C)

"Employed by, or provide service to, the Company" shall mean employment or service as an Employee, Contractor or member of the Board (so that, for purposes of exercising Options and SARs and satisfying conditions with respect to Restricted Stock, RSUs and Performance Units, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee, Contractor and member of the Board), unless the Committee determines otherwise.

(D) 

"Retired" shall mean a 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  Northeast Utilities System Companies, or  employment-related agreement with the Company, or  (z) attainment of age 55 after completing at least ten years of vesting service under the Northeast Utilities Service Company 401k Plan.   

(f)

Exercise of Options.  A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company with payment of the Exercise Price.  The Grantee shall pay the Exercise Price for an Option as specified by the Committee:

(i)    in cash, 

(ii)  with the approval of the Committee, by delivering shares of Company Stock owned by the Grantee (including Company Stock acquired in connection with the exercise of an Option or Restricted Stock, as defined below, granted under this Plan, subject to such restrictions as the Committee deems appropriate including placing the same restrictions on the shares of Company Stock obtained through the exchange of the Restricted Stock) and having a Fair Market Value on the date of exercise equal to the Exercise Price, or

 (iii)  by such other method as the Committee may approve, including payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board.  The Grantee shall pay the Exercise Price and the amount of any withholding tax due at the time of exercise. 

(g)

Limits on Incentive Stock Options.  Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company exceeds $100,000, then the option, as to the excess, shall be treated as a Nonqualified Stock Option.  An Incentive Stock Option shall not be granted to any person who is not an Employee of the Company.

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ARTICLE V

STOCK-BASED GRANTS TO NON-EMPLOYEE TRUSTEES

1.

Eligibility for Participation.  Non-Employee Trustees shall be eligible to receive Grants as set forth in Article IV; provided, that the number of shares of Company Stock subject to each Grant of Options, as well as the terms of all Grants, to Non-Employee Trustees shall be approved by the Board, in accordance with Article (9) of the Declaration of Trust of Northeast Utilities, as amended.

2.

Terms of Retirement.  The words "age 65" in the definition of "Retired" in Section 3(e)(ii)(D) of Article IV shall be read as "age 70" with respect to Non-Employee Trustees.

ARTICLE VI

RESTRICTED STOCK AND RESTRICTED SHARE UNIT GRANTS

1.

Restricted Stock Grants.  Subject to the terms and conditions of the Plan, the Committee may issue or transfer shares of Company Stock to a Grantee with such restrictions as the Committee deems appropriate ("Restricted Stock").  The following provisions are applicable to Restricted Stock:

(a)

General Requirements.  Shares of Company Stock issued or transferred pursuant to Restricted Stock Grants may be issued or transferred in exchange for services performed or to be performed.  The Committee may establish conditions under which restrictions on shares of Restricted Stock shall lapse over a period of time or according to such other criteria as the Committee deems appropriate.  The period of time during which the Restricted Stock will remain subject to restrictions (the "Restriction Period") will be designated in the Grant Instrument 

(b)

Number of Shares.  The Committee shall determine the number of shares of Company Stock to be issued or transferred pursuant to a Restricted Stock Grant and the restrictions applicable to such shares, subject to the limitations contained in Article IX. 

(c)

Requirement of Employment or Service.  If the Grantee ceases to be employed by, or provide service to, the Company during the Restriction Period, or if other specified conditions are not met, the Restricted Stock Grant shall terminate as to all shares covered by the Grant as to which the restrictions have not lapsed, and those shares of Company Stock must be immediately returned to the Company.  The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d)

Restrictions on Transfer and Legend on Share Certificate.  During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of Restricted Stock except to a Successor Grantee, as defined below.  The Committee may determine that the Company will issue certificates for shares of Restricted Stock, in which case each certificate for a share of Restricted Stock shall contain a legend giving appropriate notice of the restrictions in the Grant.  The Grantee shall be entitled to have the legend removed from the share certificate covering the shares 

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subject to restrictions when all restrictions on such shares have lapsed.  The Committee may determine that the Company will not issue certificates for shares of Restricted Stock until all restrictions on such shares have lapsed, or that the Company will retain possession of certificates for shares of Restricted Stock until all restrictions on such shares have lapsed.

(e)

Right to Vote and to Receive Dividends.  Unless the Committee determines otherwise, the Grantee shall have the right to vote Restricted Stock and to receive any dividends or other distributions paid on such shares during the Restriction Period subject to any restrictions deemed appropriate by the Committee.

(f)

Lapse of Restrictions.  All restrictions imposed on Restricted Stock shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Committee.  The Committee may determine, as to any or all Restricted Stock Grants, that the restrictions shall lapse without regard to any Restriction Period.

2.

 Restricted Share Unit Grants.  

(a) 

Restriction Period.  The Committee may make Grants of Restricted Share Units to Employees and Non-Employee Trustees representing the right to receive shares of Company Stock, cash, or both, as determined by the Committee (hereafter, "Restricted Share Units"). 

Between the end of the Restriction Period and the second payroll date following

 the end of the Restriction Period, subject to any deferral election that may be made or applied to the Grant pursuant to subsection (e) below

 and further subject to the limitations set forth in Section 3 of Article XIII of this Plan with respect to a Grant of Restricted Share Units that is subject to Section 409A of the Code

, cash or shares or both shall be delivered to the Grantee (unless previously forfeited).  Restricted Share Units may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restriction Period.  A Grantee of Restricted Share Units shall have none of the rights of a holder of Company Stock unless and until shares of Company Stock are actually delivered in satisfaction of such Restricted Share Units.

(b)

Number of Units.  The Committee shall determine the number of Restricted Share Units pursuant to a Restricted Share Unit Grant and the restrictions applicable to such shares, subject to the limitations contained in Article IX. 

(c)

Requirement of Employment or Service.  If the Grantee ceases to be employed by, or provide service to, the Company during a period designated in the Grant Instrument as the Restriction Period, or if other specified conditions are not met, the Restricted Share Unit Grant shall terminate as to all Restricted Share Units covered by the Grant as to which the restrictions have not lapsed.  The Committee may, however, provide 

in the Grant Instrument

 

for complete or partial exceptions to this requirement if an Employee’s employment or Non-Employee Trustee’s service with the Board ends on account of Retirement, termination without Cause, death or Disability or due to a Change of Control, as it deems appropriate

 subject to the limitations set forth in Section 3 of Article XIII of this Plan

..

 

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(d)  Dividend Equivalents.  The Committee may determine that a Grant Instrument with respect to Restricted Share Units may provide that the Grantee shall be entitled to receive as compensation from the Company dividend equivalents with respect thereto, in the form determined by the Committee from the effective date of the Grant Instrument through the earlier of (i) the date the Restricted Share Unit is forfeited, and (ii) the date Company Stock representing such Restricted Share Units or cash is delivered to the Grantee as provided herein.

(e) 

Deferrals of Restricted Share Units.  The Committee may provide 

in the Grant Instrument 

for the automatic deferral of the payment of Restricted Share Units upon the lapse of restrictions on the Grant or permit a Grantee to elect deferral by filing a written election with the Committee in accordance with such procedures as the Committee may from time to time specify,

subject to the limitations set forth in Section 3 of Article XIII of this Plan

..

3.

Withholding.  The Company shall have the right to deduct from any settlement of a Grant of Restricted Shares or Restricted Share Units, including the delivery or vesting of shares or dividend equivalents, an amount sufficient to cover withholding required by law for any federal, state or local taxes or to take such other action as may be necessary to satisfy any withholding obligations.  The Committee may permit shares to be used to satisfy required tax withholding, and such shares shall be valued at the fair market value as of the settlement date of the applicable Grant.

4. 

Section 162(m).  Notwithstanding any other provision of the Plan or the terms of any Grant or Award issued hereunder, Grants of Restricted Stock or Restricted Share Units under this Article VI are not intended to be or meet the requirements for "qualified performance based compensation" under Section 162(m) of the Code or Treasury Regulation § 1.162-27(e).

 

ARTICLE VII

STOCK APPRECIATION RIGHTS

1.

Stock Appreciation Rights.

(a)

General Requirements.  The Committee may grant stock appreciation rights ("SARs") to a Grantee separately or in tandem with any Option (for all or a portion of the applicable Option).  Tandem SARs may be granted either at the time the Option is granted or at any time thereafter while the Option remains outstanding; provided, however, that, in the case of an Incentive Stock Option, SARs may be granted only at the time of the Grant of the Incentive Stock Option.  The Committee shall establish the base amount of the SAR at the time the SAR is granted.  The base amount of each SAR shall be equal to the per share Exercise Price of the related Option or, if there is no related Option, the Fair Market Value of a share of Company Stock as of the date of Grant of the SAR ("Base Amount").  The Committee may not modify the applicable Base Amount of the SAR after the date of Grant.

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(b)

Tandem SARs.  In the case of tandem SARs, the number of SARs granted to a Grantee that shall be exercisable during a specified period shall not exceed the number of shares of Company Stock that the Grantee may purchase upon the exercise of the related Option during such period.  Upon the exercise of an Option, the SARs relating to the Company Stock covered by such Option shall terminate.  Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of shares of Company Stock.

(c)

Exercisability.  An SAR shall be exercisable during the period specified by the Committee in the Grant Instrument and shall be subject to such vesting and other restrictions as may be specified in the Grant Instrument.  SARs may only be exercised while the Grantee is employed by the Company or during the applicable period after termination of employment as described in Article IV, Section 3(e).  A tandem SAR shall be exercisable only during the period when the Option to which it is related is also exercisable.

(d)

Value of SARs.  When a Grantee exercises SARs, the Grantee shall receive in settlement of such SARs an amount equal to the "spread value" for the number of SARs exercised, payable in cash..  The "spread value" for an SAR is the amount representing the  difference by which the Fair Market Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of the SAR as described in Subsection (a).

(e)

Form of Payment.   For purposes of calculating the amount of cash to be received, shares of Company Stock shall be valued at their Fair Market Value on the date of exercise of the SAR and cash shall be distributed, net of applicable withholding taxes.  

ARTICLE VIII

PERFORMANCE UNITS

1.

Performance Units.

(a)

General Requirements.  The Committee may grant performance units ("Performance Units") to an Employee.  Each Performance Unit shall represent the right of the Grantee to receive an amount based on the value of the Performance Unit, if performance goals established by the Committee are met.  A Performance Unit shall be based on the Fair Market Value of a share of Company Stock or on such other measurement base as the Committee deems appropriate.  The Committee shall determine the number of Performance Units to be granted and the requirements applicable to such Units, subject to the limitations contained in Article IX. 

(b)

Performance Period and Performance Goals.  When Performance Units are granted, the Committee shall establish the Performance Period during which performance shall be measured, Performance Goals applicable to the Units and such other conditions of the Grant as the Committee deems appropriate.  Performance Goals may relate to the financial performance of the Company or its operating units, the performance of Company Stock, individual performance, or such other criteria as the Committee deems appropriate.

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(c)

Payment with respect to Performance Units.  At the end of each Performance Period, the Committee shall determine to what extent the Performance Goals and other conditions of the Performance Units are met and the amount, if any, to be paid with respect to the Performance Units.  Payments with respect to Performance Units shall be made in cash, in Company Stock, or in a combination of the two, as determined by the Committee

after the end of the relevant Performance Period but not later than two and one-half months after

 the end of such

Performance Period subject to any deferral election that may be made or applied to the Grant pursuant to subsection (e) below and further subject to the limitations set forth in Section 3 of Article XIII of this Plan with respect to a Grant of Performance Units that is subject to Section 409A of the Code. 

(d)

Requirement of Employment or Service.  If the Grantee ceases to be employed by, or provide service to, the Company (as defined in Article IV, Section 3(e)) during a Performance Period, or if other conditions established by the Committee are not met, the Grantee's Performance Units shall be forfeited.  The Committee may, however, provide 

 in the Grant Instrument

for complete or partial exceptions to this requirement if an Employee’s employment ends on account of Retirement, termination without Cause, death or Disability or due to a Change of Control, as it deems appropriate

subject to the limitations set forth in Section 3 of Article XIII of this Plan

...

(e)

Deferrals of Performance Units.  The Committee may provide in the Grant Instrument for the automatic deferral of the payment of Performance Units at the end of the Performance Period or permit a Grantee to elect deferral by filing a written election with the Committee in accordance with such procedures as the Committee may from time to time specify subject to the limitations set forth in Section 3 of Article XIII of this Plan.

(f)

Designation as Qualified Performance-Based Compensation.  The Committee may determine that Performance Units granted to a Grantee shall be considered "qualified performance-based compensation" under Section 162(m) of the Code.  The provisions of this subsection (e) shall apply to Grants of Performance Units that are to be considered "qualified performance-based compensation" under Section 162(m) of the Code.  

(i)

Performance Goals.  When Performance Units that are to be considered "qualified performance-based compensation" are Granted, the Committee shall establish in writing (A) the objective Performance Goals that must be met in order for amounts to be paid under the Performance Units, (B) the Performance Period during which the performance goals must be met, (C) the threshold, target and maximum amounts that may be paid if the Performance Goals are met, and (D) any other conditions, including without limitation provisions relating to death, disability, other termination of employment or Change of Control, that the Committee deems appropriate and consistent with the Plan and Section 162(m) of the Code.  The performance goals may relate to the Employee’s business unit or the performance of the Company and its subsidiaries as a whole, or any combination of the foregoing. 

(ii)

Establishment of Goals.  The Committee shall establish the Performance Goals in writing either before the beginning of the Performance Period or 

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during a period ending no later than the earlier of (A) 90 days after the beginning of the Performance Period or (B) the date on which 25% of the Performance Period has been completed, or such other date as may be required or permitted under applicable regulations under Section 162(m) of the Code.  The performance goals shall satisfy the requirements for "qualified performance-based compensation," including the requirement that the achievement of the goals be substantially uncertain at the time they are established and that the goals be established in such a way that a third party with knowledge of the relevant facts could determine whether and to what extent the performance goals have been met.  The Committee shall not have discretion to increase the amount of compensation that is payable upon achievement of the designated performance goals.

(iii)

Maximum Payment.  The number of Performance Units granted and paid in shares shall not exceed the limit specified under Article IX(1)(a).  If Performance Units are paid in cash, the maximum amount that may be paid to an Employee with respect to a Performance Period is $4,000,000.

(iv)

Announcement of Grants.  The Committee shall certify and announce the results for each Performance Period to all Grantees immediately following the announcement of the Company’s financial results for the Performance Period.  If and to the extent that the Committee does not so certify that the performance goals have been met, the grants of Performance Units for the Performance Period shall be forfeited.

ARTICLE IX

AUTHORIZED SHARES

1.

Shares Subject to the Plan.

(a)

Shares Reserved for Grants and Awards.  The aggregate number of common shares of NU, par value $5.00, ("Company Stock") that may be subject to Grants of Options, or transferred on account of other Grants or Awards under the Plan may not exceed 4.5 million shares.  The shares may be authorized but unissued shares of Company Stock or reacquired shares of Company Stock, including shares purchased by the Company on the open market for purposes of the Plan.  If and to the extent (i) Options or SARs granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised (other than for reasons of the Exercise Price of the Option being less than the current Fair Market Value thereof), or (ii) any shares of Restricted Stock, RSUs or Performance Units are forfeited, or (iii) Company Stock, including RSUs, are used by the Participant to pay withholding taxes or as payment for the Exercise Price of the Grant, then the shares not made the subject of Grants and Awards, and the shares subject to such terminated, expired, canceled, forfeited, exchanged or surrendered Grants and Awards shall again be available for purposes of the Plan in addition to the number of shares of Company Stock otherwise available for Grants and Awards.  No Participant under the Plan may receive aggregate Grants and Awards in excess of one million shares over the term of the Plan.  

(b)

Adjustments.  If there is any change in the number or kind of shares of Company Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, 

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stock split, or combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation in which NU is the surviving entity, (iii) by reason of a reclassification or change in par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding Company Stock as a class without NU's receipt of consideration, or (v) otherwise in the event of an equity restructuring within the meaning of Statement of Financial Accounting Standards No. 123 (revised 2004), other than (A) any distribution of securities or other property by the Company to shareholders in a spin-off or split-off that does not qualify as a tax-free spin-off or split-up under Section 355 of the Code (or any successor provision of the Code) or (B) any cash dividend (other than an extraordinary cash dividend or distribution), then the maximum number of shares of Company Stock available for Grants, the number of shares covered by outstanding Grants, the kind of shares issued under the Plan, and the price per share or the applicable market value of such Grants, including the per share exercise price of  Options and Stock Appreciation Rights, shall be appropriately adjusted by the Committee to reflect any increase or decrease in the number of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under such Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated

and, provided further, that any substitution of a new stock right or assumption of an outstanding stock right pursuant to a corporate transaction shall comply with the requirements of Section 1.409A-1(b)(5)(v)(D) of the Treasury Regulations and any adjustment of a stock right to reflect a stock split or stock dividend shall comply with the requirements of Section 1.409A-1(b)(5)(v)(H) of the Treasury Regulations

..

 

Any increase to the  number or kind of shares of Company Stock outstanding under this Article IX(1)(b) occurring on or after May 9, 2007 shall result in the adjustment in the 4.5 million shares authorized under Article IX(1)(a).  No such adjustment shall be required to reflect the events described in clauses (x) and (y) above, or any other change in capitalization that does not constitute an equity restructuring; however, such adjustment may be made if the Committee determines that such adjustment is appropriate

; provided, however, that any such adjustment shall comply with the requirements of Section 1.409A-1(b)(5)(v) of the Treasury Regulations

..  Any adjustments determined by the Committee shall be final, binding and conclusive.

(c)

Minimum Vesting Requirement.  Grants of Restricted Stock or RSUs made pursuant to the Plan shall vest ratably no sooner than the first business day of each of the three years following the calendar year of the Grant.  Grants of Options shall vest no sooner than the first business day of the year following the calendar year of the Grant.  The Committee may, in its discretion, determine such other vesting schedule as it deems appropriate, except that any such other vesting schedule must fulfill at least the applicable minimum requirements set forth in the prior two sentences.  The Committee may provide 

in the Grant Instrument

 

for complete or partial exceptions to these requirements as it deems appropriate in the case of a Participant whose service with the Company ends for reason of Retirement, Death, or Disability, or in the case of a Grant to a Non-Employee Trustee or a newly-hired Employee, or upon a Change of Control of NU

subject to the limitations set forth in Section 3 of Article XIII of this Plan

..

ARTICLE X

OPERATING RULES

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1.

Withholding of Taxes.  All Grants under the Plan shall be subject to applicable federal (including FICA), state and local tax withholding requirements.  The Company shall have the right to deduct from all Grants paid in cash, or from other wages paid to the Grantee, any federal, state or local taxes required by law to be withheld with respect to such Grants.  In the case of Options and other Grants paid in Company Stock, the Company may require the Grantee or other person receiving such shares to pay to the Company the amount of any such taxes that the Company is required to withhold with respect to such Grants, or the Company may deduct from other wages paid by the Company the amount of any withholding taxes due with respect to such Grants.  If the Committee so permits, a Grantee may elect to satisfy the Company's income tax withholding obligation with respect to an Option, SAR, Restricted Stock, Restricted Share Units or Performance Units that are paid in Company Stock, by having shares withheld up to an amount that does not exceed the Grantee's minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  The election must be in a form and manner prescribed by the Committee. 

2.

Transferability of Grants.

(a)

Nontransferability of Grants.  Except as provided below, only the Grantee may exercise rights under a Grant during the Grantee’s lifetime.  A Grantee may not transfer those rights except by will or by the laws of descent and distribution or, with respect to Grants other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to a domestic relations order (as defined under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the regulations thereunder).  When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee ("Successor Grantee") may exercise such rights.  A Successor Grantee must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Grantee's will or under the applicable laws of descent and distribution.

(b)

Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to family members, one or more trusts for the benefit of family members, or one or more partnerships of which family members are the only partners, according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.

3.

Requirements for Issuance or Transfer of Shares.  No Company Stock shall be issued or transferred in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance or transfer of such Company Stock have been complied with to the satisfaction of the Committee.  The Committee shall have the right to condition any Grant made to any Grantee hereunder on such Grantee's undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and certificates 

- 14 -

representing such shares may be legended to reflect any such restrictions.  Certificates representing shares of Company Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.

4.

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 Grants under this Plan.  In no event shall interest be paid or accrued on any Grant, including unpaid installments of Grants.

5.

Rights of Participants.  Nothing in this Plan shall entitle any Employee or Non-Employee Trustee or other person to any claim or right to be granted a Grant under this Plan except as provided in Article V.  Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Company or any other employment rights, nor shall they interfere in any way with the right of the Company, a subsidiary or an affiliate to terminate the employment of any Employee at any time.

6.

Headings.  Section headings are for reference only.  In the event of a conflict between a title and the content of a Section, the content of the Section shall control.

7.

Effective Date of the Plan.  Subject to approval by NU's shareholders, if required, the Plan as amended and restated, is effective on January 1, 2009.

 

8.

Definition of Company.  "Company" means NU and any Affiliate which is authorized by the Board to adopt the Plan and cover its eligible employees and whose designation as such has become effective upon acceptance of such status by the board of directors of the Affiliate.  An Affiliate may revoke its acceptance of such designation at any time, but until such acceptance has been revoked, all the provisions of the Plan, including the authority of the Board and the Committee, and amendments thereto shall apply to the eligible employees of the Affiliate.  In the event the designation is revoked by the board of directors of an Affiliate, the Plan shall be deemed terminated only with respect to such Affiliate.  For the purposes hereof, "Affiliate" means each direct and indirect affiliated company that directly or through one or more intermediaries, controls, is controlled by, or is under common control with NU. 

ARTICLE XI

CHANGE OF CONTROL OF NU

1.

Change of Control of NU.

As used herein, a "Change of Control" shall

mean a change in ownership or control effected through any one or more of the following

:

(a)

When any "person," as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), other than the Company, its 

- 15 -

affiliates, or any Company or NU employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of NU representing more than 20% of the combined voting power of either (i) the then outstanding common shares of NU (the "Outstanding Common Shares") or (ii) the then outstanding voting securities of NU entitled to vote generally in the election of directors (the "Voting Securities"); or

(b)

Individuals who, as of the beginning of any twenty-four month period, constitute the Trustees (the "Incumbent Trustees") cease for any reason to constitute at least a majority of the Trustees or cease to be able to exercise the powers of the majority of the Trustees, provided that any individual becoming a trustee subsequent to the beginning of such period whose election or nomination for election by the Company's stockholders was approved by a vote of at least a majority of the trustees then comprising the Incumbent Trustees shall be considered as though such individual were a member of the Incumbent Trustees, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Trustees of NU (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(c)

Consummation by NU of a reorganization, merger or consolidation (a "Business Combination"), in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Common Shares and Voting Securities immediately prior to such Business Combination do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination in substantially the same proportion as their ownership immediately prior to such Business Combination of the Outstanding Common Shares and Voting Securities, as the case may be; or

(d)

Consummation of a complete liquidation or dissolution of NU or sale or other disposition of all or substantially all of the assets of NU other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, is then owned beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Shares and Voting Securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the Outstanding Common Shares and Voting Securities, as the case may be, immediately prior to such sale or disposition. 

- 16 -

2.

Consequences of a Change of Control.

(a)

Notice.  Upon a Change of Control, the Company shall provide each Grantee with outstanding Grants written notice of such Change of Control.

 

(b)

Assumption of Grants.  Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all outstanding Options and SARs that are not exercised and all outstanding restricted shares, restricted share units and Performance Units that are denominated in shares of Company Stock shall be assumed by, or replaced with comparable options, rights or entitlements by, the surviving corporation

, subject to compliance with Section 1.409A-1(b)(5)(v) of the Treasury Regulations

..

(c)

Other Alternatives.  Notwithstanding the foregoing, subject to subsection (d) below

and compliance with Section 1.409A-1(b)(5)(v) of the Treasury Regulations

, in the event of a Change of Control, the Committee may provide in annual program documents that, notwithstanding any deferral election or deferral provision, take any of the following actions: (i) eliminate all risk of forfeiture remaining on any  Options, SARs, restricted shares, restricted share units and Performance Units outstanding at the time of a Change of Control; (ii) require that Grantees surrender their outstanding Options, SARs, restricted shares, restricted share units and Performance Units that are denominated in shares of Company Stock in exchange for a payment by the Company, in cash or Company Stock as determined by the Committee, in an amount equal to the restricted shares, restricted share units or Performance Units (based on the then Fair Market Value of shares of Company Stock) (except that a distribution of any award that is a

409A Award may only be made, other than on Termination, upon

a change of control that qualifies as a "change in control" under Section 1.409A -3(i)(5) of the Treasury Regulations), or with respect to unexercised Options or SARs, in the amount by which the then Fair Market Value of the shares of Company Stock subject to the Grantee's unexercised Options and SARs exceeds the Exercise Price of the Options or the base amount of the SARs, as applicable, or (iii) after giving Grantees an opportunity to exercise their outstanding Options and SARs, terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate.  Such surrender or termination shall take place as of the date of the Change of Control or such other date as the Committee may specify.  

(d)

Committee.  The Committee making the determinations under this Article XI, Section 2(d) following a Change of Control must comprise the same members as those on the Committee immediately before the Change of Control.  If the Committee members do not meet this requirement, the automatic provisions of Subsections (a) and (b) shall apply, and the Committee shall not have discretion to vary them.

(e)

Limitations.  Notwithstanding anything in the Plan to the contrary, in the event of a Change of Control, the Committee shall not have the right to take any actions described in the Plan (including without limitation actions described in Subsection (c) above) that would make the Change of Control ineligible for pooling of interests accounting treatment or that would make the Change of Control ineligible for desired tax 

- 17 -

treatment if, in the absence of such right, the Change of Control would qualify for such treatment and the Company intends to use such treatment with respect to the Change of Control.

ARTICLE XII

AMENDMENT AND TERMINATION

1.

Amendment and Termination of the Plan.

(a)

Amendment.  

Subject to the limitations set forth in Section 3 of Article XIII of this Plan, the

 Board or the Committee may amend or terminate the Plan at any time; provided, however, that neither the Board nor the Committee shall amend the Plan without shareholder approval if such approval is required by Sections 162(m) or 422 of the Code.

(b)

Termination of the Plan.  The Plan shall terminate on the day preceding the tenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or the Committee

in accordance with Subsection (a) above

, or is extended by the Board or the Committee with the approval of the shareholders.

(c)

Termination and Amendment of Outstanding Grants.  A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless the Grantee consents, unless the Committee acts under Article XI, Section 2(c), or unless the amendment or termination is required under statute, regulation, other law, or rule of a governing or administrative body having the effect of a statute or regulation

or unless such an amendment is necessary to bring a Grant into compliance with, or obtain an exemption from, the requirements of Section 409A of the Code

..  The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant.

(d)

Governing Document.  The Plan shall be the controlling document.  No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner.  The Plan shall be binding upon and enforceable against the Company and its successors and assigns.

ARTICLE XIII

MISCELLANEOUS

1.

Grants in Connection with Corporate Transactions and Otherwise.  Nothing contained in this Plan shall be construed to (

a

) limit the right of the Committee to make Grants under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees of the Company, or for other proper corporate purposes, or (

b

) limit the right of the Company to grant stock options or make other awards outside of this Plan.  Without limiting the foregoing, the Committee may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company or any of its 

- 18 -

subsidiaries in substitution for a stock option or restricted stock grant made by such corporation.  The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives.  The Committee shall prescribe the provisions of the substitute grants.

2.

Compliance with Law.  The Plan, the exercise of Options and SARs and the obligations of the Company to issue or transfer shares of Company Stock under Grants shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required.  With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition, it is the intent of the Company that the Plan and applicable Grants under the Plan comply with the applicable provisions of sections 162(m) and 422 of the Code, and any other applicable law or regulation having the effect of law.  To the extent that any legal requirement of section 16 of the Exchange Act or section 162(m) or 422 of the Code as set forth in the Plan ceases to be required under section 16 of the Exchange Act or section 162(m) or 422 of the Code, that Plan provision shall cease to apply.

 

Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Treasury Regulations thereunder and the Company shall have no right to make any payment under this Plan except to the extent permitted under Section 409A of the Code. It is intended that payments made under this Plan on or before the 15th day of the third month following the end of the Participant’s first taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture shall be exempt from compliance with Section 409A of the Code pursuant to the exception for short-term deferrals set forth in Section 1.409A-1(b)(4) of the Treasury Regulations

.. 

The Company shall have no obligation, however, to reimburse a Participant for any tax penalty or interest payable or provide a gross-up payment in connection with any tax liability of a Participant under Section 409A of the Code except that this provision shall not apply in the event of the Company’s negligence or willful disregard in interpreting the application of  Section 409A of the Code to the Plan which negligence or willful disregard causes the Participant to become subject to a tax penalty or interest payable under Section 409A of the Code, in which case the Company will reimburse the Participant on an after-tax basis for any such tax penalty or interest not later than the last day of the Participant’s taxable year next following the Participant’s taxable year in which the Participant remits the applicable taxes and interest. To the extent permitted by applicable law, the 

Committee may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation.  The Committee may also adopt rules regarding the withholding of taxes on payments to Grantees.  The Committee may, in its sole discretion, agree to limit its authority under this Section.

3.

Deferred Compensation.  

(a)  409A Awards.  Anything in this Plan to the contrary notwithstanding, the following rules shall apply to 409A Awards and shall constitute further restrictions on terms of Awards and Grants set forth elsewhere in this Plan:

- 19 -

(i) 

The Committee may permit a Participant to elect to defer a Grant or Award, or any payment under a Grant or Award, in 2005 or thereafter, only if such election is either made before the beginning of the fiscal year for which the Grant or Award is granted or complies with an exception set forth in the Treasury Regulations under Section 409A of the Code or the transition rules set forth in Q&A 19(c) of IRS Notice 2005-1 as extended by the Treasury Regulations and IRS Notices 2006-79 and 2007-86 (collectively, the

"Transition Rules").  

(ii)

The Committee may, in its discretion, for the period beginning January 1, 2005 through December 31, 2008, require or permit on an elective basis (one or more times) a change in the distribution terms applicable to 409A Awards (and Non-409A Awards that qualify for the short-term deferral exemption under Section 409A) in accordance with, and to the fullest extent permitted by, the Transition Rules.

 

(iii) The Committee shall have no authority to accelerate distributions relating to 409A Awards in excess of the authority permitted under Section 1.409A-3(j) of the Treasury Regulations.

(iv) Any distribution of a 409A Award triggered by a Participant’s termination of employment and intended to qualify under Section 409A(a)(2)(A)(i) of the Code shall be made only at the time that the Participant has had a Termination (or at such earlier time, after a termination of employment, that there occurs another event triggering a distribution under the Plan or the applicable Grant Instrument in compliance with Section 409A).

(v) Any distribution of a 409A Award triggered by a Participant’s Termination shall be delayed for six months following the date of such Termination if such Participant is a Specified Employee on such date.  In the event of any such delay in the distribution date, the 409A Award will be paid at the beginning of the seventh month following the Participant’s Termination. In the event of the Participant’s death during such six-month period, payment will be made in the payroll period next following the payroll period in which the Participant’s death occurs.

Any payment due within such six-month period will be adjusted to reflect the deferred payment date by multiplying the payment by the product of the interest

discount rate used for financial accounting purposes to compute the present value liability of the  Supplemental Executive Retirement Plan for Officers of Northeast Utilities System Companies for the plan year immediately preceding the date of the Specified Employee’s Termination,

multiplied by a fraction, the numerator of which is the number of days by which such payment was delayed and the denominator of which is 365.

(vi)  In the case of any distribution of a 409A Award, if the timing of such distribution is not otherwise specified in the Plan or a Grant Instrument, the distribution shall be made on or after the date at which the settlement of the Award is specified to occur and on or before the 75th day following the date at which the settlement of the Award is specified to occur, determined in the sole discretion of the Committee, except as otherwise provided in Subsection (v) above.

- 20 -

(vii)  No amendment or termination of the Plan or a Grant pursuant to Article XII shall be effective with respect to 409A Awards except insofar as it complies with the requirements of Section 409A of the Code and the Treasury Regulations thereunder or the Transition Rules, including without limitation, the requirements set forth in Treasury Regulations Section 1.409A-2(b) governing subsequent changes in time and form of payment and Section 1.409A-3(j)(4)(ix) governing plan terminations.

(b)

Grandfathered Grants.  Any Grant that was both granted and vested before 2005 and which otherwise might constitute a deferral of compensation under Section 409A is intended to be "grandfathered" under Section 409A.  No amendment or change to the Plan or other change (including an exercise of discretion) with respect to such a grandfathered Grant after October 3, 2004, shall be effective if such change would constitute a "material modification" within the meaning of the Treasury Regulations under Section 409A, except in the case of a Grant that is specifically modified to become compliant as a 409A Award or compliant with an exemption under Section 409A.

(c)

Distributions Upon Vesting.  In the case of any Grant providing for a distribution upon the lapse of a risk of forfeiture, if the timing of such distribution is not otherwise specified in the Plan or a Grant Instrument, the distribution shall be made on or after January 1 and on or before March 15 of the year following the year in which the risk of forfeiture lapsed.  

(d)

Scope and Application of this Provision.  For purposes of this Section 3 and Section 2 above, references to a term or event (including any authority or right of the Company or a Participant) being "permitted" under or in "compliance" with Section 409A and the Treasury Regulations thereunder or the Transition Rules mean that the term or event will not cause the Participant to be deemed to be in constructive receipt of compensation relating to the 409A Award prior to the distribution of cash, shares or other property or to be liable for payment of interest or a tax penalty under Section 409A.  

 

4. 

Clawback.  Upon written demand of the Company, an Employee will reimburse or forfeit all or a portion of any Award or Grant paid to the Employee under the Plan where: (

a

) payment of the Award or Grant  was predicated on the achievement of certain financial results that were subsequently the subject of a substantial restatement of the financial statements of the Company, (

b

) in the judgment of the Board the Employee engaged in fraud or misconduct that caused or partially caused the need for the substantial restatement, and (

c

) a lower payment would have been made to the Employee based on the restated financial results.  In the event the Employee fails to make prompt reimbursement of any such Award or Grant previously paid or delivered, the Company may, to the extent permitted by applicable law, deduct the amount required to be reimbursed from the Grantee’s compensation otherwise due from the Company; provided, however, that the Company will not seek to recover upon Awards or Grants paid more than three years prior to the date the applicable restatement is disclosed. 

5.

Governing Law.  The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall exclusively be governed by and determined in accordance with the law of the State of Connecticut.

- 21 -

6.

Disclaimer of Liability.  The Declaration of Trust of NU provides that no shareholder of NU 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, and every person or entity, having any claim or demand arising out of any such  contract, obligation or undertaking shall look only to the trust estate for the payment or satisfaction thereof.

ARTICLE XIV

DEFINITIONS

When used herein, each of the following terms shall have the corresponding meaning set forth below unless a different meaning is plainly required by the context in which a term is used:

14.1

 "Award" is an annual incentive award made to an Employee as provided in Article III.

14.2

 

"Cause" is described in Article IV(3)(e)(ii)(A).

14.3

 

"Change of Control" is described in Article XI(1).

14.4

"Code" is the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

14.5

"Committee" is described in Article II(1).

14.6

"Company Stock" or "Stock" is Northeast Utilities common shares, as described in Article IX(1)(a).

14.7

"Company" or "NU" is described in Article X.

14.8

 

"Disability" is described in Article IV(3)(e)(ii)(B).

14.9

"Exchange Act" is the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.

- 22 -

14.10 

 "Exercise Price" is described in Article IV(3)(b)(ii).

14.11 

"409A Award" is an Award or Grant that constitutes a deferral of compensation subject to Code Section 409A and the Treasury Regulations thereunder.  "Non-409A Award" is an Award or Grant other than a 409A Award (including Awards and Grants exempt under the short-term deferral exception set forth in Treasury Regulation Section 1.409A-1(b)(4) and Awards and Grants that vested before 2005 and therefore are "grandfathered" under Section 409A).  Although the Committee retains authority under the Plan to grant Options and Stock Appreciation Rights on terms that will cause those Grants to be 409A Awards, Options and Stock Appreciation Rights are intended to be Non-409A Awards unless otherwise expressly specified by the Committee.

14.12  

"Fair Market Value" is, as of any given date, the value of Company Stock, as provided in Article IV(3)(b)(iii), or as otherwise determined by the Committee.

14.13

"Grant" is described in Article IV(1).  

14.14

"Grantee" is the individual to whom a Grant is made, as provided in Article IV, Section 2(b).

14.15

"Grant Instrument" is described in Article IV(1).

14.16  

 "Stock Option" is described in Article IV(3)(b).

14.17   

"Nonqualified Stock Option

"

 is described in Article IV(3)(b).

14.18

"

Option

" is an Incentive Stock Option or a Nonqualified Stock Option, as described in Article IV(3)(b).

14.19

  

"Participant" is any eligible individual to whom an Award or Grant is made.

14.20

"Performance Goals" means the objectives for the Company or any subsidiary or affiliate or any unit thereof or any individual that may be established by the Committee for a Performance Period with respect to any performance-based Awards or Grants contingently awarded under the Plan.  The Performance Goals for Awards or Grants that are intended to constitute "performance-based" compensation within the meaning of Section 162(m) (or any amended or successor provision) of the Code shall be based on one or more of the following criteria, either individually, alternatively or in any combination, and subject to such modifications or variations as specified by the Committee, applied to either the Company as a whole or to a business unit or subsidiary entity thereof, either individually, alternatively or in any combination, and measured over 

- 23 -

a period of time including any portion of a year, annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years' results or to a designated comparison group, in each case as specified by the Committee: 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; 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.

With respect to awards that are intended to qualify as performance-based compensation within the meaning of Section 162(m) and to the extent consistent with Section 162(m) of the Code and the regulations promulgated thereunder, the Committee may, unless otherwise determined by the Committee at the time the Performance Goals are established, adjust the Performance Goals to exclude the effect of any of the following events that occur during a Performance Period: the impairment of tangible or intangible assets; litigation or claim judgments or settlements; changes in tax law, accounting principles or other such laws or provisions affecting reported results; business combinations, reorganizations and/or restructuring programs that have been approved by the Board; reductions in force and early retirement incentives; and any extraordinary, unusual, infrequent or non-recurring items separately identified in the financial statements and/or notes thereto in accordance with generally accepted accounting principles.  Notwithstanding the foregoing and with respect to awards that are not intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, the Committee may, in its discretion, adjust Performance Goals as it considers necessary or appropriate.

14.21

 

"Performance Period" is the period selected by the Committee during which the performance of the Company or any subsidiary, affiliate or unit thereof or any individual is measured for the purpose of determining the extent to which an Award or Grant subject to Performance Goals or time vesting has been earned.

14.22

 

"Performance Unit" is described in Article VIII(1)(a).

14.23

"Plan" is this Northeast Utilities Incentive Plan, as amended from time to time.

- 24 -

14.24

"Qualified Performance-Based Compensation" is described in Article VIII(1)(e).

14.25

"Restriction Period" is described in Article VI(1)(a) and (2)(a).

14.26

"Restricted Stock" is a Grant described in Article VI.

14.27

"Restricted Share Units" or "RSUs" is a Grant described in Article VI.

14.28

"Retired" or "Retirement" is described in Article IV(3)(c)(ii)(D).  

14.29  

"Specified Employee" is a Vice President or more senior officer of the Company at any time during a calendar year in which case such employee shall be considered a Specified Employee for the 12-month period beginning on the first day of the fourth month immediately following the end of such calendar year.

14.30

"Stock Appreciation Right" or "SAR" is a right granted pursuant to Article VII. 

14.31  

"Termination" is a 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 on the basis of 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).

14.32 

"Termination on Account of Change of Control" of a Participant shall mean a Termination during the period beginning on the earlier of (a) approval by the shareholders of NU of a Change of Control or (b) consummation of a Change of Control and, in either case, ending on the second anniversary of the consummation of the transaction that constitutes the Change of Control (or if such period started on shareholder approval and after such shareholder approval the Board abandoned the transaction, on the date the Board abandoned the transaction) either: 

(i)  

initiated by the Company for any reason other than the Participant’s (A) Disability, (B) death, (C) retirement on or after attaining age 65, or (D) Cause, or 

(ii) 

initiated by the Participant upon written notice to the Company provided within 90 days of the initial existence of any of the following circumstances unless such circumstances are corrected within 30 days after the Company’s receipt of such notice (A) upon any significant reduction by the Company of the authority, duties or 

- 25 -

responsibilities of the Participant, (B) any material reduction of the Participant's base compensation as in effect immediately prior to the Change of Control, (C) the assignment to the Participant of duties which are materially inconsistent with the duties of the Participant's position with the Company or those of his or her supervisor, or (D) if the Participant is transferred, without the Participant's written consent, to a location that is more than 50 miles from the Participant's principal place of business immediately preceding the Change of Control.

- 26 -Converted by EDGARwiz

Exhibit 10.4

Deferred Compensation Plan for Executives

Adopted by Northeast Utilities Board of Trustees 

on January 13, 1998

Amended and

Restated 

Effective

 January 1, 2009

 

ARTICLE 1

PURPOSE

The purpose of the Northeast Utilities Deferred Compensation Plan for Executives (the “Plan”) is to provide a means whereby the Company (as hereinafter defined) may afford increased financial security, on a tax-favored basis, to a select group of “key management or other highly compensated employees” of the Company.  These individuals have rendered and continue to render valuable services to the Company that constitute an important contribution towards the Company's continued growth and success.  This Plan provides for additional compensation so that such employees may be recruited and retained and their productive efforts encouraged.  This document represents a complete restatement of the Plan effective as of January 1, 2009.  The provisions of this amendment and restatement of the Plan shall apply to Plan participants who have not retired or terminated employment with the Company as of January 1, 2009.

The Plan is intended to constitute an unfunded “top hat” plan within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  As a top hat plan, the Plan is not subject to the eligibility, vesting, funding or fiduciary responsibility requirements of ERISA.

ARTICLE 2

DEFINITIONS

Account.  “Account” means, with respect to a Participant, the account, including any subaccounts, established on the books of account of the Company, pursuant to Section 5.1, to record the Participant’s interest in the Plan.

Administrator.  “Administrator” means the Administrator as defined in the Retirement Plan, or the person or persons to whom such entity delegates any of its functions under the Plan.

Affiliate.  “Affiliate” means each direct and indirect affiliated company that directly or through one or more intermediaries, controls, is controlled by, or is under common control with NU. 

Applicable Percentage.  “Applicable Percentage” with respect to a Participant for any Plan Year means the applicable percentage used in the Savings Plan for such Plan Year to determine such Participant’s K-Vantage Contributions for that Plan Year.

Base Salary.  “Base Salary” means with respect to a Participant for any Plan Year such Participant's annual base salary, before deferral pursuant to this Plan or any agreement or any other plan of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Code Section 401(k) or reduced in accordance with Code Section 125.

Base Salary Deferral.  “Base Salary Deferral” means that portion of Base Salary as to which an Eligible Employee has made an annual irrevocable election to defer receipt.

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Beneficiary.  “Beneficiary” means the person or persons designated as such in accordance with Section 12.3.

Board.  “Board” means the Board of Trustees of NU.

Bonus Compensation.  “Bonus Compensation” means with respect to a Participant for any Plan Year such Participant's annual bonus compensation under the Incentive Plan or any other incentive plan of the Company before deferral pursuant to this Plan or pursuant to any agreement or any other plan of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Code Section 401(k) or reduced in accordance with Code Section 125.

Bonus Compensation Deferral.  “Bonus Compensation Deferral” means that portion of cash Bonus Compensation as to which an Eligible Employee has made an annual irrevocable election to defer receipt.

Change of Control.  “Change of Control” shall mean the happening of any of the following:

(a)

When any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), other than the Company, its Affiliates, or any Company or NU employee benefit plan (including any trustee of such plan acting as trustee), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of NU representing more than 20% of the combined voting power of either (i) the then outstanding common shares of NU (the “Outstanding Common Shares”) or (ii) the Voting Securities; or

(b)

Individuals who, as of the beginning of any twenty-four month period, constitute the Trustees (the “Incumbent Trustees”) cease for any reason to constitute at least a majority of the Trustees or cease to be able to exercise the powers of the majority of the Trustees, provided that any individual becoming a trustee subsequent to the beginning of such period 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 Trustees shall be considered as though such individual were a member of the Incumbent Trustees, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Trustees of NU (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(c)

Consummation by NU of a reorganization, merger or consolidation (a “Business Combination”), in each case, with respect to which all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Common Shares and Voting Securities immediately prior to such Business Combination do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting power of the then 

- 2 -

 

outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination in substantially the same proportion as their ownership immediately prior to such Business Combination of the Outstanding Common Shares and Voting Securities, as the case may be; or

(d)

Consummation of a complete liquidation or dissolution of NU or sale or other disposition of all or substantially all of the assets of NU other than to a corporation, business trust or other entity with respect to which, following consummation of all transactions intended to constitute part of such sale or disposition, more than 75% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, is then owned beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Shares and Voting Securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the Outstanding Common Shares and Voting Securities, as the case may be, immediately prior to such sale or disposition. 

Code.  “Code” means the Internal Revenue Code of 1986, as amended from time to time.

Committee.  “Committee” means the Board’s Compensation Committee, or the person or persons to which such committee delegates any of its functions under the Plan.

Company.  “Company” means NU and any Affiliate which is authorized by the Board to adopt the Plan and cover its Eligible Employees and whose designation as such has become effective upon acceptance of such status by the board of directors of the Affiliate.  An Affiliate may revoke its acceptance of such designation at any time, but until such acceptance has been revoked, all the provisions of the Plan, including the authority of the Board and the Committee, and amendments thereto shall apply to the Eligible Employees of the Affiliate.  In the event the designation is revoked by the board of directors of an Affiliate, the Plan shall be deemed terminated only with respect to such Affiliate.

Disabled.  “Disabled” means a mental or physical condition that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months which qualifies a Participant for benefits under the Company’s long term disability plan.

Earnings Crediting Options.  “Earnings Crediting Options” means the options selected by the Participant from time to time pursuant to which earnings are credited to the Participant's Account.  The option for Matching Contributions shall be deemed investments in Voting Securities and any deemed dividends shall be deemed reinvested in additional Voting Securities.

Effective Date.  “Effective Date” means the initial effective date of the Plan, which is January 1, 1998.

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Eligible Employee.  “Eligible Employee” means an Employee who is a member of the group of selected management and/or highly compensated Employees of the Company designated by the Committee, acting on behalf of the Company, as eligible to participate in the Plan other than an individual that the Company treats as an independent contractor (and an individual shall be treated as an independent contractor if payment for the individual’s services is memorialized on a Form 1099, and not on a Form W-2) or any individual who has signed an agreement with the Company stating that the individual is not eligible to participate in the Plan.

Employee.  “Employee” means any person employed by the Company on a regular full-time salaried basis or who is an officer of the Company, or a member of the Board.

End Termination Date.  “End Termination Date” means the date of termination of a Participant's Service with the Company and its Affiliates.  Whether the termination of a Participant’s Service has occurred shall be determined by the Administrator with reference to Treasury Regulations Section 1.409A-1(h).

Enrollment Agreement.  “Enrollment Agreement” means the authorization form which an Eligible Employee executes and files with the Administrator for the purpose of making Base Salary Deferrals and Bonus Compensation Deferrals and/or for electing the time and manner of payment of Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions and the earnings thereon credited to the Eligible Employee’s Account.

Incentive Plan.  “Incentive Plan” means the Northeast Utilities Incentive Plan, effective January 1, 1998, as restated January 1, 2009, and as amended from time to time.

K-Vantage Contributions.  “K-Vantage Contributions” with respect to a Participant in any Plan Year means the K-Vantage Contributions made on behalf of such Participant under the Savings Plan for such Plan Year.

K-Vantage Employee.  “K-Vantage Employee” means an Eligible Employee who receives K-Vantage Contributions under the Savings Plan.

K-Vantage Make-Whole Account.  “K-Vantage Make-Whole Account” means the sub-account in which K-Vantage Make-Whole Contributions, and earnings thereon, are held.

K-Vantage Make-Whole Compensation.  “K-Vantage Make-Whole Compensation” with respect to a Participant for any Plan Year means the compensation paid to a Participant who is a K-Vantage Employee that is used under the Savings Plan for purposes of determining such K-Vantage Employee’s K-Vantage Contributions under the Savings Plan, but without the limitation imposed by Section 401(a)(17) of the Code or the exclusion from the definition of compensation under the Savings Plan of amounts deferred under this Plan or any other nonqualified deferred compensation plan.

-  4  -

 

K-Vantage Make-Whole Contributions.  “K-Vantage Make-Whole Contributions” means those contributions credited to the Participant’s Account by the Company pursuant to Section 4.4.

Matching Contributions.  “Matching Contributions” means those contributions credited to the Participant's Account by the Company pursuant to Section 4.3.

NU.  “NU” means Northeast Utilities, a Massachusetts business trust and its successors and assigns.

Participant.  “Participant” means an Eligible Employee who has filed a completed and executed Enrollment Agreement with the Administrator as provided in Section 4.3.  An Eligible Employee who is a K-Vantage Employee shall be an automatic Participant for purposes of having K-Vantage Make-Whole Contributions allocated to his or her Account under Section 4.4.

Pension Committee.  “Pension Committee” means the Pension Committee as defined in the Retirement Plan.

Plan.  “Plan” means this plan, called the Northeast Utilities Deferred Compensation Plan for Executives, as amended from time to time.  The Plan shall supersede the Deferred Compensation Plan for Officers of Northeast System Companies as of the Effective Date and the benefits payable to participants thereunder shall instead be payable under the Plan.

Plan Year.  “Plan Year” means the 12 month period beginning on each January 1 and ending on the following December 31.  

Retires or Retirement.  “Retires” or “Retirement” means the termination of the Participant's Service with the Company for a reason other than “cause” as determined by the Administrator on or after the earlier to occur of:

(a)

attainment of age 65, or

(b)

eligibility for pension payments under the Supplemental Executive Retirement Plan for Officers of  Northeast Utilities System Companies or employment related agreement with the Company, or

(c) 

attainment of age 55 after completing at least 10 years of Service.

Retirement Plan.  “Retirement Plan” means the Northeast Utilities Service Company Retirement Plan.

Savings Plan.  “Savings Plan” means the Northeast Utilities Service Company 401k Plan.

Service.  “Service” means the period of time during which an employment relationship exists between an Employee and the Company, as credited under the Retirement 

-  5  -

 

Plan for vesting purposes or, in the case of a K-Vantage Employee, as credited under the Savings Plan for vesting purposes.

Specified Employee.  “Specified Employee” means an Employee who is a Vice President or more senior officer of the Company at any time during a Plan Year in which case such Employee shall be considered a Specified Employee for the 12-month period beginning on the first day of the fourth month immediately following the end of such Plan Year.

Unforeseeable Emergency.  “Unforeseeable Emergency” means a severe financial hardship of a Participant resulting from: (a) an illness or accident of the Participant or the Participant’s spouse or dependent as defined in Section 152 of the Code without regard to Section 152(b)(1), (b)(2) and (d)(1)(B); (b) a loss of the Participant’s property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  Whether a Participant has an Unforeseeable Emergency shall be determined by the Administrator on the basis of all relevant facts and circumstances and with reference to Treasury Regulations Section 409A-3(i)(3).

Vesting or Vested.  “Vesting” or “Vested” refers to the time after which Matching Contributions and K-Vantage Make-Whole Contributions, and their related earnings, become non-forfeitable, as provided under Section 4.5.

Voting Securities.  “Voting Securities” means the common shares of NU, par value $5.00 or any successor security of NU which carries the right to vote generally in the election of the Board.

Year of Service.  “Year of Service” for Vesting purposes means each year of credited service recognized for determining a Participant’s vesting in his or her accrued benefit in the Retirement Plan or, for a K-Vantage Employee, in his or her K-Vantage Contributions source account in the Savings Plan.

ARTICLE 3

ADMINISTRATION OF THE PLAN

The Administrator is hereby authorized to administer the Plan and establish, adopt, or revise such rules and regulations as it may deem necessary or advisable for the administration of the Plan.  The Administrator shall have discretionary authority to construe and interpret the Plan, to make determinations, including factual determinations, and to determine the rights, if any, of Participants and Beneficiaries under the Plan which, subject to the claims procedure set forth in Section 11.2, shall be final and binding upon any Participant and Beneficiary affected thereby.  The Administrator and members of the Committee and the Pension Committee shall be eligible to participate in the Plan while serving as such, but no such person shall vote or act upon any matter which relates solely to such person's interest in the Plan as a Participant.

-  6  -

 

ARTICLE 4

PARTICIPATION

4.1

Annual Election to Participate; Designation of Time and Manner of Payment.  Annually, all Eligible Employees will be offered the opportunity to make Base Salary and Bonus Compensation Deferrals.  Any Eligible Employee may enroll in the Plan effective as of the first day of a Plan Year by filing a completed and fully executed Enrollment Agreement with the Administrator prior to the end of December of the Plan Year preceding the Plan Year for which the deferral is to occur.  Pursuant to said Enrollment Agreement, the Eligible Employee shall irrevocably elect the amount of Base Salary or cash Bonus Compensation (in each case after non-deferrable payroll tax deductions) of such Eligible Employee for the Plan Year that will be deferred and the time and manner of payment of all Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions credited to the Eligible Employee’s Account for such Plan Year (and the earnings thereon) in accordance with Section 6.1 and Article 7.  All K-Vantage Employees shall automatically become Participants in the Plan in the Plan Year in which they become eligible for K-Vantage Make Whole Contributions, and such K-Vantage Make-Whole Contributions (and the earnings thereon) shall automatically be paid as provided in Section 6.2.  All such elections as to the time and manner of payment of Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) shall be irrevocable except as otherwise specifically provided in this Plan.  

4.2

New Eligible Employees.  The Administrator, acting on behalf of the Company, may permit Employees who first become Eligible Employees after the beginning of a Plan Year to enroll in the Plan for that Plan Year by filing a completed and fully executed Enrollment Agreement, in accordance with Section 4.1, which includes a designation as to the time and manner of payment of their Base Salary and Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) as soon as practicable following the date the Employee becomes an Eligible Employee but, in any event, within 30 days after such date.  Notwithstanding the foregoing, any election by an Eligible Employee, pursuant to this Section, to defer Base Salary shall apply only to such amounts as are otherwise to be paid after the date on which such Enrollment Agreement is filed and with respect to Bonus Compensation Deferrals, only to Bonus Compensation paid for Service performed after the date on which such Enrollment Agreement is filed.

4.3

Matching Contributions.  An Eligible Employee who elects to participate in the Plan pursuant to Section 4.1 or Section 4.2 shall be eligible to receive Matching Contributions by the Company.  The amount of such Matching Contributions for a Plan Year shall be 100% of the Base Salary and Bonus Compensation Deferrals for the Plan Year, not to exceed the amount by which 3% of the Participant’s Base Salary for the Plan Year exceeds the amount of matching contributions made for the Participant for the Plan Year under the Savings Plan.  Matching Contributions will be credited as frequently as determined by the Administrator, acting on behalf of the Company, but in any event at least once per year.  Matching Contributions will be credited as soon as practicable in the Participant's final year of participation in the Plan.

-  7  -

 

4.4

K-Vantage Make-Whole Contributions.  With respect to any Participant who is a K-Vantage Employee, the Company shall make K-Vantage Make-Whole Contributions for such K-Vantage Employee each Plan Year equal to the Applicable Percentage for such Plan Year multiplied by the K-Vantage Employee’s K-Vantage Make-Whole Compensation for such Plan Year, reduced by the K-Vantage Contributions made for such K-Vantage Employee for such Plan Year under the Savings Plan.  K-Vantage Make-Whole Contributions will be credited as frequently as determined by the Administrator, acting on behalf of the Company, but in any event at least once per year and held in the Participant’s K-Vantage Make-Whole Account.  K-Vantage Make-Whole Contributions will be credited as soon as practicable in the Participant's final year of participation in the Plan.

4.5.

Vesting in Matching Contributions and K-Vantage Make-Whole Contributions.  

(a)

Matching Contributions.  A Participant becomes Vested in Matching Contributions and related earnings when the Participant has been credited with three Years of Service after the end of the Plan Year for which the Matching Contributions were made.  Matching Contributions and related earnings are forfeited when Service terminates, to the extent not then Vested.  A Participant is automatically 100% Vested if a Change of Control occurs or if the Participant becomes Disabled, Retires, or dies.  A Participant is always 100% Vested in his or her Base Salary Deferrals, Bonus Compensation Deferrals, and related earnings.

(b)

K-Vantage Make-Whole Contributions.  A Participant becomes Vested in his or her K-Vantage Make-Whole Account when the Participant becomes Vested in his or her K-Vantage Contributions and related earnings in the Savings Plan.

4.6

Cancellation of Deferrals.  The provisions of Sections 4.1 and 4.2 to the contrary notwithstanding, a Participant’s Base Salary and/or Bonus Compensation Deferral election under this Plan shall terminate if necessary for the Participant to obtain a hardship distribution under a qualified retirement plan that includes a cash or deferred arrangement under Section 401(k) of the Code as required by Treasury Regulations Section 1.401(k)-1(d)(3).  Following any such termination of a Participant’s Base Salary and/or Bonus Compensation Deferral election, the Participant may not make a subsequent Base Salary or Bonus Compensation Deferral election except in accordance with the provisions set forth in Section 4.1.

ARTICLE 5

ACCOUNTS

5.1

Accounts.  The Administrator shall establish and maintain a separate Account with respect to a Participant.  The amount of Base Salary and/or Bonus Compensation deferred pursuant to Section 4.1 or Section 4.2 shall be credited by the Company to the Participant's Account no later than the first day of the month following the month in which such Base Salary and/or Bonus Compensation would otherwise have been paid.  Any amount once taken into account as Base Salary and/or Bonus Compensation for purposes of this Plan shall not be taken into account thereafter.  Matching Contributions and K-Vantage 

-  8  -

 

Make-Whole Contributions made pursuant to Sections 4.3 and 4.4, respectively, shall be credited to the Participant’s Account as provided therein.  The Participant's Account shall be reduced by the amount of payments made by the Company to the Participant or the Participant's Beneficiary pursuant to this Plan.

5.2

Earnings on Accounts.  A Participant's Account shall be credited with earnings in accordance with the Earnings Crediting Options elected by the Participant from time to time for amounts credited to the Account until such Account is paid out in full to such Participant or such Participant’s Beneficiary.  Participants may allocate their Account among the Earnings Crediting Options available under the Plan only in whole percentages of not less than five percent.  The deemed rate of return, positive or negative, credited under each Earnings Crediting Option is based upon the actual investment performance of the corresponding investment portfolios under the Savings Plan (except that Matching Contributions and earnings thereon shall at all times be deemed invested and reinvested in Voting Securities) and shall equal the total return of such investment fund net of asset based charges, including, without limitation, money management fees and fund expenses.  The Company reserves the right, on a prospective basis, to add or delete Earnings Crediting Options.

5.3

Earnings Crediting Options.  Except as otherwise provided pursuant to Section 5.2, the Earnings Crediting Options available under the Plan shall consist of  options which correspond to the investment funds maintained from time to time under the Savings Plan.  In the event of a stock split, stock dividend, reclassification, reorganization or other capital adjustment in the Voting Securities, the number of deemed shares of Voting Securities then credited to the Participant's Account shall be adjusted in the same manner as the shares of Voting Securities are adjusted.  Notwithstanding that the rates of return credited to Participants' Accounts under the Earnings Crediting Options are based upon the actual performance of the corresponding investment funds (or the number of Voting Securities), or such other investment funds as the Company may designate, the Company shall not be obligated to invest any Base Salary and/or Bonus Compensation deferred by Participants under this Plan, Matching Contributions, K-Vantage Make-Whole Contributions or any other amounts, in such portfolios or in any other investment funds.

5.4

Changes in Earnings Crediting Options.  A Participant may change the Earnings Crediting Options to which the Participant’s Account is deemed to be allocated not more frequently than is permitted under the Savings Plan.  Each such change may include (a) reallocation of the Participant's existing Account in whole percentages of not less than five percent, and/or (b) change in investment allocation of amounts to be credited to the Participant's Account in the future, as the Participant may elect.  Notwithstanding the foregoing, however, in the event the Company eliminates an Earnings Crediting Option, a Participant whose Account is allocated to such Earnings Crediting Option, in whole or in part, shall be entitled to reallocate the Account and/or any amounts to be credited in the future to such Account among the remaining Earnings Crediting Options, at the time of such elimination, without regard to any annual limit on such changes.

5.5

Valuation of Accounts.  The value of a Participant's Account as of any date shall equal the amounts theretofore credited to such Account, including any earnings 

-  9  -

 

(positive or negative) deemed to be earned on such Account in accordance with Section 5.2 through the day preceding such date, less the amounts theretofore deducted from such Accounts.  The value of that portion of the Participant’s Account attributable to Matching Contributions shall equal the value of the number of shares of Voting Securities credited to the Participant’s Account plus the number of such shares deemed purchased by reinvesting the earnings on Voting Securities already deemed credited to the Participant’s Account.

5.6

Statement of Accounts.  The Administrator shall provide to each Participant, not less frequently than quarterly, a statement in such form as the Administrator deems desirable setting forth the balance standing to the credit of each Participant in the Participant’s Account.

5.7

Distributions from Accounts.  Any distribution made to or on behalf of a Participant from the Participant’s Account in an amount which is less than the entire balance of such Account shall be made pro rata from each of the Earnings Crediting Options to which such Account is then allocated.

ARTICLE 6

TIMING OF DISTRIBUTIONS

6.1

Election of Timing of Distributions.  In each Enrollment Agreement filed with the Administrator for a Plan Year, in accordance with Section 4.1 or 4.2, an Eligible Employee shall elect the time and manner of payment pursuant to which all Base Salary Deferrals, Bonus Compensation Deferrals and Vested Matching Contributions credited to the Eligible Employee’s Account for that Plan Year (and earnings thereon) will be distributed.  The manner of payment shall be elected in accordance with Article 7.  The time of payment shall be elected according to one of the following options applicable to all components of the Participant’s Account other than K-Vantage Make-Whole Contributions and earnings thereon: (a) a date certain specified in the Enrollment Agreement (which date certain may commence no sooner than three years from the end of the plan year to which the deferral relates); (b) the Participant’s End Termination Date, (c) the earlier of (a) or (b); or (d) the later of (a) or (b).  With respect to distributions upon a Participant’s End Termination Date, payment shall be made or begin on the first regularly scheduled payroll date following such End Termination Date and in no event later than 90 days following such End Termination Date.  Elections as to the time of payment shall be irrevocable except as otherwise specifically provided in this Plan.  In the event of an Eligible Employee’s failure to make a time of payment election with respect to any Plan Year, the time of payment election in effect for the preceding Plan Year shall continue in effect for subsequent Plan Years until the Eligible Employee makes a new valid election in a subsequent Plan Year by the applicable deadline for such election as provided in Sections 4.1 or 6.4.

6.2 

Distribution of K-Vantage Make-Whole Account.  The value of a Participant’s Vested K-Vantage Make-Whole Account shall be distributed to the Participant, in cash, in a single lump sum on the first regularly scheduled payroll date following the Participant’s End Termination Date and in no event later than 90 days following such End Termination Date, except as otherwise provided in this Article 6.  

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6.3

Distribution following Change of Control.  In the event that a Participant terminates Service for any reason within two years following a Change of Control that qualifies as a “change in control” under Section 1.409A -3(i)(5) of the Treasury Regulations, notwithstanding anything else in this Plan to the contrary, the Participant’s Account shall be distributed, in a single lump sum, in cash on the first regularly scheduled payroll date following the Participant’s End Termination Date and in no event later than 90 days following such End Termination Date.

6.4

Changes in Elections.  

(a)

Notwithstanding Sections 4.1, 4.2, 6.1 and 7.1 to the contrary, a Participant who has a Vested Account under this Plan on or after January 1, 2005 and before January 1, 2009 shall be permitted to elect (one or more times) on or before December 31, 2008, on forms to be provided by the Administrator, the time and form of payment of his or her Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) in accordance with Section 6.1 and Article VII provided that such election may apply only to amounts that would not otherwise be payable in the calendar year in which the election is made and may not cause an amount to be paid in such calendar year that would not otherwise be payable in such calendar year.

(b)

Notwithstanding Sections 4.1, 4.2, 6.1 and 7.1 to the contrary, a Participant may make elections on and after January 1, 2009, on forms to be provided by the Administrator, to change the time and/or form of payment of his or her Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) in accordance with Section 6.1 and Article VII subject to the following conditions:

(i)

No such subsequent election shall be effective until 12 months after the date such election is filed with the Administrator;

(ii)

Except in the event of payment upon death, any such subsequent election must be filed with the Administrator at least 12 months prior to the earliest date on which the Participant’s Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) could be payable pursuant to the Participant’s last election;

(iii)

Except in the event of payment upon death, the date on which the Participant’s Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) are paid or commence to be paid shall be deferred by not less than five years from the date on which such Base Salary Deferrals, Bonus Compensation Deferrals and Matching Contributions (and the earnings thereon) would have been paid or commenced under the Participant’s last election.  An installment form of payment shall be treated as an entitlement to a single payment in accordance with the provisions of the Treasury Regulations and such five-year delay shall apply to all payments under the installment form.

6.5

Delays in Payment to Specified Employees.  Anything in this Plan to the contrary notwithstanding, payment to any Specified Employee on such Specified 

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Employee’s End Termination Date shall not be made before the date that is six months after the End Termination Date (or, if earlier, the date of death of such Specified Employee).  In the event such Specified Employee has elected payment of his or her Account in the form of installments as provided in Article 7, installment payments to which such Specified Employee would otherwise be entitled during the first six months following his or her End Termination Date shall be accumulated and paid on the first installment payment date of the seventh month following the End Termination Date.  

6.6

Acceleration of Payment.  The provisions of Section 6.1 and 6.2 to the contrary notwithstanding, a payment to or on behalf of a Participant shall be accelerated under each of the following circumstances:

(a)

if payment is required to be made to an individual other than the Participant to fulfill a domestic relations order as defined in Section 414(p)(1)(B) of the Code;

(b)

if the balance of the Participant’s Account on the Participant’s End Termination Date, without reference to the balance of his or her K-Vantage Make-Whole Account, is less than $250,000.

With respect to Section 6.6(b), payment shall be made on the first regularly scheduled payroll date following such End Termination Date and in no event later than 90 days following such End Termination Date or, for a Specified Employee, on the first regularly scheduled payroll date that is six months after the End Termination Date (or, if earlier, the date of death of such Specified Employee).  

ARTICLE 7

MANNER OF PAYMENT OF BENEFITS

All Base Salary Deferrals, Bonus Compensation Deferrals and Vested Matching Contributions that are credited to a Participant’s Account for a Plan Year, with earnings thereon, as well as Vested amounts held in the Participant’s K-Vantage Make-Whole Account, shall automatically be paid in a lump sum at the time provided in Article VI, subject, except for amounts held in the Participant’s K-Vantage Make-Whole Account, to the Participant’s election on his or her Enrollment Agreement (at the time provided in Section 4.1 or 4.2, as the case may be) or special election in accordance with Section 6.4 to instead receive payment of his or her Base Salary Deferrals, Bonus Compensation Deferrals and Vested Matching Contributions (and the earnings thereon) in the form of  2, 3, 4, 5, 10, 15, or 20 annual installments, and not in one lump sum, commencing in accordance with the Participant’s election made pursuant to Sections 6.1 or 6.4.

Subject to Section 6.6, distributions shall be made, in cash, beginning on the first regularly scheduled payroll date following the distribution commencement date elected by the Participant pursuant to Section 6.1 or Section 6.4 and in no event later than 90 days following such date in an amount equal to the value of the Participant’s Account (without reference to amounts held in the Participant’s K-Vantage Make-Whole Account) as of the last business day preceding the distribution date.  In the case of installment payments, the 

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amount of each installment shall be equal to (i) the value of the Participant’s Account (without reference to amounts held in the Participant’s K-Vantage Make-Whole Account) as of the last business day preceding the initial date of payment, divided by (ii) the number of annual installment payments elected by the Participant in the Enrollment Agreement or in the special election pursuant to Section 6.4.  After the initial installment payment, successive payments will be paid on the first regularly scheduled payroll date on or following the January 1 of the new Plan Year and in no event later than 90 days following such date in an amount equal to the value of such Account (without reference to amounts held in the Participant’s K-Vantage Make-Whole Account) divided by the number of installments remaining.  In the event of a Participant’s failure to make an election as to the manner of payment of his or her Account (without reference to amounts held in the Participant’s K-Vantage Make-Whole Account) with respect to any Plan Year, the manner of payment in effect for the preceding Plan Year shall continue in effect for subsequent Plan Years until the Participant makes a new valid election in a subsequent Plan Year by the applicable deadline for such election as provided in Sections 4.1 and 6.4. If an initial payment is delayed because the Participant is a Specified Employee, any installment payment scheduled to be paid within the six months that the initial payment is delayed, shall also be delayed, and paid at the same time as the delayed initial payment.

ARTICLE 8

DISABILITY

In the event a Participant becomes Disabled, the Participant's right to make any further deferrals under this Plan shall terminate as of the date for which the Participant first receives benefits under the Company’s long term disability plan, as amended from time to time.  The Participant's Account shall continue to be credited with earnings in accordance with Section 5.2 until such Account is fully distributed.  The Participant's Account shall be distributed to the Participant in accordance with Articles 6 and 7 treating his or her Disability as his or her End Termination Date.

ARTICLE 9

SURVIVOR BENEFITS

9.1

Death of Participant Prior to the Commencement of Benefits.  The provisions of Section 6.1 and Article 7 to the contrary notwithstanding, in the event of a Participant's death prior to the commencement of payment of the Participant’s Account, payment shall be made to the Participant's Beneficiary in a single lump sum on the first regularly scheduled payroll date following the Participant’s death unless (except for the balance in the Participant’s K-Vantage Make-Whole Account) otherwise specified in the Participant’s Enrollment Agreement.  A Participant may elect in his or her Enrollment Agreement for payment to be made to his or her Beneficiary at the time and in the manner provided in his or her Enrollment Agreement had the Participant survived.  The amount of any lump sum benefit payable in accordance with this Section shall equal the value of such portion of the Participant’s Account as of the last business day of the calendar month immediately preceding the date on which such benefit is paid.

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9.2

Death of Participant After Benefits Have Commenced.  In the event a Participant dies after annual installment benefits payable under Article 7 from the Participant's Account have commenced, but before the entire balance of such installments have been paid, any remaining installments shall continue to be paid to the Participant's Beneficiary at such times and in such amounts as they would have been paid to the Participant had the Participant survived.

9.3

Changes in Earnings Crediting Options.  In the event of a deferred distribution under this Article, the Beneficiary shall be permitted to make changes in the Earnings Crediting Options to the same extent that the Participant would have been entitled to make such changes under Section 5.4 during such deferral period.

ARTICLE 10

EMERGENCY BENEFIT

The provisions of Article 6 and 7 to the contrary notwithstanding, in the event that the Administrator, upon written request of a Participant, determines, in its sole discretion, that the Participant has suffered an Unforeseeable Emergency, the Company shall pay to the Participant from the Vested portion of the Participant’s Account in cash, on the regularly scheduled payroll date next following such determination, an amount reasonably necessary to meet the Unforeseeable Emergency (which may include amounts necessary to pay any Federal, State or local income taxes or penalties reasonably anticipated to result from the distribution) provided that such Unforeseeable Emergency may not be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or by cessation of deferrals under the Plan or any other retirement plan maintained by the Company (the "Emergency Benefit").  Notwithstanding anything in this Plan to the contrary, a Participant who receives an Emergency Benefit in any Plan Year shall not be entitled to make any further deferrals for the remainder of such Plan Year.  

ARTICLE 11

MISCELLANEOUS

11.1

Amendment and Termination.  The Plan may be amended, suspended, discontinued or terminated at any time by NU, through action of the Board or by the Compensation Committee of the Board; provided, however, that (a) no such amendment, suspension, discontinuance or termination, unless required under statute, regulation, or rule of a governing or administrative body having the effect of a statute or regulation, shall reduce or in any manner adversely affect the rights of any Participant with respect to benefits that are payable or may become payable under the Plan based upon the balance of the Participant’s Account as of the effective date of such amendment, suspension, discontinuance or termination; (b) no such amendment, suspension, discontinuance or termination shall cause any payment that a Participant or Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty under Section 409A of the Code; and (c) no such discontinuation or termination of the Plan may be effected except in accordance with Section 1.409A-3(j)(4)(ix) of the Treasury Regulations.

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11.2

Claims Procedure.  

(a)

Claim.  A person who believes that he is being denied a benefit to which he is entitled under the Plan (hereinafter referred to as a "Claimant") may file a written request for such benefit with the Administrator, setting forth his claim.

(b)

Claim Decision.  Upon receipt of a claim, the Administrator shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period.  The Human Resources Department of the Company may, however, extend the reply period for an additional ninety (90) days for reasonable cause.

If the claim is denied in whole or in part, the Claimant shall be provided a written opinion, using language calculated to be understood by the Claimant, setting forth:

(i)  The specific reason or reasons for such denial;

(ii)  The specific reference to pertinent provisions of this Plan on which such denial is based;

(iii)  A description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary;

(iv)  Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; 

(v)  The time limits for requesting a review under subsection (c) and for review under subsection (d) hereof; and

(vi) A statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

(c)

Request for Review.  

Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Pension Committee review the determination of the Administrator.  The Claimant or his duly authorized representative may, but need not, review the pertinent documents and submit issues and comment in writing for consideration by the Pension Committee.  If the Claimant does not request a review of the initial determination within such sixty (60) day period, the Claimant shall be barred and stopped from challenging the determination.

(d)

Review of Decision.  

Within sixty (60) days after the Pension Committee's receipt of a request for review, it will review the initial determination.  After considering all materials presented by the Claimant, the Pension Committee will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision, containing specific references to the pertinent provisions of this Plan on which the decision is based, a statement that the claimant has a 

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right to bring a civil action under Section 502(a) of ERISA and that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claim for benefits.  A document is relevant to the claim for benefits if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.  If special circumstances require that the sixty (60) day time period be extended, the Pension Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

(e)

Exhaustion Requirement.  No Employee, former Employee or Beneficiary of an Employee shall institute any action or proceeding in any state or federal court of law or equity, or before any administrative tribunal or arbitrator, for a claim for benefits under the Plan until such claimant has first exhausted the procedures set forth in this Section 11.2.  

11.3

Designation of Beneficiary.  Each Participant may designate a Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a natural person) to receive any payments which may be made following the Participant's death.  Such designation may be changed or canceled at any time without the consent of any such Beneficiary.  Any such designation, change or cancellation must be made in a form approved by the Administrator and shall not be effective until received by the Administrator.  If no Beneficiary has been named, or the designated Beneficiary or Beneficiaries shall have predeceased the Participant, the Beneficiary shall be the Participant’s Savings Plan beneficiary, or, if none, the Participant's estate.  If a Participant designates more than one Beneficiary, the interests of such Beneficiaries shall be paid in equal shares, unless the Participant has specifically designated otherwise.

11.4

Limitation of Participant's Right.  Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Company, nor shall it interfere with the rights of the Company to terminate the employment of any Participant and/or to take any personnel action affecting any Participant without regard to the effect which such action may have upon such Participant as a recipient or prospective recipient of benefits under the Plan.

11.5

No Limitation on Company Actions.  Nothing contained in the Plan shall be construed to prevent the Company from taking any action which is deemed by it to be appropriate or in its best interest; provided, however, that no such action may diminish the then balance or value of the Participant’s Account.  No Participant, Beneficiary, or other person shall have any claim against the Company as a result of such action.  Any decisions, actions or interpretations to be made under the Plan by the Company or the Board, or the Committee acting on behalf of the Company, shall be made in its respective sole discretion, not as a fiduciary, need not be uniformly applied to similarly situated individuals and shall be final, binding and conclusive on all persons interested in the Plan.

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11.6

Obligations to Company.  If a Participant becomes entitled to a distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owing to the Company, then the Company may offset such amount owed to it against the amount of benefits otherwise distributable.  Such determination shall be made by the Administrator.

11.7

Nonalienation of Benefits.  Except as expressly provided herein, no Participant or Beneficiary shall have the power or right to transfer (otherwise than by will or the laws of descent and distribution), alienate, or otherwise encumber the Participant's interest under the Plan.  The Company's obligations under this Plan are not assignable or transferable except to (a) any corporation or partnership which acquires all or substantially all of the Company's assets or (b) any corporation or partnership into which the Company may be merged or consolidated.  The provisions of the Plan shall inure to the benefit of each Participant and the Participant's Beneficiaries, heirs, executors, administrators or successors in interest.

11.8

Withholding Taxes.  The Company may make such provisions and take such action as it may deem necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority, whether Federal, state or local, to withhold in connection with any benefits under the Plan from any amount otherwise payable to the Participant (or Beneficiary).  Each Participant, however, shall be responsible for the payment of all individual tax liabilities relating to any such benefits.  

11.9

Unfunded Status of Plan.  The Plan is intended to constitute an "unfunded" plan of deferred compensation for Participants.  Benefits payable hereunder shall be payable out of the general assets of the Company, and no segregation of any assets whatsoever for such benefits shall be made.  Notwithstanding any segregation of assets or transfer to a grantor trust, with respect to any payments not yet made to a Participant, nothing contained herein shall give any such Participant any rights to assets that are greater than those of a general creditor of the Company.

11.10

Severability.  If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

11.11

Governing Law.  The Plan shall be construed in accordance with and governed by the laws of the State of Connecticut, without reference to the principles of conflict of laws to the extent not preempted by federal law.  Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Treasury Regulations thereunder and the Company shall have no right to accelerate or make any payment under this Plan except to the extent such action would not subject any Participant or Beneficiary to the payment of any tax penalty or interest under Section 409A of the Code.  The Company shall have no obligation, however, to reimburse a Participant for any tax penalty or interest payable or provide a gross-up payment in connection with any tax liability of the Participant 

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under Section 409A of the Code except that this provision shall not apply in the event of the Company’s negligence or willful disregard in interpreting the application of  Section 409A of the Code to the Plan which negligence or willful disregard causes a Participant to become subject to a tax penalty or interest payable under Section 409A of the Code, in which case the Company will reimburse the Participant or Beneficiary, as the case may be, on an after-tax basis for any such tax penalty or interest not later than the last day of the taxable year next following the taxable year in which the Participant or Beneficiary remits the applicable taxes and interest.

11.12

Headings.  Headings are inserted in this Plan for convenience of reference only and are to be ignored in the construction of the provisions of the Plan. 

11.13

Gender, Singular and Plural.  All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require.  As the context may require, the singular may read as the plural and the plural as the singular.

11.14

Notice.  Any notice or filing required or permitted to be given to the Committee, the Pension Committee, or the Administrator under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Human Resources Department, or to such other entity as the Administrator may designate from time to time.  Such notice shall be deemed given as to the date of delivery, or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

11.15

Disclaimer of Liability.  The Declaration of Trust of NU provides that no shareholder of NU 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, and every person or entity, having any claim or demand arising out of any such contract, obligation or undertaking shall look only to the trust estate for the payment or satisfaction thereof.

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