Document:

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                                                                   Exhibit 10(m)

LYDIA PASTUSZEK                                                DECEMBER 22, 2005

                                NATIONAL GRID USA
                            MICHAEL E. JESANIS - CEO

                           DEFERRED COMPENSATION PLAN

SUMMARY

1. This paper seeks approval for further amending the Deferred Compensation Plan
(the Plan) as necessary for compliance with Section 409A of the Internal Revenue
Code (added under the American Jobs Creation Act of 2004) and to reflect
decisions made regarding Plan design since the Deferred Compensation Plan White
Paper dated February 1, 2005 (the Previous White Paper).

BACKGROUND

2. Authorization was obtained in February to modify the Plan in ways that would
both deliver desirable design features and Section 409A requirements. Since that
time (in October) the Department of Treasury issued further guidance on Section
409A in the form of proposed regulations. Further, Human Resources has
undertaken the task of implementing certain transition re-elections and design
modifications for which it now seeks amending authority and ratification of
implementation.

3. The below reflects the final design that is recommended for approval, which
approval is intended to supersede any inconsistent design elements approved in
the Previous While Paper.

PROPOSED AMENDMENTS

4. Plan Year As noted in the Previous While Paper, the plan will operate on a
calendar year basis for base pay deferrals. Deferral deadlines for such
deferrals as well as for other types of pay are set forth in Paragraph 9 below.

5. Types of Pay In clarification of the Previous White Paper, pay will be
deferrable as follows:

     Base Pay                                From 1% to 75%
     ICP Cash Bonus*                         From 1% to 100%
     Incentive Share Award*                  All or none
     Performance Share Plan Award (grants**) All or none

*    Includes Group Executive Director cash and Deferred Share Plan awards made
     in lieu of ICP cash and share awards.

**   Includes grants made in June 2005 and those made in future fiscal years.

Deferrals of Group Performance Share Plan awards and Group Director Deferred
Share Plan awards under the Plan will be administered to take into account the
fact that those plan are subject to Section 409A.

6. Deferral duration As noted in the Previous While Paper, participants be given
the following options with regard to duration of deferral:

          - 10 years

          - Separation from service*

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          - ages 55 through 75

*    In clarification of the Previous White Paper, all Section 409A covered
     deferrals payable upon Separation from Service will be delayed for 6 months
     following Separation from Service to comply with "Key Employee" provisions
     of Section 409A.

7. Distribution types As noted in the Previous While Paper, two distribution
types will be offered:

          - Lump sum

          - Annual installments, 2 - 10

8. Distribution re-election In clarification of the Previous White Paper,
participants will be permitted to re-elect the timing and type of distribution
subject to applicable restrictions under Section 409A, including that the
re-election:

     - must be made no less than 12 months prior to the date distributions were
scheduled to commence under the original "initial" election;

     - will not be effective for 12 months;

     - must provide for the future payment date or commencement at least five
years later than initially elected; and

     - may not accelerate the payment of distributions. For example, if a
participant initially elected 10 annual installments, at re-election that
participant would not be able to elect a lump sum payable in five years.
However, the reelection may postpone the distribution. For example, if a
participant elected a lump sum, he or she can re-elect a series of 10
installments commencing 5 years from the date the lump sum was otherwise
payable. As a matter of plan design, a participant will not be permitted to
change a series of annual payments to a lump sum payment.

9. Timing of Elections It is recommended that the Plan be amended to reflect the
following:

Base Pay - Elections are proposed to be based upon a calendar year commencing in
2006. As a transition matter, participants were solicited for deferral of base
pay for the period April 1, 2005 through December 31, 2005 prior to March 15,
2005 in anticipation of the change in base pay deferral elections to a calendar
year.

ICP Cash Bonus and Incentive Share Award (ICP Bonus/Share Award) - Elections for
the fiscal year ending March 31, 2006 ICP Bonus/Share Award (payable in June
2006) were made under the "performance based compensation" provisions of Section
409A in September 2005. It is recommended that elections for the fiscal year
ending March 31, 2007 ICP Bonus/Share Award (payable in June 2007) be completed
prior to the end of the preceding fiscal year (March 31, 2006) consistent with
fiscal year bonus compensation provisions under Section 409A. Further, it is
recommended that future ICP Bonus/Share Awards be solicited in the same manner.

Performance Share Awards - Elections for grants made in a particular fiscal year
(usually June) will be made prior to the end of the preceding fiscal year.

New Participants - Elections for Base Pay, ICP Bonus/Share Awards and/or
Performance Share Awards will be solicited consistent with the requirements of
Section 409A for new entrants.

10. Transition Re-Elections - It is recommended that the Plan be amended to
reflect the following:

Base Pay - Consistent with Section 409A transition rules, participants who had
outstanding base pay deferrals made on a fiscal year base in 2004 (which carried
over from 2004 into 2005) were permitted to either (1) cancel the election for
the period January 1, 2005 through March 31,

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2005 (and were taxed accordingly) or (2) re-elect to defer the applicable
compensation under deferral period and payment options designed to comply with
Section 409A. That solicitation occurred prior to March 15, 2005 as required
under then applicable Section 409A regulations.

ICP Cash Bonus and Incentive Share Award - Consistent with Section 409A
transition rules, participants who had outstanding deferral elections made in
2004 under prior plan provisions effective against cash bonus and/or share
awards payable in June 2005 were permitted to either (1) cancel the deferral
election or (2) re-elect to defer the applicable bonus and/or share award under
deferral period and payment options designed to comply with Section 409A. That
solicitation occurred prior to March 15, 2005 as required under applicable
Section 409A transition rules.

11. Death, Disability, Unforeseeable Emergency, and Change in Control. A
participant's deferrals will be paid out upon his or her death to the
participant's beneficiary(ies) consistent with the beneficiary provisions
adopted earlier in the year. Section 409A limits the circumstances under which
initial deferral elections may be superseded on account of Disability,
Unforeseeable Emergency or Change in Control as defined in Section 409A. Final
recommendations have not been made on these features.

12. Termination. It is recommended that the right to terminate the plan and pay
out a lump sum be reserved to the extent permitted under applicable provisions
of Section 409A.

13. Executive Supplemental Retirement Plan (ESRP) Included in the types of plans
to which these new requirements apply are supplemental executive retirement
plans - our ESRP. Additional regulations are expected to be issued relative to
ESRP accruals in early 2006. Recommendations regarding the ESRP will be made
following the issuance of those regulations.

14. Executive Share Options. Options are not a permissible form of deferrable
compensation under Section 409A and are therefore not included under the Plan.

REQUESTED ACTION

15. Mike Jesanis is asked to NOTE this paper and APPROVE the requested
amendments relative to deferrals made during 2005 as well as future deferrals,
and to ratify all actions taken consistent therewith.

APPROVAL

I, Michael E. Jesanis, hereby approve the requested amendments to the National
Grid USA Companies' Deferred Compensation Plan by White Paper from Lydia
Pastuszek dated February 1, 2005 as further amended by this White Paper from
Lydia Pastuszek dated December 21, 2005.

/s/                                 Date: 12/22/05
---------------------------------
Michael E. Jesanis
Chief Executive Officer
National Grid USA

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LYDIA PASTUSZEK                                                 FEBRUARY 1, 2005

                               NATIONAL GRID USA
                            MICHAEL E. JESANIS - CEO

                           DEFERRED COMPENSATION PLAN

SUMMARY

1. This paper seeks approval for amendments to the Deferred Compensation Plan
necessary for compliance with the American Jobs Creation Act of 2004.

BACKGROUND

2. Due to a number of Internal Revenue Service (IRS) restrictions on the
Incentive Thrift Plan (401k), our qualified tax favored retirement savings plan,
National Grid USA provides a non-qualified tax deferred savings plan for
executives in ICP I and II. The plan is called the Deferred Compensation Plan
(DCP) and allows participants to defer from income taxation amounts that exceed
IRS qualified plan limits. The Plan operates on a fiscal year basis, April 1 to
March 31. Elections are made each March for the following fiscal year. By this
schedule, executives are considering deferral treatment of bonuses to be paid 15
months in the future.

3. Types of pay Eligible Executives can elect to defer:

     - Base pay from 1% to 15%

     - Incentive Compensation Plan (ICP) bonuses from 1% to 100%

     - Incentive Share Awards all or none

4. Deferral period and distributions Eligible executives may elect to defer
payment until:

     - 10 years

          - Lump sum only

     - Retirement

          - Lump sum

          - Three, five or ten annual installments

Distributions prior to the elected time are permissible only upon death,
disability, financial hardship or change in control. Distributions that are due
upon "Retirement" may generally be changed to a new form of payment up to 6
months in advance of retirement.

5. Investment Options Participants elect to allocate their deferrals to any of
three "phantom" investments. No actual securities are purchased or held for
individual participants. Rather, these investments are used merely to determine
account value from time to time.

     - Prime Rate of interest

     - S&P 500 Index

     - National Grid ADR's

Participants are permitted to reallocate their account balances only during the
last 10 trading days in each calendar quarter with the trade effective as of the
closing price of investments on the final trading day.

6. Rabbi Trust The majority of the future payout liability to participants has
been funded through a Rabbi Trust which protects participants from the
unwillingness of the Company to pay, but not the inability to pay resulting from
insolvency. In the event of insolvency, ail participants with an account balance
become unsecured creditors of the Company.

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RECENT LEGISLATIVE CHANGES

7. American Jobs Creation Act of 2004 Recent corporate accounting scandals and
high profile executive compensation abuses have resulted in the enactment of new
Federal legislation relative to these plans effective January 1, 2005. In order
to comply with the new requirements, several significant changes to our plan
will be required.

8. Plan Year All of the terminology and timing references in both the law and
the initial guidance speak to a calendar plan year operation. This is primarily
due to the fact that individual participants all have a calendar year tax year
regardless of the Company's fiscal year. While there were initial indications
that allowance would be made for fiscal year plans, none was included in the
initial guidance and it is not clear what, if any, guidance accommodating fiscal
year plans may be forthcoming.

9. Initial Deferral Election The election to defer base pay must be made for a
one year period, no later than the last day of the preceding year. Deferral
election of bonus pay must be made no later than six months prior to the end of
the bonus earned period. At the initial deferral election, participants must
elect both the point in time at which distributions are to be made and the form
those distributions will take.

     Permissible Timing Options

          1. A fixed time period, i.e. 10 years

          2. A specified date, i.e. 55th birthday

          3. Separation from service - regardless of reason

Once elected, the distribution may not be accelerated to an earlier date except
in the case of death, disability, change in control or unforeseen emergency. For
both the Change in Control and the unforeseen emergency, further regulations are
required in order to understand the limitations. Further, for "Key Employees"
which includes all Plan eliglbles for us, distributions that are scheduled to be
paid out upon separation from service may not commence for at least 6 months
following separation from service.

10. Distribution re-election No less than 12 months prior to the initially
elected distribution date, participants will be permitted to re-elect the timing
and type of distribution with the following two limitations:

     - The reelection must provide for the future payment date or commencement
at least five years later than initially elected

     - The reelection cannot accelerate the payment of distributions. For
example, if a participant initially elected 10 annual installments, at
re-election that participant would not be able to elect a lump sum payable in
five years. However, the reelection may postpone the distribution. For example,
if a participant elected a lump sum, he she can re-elect a series of 10
installments commencing 5 years hence.

PROPOSED AMENDMENTS

11. Plan Year We recommend that the plan be amended to operate on a calendar
year basis. Base pay deferrals would be solicited each December for the upcoming
calendar year and bonus deferral elections would be solicited each September for
the bonus payable the following June.

12. Types of Pay We recommend the following pay types and percentages be
deferrable:

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     Base Pay                           From 1% to 75%
     ICP Cash Bonus                     From 1% to 100%
     Incentive Share Award              All or none
     Option Exercise (future)           All or none
     Performance Share Award (future)   All or none (Under review)

Additional work is needed to define the election timing for future option and
performance share grants and to ensure that their inclusion will not create
administrative or reporting problems in the UK.

13. Deferral duration We recommend that participants be given the following
options with regard to duration of deferral:

          - 10 years

          - Separation from service

          - ages 55 through 75

This combination wiil provide maximum flexibility at both initial election and
subsequent reelection to ensure the participant receives payments as he/she sees
fit.

14. Distribution types As for the types of distribution, we recommend that two
choices be offered as foliows:

          - Lump sum

          - Annual installments, 2 - 10

15. Investment Options While we do not recommend any change in the Plan's
investment options, we do recommend that participants be permitted to reallocate
their account balances on a daily basis just like the 401k. The current
restrictive policy was implemented when a.) the Rabbi Trust held a large number
of NEES Shares matched to the shares liability of the plan, and b.) there was a
very close relationship maintained between the shares held in the trust and the
shares allocated to participant accounts. There were concerns that allowing
frequent reallocation rights would produce frequent and costly trading practices
within the Rabbi Trust. Since the Rabbi Trust does not hold National Grid ADR's
as an investment - due to the absence of favorable treatment on dividends - and
the Trust is managed more on a global basis in support of all non-qualified
benefit liabilities, there is no longer a need to worry about Trust transactions
mirroring participant elections on a contemporaneous basis. The Trust's
investment can be managed on a periodic basis and rebalanced if necessary to
conform to participant investment elections.

16. Executive Supplemental Retirement Plan (ESRP) Included in the types of plans
to which these new requirements apply are supplemental executive retirement
plans - our ESRP. At this time, it is not clear how participation in or
operation of the ESRP is affected by the law. Upon issuance of regulations that
are expected later this year, we will apprise you of the impacts and seek any
necessary amendments to ensure the plan remains in compliance.

17. Executive Share Options and Performance Share Awards All those eligible for
the Deferred Compensation Plan have also been issued share option grants and/or
performance share awards. At this time, it appears that it will not be possible
to allow deferral of exercised options or receipt of performance shares for
grants already made. Although it does appear that deferral of future performance
share awards was anticipated by the law, it is not clear what impact such a
deferral would have on NGT's books nor how it may affect Executive Director
reporting/disclosures. We will resolve these issues in advance of the 2005 grant
process so that the proper election process can be scheduled if approved by the
UK.

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18. Miscellaneous provisions The current "grandfathered" plan provisions that
permit expedited payouts upon a "change in control" with a 10% haircut, upon
dissolution of the participant's employer, or upon the failure of the company to
make payments, will continue to be honored for prior deferrals but will not be
permitted for new deferrals (although there will be some allowance for expedited
payments upon an Act defined "change in control"). The Rabbi Trust document and
operations will be amended to conform with applicable Act provisions as well.

19. Approach to amendments The new law restricts the Company from making any
material modifications to existing deferred compensation arrangements. The
consequences and penalties for violation of this are substantial and apply to
plan participants. Therefore, we will not be permitted to adopt any of the
favorable changes relative to amounts already deferred. Further, while many
Companies are adopting entirely new plans to avoid any possible confusion or
concerns, adoption of a new plan could raise many issues around UK listing
authority rules and/or shareholder approval. To avoid those concerns, pending
concurrence from the UK, we recommend that the current Deferred Compensation
Plan be amended in a way that clearly isolates past deferrals from future
deferrals.

20. REMCO review Since Mike Jesanis is a participant in the plan, REMCO review
of these amendments will be required. We are also evaluating whether any
additional approvals are required.

REQUESTED ACTION

21. Mike Jesanis is asked to NOTE this paper and APPROVE the requested
amendments.<PAGE>

                                                                   Exhibit 10(v)

                      NEW ENGLAND ELECTRIC SYSTEM COMPANIES

                     LIFE INSURANCE PROGRAM FOR EXECUTIVES I
                                       FOR
                            [_______________________]

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Section 1.  The Program..................................................     1
Section 2.  Prior Insurance Program......................................     2
Section 3.  Vesting and Forfeiture.......................................     2
Section 4.  Life Insurance Policy........................................     2
Section 5.  Death Benefit................................................     4
Section 6.  Termination of Agreement.....................................     4
Section 7.  Benefits Upon Termination of Employment During the
            Executive's Lifetime.........................................     5
Section 8.  Policy Premiums..............................................     6
Section 9.  Return of Premiums...........................................     7
Section 10. Withdrawals from Policy; Release of Assignment...............     7
Section 11. Liability and Limitation of Obligation.......................     7
Section 12. Named Fiduciary, Determination of Benefits, Claims Procedure
            and Administration...........................................     8
Section 13. Notices......................................................    10
Section 14. Binding Effect...............................................    11
Section 15. Governing Law................................................    11
Section 16. Further Documentation........................................    11
Section 17. Amendments and Transfers Within the New England Electric
            System Companies.............................................    11
Section 18. Interpretation of Agreement..................................    11
Section 19. No Implied Right to Employment...............................    12
</TABLE>

<PAGE>

                              COLLATERAL ASSIGNMENT

                            LIFE INSURANCE PROGRAM I

     Agreement entered into as of the 1ST day of __________, between New England
Power Service Company, a Commonwealth of Massachusetts corporation (the
Company), and _______________ (the Executive).

     Section 1. The Program

     The program provides the Executive death benefits and post-retirement
ownership of the cash assets of the related policy. The program is designed with
a goal of three times the Executive's base pay (rounded up to the nearest even
whole thousand) at the time of death (the Target Benefit). During employment,
the first $50,000 of the coverage is to be provided by the Company's group term
life insurance policy.

     For the purposes of this Agreement, "annual base pay" means the annualized
compensation being paid to the Executive on the day of determination (or, if
greater, the highest compensation paid to the Executive during any 12-month
period of employment), including compensation deferred under other plans but
excluding bonuses (such as NEES Goals and Incentive Compensation bonuses ) and
contributions made by the Company to or under any form of employee benefit
program and employer contributions under the New England Electric System
Companies Incentive Thrift Plan, and "final annual base pay" means the
Executive's annualized base pay on the last day of employment (or, if greater,
the highest compensation paid to the Executive during any 12-month period of
employment).

     Section 2. Prior Insurance Program

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                                        2

     The Executive hereby waives the benefits under the Company's group
term-life insurance policy, and the New England Electric System Companies Life
Insurance Program for Executive II, to the extent that the benefit provided to
the Executive's beneficiaries, in accordance with Section 5, from the Policy (as
hereinafter defined) equals the Target Benefit. This waiver does not extend to
any optional benefits under the group term-life policy. To the extent that such
waiver is ineffective, the amount of the death benefit provided under the Policy
and otherwise payable hereunder to the beneficiary or beneficiaries designated
by the Executive shall be correspondingly reduced and the amount payable to the
Company shall be correspondingly increased.

     Section 3. Vesting and Forfeiture

     Subject to the provisions of Section 6, the Executive is 100% vested in his
benefits under this Program.

     Section 4. Life Insurance Policy

     One or more split-dollar life insurance policies listed in Exhibit A hereto
(the Policy) have been or will be purchased on the life of the Executive by the
Company. The issuer or issuers of the Policy are hereinafter referred to as the
Insurer. Purchase of insurance policies either now or at later dates may require
proof of insurability at that time.

     To the extent that necessary insurance policies are not reasonably
available at a later date, benefits will be provided under the Company's group
term-life insurance policy so that the total death benefit to the Executive's
beneficiaries during his employment is three times base pay.

     (a) Interest in the Policy

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                                        3

     The Executive shall be the sole owner of the Policy and may exercise all
ownership rights granted to the owner thereof by the terms of the Policy, except
as may otherwise be provided herein.

     Except as otherwise provided herein, the Executive shall not sell, assign,
transfer, borrow against, surrender, or cancel the Policy, change the
beneficiary designation provision, or terminate the dividend election without
the express written consent of the Company.

     (b) Collateral Assignment

     To secure the right of the Company to the Excess Value and/or the Company's
Cost (both as hereafter defined), the Executive will, contemporaneously
herewith, assign the Policy to the Company as collateral, using a form
substantially similar to that attached hereto as Exhibit B. The collateral
assignment of the Policy to the Company hereunder shall not be terminated,
altered, or amended by the Executive, without the express written consent of the
Company.

     (c) Assignment of Executive's Interest

     The Executive shall have the right to make an absolute assignment of his
entire interest, or any portion thereof, in the Policy at any time to any person
or persons, subject to the collateral assignment of the policy to the Company
pursuant to subsection (b) hereof. Upon delivery of a signed copy of such
assignment to the Company, all, or such portion, of the rights, obligations, and
duties of the Executive thereunder (subject to the collateral assignment of the
Company) and hereunder shall pass to and be binding upon such assignee
(including the right to make further assignments) and the Executive shall have
no further interest whatsoever in the Policy, or such portions.

     (d) Company's Cost

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                                        4

     For the purposes of this Agreement, the Company's Cost means the amount of
the premiums on the Policy paid by it hereunder, less any withdrawals by the
Company from the Policy in accordance with Section 10.

     (e) Dividends

     Any dividend declared on the Policy shall be applied to purchase paid-up
additional insurance on the life of the Executive. The dividend election
provisions of the Policy shall conform to the provisions hereof.

     Section 5. Death Benefit

     Upon the death of the Executive, the beneficiary or beneficiaries
designated by the Executive shall be paid directly, in the manner and in the
amount or amounts provided in the beneficiary designation provision of the
Policy, a death benefit equal to the smaller of (a) the death benefit payable
under the Policy or (b) the Target Benefit. After such payment to such
beneficiary, the balance, if any, of the Policy death benefit (the Excess Value)
shall be paid to the Company.

     Section 6. Termination of Agreement

     (a) This Agreement shall terminate during the Executive's lifetime, without
notice, upon the occurrence of any of the following events:

          (i)  total cessation of the Company's business;

          (ii) bankruptcy, receivership, or dissolution of the Company;

          (iii) termination for cause of the Executive's employment by the
               Company or by any direct or indirect subsidiary of the New
               England Electric System or

<PAGE>

                                        5

          (iv) payment of the Company's Cost by the Executive to the Company.

     (b) After termination of this Agreement under this section 6, the Executive
will not be permitted to re-enroll in the program. Upon such termination, the
Company may immediately withdraw its Cost from the Policy. The Executive will
receive no life insurance coverage under the New England Electric System
companies' group life insurance plan.

     Section 7. Benefits Upon Termination of Employment During the Executive's
          Lifetime.

     (a) For sixty days after the date of the termination of this Agreement
during the Executive's lifetime, the Executive shall have the option of
obtaining the release of the collateral assignment of the policy to the Company.
To obtain such release, the Executive shall repay to the Company Company's Cost.
Upon receipt of such amount, the Company shall release the collateral assignment
of the Policy.

     (b) If the Executive has terminated employment but has not Retired from the
Company, the Company will continue to pay premiums on the Policy in accordance
with Section 8 until the earlier of (i) the Policy can be kept in force with no
future premiums due based upon the then current crediting of the Policy or (ii)
the tenth anniversary of the Policy. Thereafter, the Company may withdraw from
the Policy amounts equal to the Company's Costs. The Company may delay
withdrawal from the Policy in order to preserve the Policy's tax treatment.

     Section 8. Policy Premiums

     During the Executive's employment and as provided in subsection 7(a), the
Company shall promptly pay all premiums on the Policy when due until the Policy
can be kept in force with no future premiums due based upon the then current
crediting of the Policy.

<PAGE>

                                        6

     The Company shall bill the Executive for an annual contribution to the
policy premium, which contribution shall be equal to the value, for Federal
income tax purposes, of the "economic benefit" of the life insurance protection
the Executive then enjoys. The Executive shall transfer the contribution to the
Company within thirty days of the bill. The Company will reimburse the Executive
for such contribution and for the related federal and state taxes. This
reimbursement is not a part of the Company's Cost.

     If the Executive fails to make such timely payment, the Company shall
report the "economic benefit" of the life insurance protection as taxable income
to the Executive for the period, and no additional reimbursement will be made to
the Executive until payment has been made.

     Section 9. Return of Premiums

     Notwithstanding any provision hereof to the contrary, in the event that,
for any reason whatsoever, no death benefit is payable under the Policy upon the
death of the Executive and in lieu thereof the Insurer refunds all or any part
of the premiums paid for the Policy, the Company and the Executive's beneficiary
or beneficiaries shall have the unqualified right to share such premiums based
on the respective cumulative contributions thereto.

     Section 10. Withdrawals from Policy; Release of Assignment

     While the Executive is employed, if no additional premiums are required to
be paid under a Policy to maintain the death benefit to the Executive's
beneficiaries, the Company may withdraw its Cost from that Policy at a time when
such withdrawal will not cause the Policy to be terminated or to lose its tax
treatment as life insurance.

<PAGE>

                                        7

     After the Company has withdrawn from the Policy amounts equal in full to
the Company's Cost (whether under section 6, 7, or 10), the Company will release
the collateral assignments of the Policy to the Executive.

     Section 11. Liability and Limitation of Obligation

     The Company and the Insurer believe the assumptions used to determine the
amount of insurance purchased are reasonable. However, the Executive recognizes
that the goals of the Agreement may not be realized and there is no guaranty
that the Target Benefit will actually be provided by the Policy and/or that
additional premiums may not be required to keep the Policy from lapsing or to
provide the Target Benefit. The Executive also recognizes that changes in the
Internal Revenue Code or rulings or regulations thereunder could increase his
tax liabilities or reduce his benefits.

     The Company has no responsibility, liability, or obligation for the
benefits provided the Executive from the Policy.

     The Company may, upon 30 days' written notice to the Executive, limit its
obligations hereunder to purchase, pay premiums on, or otherwise provide life
insurance policies beyond the total death benefit, including all riders then in
force, and all references herein to the annual base pay or final annual base pay
of the Executive shall mean annual base pay at the time of such written
notification.

     The Insurer shall have no liability except as set forth in the Policy and
in any beneficiary designation and in any optional method of settlement election
filed with it. The Insurer shall not be bound to inquire into or take notice of
any of the covenants herein contained as to the Policy. In case of the
Executive's death, the Insurer shall be discharged from all liability on payment
of the proceeds in accordance with the Policy's provision, and any beneficiary
designation and any

<PAGE>

                                        8

optional method of settlement election filed with it without regard to this
Agreement or any amendment thereof.

     Section 12. Named Fiduciary, Determination of Benefits, Claims Procedure
          and Administration

     (a) The Company is hereby designated as the named fiduciary under this
Agreement. The named fiduciary shall have authority to control and manage the
operation and administration of this Agreement, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with the
objectives of this Agreement.

     (b)  (i) Claim

          A person who believes that he is being denied a benefit to which he is
entitled under this Agreement (the Claimant) may file a written request for such
benefit with the Company, setting forth his claim. The request must be addressed
to the President of the Company at its then principal place of business.

          (ii) Claim Decision

          Upon receipt of a claim, the Company shall advise the Claimant that a
reply will be forthcoming within ninety days and shall, in fact, deliver such
reply within such period. The Company may, however, extend the reply period for
an additional ninety days for reasonable cause.

          If the claim is denied in whole or in part, the Company shall adopt a
written opinion, using language calculated to be understood by the Claimant,
setting forth: (a) the specific reason or reasons for such denial; (b) the
specific reference to pertinent provisions of this Agreement on which such
denial is based; (c) a description of any additional material or

<PAGE>

                                        9

information necessary for the Claimant to perfect his claim and an explanation
why such material or such information is necessary; (d) appropriate information
as to the steps to be taken if the Claimant wishes to submit the claim for
review; and (e) the time limits for requesting a review under subsection (iii)
and for review under subsection (iv) hereof.

          (iii) Request for Review

          Within sixty days after the receipt by the Claimant of the written
opinion described above, the Claimant may request in writing that the Benefits
Appeal Committee (as defined in the Final Average Pay Pension Plan I) review the
determination of the Company. Such request must be addressed to the Secretary of
the Committee, at its then principal place of business. The Claimant or his duly
authorized representative may, but need not, review the pertinent documents and
submit issues and comments in writing for consideration by the Committee. If the
Claimant does not request a review of the Company's determination by the
Committee within such sixty day period, he shall be barred and estopped from
challenging the Company's determination.

          (iv) Review of Decision

          Within sixty days after the Secretary's receipt of a request for
review, the Committee will review the Company's determination. After considering
all materials presented by the Claimant, the Committee will render an opinion,
setting forth the specific reasons for the decision and containing specific
references to the pertinent provisions of this Agreement on which the decision
is based. If special circumstances require that the sixty day time period be
extended, the Secretary will so notify the Claimant and the Committee will
render the decision as soon as possible, but no later than one hundred twenty
days after receipt of the request for review.

<PAGE>

                                       10

     Section 13. Notices

     Any notice, consent, or demand required or permitted to be given under the
provisions of this Agreement shall be in writing, and shall be signed by the
party giving or making the same. If such notice, consent, or demand is mailed to
a party hereto, it shall be sent to United States certified mail, postage
prepaid, addressed to such party's last known address as shown on the records of
the Company. The date of such mailing shall be deemed the date of notice,
consent, or demand.

     Section 14. Binding Effect

     This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns, and the Executive, and the Executive's
successors, assigns, heirs, executors, administrators, and beneficiaries.

     Section 15. Governing Law

     This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.

     Section 16. Further Documentation

     The parties hereto agree to execute any documents which may be necessary or
proper in the carrying out of the purpose and intent of this Agreement.

     Section 17. Amendments and Transfers Within the New England Electric System
          Companies

     This Agreement may be amended or altered in any of its provisions, and such
changes shall become effective when reduced to writing and signed by the parties
hereto.

<PAGE>

                                       11

     The Company may, without any consent of the Insurer or the Executive,
assign or reassign all of its rights and obligations hereunder to such other
direct or indirect subsidiary of the New England Electric System by which the
Executive may from time to time be employed.

     Section 18. Interpretation of Agreement

     Where appropriate in this Agreement, words used in the singular shall
include the plural and words used in the masculine shall include the feminine
and vice versa. The headings of sections and subsections of this Agreement are
for convenience of reference only.

     Section 19. No Implied Right to Employment

     Neither this Agreement nor the payment of any premiums hereunder by the
Company shall be construed to create any obligation to give the Executive any
right to continue employment.

                                        ----------------------------------------
                                        New England Power Service Company

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Treasurer

<PAGE>

                                       12

                                    EXHIBIT A

                               Insurance Policies

Metropolitan Policy Number

<PAGE>

                                       13

                                    EXHIBIT B

                       Split-Dollar Collateral Assignment

     FOR VALUE RECEIVED, the undersigned owner (hereafter the Assignor) assigns,
transfers, and sets over to New England Power Service Company (Assignee), its
successors and assigns, certain rights in and to policy number ___________ (the
Policy), and any and all supplemental benefit riders or agreements issued under
the Policy, issued by Metropolitan Life Insurance Company (the Insurer), subject
to all the terms and conditions of the Policy and this Assignment and to all
superior liens, if any, which the Insurer or any prior Assignee may have against
the Policy. The Assignor by this instrument and the Assignee by acceptance of
the Assignment jointly and severally agree to the conditions and provisions
hereof. This Assignment is made and the Policy is to be held as collateral
security for any and all liabilities of the Assignor to the Assignee, either now
existing or that may hereafter arise between the Assignor or any successors or
assigns and the Assignee under the New England Electric System Companies Life
Insurance Program for Executives I, dated ______, with regard to the Policy.

     1.   (a)  It is expressly agreed that the Assignee shall have the following
               rights in the Policy:

               (i)  the right to make and receive withdrawals from the Policy
                    (from the Insurer or otherwise), to the extent of the
                    aggregate premiums paid by the Assignee on the Policy;

               (ii) the right to release this Assignment to the Assignor or his
                    assigns;

<PAGE>

                                       14

               (iii) the right to surrender the Policy and to receive the Policy
                    cash value and any dividend credits outstanding of the
                    excess over the Target Benefit (as defined in the Program);
                    and

               (iv) the right to receive from the death proceeds of the Policy,
                    and to elect an income settlement option with respect
                    thereto, an amount equal to the excess over the Target
                    Benefit (as defined in the Program).

          (b)  Except as provided in Paragraph (a) above, all other rights in
               the Policy, including but not limited to the right to designate
               and change the beneficiary of the Policy and the right to make
               loans against or withdrawals from the Policy and to receive any
               cash values and dividends credits outstanding in excess of
               aggregate premiums paid by the Assignee on the Policy, are
               expressly reserved to the Assignor and are, therefore, excluded
               from this Assignment.

          (c)  For purposes of Paragraphs (a) and (b) above, the signature of
               either the Assignor or the Assignee shall be adequate. Both the
               Assignor and the Assignee acknowledge that, between themselves,
               they are bound by the limitations of this Assignment and that the
               Insurer will recognize the signature of either.

     2. For purposes of this Assignment, aggregate premiums paid by the Assignee
on the Policy shall exclude premiums for any extra benefit riders or agreements
issues under the Policy.

<PAGE>

                                       15

     3. All provisions of this Assignment shall be binding upon the successors,
assigns, heirs, executors, administrators, or beneficiaries of the Assignor.

     4. All Policy options and designations in effect as of the date of this
Assignment shall remain in effect unless specifically changed by this Assignment
or by action taken thereafter consistent with this Assignment.

     5. The Insurer is hereby authorized to recognize the Assignee's claim of
right hereunder without investigating the validity or amount thereof, the giving
of any notice, or the existence or amount of any liabilities of the Assignor to
the Assignee. Payment by the Insurer of any or all death proceeds of the Policy
to the Assignee in reliance upon an affidavit of any officer of the Company as
to the share of death proceeds due it shall be a full discharge of the Insurer
for such share and shall be binding on all parties claiming any interest under
the Policy.

Signed at                               on                         .
          ---------------------------      ------------------------
          (City and State)                 (Date)

-------------------------------------   ----------------------------------------
Witness                                 (Owner)

<PAGE>

                                       16

Accepted and Agreed to:                 New England Power Service Company

-------------------------------------   By:
Witness                                     ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Treasurer

     The Insurer hereby acknowledges receipt of a copy of this Collateral
Assignment form.

Insurer

Date:                                   By:
      -------------------------             ------------------------------------

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