EXHIBIT 10-21
NEW YORK STATE ELECTRIC & GAS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Includes amendments through Amendment No. 11 as last
adopted by Board of Directors on February 9, 1996)
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1. Establishment of the Plan and Effective Date. New York
State Electric & Gas Corporation (hereinafter called the
"Corporation") has established a Supplemental Executive Retire-
ment Plan (hereinafter called the "Plan"). The Corporation is
the Plan Sponsor. The purpose of the Plan is to increase
retirement benefits for salaried employees beyond those currently
provided for in the Corporation's tax qualified Retirement
Benefit Plan for Employees. The Plan is effective as of
September 7, 1984 and will continue in effect unless terminated
or modified by the Corporation.
2. Plan Administrator. The Plan Administrator is the
Corporation.
3. Provisions Applicable to All Salaried Employees
Concerning Pension Benefits. All employees of the Corporation,
other than ones included in a unit of employees covered by a
collective bargaining agreement, shall receive the amount of
benefits specified under the Corporation's tax qualified
Retirement Benefit Plan for Employees (i) without regard to any
limitations imposed on these pension benefits by any provision of
the Internal Revenue Code of 1954, as amended, and the
regulations thereunder, whether now existing or as may hereafter
be adopted and (ii) by including as "Basic Compensation" for
purposes of said plan any amounts of the salaried employee's
compensation that would constitute "Basic Compensation" under
said plan but for the salaried employee's election to defer such
amount pursuant to the Corporation's Deferred Compensation Plan
for Salaried Employees (hereinafter called the "Deferred
Compensation Plan"). Payment of this benefit shall be made in
the same form as elected by the salaried employee under the
Retirement Benefit Plan for Employees. The benefit payable
pursuant to this Paragraph 3 shall be calculated by subtracting
the sum of (i) the benefit payable under the Corporation's
Retirement Benefit Plan for Employees and (ii) any benefit
payable pursuant to Section 7 of a Deferred Compensation
Agreement executed pursuant to the Deferred Compensation Plan in
order to defer part of the salaried employee's compensation
(other than awards pursuant to the Corporation's Annual Executive
Incentive Plan, or its predecessor plan, the Annual Executive
Incentive Compensation Plan) from the benefit described in the
first sentence of this Paragraph 3.
4. Provisions Applicable to Certain Key Persons Concerning
Pension Benefits.
A. Determination of Benefit. In addition to the
benefits provided pursuant to Paragraph 3 hereof, all Key
Persons who retire either voluntarily or by reason of a
disability at age 60 (or age 55 in the case of a Participant
in the Corporation's tax qualified Retirement Benefit Plan
for Employees who is described in Section 2 of Article XI of
said plan) or later shall be entitled to receive a total
retirement benefit equivalent to the percentage of the
average of such Key Person's highest three years of earnings
within the last ten years of employment with the Corporation
that is determined as follows: (i) the percentage benefit
shall be 45% for each Key Person who has ten years of
service; (ii) the percentage amount shall be increased by
one percentage point per year for each additional full year
of Service up to a maximum of 75% for forty or more years of
service. For the purpose of determining the earnings of a
Key Person who is a participant in the Corporation's Annual
Executive Incentive Plan or Long Term Executive Incentive
Share Plan, (or their respective predecessor plans, the
Annual Executive Incentive Compensation Plan and the
Performance Share Plan), there shall be excluded any
amounts received pursuant to such plans. Additionally, upon
and after a Change in Control (as defined in Paragraph 7
hereof), all Key Persons whose employment is terminated at
age 55 or later for any reason other than death or Cause (as
defined in Paragraph 7 hereof) shall be entitled to receive
the retirement benefit described in this Paragraph 4A, as
well as any benefits provided pursuant to the terms of
Paragraph 3 hereof. For purposes of the benefits payable
pursuant to the immediately preceding sentence, the benefit
calculated under Paragraph 4A hereof shall be determined by
applying the same reduction in benefits for commencement
prior to age 60 as is applied upon early retirement under
the Corporation's Retirement Benefit Plan for Employees.
From the amount determined in accordance with the
provisions of this paragraph there shall be subtracted (i)
any amounts received by the Key Person pursuant to Paragraph
3 hereof or from the Company's tax qualified Retirement
Benefit Plan for Employees (prior to reduction for the
survivor's benefit or ten year certain benefit) and (ii) any
social security benefits which the Key Person is eligible or
expected to become eligible to receive as determined by the
Plan Administrator. If after the subtraction there remains
a positive amount, that amount shall be paid by the
Corporation as an additional benefit to the Key Person in
accordance with the terms of this Plan.
For purposes of making the subtraction set forth in the
immediately preceding paragraph, if (i) a Key Person retires
at or after age 60 (or age 55 in the case of a Participant
in the Corporation's tax qualified Retirement Benefit Plan
for Employees who is described in Section 2 of Article XI of
said plan) and prior to age 62, or (ii) a Key Person's
employment is terminated, upon and after a Change in Control
(as defined in Paragraph 7 hereof), for any reason other
than death or Cause (as defined in Paragraph 7 hereof) at or
after age 55 and prior to age 62, the amount of social
security benefits subtracted will be the amount of estimated
social security benefits that the Plan Administrator
estimates that the Key Person would have received if he had
retired at age 62.
B. Survivor's Benefit. One-half of any amount being
paid to a key person pursuant to Paragraph 4A hereof after
retirement will be paid to the surviving spouse of the Key
Person during the spouse's lifetime upon the death of the
Key Person after retirement. If a Key Person dies prior to
retirement and such Key Person would have been entitled to
payments pursuant to Paragraph 4A hereof if, at the time of
his death, he had retired rather than died, his spouse shall
be paid during her lifetime the amount specified in the next
sentence of this Paragraph 4B. Said amount shall be
determined by applying the first sentence of this Paragraph
4B as if the Key Person had retired on the date of his
death, rather than dying on such date, and survived long
enough to receive the first payment due to him pursuant to
Paragraph 4A hereof.
C. Payment of Benefit. Benefits payable under
Paragraph 4A of this Plan shall be payable monthly to the
Key Person.
All benefits payable pursuant to Paragraphs 4A and 4B
of this Plan will cease upon the death of the surviving
spouse of the Key Person or, if there is no surviving
spouse, upon the death of the Key Person. No rights shall
accrue under this paragraph to (i) the estate of the Key
Person, (ii) any beneficiary of the Key Person other than a
surviving spouse or (iii) the estate of the surviving
spouse.
Except as specifically provided in the last two
sentences of the first paragraph of Paragraph 4A hereof or
in the second and third sentences of Paragraph 4B hereof, no
benefits will be paid to the Key Person or any surviving
spouse pursuant to this plan if the Key Person dies prior to
retirement or the employment of the Key Person is terminated
by the Corporation.
D. Definition of Key Person. For purposes of this
Plan, the term "Key Person" means a person who has at least
10 years of service and either (i) who, for at least 5
years, either had been an officer of the Corporation or had
a salary grade level of at least 18, or (ii) who was, on
December 31, 1990, a member of the Executive Staff of the
Corporation and who first became a member of the Executive
Staff of the Corporation at least 5 years prior to his
retirement.
5. Other Provisions. The Corporation reserves the right to
terminate or modify the Plan in whole or in part at any time by
action of the Board of Directors of the Corporation. Any such
termination or modification shall not affect rights previously
accrued. Participation in the Plan shall not be deemed to be an
employment contract. A participant's rights and benefits under
the Plan may not be assigned, pledged, or encumbered by the
participant, his estate or beneficiary. The Plan Administrator
will make such decisions, rules and regulations as are necessary
to administer the Plan and interpret the provisions of the Plan.
6. Funding. There will be no funding of any amounts to be
paid pursuant to this Plan; provided, however, that the
Corporation, in its discretion, may establish a trust to pay such
amounts, which trust shall be subject to the claims of the
Corporation's creditors in the event of the Corporation's
bankruptcy or insolvency; and provided, further, that the
Corporation shall remain responsible for the payment of any such
amounts which are not so paid by any such trust.
7. Definitions of Cause and Change in Control. "Cause" for
termination by the Corporation of a Key Person's employment (for
purposes of this Plan), after any Change in Control, shall mean
(i) the willful and continued failure by the Key Person to
substantially perform the Key Person's duties with the
Corporation (other than any such failure resulting from the Key
Person's incapacity due to physical or mental illness) after a
written demand for substantial performance is delivered to the
Key Person by the Board of Directors, which demand specifically
identifies the manner in which the Board of Directors believes
that the Key Person has not substantially performed the Key
Person's duties, or (ii) the willful engaging by the Key Person
in conduct which is demonstrably and materially injurious to the
Corporation or its subsidiaries, monetarily or otherwise. For
purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Key Person's part shall be deemed
"willful" unless done, or omitted to be done, by the Key Person
not in good faith and without reasonable belief that the Key
Person's act, or failure to act, was in the best interest of the
Corporation.
A "Change in Control" shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs
shall have been satisfied:
(i) any Person (as defined in this Paragraph 7) is or
becomes the Beneficial Owner (as defined in this Paragraph
7), directly or indirectly, of securities of the Corporation
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Corporation
or its affiliates) representing 25% or more of the combined
voting power of the Corporation's then outstanding
securities; or
(ii) during any period of two consecutive years (not
including any period prior to January 7, 1994), individuals
who at the beginning of such period constitute the Board of
Directors and any new director (other than a director
designated by a Person who has entered into an agreement
with the Corporation to effect a transaction described in
paragraph (i), (iii) or (iv) of this Change in Control
definition) whose election by the Board of Directors or
nomination for election by the Corporation's stockholders
was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any
reason to constitute a majority thereof; or
(iii) the shareholders of the Corporation approve a
merger or consolidation of the Corporation with any other
corporation, other than (x) a merger or consolidation which
would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity),
in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan
of the Corporation, at least 75% of the combined voting
power of the voting securities of the Corporation or such
surviving entity outstanding immediately after such merger
or consolidation or (y) a merger or consolidation effected
to implement a recapitalization of the Corporation (or
similar transaction) in which no Person acquires more than
50% of the combined voting power of the Corporation's then
outstanding securities; or
(iv) the shareholders of the Corporation approve a
plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of
all or substantially all the Corporation's assets.
For purposes of the definition of Change in Control in
this Paragraph 7:
"Beneficial Owner" shall have the meaning
defined in Rule 13d-3 under the Exchange Act.
"Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
"Person" shall have the meaning given in
Section 3(a) (9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include (i) the
Corporation or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under
any employee benefit plan of the Corporation or any
of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Corporation
in substantially the same proportions as their
ownership of stock of the Corporation.