EXHIBIT 10-13
ROCHESTER GAS AND ELECTRIC CORPORATION
LONG TERM INCENTIVE PLAN
I. SYNOPSIS OF PLAN
The Plan seeks to incent top management of RG&E by creating long-term
goals and by tying the growth in their potential bonus to the performance of
RG&E Common Stock. Selected executives will be awarded Performance Shares which
will mirror actual shares of Common Stock of RG&E. Whether or not the
executives actually receive payment from the Plan depends upon how the Company's
performance compares to the 24 companies in the Standard & Poor Index of
Electric Companies over a three year period. Payments, when made, will be in
cash.
II. PURPOSE OF PLAN
The purpose of this Plan is to further the long-term growth in
earnings of Rochester Gas and Electric Corporation ("RG&E") by offering long-
term incentives in addition to current compensation to those officers and key
employees for RG&E who will be largely responsible for such growth.
III. ADMINISTRATION
This Plan shall be administered by the Committee on Management of the
Board of Directors ("Committee") which shall possess the authority to delegate
authority and to adopt rules and regulations for carrying out the Plan and to
interpret, construe and implement the provisions of the Plan and any decision or
interpretation of any provision of the Plan by such Committee or its delegate
shall be final and conclusive.
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IV. ELIGIBILITY
An Employee on the RG&E Executive Payroll, and any other Employee whom
the Committee may select in its sole discretion, shall be eligible to
participate in this Plan.
V. PERFORMANCE SHARES
Awards under this Plan shall be granted to a Participant in the form
of Performance Shares, which shall be credited to a Performance Share Account to
be maintained for each such Participant. Each Performance Share shall be deemed
to be equivalent in value to one share of Common Stock of RG&E. The award of
Performance Shares under the Plan shall not entitle the recipient to any
dividend or voting rights or any other rights of a shareholder with respect to
such Performance Shares. However, dividends shall be deemed to be paid and
reinvested during a Performance Cycle, all being credited to Participant's Share
Accounts.
VI. GRANT OF PERFORMANCE SHARES
Performance Shares shall be granted each year in accordance with
a Participant's Salary Range as follows:
Salary
Range Shares
------ ------
E7 4,000 Shares
E6 3,000 Shares
E5 2,000 Shares
E4 1,000 Shares
E3 1,000 Shares
E2 500 Shares
E1 500 Shares
It is expected that the above number of shares shall be granted for each of the
Plan's first three years, and that the Board will
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consider whether to recalibrate the number of shares for each ensuing three year
period. The first grant shall be made in 1993.
VII. PERFORMANCE CYCLES
There shall be Performance Cycles of three years each, except that the
first Performance Cycle shall be two years in order to create uniform payment
years. Thus, the first Performance Cycle for Shares awarded in 1993 shall be
1994 and 1995. The second Performance Cycle, for shares awarded in 1994, shall
be 1994, 1995 and 1996. The third Performance Cycle, for shares awarded in
1995, shall be 1995, 1996 and 1997.
VIII. PERFORMANCE MEASURE
The Performance Measure shall be the yearly percentage change of
RG&E's cumulative total shareholder return (i.e., stock price appreciation plus
100 percent dividends reinvested quarterly), on RG&E Common Stock compared to
the 24 companies in the Standard & Poor Index of Electric Companies ("Index")
representing the electric utility industry. For the first Performance Cycle,
the Measure shall be a two year average; thereafter, it will be a three year
average, corresponding to the years in the Cycle.
IX. RIGHT TO PAYMENT
A Participant shall have the right to receive payment for all or a
part of Performance Shares upon the condition that the Participant remain
employed by RG&E until the end of the Performance Cycle related to such Shares.
The
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condition shall be satisfied in the event employment terminates prior to the end
of a Cycle if such termination is on account of retirement, death or disability.
If an eligible Participant terminates prior to the end of a Cycle, but at least
six months after the start of the Cycle, any award determined at the end of the
cycle will be prorated between six and 36 months (six and 24 months for the
initial Cycle). In addition, the Committee may, in its sole discretion, approve
payment of any or all Performance Shares which would otherwise be forfeited as a
result of a Participant failing to remain in the employment of RG&E for the
required period.
X. DETERMINATION OF AWARD
The extent to which a Participant shall receive payment of all or part
of the Performance Shares in an award grant shall be determined by the Committee
by ranking each of the 24 companies in the Index (which does not include RG&E)
in descending order of performance and determining where RG&E would fit if it
were to be included in the Index, all in terms of the Performance Measure.
If RG&E would be among the first 12 companies, then the Committee may
award from 100 percent to 200 percent of the shares granted.
If RG&E would be among companies 13 through 16, then the Committee may
award from zero percent to 100 percent of the shares granted.
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If RG&E would rank number 17 or lower, then no awards may be made.
XI. TIME OF PAYMENT
A Participant shall receive payment 60 days after the start of
the year following the end of a Performance Cycle.
XII. FORM OF PAYMENT
The number of Performance Shares payable to a Participant shall be
calculated according to Section VIII and shall be valued as of the end of the
Performance Cycle based on the average closing price of RG&E Common Stock during
the December with which the Cycle ends. Payment shall be made to the
Participant in cash.
XIII. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock
of RG&E by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or
other similar corporate change, then the Committee shall determine, in its sole
discretion, that such change equitably requires an adjustment in the number or
kind of Performance Shares then held in Participants' Performance Share
Accounts, or which may be awarded to any one employee, or an adjustment in any
measures of performance. Such adjustments shall be made by the Committee and
shall be conclusive and binding for all purposes of the Plan.
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XIV. CANCELLATION OF PERFORMANCE SHARES
In addition to cancellation by forfeiture as a result of failure to
complete the requisite period of employment or failure to earn payment by not
meeting performance objectives, the Committee may cancel Performance Shares with
the written consent of a Participant holding such Performance Shares. In the
event of any cancellation, all rights of the former holder of such cancelled
Performance Shares with respect to such cancelled Shares shall terminate.
XV. MISCELLANEOUS
A. An employee's rights and interests under the Plan may not be
assigned or transferred. In the case of death, payment of Performance Shares
due under this Plan shall be made to the Participant's estate.
B. No employee or other person shall have any claim or right to be
granted an award under this Plan. Neither this Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of RG&E.
C. RG&E shall have the right to deduct from all payments any taxes
required by law to be withheld with respect to such cash.
D. The expenses of administering this Plan and the amounts which
become payable shall be borne by RG&E. This Plan is unfunded and is a mere
promise by RG&E to make the payments called for; all Participants have the
status of general unsecured creditors of RG&E.
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XVI. AMENDMENT AND TERMINATION
The Board of Directors of RG&E may at any time terminate this Plan or
amend it in any way, provided that no such action shall adversely affect any
right or obligation with respect to any award theretofore granted.
XVII. EFFECTIVE DATE
The Plan shall be effective as of October 15, 1993.
ROCHESTER GAS AND ELECTRIC CORPORATION
By ROGER W. KOBER
Its Chairman, President and CEO