Exhibit 10-2
ROCHESTER GAS AND ELECTRIC CORPORATION
SUPPLEMENTAL RETIREMENT BENEFIT PROGRAM
Effective July 1, 1999, ROCHESTER GAS AND ELECTRIC CORPORATION (the
"Company") hereby amends, restates and renames the excess benefit plan
previously named the RG&E Unfunded Retirement Income Plan as the ROCHESTER GAS
AND ELECTRIC CORPORATION SUPPLEMENTAL RETIREMENT BENEFIT PROGRAM (the "Plan")
for the benefit of eligible Employees. The principal benefits provided by this
Plan are top-hat pension and 401(k) benefits plus certain substitute retiree
death benefits.
ARTICLE ONE
Definitions
-----------
1.1 "Board" means the Board of Directors of Rochester Gas and Electric
Corporation.
1.2 "Change in Control" means one of the following circumstances:
(i) any "person," including a "group" as determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act"), is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20 percent or
more of the combined voting power of the Company's then outstanding
securities;
(ii) as a result of, or in connection with, any tender offer or
exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing
transactions (a "Transaction"), the persons who were directors of the
Company before the Transaction shall cease to constitute a majority of
the Board of Directors of the Company or any successor to the Company;
(iii) the Company is merged or consolidated with another corporation
and as a result of the merger or consolidation less than 70 percent of
the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former
stockholders of the Company, other than (x) affiliates within the
meaning of the Exchange Act or (y) any party to the merger or
consolidation;
(iv) a tender offer or exchange offer is made and consummated for
the ownership of securities of the Company representing 20 percent or
more of the combined voting power of the Company's then outstanding
voting securities; or
(v) the Company transfers substantially all of its assets to
another corporation which is not a wholly-owned subsidiary of the
Company.
-2-
1.3 "Code" means the Internal Revenue Code of 1986 as amended from time to
time.
1.4 "Committee" means the Committee on Management of the Company's Board
of Directors.
1.5 "Company" means Rochester Gas and Electric Corporation, or its
successor.
1.6 "Effective Date" means January 1, 1983, provided that this restatement
is effective as of July 1, 1999.
1.7 "Employee" means any employee of a Participating Company who (i)
participates in the Qualified Plan, (ii) is a management or highly
compensated employee as such employees are defined in Title I of ERISA, and
(iii) is designated by the Committee, in its sole discretion, as eligible
to participate in this Plan.
1.8 "Participating Company" means the Company and any related entity that
meets the definition of "Affiliated Company" in the Qualified Plan and
which is approved by the Committee as a Participating Company under this
Plan. Participating Companies are listed in Appendix A.
1.9 "Plan" means this Rochester Gas and Electric Corporation Supplemental
Retirement Benefit Program.
1.10 "Plan Year" means the calendar year.
1.11 "Qualified Plan" means the Rochester Gas and Electric Corporation
Retirement Plan and the Rochester Gas and Electric Corporation Savings Plus
Plan except that where the context requires application to only one of
these plans they are referred to as the Qualified Retirement Plan and the
Qualified Savings Plus Plan, respectively.
ARTICLE TWO
Purpose and Intent of Plan
--------------------------
The purpose of this Plan is to attract and retain a highly-motivated
executive workforce by providing to eligible Employees certain retirement
benefits that cannot be provided in the Qualified Plans because of
statutory limits on contributions, benefits or compensation and by
providing to designated individuals an insurance replacement benefit. The
Plan is intended to constitute an unfunded plan of deferred compensation
for a select group of management or highly-compensated employees as
provided for in Title I of ERISA.
ARTICLE THREE
Benefits
--------
Sections 3.1, 3.2 and 3.3 provide, respectively, the general terms and
conditions for eligibility to receive benefit supplements to the Qualified
Retirement Plan and the
-3-
Qualified Savings Plus Plan and the insurance replacement benefit. Benefit
provisions of general applicability are set forth in Article Four.
Section 3.1. Qualified Retirement Plan Supplement.
------------------------------------
(a) Eligibility. All Employees eligible to receive benefits from the
-----------
Qualified Retirement Plan shall be eligible to receive benefits
under this Plan if their benefits cannot be fully provided by the
Qualified Retirement Plan because of compensation limits under
Code Section 401(a)(17) or benefit limits under Code Section 415
after the Effective Date, regardless of when they may have
retired, or if they have received an award under the RG&E
Executive Incentive Plan. In addition, certain Employees whose
rates of benefit accrual under the Qualified Retirement Plan
lessened as of January 1, 1989, as compared to the rate of
accrual in effect on December 31, 1988, will be eligible for
benefits under this Plan.
(b) Amount of Benefit. The benefit amount payable under this Plan
-----------------
shall be the amount of the benefit to which an Employee would
otherwise be entitled under the Qualified Retirement Plan formula
if the Qualified Retirement Plan (i) did not include the
limitation on compensation under Code Section 401(a)(17) and the
limitation on benefits under Code Section 415, (ii) did include
any award under the RG&E Executive Incentive Plan as compensation
in the benefit formula, and (iii) had a definition of final
average compensation based on the 36 months (not necessarily
consecutive) within the 120 months preceding termination which
produce the highest average, less the amount of the benefit to
which the Employee is actually entitled to receive under the
Qualified Retirement Plan as constituted at the time of the
calculation. In calculating said benefit there shall also be
taken into account the difference, if any, between the benefit
payable from the Qualified Retirement Plan and the benefit that
would have been payable from the Qualified Retirement Plan (as
modified in the preceding sentence) had the benefit formula
applicable to the particular Employee as of December 31, 1988,
remained in effect.
(c) Form of Payment of Benefit. The benefit computed under
--------------------------
subsection (b) above shall be computed and payable in the same
form in which the Employee's benefit is computed and payable
under the Qualified Retirement Plan. If an Employee's benefit
from the Qualified Retirement Plan is subject to an actuarial
adjustment because of a conversion of the form of benefit from
one form to another or because of the time when payment
commences, the benefit from this Plan shall also be actuarially
adjusted using the same actuarial adjustments as are used from
time to time under the Qualified Retirement Plan.
Notwithstanding the foregoing, the Committee in its sole
discretion may elect to pay the benefit in any alternative form
of payment permitted under the Qualified Plan or, in the event of
the Employee's or his beneficiary's financial need, to pay the
-4-
entire benefit, or the present value of the remaining
installments, in a lump sum payment.
(d) Commencement of Benefits. A Participating Company shall pay the
------------------------
benefits due under this Plan commencing within 30 days of
retirement, disability, death or any other event that entitles an
eligible Employee or his beneficiary to receive benefits under
the Qualified Retirement Plan.
(e) Death Benefits During Employment. If an eligible Employee dies
--------------------------------
while still employed by a Participating Company but after
becoming entitled to receive a vested benefit, the eligible
Employee's spouse, if surviving, shall be entitled to a monthly
lifetime benefit equal to 50 percent of the benefit the eligible
Employee would have received under subsection (b) of this Section
3.1. This benefit shall be payable at such time as in-service
death benefits are payable under the Qualified Retirement Plan
and pursuant to such other terms and conditions as may apply to
benefits payable under the Qualified Retirement Plan. In the
discretion of the Committee, the value of this benefit may be
paid out in a lump sum or in another alternative form of benefit
the Committee may prescribe.
(f) Coordination with Qualified Retirement Plan Benefits. If an
----------------------------------------------------
eligible Employee is receiving benefits under this Plan and his
annual benefits under the Qualified Retirement Plan are increased
due to cost of living adjustments to the Qualified Retirement
Plan limits under Section 415 of the Internal Revenue Code, his
annual benefit under this Plan shall be correspondingly reduced
in order to maintain the same aggregate level of benefits. If
the Qualified Retirement Plan is amended to improve the benefits
paid to retirees or their beneficiaries, the benefits payable
under this Plan to a retiree or beneficiary shall automatically
be increased by the same percentage increase that the retiree's
or beneficiary's Qualified Retirement Plan benefit is increased.
Section 3.2. Qualified Savings Plus Plan Supplement.
--------------------------------------
(a) Eligibility. An Employee is eligible to defer a portion of his
-----------
annual compensation under this Plan if he is eligible to
participate in the Qualified Savings Plus Plan, has contributed
the maximum amount permitted under the Qualified Savings Plus
Plan and such contributions will aggregate less than six percent
of his annual compensation without regard to Code limits on
compensation.
(b) Amount of Contributions. Eligible Employees shall be able to
-----------------------
elect to defer the difference between their actual Qualified
Savings Plus Plan contributions and six percent of their total
compensation and to be credited with a Participating Company
matching contribution equal to one-half of such deferral. An
account shall be created for each Employee who defers
-5-
compensation under this Plan. The amounts credited to such
account shall be deemed to be invested in shares of Company
Common Stock (with dividends deemed reinvested and valued as
under the Savings Plus Plan) from the date of contribution until
the amount in the account is paid to the Employee. The time for
deferring hereunder shall be within 30 days of an Employee's
becoming eligible for the first time, and prior to the year in
which the income to be deferred is to be earned for other
deferrals.
(c) Form and Timing of Benefit Payment. The total amount deferred in
----------------------------------
the accounts established hereunder shall be paid in a single sum
in the first quarter of the calendar year following the
Employee's termination of employment, unless otherwise elected at
the time of the election to defer.
Section 3.3. Insurance Replacement Benefit. In consideration of the
-----------------------------
cancellation by the Company of certain life insurance of retirees, the
individuals named in Appendix B attached to this Plan shall be paid the
amounts listed after their names on a monthly basis for 120 months
following retirement pursuant to the Qualified Retirement Plan. In the
event of an individual's death after retirement but prior to the completion
of 120 monthly payments, the balance of such payments shall be made to the
beneficiary designated by the individual or to the estate of the individual
should there be no beneficiary then living or designated. Where payments
have been made to a surviving beneficiary who dies before a total of 120
payments have been made, any balance of such payments shall be made to the
estate of the beneficiary.
ARTICLE FOUR
Benefit Provisions of General Applicability
-------------------------------------------
4.1 Vesting. Insurance replacement benefits are 100 percent vested at all
-------
times. Benefit supplements under Sections 3.1 and 3.2 shall vest in
accordance with the relevant vesting schedule set forth in the Qualified
Retirement Plan or Qualified Savings Plus Plan, respectively.
4.2 Unfunded Plan. All benefits payable to an eligible Employee under this
-------------
Plan shall be paid by the Participating Company that employs the eligible
Employee out of its general assets and the Plan shall not otherwise be
funded. However, a Participating Company may, in its discretion, set aside
assets for meeting its obligations, including, but not limited to, the
establishment of a rabbi or other grantor trust. In the event such fund or
trust is established, each Participating Company shall be responsible for
making contributions to provide for the benefits of its own eligible
Employees.
In the event of a Change of Control, the Company's Chief Executive Officer
shall inform the trustee of any rabbi trust that has been established to
provide Plan benefits of the Change of Control and shall arrange for the
Participating Companies to fully fund, to the extent practicable, the
present value of all Plan benefits.
-6-
No Employee shall have any property rights in any such fund or trust or in
any other assets held by a Participating Company. The right of an eligible
Employee or his or her spouse or beneficiary to receive any of the benefits
provided by this Plan shall be an unsecured claim against the general
assets of a Participating Company.
4.3 Change in Control. In the event of a Change in Control, all Plan
-----------------
benefits of eligible Employees shall become fully vested, and upon
termination of employment, or by action of the Committee in anticipation of
termination of employment, eligible Employees shall be paid such vested
benefits in a single lump sum payment. For this purpose, termination of
employment shall mean termination of the Employee's employment with a
Participating Company within four years following a Change in Control. A
termination shall be deemed to occur if during such period the Employee
determines in good faith that the position, duties, responsibilities and
status assigned to the Employee are inconsistent with the position, duties,
responsibilities and status of the Employee with the Participating Company
immediately prior to the Change in Control. Such determination shall be
evidenced by the Employee in a writing delivered to the Secretary of the
Company promptly but in no event later than 180 days after such
determination.
In the case of a Change in Control and a termination of employment as
above described, an eligible Employee who has not at such time attained the
age of 55 and whose Qualified Retirement Plan benefits are therefore
deferred shall nevertheless be entitled to receive an immediate lump sum
payment under this Plan equal to the then present value of the benefit that
would have been payable at the time the Employee reached age 55 had he
remained in employment but determined on the basis of compensation and
service figures in effect on the date of the Employee's termination of
employment.
4.4 No Transferability. The rights of an Employee under this Plan shall
------------------
not be transferable, voluntarily or involuntarily, other than by will or
the laws of descent and distribution and are exercisable during the
Employee's lifetime only by the Employee or the Employee's guardian or
legal representative.
ARTICLE FIVE
Administration
--------------
5.1 Committee as Administrator. This Plan shall be administered by the
--------------------------
Committee in accordance with the Plan's terms.
The Committee shall determine the benefits due each Employee from this
Plan and the Qualified Plan and shall cause them to be paid by the
Qualified Plan or by a Participating Company under this Plan accordingly.
The Committee shall inform each Employee of any elections which the
Employee may possess and shall record such choices along with such other
information as may be necessary to administer the Plan.
-7-
5.2 Coordination with Qualified Plan. Since this Plan is intended to
--------------------------------
operate in conjunction with the Qualified Plan, any questions concerning
plan administration or the calculation of benefits that arise but are not
specifically addressed by this Plan shall be considered in light of the
Qualified Plan. In addition, unless the context requires otherwise, the
terms used in this Plan shall have the same meaning as the same terms used
in the Qualified Plan.
5.3 Committee Action Final. The Committee has sole discretion to
----------------------
determine eligibility to participate in this Plan, to determine the
eligibility for and the amount of benefits, to interpret the Plan and to
take any other action it deems appropriate to administer this Plan. The
decisions made by and the actions taken by the Committee shall be final and
conclusive on all persons.
Members of the Committee shall not be subject to individual liability
with respect to their actions under this Plan. Notwithstanding the
foregoing, the Company shall indemnify each member of the Committee who may
incur financial liability for actions or failures to act with respect to
the member's Committee responsibilities.
ARTICLE SIX
Amendment and Termination
-------------------------
While the Company intends to maintain this Plan in conjunction with
the Qualified Plan indefinitely, the Board reserves the right to amend or
terminate it at any time for whatever reasons it may deem appropriate.
Notwithstanding the preceding paragraph, however, the Company hereby
makes a contractual commitment on behalf of itself, the other Participating
Companies and their successors to pay, or to require the other
Participating Companies to pay, the benefits accrued under this Plan prior
to its amendment or termination to the extent it or the other Participating
Companies are financially capable of meeting such obligation.
ARTICLE SEVEN
Miscellaneous
-------------
7.1 No Contract of Employment. Nothing contained in this Plan shall be
-------------------------
construed as a contract of employment between a Participating Company and
an Employee, or as a right of any Employee to be continued in the
employment of a Participating Company, or as a limitation of the right of a
Participating Company to discharge any of its Employees, with or without
cause.
7.2 Taxation. The benefits payable under this Plan shall be subject to
--------
all federal, state and local income and employment taxes to which benefits
of this type are normally subject.
-8-
7.3 Indemnification. To the fullest extent authorized or permitted by
---------------
law, the Company shall indemnify any eligible Employee who brings an action
or proceeding, whether civil or criminal, or who is made, or threatened to
be made, a party to an action or proceeding, whether civil or criminal, by
reason of the fact that he, his testator or intestate, is or shall be
entitled to benefits under this Plan and the Company has failed to make
payments hereunder when due or has otherwise failed to follow the terms of
the Plan or such eligible Employee has reasonable cause to believe the
Company shall fail or intends to fail to perform its future obligations
hereunder arising within a reasonable time thereof, or with respect to any
other matter directly or indirectly related to this Plan, unless a judgment
or other final adjudication adverse to such eligible Employee establishes
that the Company was or is legally entitled to fail to so perform its
obligations hereunder. Without limitation of the foregoing, such
indemnification shall include indemnification against all costs of whatever
nature or kind, including attorneys' fees and costs of investigation or
defense, incurred by any eligible Employee with respect to any such action
or proceeding and any appeal therein, and which judgments, fines, amounts
and expenses have not been recouped by him in any other manner. All
expenses incurred by a person in connection with an actual or threatened
action or proceeding with respect to which such person is or may be
entitled to indemnification under this Section, shall, in the absence of a
final adjudication adverse to such person as described above, be promptly
paid by the Company to him, upon receipt of an undertaking by him to repay
the portion of such advances, if any, to which he may finally be determined
not to be entitled. The Company's obligations under this Section 7.3 may
be paid from any rabbi trust or other fund established by the Company for
the purpose of paying such expenses. This Section may not without the
consent of a eligible Employee be amended or changed in any manner adverse
to such eligible Employee. The indemnification provided by this Section
shall not be deemed exclusive of any other rights to which an eligible
Employee may be entitled other than pursuant to this Section.
7.4 Successors. This Plan shall be binding on the Company's successors
----------
and assigns.
7.5 Governing Law. This Plan shall be interpreted and enforced in
-------------
accordance with the laws of the State of New York.
-9-
IN WITNESS WHEREOF, the Company has caused this Plan document to be
executed by its duly authorized officer this 1st day of July, 1999.
ROCHESTER GAS AND ELECTRIC
CORPORATION
By /s/ Thomas S. Richards
--------------------------
Title Chairman of the Board, President
--------------------------------
and Chief Executive Officer
---------------------------
Exhibit 10-2
APPENDIX A
Participating Companies
Name of Company Effective Date of Participation
- --------------- -------------------------------
Rochester Gas and Electric Corporation July 1, 1999
RGS Energy Group, Inc. July 1, 1999
RGS Development Corporation July 1, 1999
Energetix, Inc. July 1, 1999
Exhibit 10-2
APPENDIX B
----------
Section 3.3: Insurance Replacement Benefit
Post-Retirement
Name Monthly Payment (120 Months)
---- ----------------------------
Paul W. Briggs $3,833.33
Keith W. Amish 2,916.67
Harry G. Saddock 2,083.33
Mario Silvestrone 858.33
Dean W. Caple 812.50
Richard J. Rudman 466.67
David K. Laniak 466.67
John E. Arthur 408.33
Francis A. Sullivan, Jr. 350.00
Roger W. Kober 291.67
Joseph J. Hartman 141.67
William C. Bailey 133.33
Lee S. Lang 125.00