EXHIBIT 10-1
FORM OF
ROCHESTER GAS AND ELECTRIC CORPORATION
1996 PERFORMANCE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
AGREEMENT made and entered into as of the day of , between
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Rochester Gas and Electric Corporation ("RG&E"), a New York corporation, and
___________________________________________ ("Employee").
Whereas, RG&E wishes to provide an incentive for the Employee to advance the
interests of RG&E and its shareholders in light of an increasingly competitive
market and,
Whereas, the Board of Directors of RG&E ("Board") has adopted the Rochester Gas
and Electric Corporation 1996 Performance Stock Option Plan ("Plan").
(Capitalized terms used in this Agreement but not otherwise defined, shall have
the meanings ascribed to them in the Plan. The Plan is hereby incorporated by
reference into this Agreement, and this Agreement is subject in all aspects to
the terms and conditions of the Plan.)
Now, therefore, in consideration of the mutual promises made herein and for
other good and valuable consideration, the parties hereby agree as follows:
SECTION ONE -- AWARD
RG&E hereby awards to the Employee, by action of the Committee on Management
("Committee") of the Board of Directors of RG&E, as a matter of separate
agreement and not in lieu of salary or any other compensation for services, the
right and option (the "Option") to purchase __________ full shares of RG&E
common stock ("Common Stock"), par value $5.00 per share, on the terms and
conditions set out in the Plan and below.
SECTION TWO -- EXERCISE PRICE
The exercise price of the shares of Common Stock subject to this Option is
$__________per share.
SECTION THREE -- WHEN EXERCISABLE
The Option may be exercised, to the extent indicated, upon the occurrence of the
following "Performance Conditions":
. _______ percent (___%) of the shares subject to the Option may be
purchased after the Common Stock has maintained for five (5)
consecutive trading days a closing price ("Closing Price") on the New
York Stock Exchange of __________________ Dollars ($______);
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. an additional ______________ percent ( ___%) of the shares subject to
the Option may be purchased after the Common Stock has maintained for
five (5) consecutive trading days a Closing Price of ___________
Dollars ($_________); and
. the final ________________percent (___%) of the shares subject to the
Option may be purchased after the Common Stock has maintained for five
(5) consecutive trading days a Closing Price of ____________ Dollars
($________).
Notwithstanding the Performance Conditions above, no Option awarded under this
Agreement may be exercised:
. after ten (10) years from the date of this Agreement or;
. after the employment of Employee by RG&E has terminated, except (i) to
the extent that one or more Performance Conditions have been met and
(ii) if one of the following special circumstances occurs:
-- In the event of the death of the Employee, the Option may be
exercised for a period of one year by the Employee's estate or by
a person who acquires the right to exercise the Option by bequest
or inheritance or by reason of the death of the Employee.
-- If the Employee retires in accordance with RG&E's formal plan of
retirement at or after age 65, or in the sole discretion of the
Committee, prior to age 65, the Option may be exercised for
ninety (90) days (or for up to three (3) years in the discretion
of the Committee) after retirement.
-- If the Employee's employment with RG&E is terminated as a result
of a Disability, the option may be exercised for ninety (90) days
(or up to one (1) year in the discretion of the Committee) after
termination of employment.
Notwithstanding any other conditions, if a Change in Control of RG&E occurs,
prior to the termination of Employee's employment with RG&E, 100% of the shares
subject to the Options will be eligible for exercise for a period of ninety (90)
days from the date of the Change in Control.
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SECTION FOUR -- METHODS OF EXERCISING THE OPTION
The Employee shall exercise the Option by written notice to RG&E in the form
provided or such other writing that the Committee accepts. The writing must
specify (i) the number of shares being purchased, (ii) the form of payment of
the Exercise Price, (iii) a statement of intention to exercise, (iv) any
representations or disclosure required by any applicable securities law and (v)
the signature of the Employee.
The Employee may use any form of payment of the Exercise Price allowed under the
Plan.
Notwithstanding any other provision of this Agreement, no exercise will be
allowed that violates any applicable securities law.
SECTION FIVE -- TRANSFER OF THE OPTION
The Option shall not be transferable by the Employee other than by will and the
laws of descent and distribution. During the lifetime of the Employee, the
Option shall be exercisable only by the Employee.
SECTION SIX -- TERMINATION OF THE OPTION
In the event of the voluntary or involuntary termination of the employment of
the Employee for any reason, other than the death, retirement or Disability of
the Employee, or in the event of a Change in Control, the Option shall terminate
immediately.
SECTION SEVEN -- DIVIDEND EQUIVALENT RIGHTS
For each share subject to this Option, the Employee shall have a Dividend
Equivalent Right ("DER") which shall entitle the Employee to a payment on a per
share basis in the amount of any dividends paid on the Common Stock of RG&E from
the date the Option is granted under this Agreement until the date the Option is
exercised, if the Option is exercised. The DER is only payable if the Option
associated with it is exercised - and is payable in the same proportion as that
of the Option exercised, i.e., if 50% of the Option is exercised, the DER is
only payable on the 50% portion of shares. If the associated Option or a
portion thereof expires unexercised, the DER or the same portion thereof expires
simultaneously with the Option. To the extent that any DER is not used as a
portion of a payment of the Exercise Price, such DER shall be paid in accordance
with the Plan.
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SECTION EIGHT -- TAX WITHHOLDING
(a) Whenever RG&E transfers shares of Common Stock under the Plan and this
Agreement to Employee, RG&E has the right to require the Employee to remit
to RG&E an amount sufficient to satisfy any federal, state or local
withholding tax requirements ("Tax Requirements") prior to the delivery of
the shares.
b) Whenever under the Plan and this Agreement payments are to be made in cash,
such payments shall be net of an amount sufficient to satisfy any Tax
Requirements.
c) Employee may satisfy his or her obligation under this Section Eight by (i)
directing RG&E to withhold shares otherwise transferable to Employee, (ii)
by delivering Common Stock to RG&E or (iii) by delivering cash, of a value
equal to the Tax Requirements amount.
SECTION NINE -- NO WARRANTY OF TAX EFFECT
Nothing in this Agreement shall be deemed to be expressed or warranted as to the
effect for federal, state or local tax purposes of any Awards.
SECTION TEN -- EFFECT ON THE EMPLOYMENT RELATIONSHIP
This Agreement does not confer any rights or privileges to the Employee
regarding any expectation of continued employment or the terms of any
employment. The Employee remains an employee-at-will of RG&E or its subsidiary,
such status being unaffected by this Agreement.
SECTION ELEVEN -- ADJUSTMENTS
Pursuant to the Plan, in the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, stock split,
combination, distribution or other change in the corporate structure of RG&E
affecting the Common Stock, the Committee shall adjust the number and class of
securities subject to the Option under this Agreement in such manner as the
Committee shall determine to be appropriate to prevent the dilution or
diminution of Awards under this Agreement.
SECTION TWELVE -- ADMINISTRATION
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.
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This is the entire Agreement between the parties; it may not be modified or
altered except in writing executed by the parties hereto.
The Committee may, as provided in the Plan, interpret the Plan and this
Agreement, adopt, amend and rescind rules and regulations relating to the Plan
and its Awards, and make all other determinations and take all other action
advisable for the implementation and administration of the Plan and Awards made
in this Agreement. All determinations and decisions made by the Committee, the
Board and any delegate of the Committee pursuant to the provisions of the Plan
shall be final, conclusive and binding on all persons. No member of the
Committee shall be liable for any action taken or decision made in good faith
relating to the Plan or any Award under this Agreement.
IN WITNESS WHEREOF, Rochester Gas and Electric Corporation has caused this
Agreement to be executed by its duly authorized officer and
_____________________________ (Employee Signature) has executed this Agreement
by his or her own hand, on the _________ day of _______________, _________.
ROCHESTER GAS AND ELECTRIC CORPORATION
By _____________________________
Title __________________________
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