Exhibit 10
RGS ENERGY GROUP, INC.
EXECUTIVE INCENTIVE PLAN
Restatement as of January 1, 1999
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I. Synopsis of Plan
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This Plan seeks to promote and balance the interests of ratepayers,
shareholders and employees by linking compensation to specific corporate and
organizational/individual objectives in such a way that an employee's total
compensation will increase when goals are reached or exceeded and will decrease
when goals are not met. The Plan is an annual cash incentive plan that pays
benefits in any year when the Company achieves or exceeds annual business plan
objectives. Benefits will be paid to each eligible employee based on the
achievement of a combination of corporate and organizational/individual
objectives. Corporate performance is measured on target objectives for the year
that relate to shareholder, customer and employee satisfaction. The weightings
for each of the corporate objectives may vary from year to year.
Organizational/individual objectives for the year will be specific to each
eligible employee. Weightings of the combined corporate and
organizational/individual objectives are based on an employee's position in the
Company.
II. Purpose
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The purpose of this Plan is to provide an incentive to key employees to
meet and exceed certain specified goals as part of the RGS cash compensation
program. This restatement of January 1, 1999, amends and continues the Plan
originally adopted as of January 1, 1992, and last restated as of January 1,
1995.
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III. Definitions
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(a) "Board" means the Board of Directors of the Company or the Committee
on Management of the Board.
(b) "Company" means RGS Energy Group, Inc. or it successor.
(c) "Corporate Objective" means the business plan objectives adopted by
the Board each year in areas that the Board, in it sole discretion, may
determine such as, but not limited to, customer, shareholder and employee
satisfaction.
(d) "Employee" means an individual employed by a Participating Company in
a position other than as an independent contractor.
(e) "Financial Objective" means the Cash Flow Return on Net Assets
objective established by the Company each year.
(f) "Participant" means an Employee who participates in this Plan.
(g) "Participating Company" means the Company and any affiliate of the
Company whose employees are, with the consent of the Board, eligible to
participate in this Plan.
(h) "RONA" means the Company's cash flow return on net assets.
(i) "Target Award" means the amount or percentage payable when 100% of all
objectives have been achieved on average.
IV. Eligibility
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Eligibility for participation in the Plan shall include any Employee
holding a position of CEO, Senior Executive, Vice President or Senior Manager
plus any Manager who is selected at the discretion of the Senior Management
group.
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V. Corporate Objectives
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Each year the Board will review the Corporate Objectives recommended for
the upcoming Plan year, including one or more factors that will be used to
measure each of the Corporate Objectives. The weighting of each of the
Corporate Objectives each year shall be established in the Board's sole
discretion.
VI. Organizational/Individual Objectives
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The Board shall determine the individual components, if any, for the
Chairman of the Board, and the Chairman shall review and approve all other
organizational/individual awards.
VII. Awards
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A Participant's award depends on whether the Plan's annual objectives have
met the Target Award or are above or below such Target Award and on the
weighting of Corporate Objectives and organizational/individual objectives, all
according to the following table:
Incentive Award* Incentive Weighting
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Tiers Position Threshold Target Superior Corp. Org./Ind.
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I CEO 15% 30% 60% 80% 20%
II Sr. Executives 12% 25% 45% 60% 40%
III VP 10% 20% 40% 50% 50%
IV Sr. Managers 8% 15% 35% 40% 60%
V Managers 6% 12% 25% 30% 70%
* Participant's Incentive Awards are calculated based upon the above table and
are applied to the participant's annualized salary at the end of the Plan
year.
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An Employee who is not a Plan Participant for a full calendar year shall
receive a pro rata portion of a full year's award based on the rate that his/her
full months of service as a Participant bears to 12 if the change in
participation is a result of his/her being a new hire, his/her retirement, death
or promotion. If a Participant voluntarily or involuntarily terminates
employment or is demoted during a year, the Board may, in its sole discretion,
direct payment of any amount from zero to a pro rata award based on his/her
months of service as a Participant prior to termination or demotion.
VIII. Payment of Awards
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A Participant's award, if any, for a calendar year will be paid in cash
during the first quarter of the following year unless deferred and paid under
the Company's Deferred Compensation Plan of 1993. Participants may elect to
defer up to 100% of any award to be paid. Elections to defer compensation must
be made before the compensation is earned.
IX. Participant's Rights
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This Plan constitutes a contractual obligation on the part of a
Participating Company, and a Participant acquires the right of an unsecured
general creditor of a Participating Company. No trust or fund of any kind is
created by reason of this Plan. Participation in this Plan shall not be
construed as giving any Participant the right to be retained in a Participating
Company's employ or the right to receive any benefits not specifically provided
by the Plan.
The rights of a Participant to any payment under this Plan shall not be
assigned, transferred, pledged, encumbered or be subject in any manner to
alienation or anticipation.
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X. Administration
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This Plan shall be administered by the Committee on Management of the Board
which shall possess the authority (i) to determine eligibility to participate in
the Plan and eligibility to receive benefits, (ii) to delegate its authority,
(iii) to adopt rules and regulations for carrying out the Plan and (iv) 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.
XI. Amendment and Termination
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The Plan may, at any time and from time to time, be amended, modified or
terminated by the Board. The Board may eliminate or award payments in any year
due to special circumstances and, in its sole discretion, change the time for
payment of any Plan benefit.
XII. General Provisions
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(a) All expenses of administering the Plan shall be borne by the Company.
(b) To the extent required by law, the Company shall withhold taxes from
any payments made under the Plan.
(c) Except to the extent superseded by federal law, the laws of the State
of New York shall be controlling in all matters relating to the Plan.
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IN WITNESS WHEREOF, RGS Energy Group, Inc. has caused its duly authorized
executive to sign this Plan this 27th day of September 1999, effective as of
January 1, 1999.
RGS ENERGY GROUP, INC.
By /s/ Thomas S Richards
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Title President
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