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EXHIBIT A 10.97.2
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
MANAGEMENT INCENTIVE PLAN
Effective as of January 1, 2006
Execution Copy
March, 2006
CENTRAL VERMONT PUBLIC SERVICE CORPORATION
MANAGEMENT INCENTIVE PLAN
Effective as of January 1, 2006
TABLE OF CONTENTS
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ARTICLE I
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INTRODUCTION AND
PURPOSE
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Page
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1.1
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Purpose of the Plan
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1
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ARTICLE II
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DEFINITIONS
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2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
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"Annual Incentive Award"
"Award Payment Date"
"Base Salary"
"Board" or "Board of Directors"
"Change in Control"
"Code"
"Committee"
"Company"
"Effective Date"
"Eligible Employees"
"For Cause"
"Participant"
"Performance Goals"
"Performance Period"
"Permanent and Total Disability"
"Plan"
"Target Potential"
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2
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
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ARTICLE III
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PARTICIPATION
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3.1
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Participation
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4
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ARTICLE IV
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PERFORMANCE GOALS AND AWARD
OPPORTUNITIES
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4.1
4.2
4.3
4.4
4.5
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Performance Goals
Performance Levels
Participant Goals
Target Potential
Amount of Award
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5
6
6
6
6
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ARTICLE V
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DETERMINATION AND PAYMENT OF
ANNUAL INCENTIVE AWARDS
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5.1
5.2
5.3
5.4
5.5
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Timing and Determination of
Annual Incentive Awards
Short Performance Year
Termination, Death, Retirement or Permanent and Total
Disability
Change in Control
Limitation on Right to Payment of Award
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8
8
9
9
9
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ARTICLE VI
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ADMINISTRATION
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6.1
6.2
6.3
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Committee
Authority of the Committee
Costs
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10
10
10
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ARTICLE VII
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MISCELLANEOUS
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7.1
7.2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
7.11
7.12
7.13
7.14
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Amendment
Termination
Employment Rights
Nonalienation of Benefits
No Funding
Tax Withholding
Controlling Laws
Gender and Number
Action by the Company
Mistake of Fact
Severability
Effect of Headings
No Liability
Successors
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11
11
11
12
12
12
12
12
12
12
13
13
13
13
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ARTICLE I
INTRODUCTION AND PURPOSE
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1.1
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Purpose of the Plan
. The Central Vermont Public Service
Corporation Management Incentive Plan (the "Plan") is an incentive
compensation program for eligible officers of Central Vermont
Public Service Corporation (the "Company"). The purpose of the Plan
is to focus the efforts of the Executive Team in achievement of
challenging and demanding objectives. The Plan is designed and
intended to further the attainment of the customer service,
financial, process improvement and employee related objectives of
the Company, to assist the Company in attracting and retaining
highly qualified executives, and to enhance the mutual interest of
customers, shareholders and eligible officers of the Company. In
addition, this Plan supports the Company's performance oriented
culture.
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ARTICLE II
DEFINITIONS
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2.1
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" Annual Incentive Award "
shall mean a cash incentive payable to a Participant under the
terms of this Plan.
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2.2
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" Award Payment Date "
shall mean, for each Performance Period, the date that the amount
of the Annual Incentive Award for that Performance Period shall be
paid to the Participant under Article 5 of the Plan.
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2.3
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" Base Salary " shall mean
a Participant's annualized salary for the Performance Period for
which the amount of an Annual Incentive Award is being
determined.
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2.4
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" Board" or "Board of
Directors " shall mean the Board of Directors of the
Company.
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2.5
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" Change in Control "
shall have the same meaning as the term defined in the Change of
Control Agreement approved by the Employer's Board of Directors on
April 3, 2000.
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2.6
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" Code " shall mean the
Internal Revenue Code of 1986, as amended, and references to
particular provisions of the Code shall include any amendments
thereto or successor provisions and any rules and regulations
promulgated thereunder.
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2.7
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" Committee " shall mean
the Compensation Committee of the Board of Directors of the Company
or any other duly established committee or subcommittee appointed
by the Board for purposes of this Plan.
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2.8
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" Company " shall mean
Central Vermont Public Service Corporation, a Vermont
corporation.
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2.9
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" Effective Date " shall
mean January 1, 2006. The Plan shall be effective for the
Performance Period beginning on January 1, 2006.
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2.10
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"Eligible Employee
" shall mean the Chief Executive
Officer (CEO) of Central Vermont Public Service Corporation and
other executive officers of the Company.
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2.11
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" For Cause " shall mean,
but is not limited to, fraud, dishonesty, theft of corporate
assets, gross misconduct, failure to substantially perform assigned
duties, material breach of any agreement with the Company, the
commission of a crime or act which involves dishonesty or moral
turpitude, or willful misconduct which subjects the Company to
potential liability.
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2.12
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" Participant " for a
Performance Period shall mean each Eligible Employee who is an
Eligible Employee for that Performance Period.
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2.13
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" Performance Goals "
shall mean the measures of the Company's performance as defined in
Section 4.1 of this Plan that must be met for any Participant to
receive any Annual Incentive Award under this Plan, as provided in
Section 4.1.
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2.14
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" Performance Period "
shall mean the taxable year of the Company or any other period
designated by the Committee with respect to which an Annual
Incentive Award may be granted.
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2.15
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" Permanent and Total
Disability " shall mean any disability that would qualify as
permanent and total disability under any long term disability
policy sponsored by the Company.
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2.16
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" Plan " shall mean this
Central Vermont Public Service Corporation Management Incentive
Plan, as it may be amended from time to time.
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2.17
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" Target Potential " shall
mean the targeted percentage of Base Salary for each
Participant.
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ARTICLE III
PARTICIPATION
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3.1
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Participation
. An Eligible Employee will become a
Participant in this Plan as of the later of the Effective Date, the
Eligible Employee's date of hire or the date the individual becomes
an Eligible Employee.
An Eligible Employee who is a
Participant for the entire length of a Performance Period shall be
eligible for consideration for an Annual Incentive Award with
respect to that Performance Period.
The Committee may provide a
prorated Annual Incentive Award for an Eligible Employee who
becomes a Participant during the Performance Period.
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ARTICLE IV
PERFORMANCE GOALS AND AWARD
OPPORTUNITIES
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4.1
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Performance Goals
. The measures of Performance Goals
are established as follows:
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a.
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Company Balanced Business
Performance. Measures the overall company performance, through a
balanced set of measures established annually, including customer
satisfaction, financial performance, process improvement and
employee measures.
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b.
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Individual Performance. Based on
advice and recommendation from the Chief Executive Officer for
those reporting to him, the Compensation Committee and Board of
Directors evaluate each Participant's individual performance
compared to performance objectives set early in the year. The
Chairman and Committee evaluate the Chief Executive Officer's
performance versus his performance objectives. This individual
performance measure is at the full discretion of the
Board.
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Company and Individual
Performance Goals will be established in writing for each
Performance Period by no later than the first quarter of the
Performance Period. The Company Balanced Business Performance is
weighted 80%, and Individual Performance has a 20%
weight.
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4.2
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Performance Levels
. Company measures described in
Section 4.1 will be established for three performance levels:
threshold, target and maximum. These levels are set based on the
following probabilities: 90% probability of achieving the threshold
level; 50% probability of achieving target level; and 10%
probability of achieving the maximum level.
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4.3
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Participant Goals
. Participants will have a
combination of Company Balanced Business Performance and Individual
Performance measured goals used in determining any Annual Incentive
Award as described in 4.1 above.
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4.4
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Target Potential
. For each time period, the
Committee and Board set the target potential measured as a
percentage of Base Salary for each eligible employee. The target
level of incentive award for the Plan is as follows:
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50% of Base Salary for the Company's
CEO;
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30% of Base Salary for the Company's
Senior Vice Presidents;
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25% of Base Salary for the Company's
Vice Presidents, and
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20% of Base Salary for the Company's
Assistant Vice Presidents.
The maximum payout is capped at
two times target potential.
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4.5
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Amount of Award
. Following the completion of the
Performance Period, the Committee shall undertake or direct a
calculation of actual performance for each of the Company and
individual measures for such performance year, based on criteria
used in the measures. The actual award opportunity for each
Participant will be determine
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