Document:

<PAGE>

                                                                    EXHIBIT 10-2
                                                                          TIER 1

                            RGS ENERGY GROUP, INC.
                    ROCHESTER GAS AND ELECTRIC CORPORATION
                              SEVERANCE AGREEMENT

          This Severance Agreement is made, effective as of April 26, 2000, by
and between RGS Energy Group, Inc. (RGS) and Rochester Gas and Electric
Corporation (RG&E), both New York corporations having their principal place of
business in Rochester, New York (collectively the "Company"), and Thomas S.
Richards, an individual currently residing in Rochester, New York (the
"Employee").

          1.   Purposes. The Company's Boards of Directors (the "Board")
consider the creation and retention of a sound and vital management team to be
essential to protecting and enhancing the best interests of the Company, its
customers and its shareowners. In this connection, the Company recognizes that
if the possibility of a Change of Control arises, the uncertainty and discomfort
it may raise could result in the departure or distraction of management
personnel during the period leading up to and during a possible Change of
Control to the detriment of the Company, its customers and its shareowners.
Furthermore, in addition to their regular duties management will be called upon
during this period to assist in the assessment of third party proposals, to
advise the Board as to whether such proposals would be in the best interests of
the Company, its customers and its shareowners and to take such other action as
the Board may determine appropriate. Accordingly, to assure the Company that it
will have the continued dedication of the Employee and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Company, and to induce the Employee to remain in
the employ of the Company, the Board has determined that it is in the Company 's
best interests to provide the Employee with certain benefits in the event of the
Employee's termination of employment under the terms and conditions below.

          2.   Employee's Services During Attempted or Actual Change of Control.
In the event a third party takes any steps designed to effect a Change of
Control, the Employee agrees not to effect a Voluntary Termination, and to
render the services contemplated in paragraph 1, until the third party has
abandoned or terminated efforts to effect a Change of Control or until three
months after an actual Change of Control has occurred.

          3.   Payment of Severance Amount. In the event of an Involuntary
Termination of the Employee's employment by the Company or any subsidiary or
successor of the Company occurring within three years after a Change of Control,
then the Company shall pay the Employee a lump sum amount equal to the Severance
Amount, payable within 15 business days after the Termination Date, plus such
other benefits as may be provided in subsequent provisions of this Agreement.

          4.   Definitions.  All the terms defined in this paragraph 4 shall
have the meanings given below throughout this Agreement.
               (a)  "Annual Salary" shall, as determined on the Termination
Date, be equal to the greater of:
                    i)   the highest annual compensation (including base
salary and bonus) paid or payable to the Employee with respect to any twelve
(12) consecutive month
<PAGE>

                                      -2-

period, as selected by the Employee, during the three years ending with the
Termination Date, or

                    ii)     the Employee's annual salary plus bonus on the
Termination Date.

"Bonus" for the purpose of this definition of Annual Salary shall mean the
Executive Incentive Plan (EIP) bonus for the Employee's final year or the
average of the bonuses for the three years prior to the Termination Date,
whichever is greater.

               (b)  "Change in Duties" shall mean any one or more of the
following:

                    i)      a significant change in the nature or scope of the
Employee's authorities or duties from those applicable to her/him immediately
prior to the date on which a Change of Control occurs;

                    ii)     a reduction in the Employee's Annual Salary from
that provided to her/him immediately prior to the date on which a Change of
Control occurs;

                    iii)    a diminution in the Employee's eligibility to
participate in bonus, incentive award and other compensation plans which provide
opportunities to receive compensation, from the greater of:

                    the opportunities provided by the Company (including its
                        subsidiaries) for executives with comparable duties; or

                    the opportunities under any such plans under which she/he
                        was participating immediately prior to the date on which
                        a Change of Control occurs;

                    iv)     a diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term disability plans) and
perquisites applicable to the Employee, from the greater of:

                    the employee benefits and perquisites provided by the
                        Company (including its subsidiaries), to executives with
                        comparable duties; or

                    the employee benefits and perquisites to which the Employee
                        was entitled immediately prior to the date on which a
                        Change of Control occurs;

                    v)      a change in the location of the Employee's principal
place of employment by the Company (including its subsidiaries) by more than
fifty miles from the location where she/he was principally employed immediately
prior to the date on which a Change of Control occurs; or
<PAGE>

                                      -3-

                    vi)    a reasonable determination by the Employee that, as
a result of a Change of Control and a change in circumstances thereafter
significantly affecting her/his position, she/he is unable to exercise the
authorities, powers, functions or duties attached to her/ his position
immediately prior to the date on which a Change of Control occurs.

               (c)  a "Change of Control" shall be deemed to have occurred if:

                    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 RGS representing 20 percent or more of the combined voting power
of RGS's then outstanding Voting 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 RGS before the transaction
shall cease to constitute a majority of the Board of Directors of RGS or any
successor to RGS;

                    iii)   RGS is merged or consolidated with another
corporation and as a result of the merger or consolidation less than 50 percent
of the outstanding Voting Securities of the surviving or resulting corporation
(or ultimate parent of such surviving or resulting corporation) shall then be
owned in the aggregate by the stockholders of RGS immediately prior to such
merger or consolidation, 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 RGS representing 20 percent or
more of the combined voting power of RGS's then outstanding Voting Securities;
or

                    v)     RGS transfers substantially all of its assets to
another corporation, which is not a wholly owned subsidiary of RGS.

               (d)  "Involuntary Termination" shall mean any termination which:

                    i)     does not result from a resignation by the Employee
(other than a resignation pursuant to clause ii of this subparagraph (d)), or

                    ii)    results from a resignation following any Change in
Duties; provided, however, the term "Involuntary Termination" shall not include:

                           x.    a Termination for Cause, or

                           y.    any termination as a result of death,
disability, or normal retirement pursuant to a retirement plan to which the
Employee was subject prior to any Change of Control.
<PAGE>

                                      -4-

               (e)  "Severance Amount" is equal to three (3) times the
Employee's Annual Salary, i.e. for a period of 36 months.

               (f)  "Termination for Cause" shall mean only a termination as a
result of fraud, misappropriation of, or intentional material damage to, the
property or business of the Company (including its subsidiaries), or commission
of a felony by the Employee.

               (g)  "Voluntary Termination" shall mean any termination, which is
not:

                    i)     an Involuntary Termination;

                    ii)    a Termination for Cause; or

                    iii)   the result of death, disability, or normal retirement
pursuant to a retirement plan to which the Employee was subject prior to any
Change of Control.

               (h)  "Voting Securities" shall mean any securities which
ordinarily possess the power to vote in the election of directors without the
happening of any pre-condition or contingency.

               (i)  "Termination Date" shall mean the date on which the
Employee's employment terminates.

          5.   Additional Payment for Excise Tax on Golden Parachute Payment. It
is anticipated that the payments to be made and benefits to be provided to the
Employee under this Agreement and other agreements (collectively, the "Change of
Control Amounts") may become subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar
tax that may hereafter be imposed), on account of "excess parachute payments" as
defined in Section 280G of the Code. In the event such excise tax is payable,
the Company shall pay to the Employee, in addition to the amounts payable
pursuant to paragraph 3 of this Agreement and any other Change of Control
Amounts, an additional amount which, together with any federal, state or local
excise or income taxes payable by the Employee on such additional amount, will
provide the Employee with a sum on a net after-tax basis equal to the amounts he
would have received if the excise tax were not applicable to the Change of
Control Amounts. The determination of the amount to be paid hereunder shall be
made at the expense of the Company by the independent certified public
accounting firm acting as auditors for the Company on the date of a Change of
Control (or another accounting firm designated by that firm).
<PAGE>

                                      -5-

          6.   Other Benefits.

               (a)  Health and Death Benefits.  From the date benefits become
                    -------------------------
payable under paragraph 3 through the end of the number of months used in
determining the Employee's Severance Amount in paragraph 4(e), the Company shall
continue to provide the Employee with life, accident, death and health insurance
plans and benefits to the same extent such benefits are provided during this
period to active employees holding positions equivalent to the position of the
Employee immediately prior to his termination. The Company's share of the cost
of providing such benefits shall be the same as its share of the benefit costs
for providing such benefits to other employees holding positions equivalent to
the position the Employee held immediately prior to his termination.

               (b)  Outplacement and Relocation. The Company shall also
                    ---------------------------
reimburse the Employee the aggregate expenses the Employee incurs for
outplacement assistance or relocation expenses in order to pursue other business
opportunities within two (2) years of the Termination Date which are not
reimbursed by another employer.

               (c)  Pension.  To the extent that any Company supplemental
                    -------
executive retirement plan benefit formula(s) takes into account service, age and
annual compensation, the Employee shall be given credit under the formula(s) for
(i) the same number of months used in determining the Employee's Severance
Amount in paragraph 4(e), and (ii) annual compensation increases equal to the
highest base salary increases received by the Employee in the three years prior
to the Termination Date and bonus payouts at target.

               (d)  Benefits of General Applicability.  The Employee shall
                    ---------------------------------
remain eligible to receive other Company benefits that apply by their terms to
persons who terminate employment with RGS.

               (e)  Incentive Compensation.  Any awards previously made shall
                    ----------------------
vest on the Termination Date and be computed and paid notwithstanding any
contrary plan provisions provided that, if the plan providing for any such award
stipulates an earlier date for vesting, such provision shall control.

          7.   Legal Fees.  The Company shall pay all legal fees and expenses
the Employee may incur as a result of any litigation brought to enforce or
interpret any provision of this Agreement, regardless of outcome.

          8.   Obligations of Employee.   Employee agrees that upon
termination of employment he will turn over to the Company all materials and
documents, whether written or electronic, that pertain to the operation,
products, services, processes, plans, business or customers of the Company.
Employee also agrees not to disclose to any person any confidential information
of the Company.  If the Employee fails to return materials required to be
returned or discloses confidential information of the Company to any person, all
payments and benefits still remaining to be paid or offered to the Employee
under this Agreement shall be forfeited.

          9.   Notices.  Notices and all other communications under this
Agreement shall be in writing and shall be deemed given when personally
delivered or when mailed by
<PAGE>

                                      -6-

United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

               If to the Company, to:
                    RGS Energy Group, Inc.
                    89 East Avenue
                    Rochester, New York  14649-0001
                    ATTENTION:  Vice President, Human Resource Services

               If to the Employee, to:

                    Thomas S. Richards
                    57 Dorchester Road
                    Rochester, New York 14610

or to such other address as either party may furnish to the other in writing,
except that a notice of a change of address shall be effective only upon
receipt.

          10.  Applicable Law.  This contract is entered into under, and shall
be governed for all purposes by, the laws of the State of New York.

          11.  Severability.  If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.

          12.  Withholding of Taxes.  The Company shall withhold from any
benefits payable under this Agreement all Federal, state, city or other taxes as
may be required pursuant to any law, governmental regulation or ruling.

          13.  Not an Employment Agreement.  Nothing in this Agreement shall
give the Employee any rights (or impose any obligations to continued employment
by the Company or any subsidiary or successor of the Company), nor shall it give
the Company any rights (or impose any obligations) for the continued performance
of duties by the Employee for the Company or any subsidiary or successor of the
Company.

          14.  No Assignment.  The Employee's right to receive payments or
benefits under this Agreement shall not be assignable or transferable, whether
by pledge, creation of a security interest or otherwise, other than a transfer
by will or by the laws of descent or distribution.  In the event of any
attempted assignment or transfer contrary to this paragraph, the Company shall
have no liability to pay any amount so attempted to be assigned or transferred.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

          15.  Successors.  This Agreement shall be binding upon and inure
to the
<PAGE>

                                      -7-

benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (i) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations of
the Company under this Agreement, or (ii) the Company shall provide, through the
establishment of a separate reserve for the payment in full of all amounts which
are, or may reasonably be expected to become, payable to the Employee under this
Agreement.

          16.  Other Benefits and Compensation. The compensation and benefits
provided hereunder shall not limit or reduce compensation or benefits otherwise
payable to Employee pursuant to arrangements between Employee and the Company,
unless specific reference to any such reduction or limit is made herein. It is
not intended that this Agreement constitute a waiver of rights under federal,
state or local law, including, without limitation, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act and the Employee
Retirement Income Security Act of 1974.

          17.  Payment Obligations Absolute.  The Company 's obligation to pay
the Employee the compensation and to make the arrangements provided herein shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right that the Company may have against him or anyone else. All amounts
payable by the Company hereunder shall be paid without notice or demand. Each
and every payment made hereunder by the Company shall be final and the Company
will not seek to recover all or any part of such payment from the Employee or
from whosoever may be entitled thereto, for any reason whatsoever.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of June 1, 2000.

                                    RGS ENERGY GROUP, INC.

                                    By: /s/ J B Stokes
                                        ------------------------------

                                    Its: Sr. V.P. & CFO
                                         ------------------------------

                                    ROCHESTER GAS AND ELECTRIC
                                    CORPORATION

                                    By: /s/ David C. Heiligman
                                        ------------------------------
   /s/ T S Richards   6/1/00
 ---------------------------
         Employee                   Its: V.P. and Corporate Secretary
                                         ------------------------------
    Thomas S. Richards<PAGE>

                                                                    EXHIBIT 10-3
                                                                          TIER 1
                            RGS ENERGY GROUP, INC.
                    ROCHESTER GAS AND ELECTRIC CORPORATION
                              SEVERANCE AGREEMENT

          This Severance Agreement is made, effective as of April 26, 2000, by
and between RGS Energy Group, Inc. (RGS) and Rochester Gas and Electric
Corporation (RG&E), both New York corporations having their principal place of
business in Rochester, New York (collectively the "Company"), and J. Burt
Stokes, an individual currently residing in Pittsford, New York (the
"Employee").

          1.   Purposes. The Company's Boards of Directors (the "Board")
consider the creation and retention of a sound and vital management team to be
essential to protecting and enhancing the best interests of the Company, its
customers and its shareowners. In this connection, the Company recognizes that
if the possibility of a Change of Control arises, the uncertainty and discomfort
it may raise could result in the departure or distraction of management
personnel during the period leading up to and during a possible Change of
Control to the detriment of the Company, its customers and its shareowners.
Furthermore, in addition to their regular duties management will be called upon
during this period to assist in the assessment of third party proposals, to
advise the Board as to whether such proposals would be in the best interests of
the Company, its customers and its shareowners and to take such other action as
the Board may determine appropriate. Accordingly, to assure the Company that it
will have the continued dedication of the Employee and the availability of his
advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Company, and to induce the Employee to remain in
the employ of the Company, the Board has determined that it is in the Company 's
best interests to provide the Employee with certain benefits in the event of the
Employee's termination of employment under the terms and conditions below.

          2.   Employee's Services During Attempted or Actual Change of Control.
In the event a third party takes any steps designed to effect a Change of
Control, the Employee agrees not to effect a Voluntary Termination, and to
render the services contemplated in paragraph 1, until the third party has
abandoned or terminated efforts to effect a Change of Control or until three
months after an actual Change of Control has occurred.

          3.   Payment of Severance Amount. In the event of an Involuntary
Termination of the Employee's employment by the Company or any subsidiary or
successor of the Company occurring within three years after a Change of Control,
then the Company shall pay the Employee a lump sum amount equal to the Severance
Amount, payable within 15 business days after the Termination Date, plus such
other benefits as may be provided in subsequent provisions of this Agreement.

          4.   Definitions. All the terms defined in this paragraph 4 shall have
the meanings given below throughout this Agreement.

               (a)  "Annual Salary" shall, as determined on the Termination
Date, be equal to the greater of:

                    i)   the highest annual compensation (including base salary
and
<PAGE>

                                      -2-

bonus) paid or payable to the Employee with respect to any twelve (12)
consecutive month period, as selected by the Employee, during the three years
ending with the Termination Date, or

               ii)  the Employee's annual salary plus bonus on the Termination
Date.

"Bonus" for the purpose of this definition of Annual Salary shall mean the
Executive Incentive Plan (EIP) bonus for the Employee's final year or the
average of the bonuses for the three years prior to the Termination Date,
whichever is greater.

          (b)  "Change in Duties" shall mean any one or more of the following:

               i)   a significant change in the nature or scope of the
Employee's authorities or duties from those applicable to her/him immediately
prior to the date on which a Change of Control occurs;

               ii)  a reduction in the Employee's Annual Salary from that
provided to her/him immediately prior to the date on which a Change of Control
occurs;

               iii) a diminution in the Employee's eligibility to participate in
bonus, incentive award and other compensation plans which provide opportunities
to receive compensation, from the greater of:

               the opportunities provided by the Company (including its
                   subsidiaries) for executives with comparable duties; or

               the opportunities under any such plans under which she/he was
                   participating immediately prior to the date on which a Change
                   of Control occurs;

               iv)  a diminution in employee benefits (including but not limited
to medical, dental, life insurance and long-term disability plans) and
perquisites applicable to the Employee, from the greater of:

               the employee benefits and perquisites provided by the Company
                   (including its subsidiaries), to executives with comparable
                   duties; or

               the employee benefits and perquisites to which the Employee was
                   entitled immediately prior to the date on which a Change of
                   Control occurs;

               v)   a change in the location of the Employee's principal place
of employment by the Company (including its subsidiaries) by more than fifty
miles from the location where she/he was principally employed immediately prior
to the date on which a Change of Control occurs; or
<PAGE>

                                      -3-

               vi)  a reasonable determination by the Employee that, as a result
of a Change of Control and a change in circumstances thereafter significantly
affecting her/his position, she/he is unable to exercise the authorities,
powers, functions or duties attached to her/ his position immediately prior to
the date on which a Change of Control occurs.

          (c)  a "Change of Control" shall be deemed to have occurred if:

               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 RGS representing 20 percent or more of the combined voting power
of RGS's then outstanding Voting 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 RGS before the transaction
shall cease to constitute a majority of the Board of Directors of RGS or any
successor to RGS;

               iii) RGS is merged or consolidated with another corporation and
as a result of the merger or consolidation less than 50 percent of the
outstanding Voting Securities of the surviving or resulting corporation (or
ultimate parent of such surviving or resulting corporation) shall then be owned
in the aggregate by the stockholders of RGS immediately prior to such merger or
consolidation, 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 RGS representing 20 percent or more of the
combined voting power of RGS's then outstanding Voting Securities; or

               v)   RGS transfers substantially all of its assets to another
corporation, which is not a wholly owned subsidiary of RGS.

          (d)  "Involuntary Termination" shall mean any termination which:

               i)   does not result from a resignation by the Employee (other
than a resignation pursuant to clause ii of this subparagraph (d)), or

               ii)  results from a resignation following any Change in Duties;
provided, however, the term "Involuntary Termination" shall not include:

                    x.   a Termination for Cause, or

                    y.   any termination as a result of death, disability, or
normal retirement pursuant to a retirement plan to which the Employee was
subject prior to any Change of Control.
<PAGE>

                                      -4-

          (e)  "Severance Amount" is equal to three (3) times the Employee's
Annual Salary, i.e. for a period of 36 months.

          (f)  "Termination for Cause" shall mean only a termination as a result
of fraud, misappropriation of, or intentional material damage to, the property
or business of the Company (including its subsidiaries), or commission of a
felony by the Employee.

          (g)  "Voluntary Termination" shall mean any termination, which is not:

               i)   an Involuntary Termination;

               ii)  a Termination for Cause; or

               iii) the result of death, disability, or normal retirement
pursuant to a retirement plan to which the Employee was subject prior to any
Change of Control.

          (h)  "Voting Securities" shall mean any securities which ordinarily
possess the power to vote in the election of directors without the happening of
any pre-condition or contingency.

          (i)  "Termination Date" shall mean the date on which the Employee's
employment terminates.

       5. Additional Payment for Excise Tax on Golden Parachute Payment. It is
anticipated that the payments to be made and benefits to be provided to the
Employee under this Agreement and other agreements (collectively, the "Change of
Control Amounts") may become subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar
tax that may hereafter be imposed), on account of "excess parachute payments" as
defined in Section 280G of the Code. In the event such excise tax is payable,
the Company shall pay to the Employee, in addition to the amounts payable
pursuant to paragraph 3 of this Agreement and any other Change of Control
Amounts, an additional amount which, together with any federal, state or local
excise or income taxes payable by the Employee on such additional amount, will
provide the Employee with a sum on a net after-tax basis equal to the amounts he
would have received if the excise tax were not applicable to the Change of
Control Amounts. The determination of the amount to be paid hereunder shall be
made at the expense of the Company by the independent certified public
accounting firm acting as auditors for the Company on the date of a Change of
Control (or another accounting firm designated by that firm).
<PAGE>

                                      -5-

          6.   Other Benefits.

               (a)  Health and Death Benefits. From the date benefits become
                    -------------------------
payable under paragraph 3 through the end of the number of months used in
determining the Employee's Severance Amount in paragraph 4(e), the Company shall
continue to provide the Employee with life, accident, death and health insurance
plans and benefits to the same extent such benefits are provided during this
period to active employees holding positions equivalent to the position of the
Employee immediately prior to his termination. The Company's share of the cost
of providing such benefits shall be the same as its share of the benefit costs
for providing such benefits to other employees holding positions equivalent to
the position the Employee held immediately prior to his termination.

               (b)  Outplacement and Relocation. The Company shall also
                    ---------------------------
reimburse the Employee the aggregate expenses the Employee incurs for
outplacement assistance or relocation expenses in order to pursue other business
opportunities within two (2) years of the Termination Date which are not
reimbursed by another employer.

               (c)  Pension. To the extent that any Company supplemental
                    -------
executive retirement plan benefit formula(s) takes into account service, age and
annual compensation, the Employee shall be given credit under the formula(s) for
(i) the same number of months used in determining the Employee's Severance
Amount in paragraph 4(e), and (ii) annual compensation increases equal to the
highest base salary increases received by the Employee in the three years prior
to the Termination Date and bonus payouts at target.

               (d)  Benefits of General Applicability. The Employee shall remain
                    ---------------------------------
eligible to receive other Company benefits that apply by their terms to persons
who terminate employment with RGS.

               (e)  Incentive Compensation. Any awards previously made shall
                    ----------------------
vest on the Termination Date and be computed and paid notwithstanding any
contrary plan provisions provided that, if the plan providing for any such award
stipulates an earlier date for vesting, such provision shall control.

          7.   Legal Fees. The Company shall pay all legal fees and expenses the
Employee may incur as a result of any litigation brought to enforce or interpret
any provision of this Agreement, regardless of outcome.

          8.   Obligations of Employee. Employee agrees that upon termination of
employment he will turn over to the Company all materials and documents, whether
written or electronic, that pertain to the operation, products, services,
processes, plans, business or customers of the Company. Employee also agrees not
to disclose to any person any confidential information of the Company. If the
Employee fails to return materials required to be returned or discloses
confidential information of the Company to any person, all payments and benefits
still remaining to be paid or offered to the Employee under this Agreement shall
be forfeited.

          9.   Notices. Notices and all other communications under this
Agreement
<PAGE>

                                      -6-

shall be in writing and shall be deemed given when personally delivered or when
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

               If to the Company, to:
                    RGS Energy Group, Inc.
                    89 East Avenue
                    Rochester, New York  14649-0001
                    ATTENTION:  Vice President, Human Resource Services

               If to the Employee, to:

                    J. Burt Stokes
                    20 Summit Oaks
                    Pittsford, New York 14534

or to such other address as either party may furnish to the other in writing,
except that a notice of a change of address shall be effective only upon
receipt.

          10.  Applicable Law. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of New York.

          11.  Severability. If a court of competent jurisdiction determines
that any provision of this Agreement is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the validity
or enforceability of any other provision of this Agreement and all other
provisions shall remain in full force and effect.

          12.  Withholding of Taxes. The Company shall withhold from any
benefits payable under this Agreement all Federal, state, city or other taxes as
may be required pursuant to any law, governmental regulation or ruling.

          13.  Not an Employment Agreement. Nothing in this Agreement shall give
the Employee any rights (or impose any obligations to continued employment by
the Company or any subsidiary or successor of the Company), nor shall it give
the Company any rights (or impose any obligations) for the continued performance
of duties by the Employee for the Company or any subsidiary or successor of the
Company.

          14.  No Assignment. The Employee's right to receive payments or
benefits under this Agreement shall not be assignable or transferable, whether
by pledge, creation of a security interest or otherwise, other than a transfer
by will or by the laws of descent or distribution. In the event of any attempted
assignment or transfer contrary to this paragraph, the Company shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
<PAGE>

                                      -7-

          15.  Successors. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns (including, without
limitation, any company into or with which the Company may merge or
consolidate). The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (i) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations of
the Company under this Agreement, or (ii) the Company shall provide, through the
establishment of a separate reserve for the payment in full of all amounts which
are, or may reasonably be expected to become, payable to the Employee under this
Agreement.

          16.  Other Benefits and Compensation. The compensation and benefits
provided hereunder shall not limit or reduce compensation or benefits otherwise
payable to Employee pursuant to arrangements between Employee and the Company,
unless specific reference to any such reduction or limit is made herein. It is
not intended that this Agreement constitute a waiver of rights under federal,
state or local law, including, without limitation, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act and the Employee
Retirement Income Security Act of 1974.

          17.  Payment Obligations Absolute. The Company 's obligation to pay
the Employee the compensation and to make the arrangements provided herein shall
be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right that the Company may have against him or anyone else. All amounts
payable by the Company hereunder shall be paid without notice or demand. Each
and every payment made hereunder by the Company shall be final and the Company
will not seek to recover all or any part of such payment from the Employee or
from whosoever may be entitled thereto, for any reason whatsoever.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of June 1, 2000.

                                        RGS ENERGY GROUP, INC.

                                        By: /s/ T S Richards
                                            -----------------------------------

                                        Its: Chairman
                                             ----------------------------------

                                        ROCHESTER GAS AND ELECTRIC CORPORATION

                                        By: /s/ David C. Heiligman
                                            -----------------------------------
/s/   J B Stokes  5-31-00
-----------------------------
           Employee                     Its: V.P. and Corporate Secretary
                                             ----------------------------------

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