Exhibit 10-Y
Deferred Stock Unit Plan for Outside Directors
of
GPU, Inc.
As Amended Effective August 8, 2000
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1. Purpose
The purpose of the Plan is to more closely align the interests of the
outside directors of GPU, Inc. with those of GPU, Inc.'s stockholders by
providing for a significant portion of the total annual compensation payable to
such directors to be paid in the form of units representing shares of GPU,
Inc.'s common stock.
2. Definitions
As used herein, the following terms shall have the following meanings:
"Account" shall mean the account established for a Participant pursuant to
Section 5.
"Award Date" shall mean July 1, 1997 and July 1 of each calendar year
thereafter.
"Beneficiary" shall mean the person or persons designated by a Participant
in accordance with Section 11 to receive any amount, or any shares of Common
Stock, payable under the Plan upon the Participant's death.
"Board of Directors" shall mean the Board of Directors of the Corporation.
"Change in Control" shall mean the occurrence of any of the following
events:
(1)An acquisition (other than directly from Corporation of any Common
Stock or other voting securities of the Corporation entitled to vote generally
for the election of directors (the "Voting Securities") by any "Person" (as the
term person is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of the then
outstanding shares of Common Stock or the combined voting power of the
Corporation's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (A) an employee benefit plan (or a
trust forming a part thereof) maintained by (i) the Corporation or (ii) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly, by
the Corporation (for purposes of this definition, a "Subsidiary"), (B) the
Corporation or its Subsidiaries, or (C) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);
(2) The individuals who, as of August 1, 1996, are members of the board
of directors of the Corporation (the "Incumbent Board"), cease for any reason to
constitute at least seventy percent (70%) of the members of the board of
directors of the Corporation; provided, however, that if the election, or
nomination for election by the Corporation's shareholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the board of directors of the Corporation (a "Proxy Contest") including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(3) The consummation of:
(a) A merger, consolidation or reorganization with or into the Corporation
or in which securities of the Corporation are issued, unless such merger,
consolidation or reorganization is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or reorganization with or into
the Corporation or in which securities of the Corporation are issued where:
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(i) the shareholders of the Corporation, immediately before such
merger, consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization, at
least sixty percent (60%) of the combined voting power of the outstanding
voting securities of the corporation resulting from such merger or
consolidation or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger, consolidation or
reorganization,
(ii) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute at least seventy
percent (70%) of the members of the board of directors of the Surviving
Corporation, or a corporation, directly or indirectly, beneficially owning
a majority of the Voting Securities of the Surviving Corporation, and
(iii) no Person other than (w) the Corporation, (x) any Subsidiary,
(y) any employee benefit plan (or any trust forming a part thereof) that,
immediately prior to such merger, consolidation or reorganization, was
maintained by the Corporation or any Subsidiary, or (z) any Person who,
immediately prior to such merger, consolidation or reorganization had
Beneficial Ownership of twenty percent (20%) or more of the then
outstanding Voting Securities or common stock of the Corporation, has
Beneficial Ownership of twenty percent (20%) or more of the combined
voting power of the Surviving Corporation's then outstanding voting
securities or its common stock.
(b)A complete liquidation or dissolution of the Corporation; or
(c)The sale or other disposition of all or substantially all of the assets
of the Corporation to any Person (other than a transfer to a Subsidiary).
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Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Common Stock
or Voting Securities as a result of the acquisition of Common Stock or Voting
Securities by the Corporation which, by reducing the number of shares of Common
Stock or Voting Securities then outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result of
the acquisition of shares of Common Stock or Voting Securities by the
Corporation, and after such share acquisition by the Corporation, the Subject
Person becomes the Beneficial Owner of any additional shares of Common Stock or
Voting Securities which increases the percentage of the then outstanding shares
of Common Stock or Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.
"Committee" shall mean the Personnel, Compensation and Nominating
Committee of the Board of Directors.
"Common Stock" shall mean the shares of common stock of the Corporation.
"Corporation" shall mean GPU, Inc.
"Deferred Stock Unit" shall mean a unit of measurement equivalent to one
share of Common Stock, with none of the attendant rights of a shareholder of
such share, including, without limitation, the right to vote such share and the
right to receive dividends thereon, except to the extent otherwise specifically
provided herein.
"Outside Director" shall mean a member of the Board of Directors who, as
of any date of reference, is not an employee of the Corporation or any
subsidiary thereof.
"Participant" shall mean any Outside Director for whom an Account has been
established, and is being maintained, pursuant to Section 5.
"Plan" shall mean the Deferred Stock Unit Plan for Outside Directors of
GPU, Inc., as set forth herein and as amended from time to time.
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"Retirement" shall mean, with respect to any Participant, the
Participant's ceasing to be a member of the Board of Directors for any reason.
"Vesting Date" shall mean, with respect to any Participant, the earliest
to occur of the following dates:
(i) the date as of which the Participant has completed at least
54 months of service, whether or not continuous, as an Outside Director;
(ii) the date of the Participant's death; or
(iii) the date on which a Change in Control occurs.
3. Maximum Number of Shares of Common Stock Available
The number of shares of Common Stock that may be distributed with respect
to Deferred Stock Units awarded under the Plan shall be limited to 200,000
shares of Common Stock. If any Deferred Stock Units credited to a Participant's
Account shall be forfeited, the number of shares of Common Stock no longer
payable with respect to the Deferred Stock Units so forfeited shall thereupon be
released and shall thereafter be available for distribution with respect to new
awards of Deferred Stock Units under the Plan. The limitation provided under
this Section 3 shall be subject to adjustment as provided in Section 9.
The shares of Common Stock distributed under the Plan may be authorized
and unissued shares, or shares purchased on the open market by the Corporation
at such time or times and in such manner as it may determine.
4. Annual Awards
As of each Award Date, the Account maintained hereunder for each member of
the Board of Directors who is an Outside Director on such date shall be credited
with a number of Deferred Stock Units determined by first multiplying the amount
of his or her Annual Cash Retainer by 1.5, and then dividing the resulting
product by the per share closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape for such Award Date, or if there are no
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sales of Common Stock on such date, for the next preceding day on which there
were sales of Common Stock. An Outside Director's "Annual Cash Retainer" shall
mean, as of any Award Date, the annual rate of cash retainer in effect for the
Outside Director as of the day preceding such Award Date.
5. Accounts
There shall be established on the books and records of the Corporation,
for bookkeeping purposes only, a separate Account for each member of the Board
of Directors who is an Outside Director on July 1, 1997, and for each individual
who becomes an Outside Director thereafter, to reflect such Participant's
interest under the Plan. The Account so established shall be maintained in
accordance with the following provisions:
(a)As of each Award Date, each Participant's Account shall be credited
with the number of Deferred Stock Units required to be credited pursuant to
Section 4.
(b)Each Participant's Account shall be adjusted to reflect all additional
Deferred Stock Units required to be credited to such Account pursuant to Section
6, and the cancellation of all Deferred Stock Units with respect to which
payments are made pursuant to Section 7.
(c)In the case of each Participant for whom an election under Section 9(b)
of the GPU, Inc. Restricted Stock Plan for Outside Directors is in effect on the
business day immediately preceding the date on which a Change in Control occurs,
such Participant's Account shall be adjusted to reflect the number of additional
Deferred Stock Units required to be credited to such account on such day
pursuant to Section 9(b)(ii) of such plan as a result of the Participant's
election.
(d)A Participant's interest in his or her Account shall become fully
vested and nonforfeitable upon his or her Vesting Date.
6. Crediting of Dividend Equivalents
Until payment with respect to a Participant's Account has been made in
full in accordance with Section 7, a Participant's Account shall be credited, as
of each date on which the Corporation pays a dividend on its Common Stock
("Dividend Payment Date"), with additional Deferred Stock Units, the number of
which shall be determined by multiplying (i) the number of Deferred Stock Units
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standing to the Participant's credit in his or her Account immediately prior to
such Dividend Payment Date by (ii) the quotient resulting from dividing (A) the
per share amount of the dividend so paid by (B) the price per share used for the
reinvestment of dividends paid on such Dividend Payment Date under the
provisions of the Corporation's Dividend Reinvestment and Stock Purchase Plan.
7. Payment of Account Balances
Payment with respect to a Participant's Account shall be made in
accordance with the following provisions:
(a)A Participant's Account shall become payable upon the Participant's
Retirement on or after his or her Vesting Date. If a Participant ceases to serve
as a member of the Board of Directors for any reason prior to his or her Vesting
Date, all of the Deferred Stock Units standing to the Participant's credit in
his or her Account shall be forfeited as of the date of such cessation of the
Participant's service.
(b)Except as otherwise provided in (c) below, payment with respect to a
Participant's Account shall be made in the form of a single lump sum payment.
Such payment shall be made to the Participant or, if the Participant's Account
becomes payable by reason of his or her death, to the Participant's Beneficiary.
Payment shall be made on the first business day of the second calendar month
following the month in which the Participant's Retirement occurs.
(c)A Participant may elect to have payment with respect to his or her
Account made to the Participant, or in the event of the Participant's death, to
his or her Beneficiary, in the form of annual installments payable over a period
of five years, or such greater number of years as the Participant specifies in
his or her election. An election under this Section 7(c) shall be made in
writing, on a form that is provided by the Committee for such purpose and that
is filed by the Participant with the Committee at least one year prior to the
date of the Participant's Retirement, or within such other period as may be
applicable under Section 15(a). Any election so made may be revoked, and a new
election may be made hereunder after such revocation. Any such revocation or new
election shall be made in the same manner, and by the same date, as described in
the second preceding sentence. If a Participant's Account becomes payable in the
form of annual installments, payments shall be made in accordance with the
following provisions:
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(i) The first installment payment shall be made on the first business
day of the second calendar month following the month in which the
Participant's Retirement occurs, and the remaining installment payments
shall be made on the anniversary of such payment commencement date in each
succeeding year.
(ii) With each annual installment, payment shall be made with respect
to a number of Deferred Stock Units equal to the quotient resulting from
dividing (A) the total number of Deferred Stock Units included in the
balance of the Participant's Account as of the last day of the calendar
month preceding the date on which such payment is to be made, by (B) the
number of installment payments remaining to be made. Immediately after
each annual installment payment has been made, the number of Deferred
Stock Units included in the balance of the Participant's Account shall be
reduced by the number of Deferred Stock Units with respect to which such
payment was made.
(iii) If the Participant should die before receiving all installment
payments required to be made hereunder with respect to the Participant's
Account, any installment payments remaining to be made at the date of the
Participant's death shall be made to the Participant's Beneficiary in the
same form, at the same times and in the same amounts, as such payments
would have been made to the Participant if he or she had not died.
(d)Payment with respect to any Deferred Stock Units included in the
balance of a Participant's Account shall be made (i) by the issuance of one
share of Common Stock for each whole Deferred Stock Unit with respect to which
payment is being made, and (ii) in cash, with respect to any fractional part of
a Deferred Stock Unit with respect to which payment is being made.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
determine that payment with respect to any or all of the Deferred Stock Units
included in the balance of a Participant's Account shall be made in cash instead
of in shares of Common Stock. The amount of the cash payment to be made with
respect to any Deferred Stock Unit shall be equal to (and the amount of the cash
payment to be made with respect to any fractional part of a Deferred Stock Unit
shall be based upon) the per share closing price of the Common Stock as reported
on the New York Stock Exchange Composite Tape for the last business day
immediately preceding the date on which such cash payment is to be made.
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(e)Notwithstanding any other provision in this Section 7 to the contrary,
payment with respect to any part or all of the Participant's Account may be made
to the Participant or, if the Participant has died, to the Participant's
Beneficiary, on any date earlier than the date on which such payment is to be
made pursuant to such other provisions of this Section 7 if (i) the Participant,
or his or her Beneficiary, requests such early payment and (ii) the Committee,
in its sole discretion, determines that such early payment is necessary to help
the Participant, or his or her Beneficiary, meet an "unforeseeable emergency"
within the meaning of Section 1.457-2(h)(4) of the federal Income Tax
Regulations. The amount that may be so paid may not exceed the amount necessary
to meet such emergency.
8. Change in Control
Notwithstanding any other provision of the Plan to the contrary or any
other optional form of distribution otherwise elected or provided for hereunder,
each Participant shall be permitted to make either one or both of the following
special distribution elections: (a) to have the entire balance of his or her
Account paid in the form of a single lump sum payment in the event of the
Participant's Retirement upon the occurrence of a Change in Control, or (b) if a
Change in Control occurs after the Participant's Retirement but before all
payments with respect to his or her Account have been made in accordance with
Section 7, to have the entire remaining unpaid balance of his or her Account at
the time of such Change in Control paid in the form of a single lump sum
payment. Subject to Section 15(a), any such election shall be effective only if
it is made at least one year prior to the Change in Control and prior to the
Participant's Retirement. Any special election made under clause (a) or (b)
above may be revoked, and a new special election may be made thereunder at any
time; provided, however, subject to Section 15(a), that any such revocation or
new election shall be effective only if it is made within the election period
specified in the preceding sentence. Any special election, or revocation of a
special election, that may be made hereunder shall be made in the manner set
forth in Section 7(c).
The lump sum payment to be made pursuant to a Participant's special
distribution election under clause (a) or (b) above shall be made as soon as
practicable after the Participant's Retirement or, in the case of a special
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election under clause (b) above, following the date of the Change in Control.
Such payment shall be made in cash, or in shares of Common Stock, or in any
combination of cash or such shares, as the Committee shall determine, and the
amount of such payment shall be determined as follows:
(i) To the extent that the payment for any of the Participants'
Deferred Stock Units is to be made in cash, the amount of cash to be paid
for such Deferred Stock Units shall be equal to the product of (A) the
number of such Deferred Stock Units, multiplied by (B) the highest closing
price per share of the Common Stock, as reported on the New York Stock
Exchange Composite Tape, occurring during the 90-day period preceding and
the 90-day period following the Change in Control (the "Multiplication
Factor").
(ii) To the extent that payment for any of the Participant's Deferred
Stock Units is to be made in shares of Common Stock, the number of shares
of Common Stock to be issued with respect to such Deferred Stock Units
shall be determined by dividing (A) the product of (y) the number of such
Deferred Stock Units multiplied by (z) the Multiplication Factor, by (B)
the per share closing price of the Common Stock as reported on the New
York Stock Exchange Composite Tape for the day preceding the payment date,
or if there are no sales of Common Stock on such date, for the next
preceding day on which there were sales of Common Stock.
9. Certain Adjustments to Plan Shares
In the event of any change in the shares of Common Stock by reason of any
stock dividend, stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or any rights
offering to purchase Common Stock at a price substantially below fair market
value, or any similar change affecting the shares of Common Stock, the number
and kind of shares represented by Deferred Stock Units shall be appropriately
adjusted consistent with such change in such manner as the Committee, in its
sole discretion, may deem equitable to prevent substantial dilution or
enlargement of the rights granted to, or available for, the Participants
hereunder. The Committee shall give notice to each Participant of any adjustment
made pursuant to this Section and, upon such notice, such adjustment shall be
effective and binding for all purposes.
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10. Listing and Qualification of Common Shares
The Corporation, in its discretion, may postpone the issuance, delivery,
or distribution of shares of Common Stock with respect to any Deferred Stock
Units until completion of such stock exchange listing or other qualification of
such shares under any state or federal law, rule or regulation as the
Corporation may consider appropriate, and may require any Participant or
Beneficiary to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of the shares
in compliance with applicable laws, rules and regulations.
11. Designation and Change of Beneficiary
Each Participant shall file with the Committee a written designation of
one or more persons as the Beneficiary who shall be entitled to receive any
amount, or any shares of Common Stock, payable under the Plan upon his or her
death. A Participant may, from time to time, revoke or change his or her
Beneficiary designation without the consent of any previously designated
Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall it be effective as of a date prior to such receipt. If at the date of a
Participant's death, there is no designation of a Beneficiary in effect for the
Participant pursuant to the provisions of this Section 11, or if no Beneficiary
designated by the Participant in accordance with the provisions hereof survives
to receive any amount, or any shares of Common Stock, payable under the Plan by
reason of the Participant's death, the Participant's estate shall be treated as
the Participant's Beneficiary for purposes of the Plan.
12. Rights of Participants
A Participant's rights and interests under the Plan shall be subject to
the following provisions:
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(a)A Participant shall have the status of a general unsecured creditor of
the Corporation with respect to his or her right to receive any payment under
the Plan. The Plan shall constitute a mere promise by the Corporation to make
payments in the future of the benefits provided for herein. It is intended that
the arrangements reflected in this Plan be treated as unfunded for tax purposes.
(b)A Participant's rights to payments under the Plan shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant or his
or her Beneficiary.
(c)Neither the Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained as a member of the Board of
Directors.
13. Administration
The Plan shall be administered by the Committee. A majority of the members
of the Committee shall constitute a quorum. The Committee may act at a meeting,
including a telephone meeting, by action of a majority of the members present,
or without a meeting by unanimous written consent. In addition to the
responsibilities and powers assigned to the Committee elsewhere in the Plan, the
Committee shall have the authority, in its discretion, to establish from time to
time guidelines or regulations for the administration of the Plan, interpret the
Plan, and make all determinations considered necessary or advisable for the
administration of the Plan. The Committee may delegate any ministerial or
nondiscretionary function pertaining to the administration of the Plan to any
one or more officers or employees of the Corporation or any subsidiary of the
Corporation.
All decisions, actions or interpretations of the Committee under the Plan
shall be final, conclusive and binding upon all parties. Notwithstanding the
foregoing, any determination made by the Committee after the occurrence of a
Change in Control that denies in whole or in part any claim made by any
individual for benefits under the Plan shall be subject to judicial review,
under a "de novo", rather than a deferential, standard.
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14. Amendment or Termination
The Board of Directors may, with prospective or retroactive effect, amend,
suspend or terminate the Plan or any portion thereof at any time; provided,
however, that Section 7(a), Section 8, the last sentence of Section 13, this
Section 14, and the definitions of Change in Control and Vesting Date in Section
2, may not be amended, and the Plan may not be suspended or terminated, (i) at
the request of a third party who has indicated an intention or taken steps to
effect a Change in Control and who effectuates a Change in Control, (ii) within
six months prior to, or otherwise in connection with, or in anticipation of, a
Change in Control which has been threatened or proposed and which actually
occurs, or (iii) following a Change in Control, if the amendment, suspension or
termination adversely affects the rights of any Participant under the Plan. In
addition, no amendment, suspension or termination of the Plan shall deprive any
Participant of any rights with respect to Deferred Stock Units previously
credited to his or her Account under the Plan without his or her written
consent.
15. Additional Change in Control Provisions
In the event of a Change in Control, the provisions set forth below shall
apply, notwithstanding any other provisions of the Plan to the contrary.
(a) The regular distribution election provided for under Section 7(c) and
any special distribution election provided for under Section 8 may be made by a
Participant, and any such election previously made by a Participant may be
revoked and a new election made by the Participant under such Sections, at any
time during the period beginning on the date of any agreement entered into by
the Corporation which provides for the occurrence of one or more transactions
which, if consummated, would constitute a Change in Control, and ending on the
45th day after such date (the "Window Period"). Any election, or revocation of
an election, that may be made pursuant to this Section 15(a) shall be made in
the manner set forth in Section 7(c). Any election or revocation of an election
under Section 7(c) that is made pursuant to this Section 15(a) shall be
effective only if the transactions provided for in the agreement referred to in
the preceding sentence are consummated.
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(b) In the case of any Participant whose Retirement has not otherwise
occurred prior to a Change in Control, such Participant's Retirement shall be
treated, for purposes of this Plan, as occurring on the date on which such
Change in Control occurs, unless an election under (c) below is in effect for
the Participant at the time of such Change in Control.
(c) During the Window Period or on any date thereafter that is at least
one year prior to the date on which a Change in Control occurs, a Participant
may make an election under this Section 15(c) pursuant to which, if he or she is
designated to serve as a member of the Successor Board (as hereinafter defined)
immediately following the occurrence of a Change in Control, the Participant's
Retirement under this Plan will not be treated as occurring at the time of the
Change in Control but instead, will be treated as occurring on the date on which
his or her service as a member of the Successor Board terminates for any reason.
For purposes of this Section 15, the term Successor Board shall mean the board
of directors of the corporation described in Section 15(e)(i). An election under
this Section 15(c) shall be made in the manner set forth in Section 7(c).
(d) In the case of any Participant for whom an election under Section
15(c) is in effect at the time of a Change in Control, the Participant's Account
shall become payable upon his or her Retirement subsequent to the Change in
Control. Payment with respect to the Participant's Account shall be made at the
time or times, and in the form, determined under the applicable provisions of
Section 7.
(e) With respect to all periods subsequent to the occurrence of a Change
in Control, the following terms shall have the following meanings:
(i) the term "Corporation" shall refer to the corporation whose
acquisition of the Common Stock of the Corporation or substantially all of its
assets, or whose merger with the Corporation, results in the occurrence of the
Change in Control;
(ii) the term "Board of Directors" shall refer to the Successor
Board; and
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(iii) the term "Committee" shall refer to the committee of the
Successor Board that has responsibility for the administration of the Plan after
the occurrence of the Change in Control.
16. Successor Corporation
The obligations of the Corporation under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Corporation, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Corporation. The Corporation agrees that it will make
appropriate provision for the preservation of Participants' rights under the
Plan in any agreement or plan which it may enter into or adopt to effect any
such merger, consolidation, reorganization or transfer of assets.
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