Exhibit 10-G
INCENTIVE COMPENSATION PLAN FOR ELECTED OFFICERS OF
JERSEY CENTRAL POWER & LIGHT COMPANY
(AS AMENDED AND RESTATED AUGUST 1, 1996)
1. Purpose.
The purpose of the Incentive Compensation Plan for
Elected Officers of Jersey Central Power & Light Company (the
"Plan") is to attract and retain highly qualified employees, to
obtain from each the best possible performance, and to underscore
the importance to them of achieving particular business
objectives established for Jersey Central Power & Light Company
and its affiliates.
2. Definitions.
For the purposes of the Plan, the following terms shall
have the following meanings:
A. Awards. Incentive Compensation Awards made
pursuant to the Plan.
B. Board. The Board of Directors of GPU, Inc.
unless otherwise specified.
C. Change in Control. A "Change in Control"
shall mean the occurrence of:
(1) An acquisition (other than directly from
the Corporation) of any common stock of the Corporation
("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
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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 (the "Incumbent Board"),
cease for any reason to constitute at least seventy
percent (70%) of the members of the Board; 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 (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 involving the Corporation, unless such
merger, consolidation or reorganization is a "Non-
Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of
the Corporation where:
(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
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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).
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.
D. Committee. The Personnel,
Compensation and Nominating Committee of the Board or
any successor thereto.
E. Company. Jersey Central Power &
Light Company
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F. Corporation. GPU, Inc.
G. Employee. An individual who was on
the active salaried payroll of the Company or a
subsidiary of the Company at any time during the period
for which an Award is made.
H. Executive Committee. The Executive
Committee of the Board of Directors of the Company.
I. Officer. An Officer of the Company
who is elected by the Company's Board of Directors and
is an Employee of the Company, but not including
Assistant Comptrollers, Assistant Secretaries and
Assistant Treasurers.
J. Performance Period. The fiscal
year (currently the calendar year) for which Awards are
made.
3. Effective Date.
The effective date of the Plan is July 1, 1987.
4. Amounts Available for Awards.
A. The aggregate amount available for Awards for any
Performance Period shall be determined by the Board upon the
recommendation of the Committee.
B. No Awards shall be made for a Performance Period
if during such Performance Period no dividends were declared or
paid on shares of Common Stock.
5. Eligibility for Awards.
A. The Executive Committee shall determine the
Officers, if any, who are eligible for Awards for each
Performance Period, subject, in the case of the President and of
Officers who are also Officers of the Corporation, to the
concurrence of the Board.
B. The Executive Committee may include, among
Officers eligible for Awards for a Performance Period, Officers
whose employment terminated (whether by reason of retirement,
death, disability or other cause) during such Performance Period.
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6. Determination of Amounts of Awards.
A. The Executive Committee shall determine the
amounts of Awards subject, in the case of Officers who are also
Officers of the Corporation, to the concurrence of the Board,
either at or following the end of the Performance Period to which
they relate. The amount of the Awards to be made for any
Performance Period shall be so determined in accordance with the
methods and procedures set forth in the GPU System Officer
Incentive Compensation Plan Administrative Manual as in effect
for such Performance Period (the "Manual").
B. Notwithstanding the foregoing or any other
provision herein or in the Manual to the contrary, if a Change in
Control occurs, then in respect of the Performance Period in
which the Change in Control occurs (and in respect of the
previous Performance Period if the Change in Control occurs prior
to the time Awards for such Performance Period have been made),
the following provisions shall apply:
(i) each objective of the Company's for each
such Performance Period shall be deemed to have been 100%
achieved;
(ii) the Company's Final Pool for each such
Performance Period shall be deemed to be 100% of the Company's
Target Pool for each such Performance Period (or if, as of the
date of the Change in Control, the Target Pool has not been
determined for the Performance Period, the Target Pool for the
immediately preceding Performance Period);
(iii) each Officer who, prior to the
occurrence of such Change in Control, was determined to be
eligible for an Award for each such Performance Period ("Eligible
Officer") shall be entitled to receive an Award for each such
Performance Period;
(iv) the amount of the Award to be made to
each Eligible Officer shall be determined by multiplying the
Company's Final Pool for each such Performance Period by a
fraction the numerator of which is the amount of the Eligible
Officer's annual base salary that was taken into account in
determining the Company's Target Pool for each such Performance
Period, and the denominator of which is the aggregate amount of
the Annual Base Salaries of all Eligible Officers so taken into
account; provided, however, that in the event an Eligible Officer
is terminated by the Company without "Cause" (as defined below)
during the Performance Period in which a Change in Control
occurs, the amount of the Award to be made to such Eligible
Officer in respect of that Performance Period shall be the amount
determined above multiplied by a fraction, the numerator of which
is the number of days that have elapsed since the end of the
immediately preceding Performance Period through the date of
termination and the denominator of which is 365.
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A termination is for Cause if the Eligible Officer is convicted
of a felony or where the Eligible Officer (1) intentionally and
continually failed substantially to perform his or her reasonably
assigned duties with the Company (other than a failure resulting
from the Eligible Officer's incapacity due to physical or mental
illness) which failure continued for a period of at least thirty
(30) days after a written notice of demand for substantial
performance, signed by a duly authorized officer, has been
delivered to the Eligible Officer specifying the manner in which
he or she has failed substantially to perform, or (2)
intentionally engaged in conduct which is demonstrably and
materially injurious to the Corporation or the Company. No act,
nor failure to act, on the Eligible Officer's part, shall be
considered "intentional" unless he or she has acted, or failed to
act, with a lack of good faith and with a lack of reasonable
belief that the Eligible Officer's action or failure to act was
in the best interest of the Corporation and the Company.
7. Form of Awards.
Awards shall be made in cash.
8. Payment of Awards.
Unless it has been deferred pursuant to the GPU System
Companies Deferred Compensation Plan, an Award shall be paid as
soon as practicable after it is made, but in any event by no
later than 60 days after the date on which the Award has been
made; provided, however, that if an Eligible Officer is entitled
to a pro-rated Award pursuant to the proviso in Section 6.B(iv),
such pro-rated Award shall be paid within twenty (20) days after
the Eligible Officer's date of termination.
9. Special Awards and Other Plans.
Nothing contained in the Plan shall prohibit the
Company from granting special performance or recognition awards
under such conditions, and in such form and manner as it sees
fit, or from establishing other incentive compensation plans
providing for the payment of incentive compensation to Employees;
provided, however, that an Officer who receives an Award under
this Plan shall not receive an award for the same Performance
Period under any other annual incentive plan.
10. Amendment and Interpretation of the Plan.
A. Action to amend, modify, suspend or terminate the
Plan may be taken by the Company either by resolution duly
adopted by the Company's Board of Directors, or by an instrument
in writing executed by an Officer of the Company to whom
authority to adopt or approve amendments to the Plan has been
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delegated pursuant to a resolution duly adopted by the Company's
Board of Directors; provided, however, that any amendment to
Section 4, Section 6 or this Section 10.A shall be subject to the
concurrence of the Board; provided further, however, that Section
2.C, Section 6 and this Section 10 may not be amended or
modified, 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 reasonably calculated to effect a Change in Control
and who effectuates a Change in Control, (ii) within six (6)
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, modification, suspension or
termination adversely affects the rights of any Eligible Officer
under the Plan. No amendment or termination of the Plan shall
reduce or otherwise adversely affect an Award already made
hereunder without the consent of the Officer affected.
B. The Executive Committee is authorized to determine
in its discretion all questions that may arise as to the
construction or interpretation of the Plan, and to resolve any
claims that may arise with respect to any Officer's rights or
entitlement to any payment under the Plan. The decision of the
Executive Committee with respect to any such questions or claims
shall be final, conclusive and binding on all parties.
Notwithstanding the foregoing, any decision made by the Executive
Committee after the occurrence of a Change in Control shall be
subject to judicial review under a "de novo", rather than a
deferential, standard.
11. Miscellaneous.
A. All expenses and costs in connection with the
operation of the Plan shall be borne by the Company.
B. All Awards under the Plan are subject to
applicable withholding for federal, state and local taxes.
C. The Participation of any Officer in the Plan may
be terminated at any time. No promise or representation, either
express or implied, is made to any Officer with respect to con-
tinued employment, transfer or promotion because of his or her
participation in the Plan.
D. Each Officer who is a participant in the Plan
shall have the status of a general unsecured creditor of the
Company with respect to any amounts payable to the Officer
hereunder. The Plan shall constitute a mere promise by the
Company to make payments in the future of the Awards provided for
herein. It is the intention of the Company that the arrangements
reflected in this Plan be treated as unfunded for tax purposes
and, if it should be determined that Title I of ERISA is
applicable to such arrangements, for purposes of Title I of
ERISA.
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E. An Officer'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 Officer or the Officer's
beneficiary.
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