Exhibit 10-J
DEFERRED REMUNERATION PLAN FOR OUTSIDE DIRECTORS OF JERSEY
CENTRAL POWER & LIGHT COMPANY
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 7, 1996)
1. Purpose
1.1 The purpose of this document is to set forth the
Deferred Remuneration Plan for Outside Directors, as
amended and restated effective November 7, 1996. The
Plan will be implemented by individual elections by
each Director.
2. Plan Summary
2.1 This Plan provides for deferral by Directors of
all or a portion of current Remuneration.
2.2 Funds being deferred will be credited with the
equivalent of interest in accordance with Section 6.
2.3 Each component of the deferred funds will be
distributed as follows:
(a) for a Director who elects deferral until a
date or dates following his or her Retirement, to
the Director, in accordance with his or her latest
effective election, and subject to provisions of
Section 4.5;
(b) for a Director who elects deferral until a
date or dates preceding his or her Retirement, to
the Director, in accordance with his or her
initial election; or
(c) if a Director dies before the deferred funds
have been fully distributed, to his or her
designated beneficiary, in accordance with the
option selected by the Director under Section 7.2
for each component except as the Board may
otherwise determine, based on the circumstances at
the time the distribution is to commence.
3. Definition of Terms
3.1 Board of Directors - refers to the Board of
Directors of Jersey Central Power & Light Company.
3.2 Change in Control - A "Change in Control" shall
mean the occurrence during the term of the Plan of:
(1) An acquisition (other than directly from GPU, Inc.
(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 of the Corporation (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
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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
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
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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 Person, 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.
3.3 Company - refers to Jersey Central Power & Light
Company.
3.4 Director - refers to a member of the Board of
Directors who is not an employee of Jersey Central
Power & Light Company or any of its subsidiaries.
3.5 Plan - refers to this Deferred Remuneration Plan
for Outside Directors as described in this document and
as it may be amended in the future.
3.6 Remuneration - refers to all cash amounts earned
during a calendar year by a Director for services
performed as a Director (including services performed
as a member of a committee of the Board of Directors),
but does not include consulting fees, reimbursement for
travel or other expenses or Company contributions to
other benefit plans.
3.7 Pre-Retirement Account - refers to the memorandum
account which shall be established and maintained for a
Director who elects, pursuant to Section 5.2, to have
payment of any portion of his or her Remuneration for
any Plan Year deferred to a date prior to his or her
Retirement. A separate Pre-Retirement Account shall be
established and maintained for the Remuneration for
each Plan Year which the Director so elects to defer.
3.8 Retirement Account - refers to the memorandum
account which shall be established and maintained for a
Director who elects, pursuant to Section 5.2, to have
payment of any portion of his or her Remuneration for
any Plan Year deferred to a date after his or her
Retirement. All amounts deferred pursuant to elections
made on or before December 31, 1985 under the Plan by a
Director, together with all interest equivalents earned
by such election and credited to such amounts prior to
December 31, 1986, shall be treated, on or after such
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date, as part of the Director's Retirement Account.
3.9 Retirement - refers to the retirement from service
on the Board of Directors, on account of resignation,
death, or any other reason, without becoming an
employee of Jersey Central Power & Light Company, the
Corporation or any of its subsidiaries.
3.10 Plan Year - refers to the period October 1, 1986
through December 31, 1986; and each twelve (12) month
period from January 1 through December 31 thereafter.
4. Administration
4.1 The Board of Directors has established this Plan.
The Board of Directors may in its sole discretion
modify the provisions of the Plan from time-to-time,
or, may terminate the entire Plan at any time;
provided, however, that Section 3.2, this Section 4.1,
Section 4.3, the last sentence of the first paragraph
of Section 6 and the last paragraph of Section 7.2 may
not be amended or modified, and the Plan may not be
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 (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 or
termination adversely affects the rights of any
Director under the Plan. No modification or
termination of the Plan shall adversely affect the
rights of any Director with respect to any amounts
standing to the Director's credit in any Account
immediately prior to the date of the adoption of such
modification or termination, including without
limitation any rights with respect to the time and
method of payment of, or the crediting of interest
equivalents with respect to, any such amounts.
4.2 Responsibility for the ongoing administration of
this Plan rests with the Corporate Secretary's
Department.
4.3 All questions concerning the disclosure of
information relating to this Plan, as well as any
dispute over accounting or administrative procedures or
interpretation of the Plan, will be resolved at the
sole discretion of the Corporate Secretary.
The Corporate Secretary will not be liable to any
person for any action taken or omitted in connection
with the interpretation and the administration of the
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Plan unless attributable to willful misconduct or lack
of good faith. Notwithstanding the foregoing, any
determination made by the Corporate Secretary 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.
4.4 All provisions of this Plan, its administration
and interpretation, are intended to be in compliance
with appropriate Internal Revenue Service Rulings
regarding the construction and operation of a deferred
compensation program, so that deferred Remuneration and
interest equivalents thereon will not constitute income
constructively received prior to being distributed
under the terms of this Plan.
4.5 A Director's election to voluntarily defer
Remuneration, selection of a distribution commencement
date and distribution option, and designation of a
beneficiary and contingent beneficiary, made pursuant
to this Plan shall be made in writing, on a form
furnished to the Director by the Company for such
purposes, signed and delivered personally or by first
class mail to:
Corporate Secretary
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962
Any such election, selection, designation, or change
therein, shall not become effective unless and until
received by the Corporate Secretary. A distribution
election or a change in a distribution election made
after May 31, 1987 will not be effective unless made at
least twenty-four (24) months prior to his or her
Retirement or Disability.
5. Deferral Election
5.1 A Director may elect to defer all or any portion
of his or her Remuneration for any Plan Year, providing
such portion is three thousand dollars ($3,000) or
more. A separate deferral election shall be made with
respect to a Director's Remuneration for each Plan
Year. An election to defer Remuneration for the 1986
amended Plan Year shall be made on or prior to
September 30. In subsequent years, the election shall
be made on or before December 31 of the year preceding
the Plan Year. Notwithstanding, the foregoing, (a)
Directors who are initially elected prior to December
1st of any Plan Year may, within 30 days of such
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initial election, make a deferral election for the then
current Plan Year, and (b) Directors who are initially
elected after December 1st of any Plan Year may
immediately make a deferral election for both the then
current Plan Year and for the immediately succeeding
Plan Year; provided, however, that any deferral
election made pursuant to clause (a) or (b) hereof
shall be effective only with respect to Remuneration
earned after such election has become effective. All
elections under this Section 5.1 shall be irrevocable.
5.2 In his or her election to defer Remuneration for
any Plan Year, a Director shall specify the amount or
portion of the Remuneration to be deferred, and shall
indicate whether the Remuneration so deferred is to be
credited to a Pre-Retirement Account, or to a
Retirement Account.
5.3 With respect to Remuneration deferred hereunder
for a Plan Year which a Director elects to have
credited to his or her Pre-Retirement Account, the
Director shall specify in the election form the date on
which distribution of the Pre-Retirement Account shall
be made or commence. The date so selected shall be no
earlier than 24 months from the close of the Plan Year.
In the election form for the Plan Year, the Director
shall also select an option under Section 7.2 for the
distribution of the account. Except as provided in
Section 7.4, the date so specified, and the option so
selected, may not thereafter be changed by the
Director.
5.4 With respect to any Remuneration deferred
hereunder which a Director elects to have credited to
his or her Retirement Account, the Director may elect a
distribution commencement date and a distribution
option under Section 7.2 for the distribution of the
account, and may change, subject to the provisions of
Section 4.5, any election as to the distribution
commencement date and distribution option for the
account previously made by the Director, at any time
prior to his or her Retirement. The distribution
commencement date so elected shall be either January 15
of the calendar year following the Director's
Retirement, or January 15 of any subsequent calendar
year.
5.5 In the case of a Director who, prior to January 1,
1986, made a deferral election under the Plan with
respect to his or her Remuneration for the calendar
year 1986, any deferral election made by the Director
hereunder with respect to the period commencing October
1, 1986 and ending December 31, 1986 shall be
effective, for that period, only with respect to the
excess, if any, of the amount he or she so elects to
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defer for said period over the amount of Remuneration
for said period deferred pursuant to the Director's
prior election.
5.6 The amounts which are deferred, including interest
equivalents, will be credited to a Director's Account.
Prior to distribution, all amounts deferred including
interest equivalents, will constitute general assets of
the Company for use as it deems necessary, and will be
subject to the claims of the Company's creditors. A
Director shall have the status of a mere unsecured
creditor of the Company with respect to his or her
right to receive any payment under the Plan. The Plan
shall constitute a mere promise by the Company 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.
6. Interest
Interest equivalents, compounded monthly on deposits treated
as monthly transactions, will be credited at the end of each
quarter in the calendar year. Such credit will be made to
the balance of each account maintained for a Director
hereunder, including the undistributed balance of any such
account from which payments are being made in installments.
The rate used in calculation of interest equivalents will be
no less than the rate equal to the simple average of
Citibank N.A. of New York Prime Rates for the last business
day of each of the three months in the calendar quarter or,
if greater, such other rate as established from time to time
by the Committee.
The Company may, but shall not be required to, purchase a
life insurance policy, or policies, to assist it in funding
its payment obligations under the Plan. If a policy, or
policies, is so purchased, it shall, at all times, remain
the exclusive property of the Company and subject to the
claims of its creditors. Neither the Director nor any
beneficiary or contingent beneficiary designated by him or
her shall have any interest in, or rights with respect to
such policy.
7. Distribution of Deferred Funds
7.1 A Director's Pre-Retirement Account shall be
distributed to the Director, or distributions from such
Pre-Retirement Accounts shall commence, on the date or
dates specified in the elections made by the Director
with respect to such accounts. A Director's Retirement
Account shall be distributed to the Director, or
distributions from such accounts shall commence, on the
date specified in the Director's latest effective
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election. In such case a distribution election made
after May 31, 1987 will not be effective unless
selected at least twenty-four (24) months prior to his
or her Retirement.
7.2 The options for distribution are:
(a) A single lump sum payment.
(b) Annual Installments over any fixed number of
years selected by the Director, with a minimum of
five annual installments required for the
Retirement Account.
If distribution of a Director's Account is to be made
in annual installments under Option (b) of Section 7.2,
the amount of each installment will equal the total
amount in such account on the date the installment is
payable, divided by the number of installments
remaining to be paid. In addition, if the distributions
are made in installments under Option (b) of Section
7.2, the interest equivalent accrued on the Director's
memorandum account each year after the date the first
installment is payable will be distributed on each
anniversary of such date.
Notwithstanding any other provision of the Plan to the
contrary or any other optional form of distribution
otherwise elected, each Outside Director shall be
permitted to make a special distribution election to
have the entire balance of his or her Accounts
distributed in the form of a single lump sum payment in
the event of the Outside Director's Retirement
following a Change in Control; provided, however, that
such election shall be effective only if it is made at
least twelve (12) months prior to such Change in
Control. Any special election made hereunder may be
revoked, and a new special election may be made at any
time; provided, however, that any such revocation or
new election shall be effective only if it is made at
least twelve (12) months prior to a Change in Control.
Any special election, or revocation of a special
election, that may be made hereunder shall be made in
the manner set forth in Section 4.5.
7.3 Except as the Board may otherwise determine based
on the circumstances at the time the distribution to
the beneficiary is to commence:
(a) If a Director should die after distribution
of any account maintained for the Director has
commenced, but before the entire balance of such
account has been fully distributed, distributions
will continue to be made from such account to the
Director's designated beneficiary or contingent
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beneficiary, in accordance with the distribution
option in effect for such Account at the time of
the Director's death.
(b) If a Director should die before any
distribution from an account maintained for the
Director hereunder has been made to him or her,
distribution of such account to the Director's
designated beneficiary or contingent beneficiary
shall be made, or shall commence, as soon as
practicable after the Director's death, in
accordance with the distribution option in effect
for such account at the time of the Director's
death.
Amounts remaining to be paid, after the death of the
Director, to the designated beneficiary and the
contingent beneficiary, will be paid in a lump sum to
the estate of the last of such persons to die.
7.4 Notwithstanding anything herein to the contrary,
any account maintained for a Director hereunder may be
distributed, in whole or in part, to such Director on
any date earlier than the date on which distribution is
to be made, or commence, pursuant to the Director's
election if:
(a) the Director requests early distribution, and
(b) the Board, in its sole discretion, determines
that early distribution is necessary to help the
Director meet some severe financial need arising
from circumstances which were beyond the
Director's control and which were not foreseen by
the Director at the time he or she made the
election as to the date or dates for distribution
from such account. A request by a Director for an
early distribution shall be made in writing, shall
set forth sufficient information as to the
Director's needs for such distribution to enable
the Board to take action on his or her request,
and shall be mailed or delivered to the Company's
Corporate Secretary.
8. Non-Assignment of Deferred Remuneration
8.1 A Director's rights to payments under this Plan
shall not be subject to any manner to anticipation,
alienation, sale, transfer (other than transfer by will
or by the laws of descent and distribution, in the
absence of a beneficiary designation), assignment,
pledge, encumbrance, attachment or garnishment by
creditors of the Director or his or her spouse or other
beneficiary.
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8.2 All amounts paid under the Plan, including the
interest equivalents credited to a Director's
memorandum account, are considered to be Remuneration.
The crediting of interest equivalents is intended to
preserve the value of the Remuneration so deferred for
the Director.
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