Exhibit 10-P
John G. Graham
November 1, 1996
Page 1
November 1, 1996
John G. Graham
21 Candace Lane
Chatham Township, New Jersey 07928
Dear John:
The purpose of this letter is to amend and restate the
letter agreement dated November 22, 1995 between you and GPU
Service, Inc. ("GPUS") (the "Prior Agreement") which set forth
the terms and conditions of the supplemental pension that GPUS
has agreed to provide to you upon your retirement. Upon your
agreement to this amendment and restatement as provided on the
last page of this letter agreement (the "Agreement"), the Prior
Agreement shall be superseded and replaced in its entirety by the
terms and conditions set forth below.
1. Upon your retirement on any date subsequent to the date
of this letter (the date as of which you so retire is referred to
herein as your "Retirement Date") you shall be entitled to
receive from GPUS a supplemental pension (your "Supplemental
Pension"), which shall be in addition to the pension payable to
you under GPUS's Employee Pension Plan and GPUS's Supplemental
and Excess Benefits Plan (together, "GPUS's Retirement Plans").
2. The Supplemental Pension payable to you hereunder, when
expressed as a single life annuity, shall be a monthly amount of
income equal to the amount, if any, by which either (a)
$12,653.50 for each month beginning after your Retirement Date
and before the month beginning after your 62nd birthday, or (b)
$12,153.50 for each month beginning after the later of your
Retirement Date or your 62nd birthday, exceeds (c) the aggregate
pension amount payable to you for such month under GPUS's
Retirement Plans, determined for this purpose without taking into
account (i) any Additional Pension amount payable to you under
GPUS's Employee Pension Plan and (ii) the 20% increase in the
pension amounts payable to you under GPUS's Retirement Plans
during the first 12 months following your retirement.
For purposes of the foregoing, if any part of the aggregate
pension amount payable to you under GPUS's Retirement Plans is
not payable in the form of a single life annuity commencing on
the first day of the month following your Retirement Date, the
pension amount referred to in (c) above shall be determined as if
such part were so payable.
John G. Graham
November 1, 1996
Page 2
3. The Supplemental Pension shall be paid to you in the
form of a single life annuity unless you are married on your
Retirement Date, in which case it shall be paid in the form
described as Option 2 in Section 10.1 of GPUS's Employee Pension
Plan, with your spouse as beneficiary.
4. If you should die before you start to receive your
Supplemental Pension, your surviving spouse, if any, shall be
entitled to receive from GPUS an annuity (the "Survivor's
Annuity") payable to her for her lifetime in a monthly amount
equal to 50% of the Supplemental Pension that would have been
payable to you hereunder if you had not died, if you had retired
on the last day of the month in which your death occurs, and if
you had not been married on such last day.
5. Payment of your Supplemental Pension shall commence on
the first day of the month following your Retirement Date and
shall end with the payment due for the month in which your death
occurs or, if the Supplemental Pension is payable in the form
described as Option 2 in Section 10.1 of GPUS's Employee Pension
Plan, the month in which your death or your spouse's death occurs
whichever is the later. Payment of the Survivor's Annuity shall
commence on the first day of the month following the date of your
death and shall end with the payment due for the month in which
your surviving spouse's death occurs.
6. With each monthly payment of the Supplemental Pension
payable to you during the first 12 months following your
Retirement Date, you shall be entitled to receive an additional
amount equal to 20% of the amount of such monthly payment;
provided, however, that if clause (a) of Section 2 hereof applies
in calculating the Supplemental Pension amount payable for such
month, the additional amount payable to you for such month under
this Section 6 shall be equal to 20% of the Supplemental Pension
amount that would be payable to you for such month if clause (b)
instead of clause (a) of Section 2 were applicable in calculating
the amount of your Supplemental Pension payment for such month.
7. In addition to the Supplemental Pension described
above, you will also receive (i) an extension of coverage in your
and your family's health care benefits under the Supplemental and
Excess Medical Plan to the third anniversary of the date of your
retirement, or your attainment of age 62, whichever is later, and
(ii) an amended Split-Dollar Agreement with respect to your
Senior Executive Life Insurance policy to provide for eligibility
to receive full benefits under your policy at age 55 with 10
years of service.
8. Notwithstanding any other provision of this Agreement
or GPUS's Retirement Plans to the contrary, or any other form of
distribution provided for or optional form of distribution
John G. Graham
November 1, 1996
Page 3
otherwise elected under this Agreement or GPUS's Retirement
Plans, you shall be permitted to make a special distribution
election to have the Supplemental Pension payable to you
hereunder, or the Survivors Annuity payable hereunder to your
surviving spouse, distributed in the form of a single lump sum
payment in the event of your termination of employment within the
GPU System (a) by any GPU System Company (1) within six (6)
months prior to a Change in Control (as defined in Appendix A
hereto) or (2) prior to a Change in Control but which you
reasonably demonstrate (A) was at the request of a third party
who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control or (B) otherwise arose
in connection with, or in anticipation of, a Change in Control
which has been threatened or proposed and which actually occurs,
or (b) for any reason within the two (2) year period following
the occurrence of a Change in Control; provided, however, that
such election shall be effective only if it is made either (y) at
least twenty-four (24) months prior to such termination of your
employment, or (z) if such termination of your employment is the
result of an "Involuntary Termination" (as defined in Appendix A
hereto) at least one year 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 within the election period specified in clause (y) or (z) of
the preceding sentence. Any special election, or revocation of a
special election, that may be made hereunder shall be made in
writing, on a form furnished to you for such purpose by the
Administrative Committee of GPUS's Employee Pension Plan. The
lump sum payment to be made to you hereunder shall be in an
amount that is "Actuarially Equivalent" (as defined below) to the
Supplemental Pension that otherwise would be payable to you
hereunder if payment of your Supplemental Pension and the pension
payable to you under GPUS's Retirement Plans (i) were to commence
on your Retirement Date, and (ii) were to be made in the form of
a single life annuity. The lump sum payment to be made hereunder
to your surviving spouse shall be in an amount that is
Actuarially Equivalent (as defined below) to the Survivor's
Annuity that otherwise would be payable to such spouse pursuant
to Section 4 hereof. The lump sum payment to be made hereunder
to you or your surviving spouse shall be made by no later than
30 days following the date of your termination of employment.
For purposes of this Section 8, "Actuarially Equivalent"
shall mean, with respect to any distribution or payment, an
actuarially equivalent amount, calculated by using the annual
interest rate on 30-year Treasury securities for the second month
preceding the calendar year in which such distribution is made or
commences, and the mortality table prescribed for purposes of
section 417(e)(3)(A)(ii)(I) of the Internal Revenue Code of 1986,
as amended (the "Code"). Such annual interest rate and mortality
John G. Graham
November 1, 1996
Page 4
table shall be as specified or prescribed by the Commissioner of
the Internal Revenue Service for purposes of Section
417(e)(3)(A)(ii) of the Code in revenue rulings, notices or other
guidance.
9. You and your surviving spouse shall have the status of
a mere unsecured creditor of GPUS with respect to your, and her,
right to receive any payment under this Agreement. This
Agreement shall constitute a mere promise by GPUS to make
payments in the future of the benefits provided for herein. It
is intended that the arrangements reflected in this Agreement be
treated as unfunded for tax purposes, as well as for purposes of
Title I of ERISA.
10. Your rights and your surviving spouse's rights to
payments under this Agreement shall not be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by your creditors or the
creditors of your spouse or any other beneficiary.
If the foregoing correctly reflects your understanding of
the agreement between you and GPUS to your Supplemental Pension,
will you please so indicate on the enclosed duplicate copy of
this letter which will then constitute a binding agreement
between GPUS on the one hand, and you, on the other.
GPU SERVICE , INC.
By: ___________________________
J.R. Leva, Chairman &
Chief Executive Officer
The foregoing correctly reflects my
understanding and is agreed to by me
as of the date of this letter
_______________________________
John G. Graham
John G. Graham
November 1, 1996
Page 1
APPENDIX A
"Change in Control" shall mean:
(1) An acquisition (other than directly from GPU,
Inc. ("GPU")) of any common stock of GPU ("Common Stock") or
other voting securities of GPU 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 GPU'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) GPU 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 GPU (for purposes of this definition, a "Subsidiary"), (B) GPU
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 GPU (the "Incumbent
Board"), cease for any reason to constitute at least seventy
percent (70%) of the members of the Board of Directors of GPU
(the "Board"); provided, however, that if the election, or
nomination for election by GPU'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
Agreement, 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 GPU, unless such merger,
consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall
mean a merger, consolidation or reorganization of
GPU where:
(i) the shareholders of GPU,
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) GPU,
(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 GPU 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 GPU, 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
GPU; or
2
(C) The sale or other disposition of all or
substantially all of the assets of GPU 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 GPU 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
GPU, and after such share acquisition by GPU, 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.
"Involuntary Termination" shall mean the termination of your
employment within the GPU System (A) as a result of your death,
(B) by GPU or GPUS, for any reason, or (C) by you, for "Good
Reason."
"Good Reason" shall mean the occurrence after a Change in
Control of any of the following events or conditions:
(1) a change in your status, title, position or
responsibilities (including reporting responsibilities) which, in
your reasonable judgment, represents an adverse change from your
status, title, position or responsibilities as in effect
immediately prior thereto; the assignment to you of any duties or
responsibilities which, in your reasonable judgment, are
inconsistent with your status, title, position or
responsibilities; or any removal of you from or failure to
reappoint or reelect you to any of such offices or positions,
except in connection with the termination of your employment for
disability, Cause, as a result of your death or by you other than
for Good Reason;
(2) a reduction in your annual base salary;
(3) any change in location of your place of
employment to a location other than Parsippany, New Jersey
without your consent,
(4) the failure by GPU to pay to you any portion
of your current compensation or to pay to you any portion of an
installment of deferred compensation under any deferred
compensation program of GPU in which you participated, within
seven (7) days of the date such compensation is due;
3
(5) the failure by GPU to (A) continue in effect
(without reduction in benefit level, and/or reward opportunities)
any material compensation or employee benefit plan in which you
were participating immediately prior to the Change in Control,
unless a substitute or replacement plan has been implemented
which provides substantially identical compensation or benefits
to you or (B) provide you with compensation and benefits, in the
aggregate, at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each other
compensation or employee benefit plan, program and practice in
which you were participating immediately prior to the Change in
Control;
(6) the failure of GPU to obtain a satisfactory
agreement from any successors or assigns to assume and agree to
honor and perform GPU's obligations under this Agreement; or
Any event or condition described in clauses (1) through (6)
which occurs (1) within six (6) months prior to a Change in
Control or (2) prior to a Change in Control but which you
reasonably demonstrate (A) was at the request of a third party
who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control or (B) otherwise arose
in connection with, or in anticipation of a Change in Control
which has been threatened or proposed, shall constitute Good
Reason for purposes of this Agreement notwithstanding that it
occurred prior to a Change in Control.
4