Exhibit 10-Q
GPU, INC.RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
AS AMENDED AND RESTATED AS OF NOVEMBER 1, 1996
GPU, INC.
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
1. Purpose. The purpose of this restricted Stock Plan for
Outside Directors (the "Plan") is to enable GPU, Inc. ("GPU") to
attract and retain persons of outstanding competence to serve on
its Board of Directors by paying such persons a portion of their
compensation in GPU Common Stock ("Common Stock") pursuant to the
terms hereof.
2. Definitions.
(a) The term "Board of Directors" shall mean the board
of directors of GPU.
(b) The term "Change in Control" shall mean the
occurrence during the term of the Plan of:
(1) An acquisition (other than directly from GPU)
of any 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 (the "Incumbent Board"),
cease for any reason to constitute at least seventy percent (70%)
of the members of the Board of Directors; 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 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 (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, 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
(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
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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
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 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.
(c) The term "Outside Director" or "Participant" means a
member of the Board of Directors who is not an employee (within
the meaning of the Employee Retirement Income Security Act of
1974) of GPU or any of its Subsidiaries. A director of GPU who
is also an employee of GPU or any of its Subsidiaries shall
become eligible to participate in this Plan and shall be entitled
to receive an award of restricted stock upon the termination of
such employment.
(d) The term "Subsidiary" means, for purposes other than
Section 2(b), any corporation 50% or more of the outstanding
Common Stock of which is owned, directly or indirectly, by GPU.
(e) The term "Service" shall mean service as an Outside
Director.
3. Eligibility. All Outside Directors of GPU shall receive
stock awards hereunder.
4. Stock Awards.
(a) A total of 33,000(1) shares of GPU Common Stock shall
be available for awards under the Plan. Such shares shall be
either previously unissued shares or reacquired shares. Any
restricted shares awarded under this Plan with respect to which
the restrictions do not lapse and which are forfeited as provided
herein shall again be available for other awards under the plan.
___________________________
(1) Initially, 20,000 shares were authorized to be issued under
the Plan. On May 29, 1991, GPU effected a two-for-one stock
split by way of a stock dividend, leaving 33,000 shares
available for issuance under the Plan on and after July 1,
1991 after giving effect to shares previously awarded.
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(b) Each Outside Director shall receive an annual award of
300 shares of GPU Common Stock with respect to each calendar year
or portion thereof, during which he or she serves as an Outside
Director, beginning with the calendar year 1993. Awards shall
be made in January of each year. However, for the calendar year
in which an Outside Director commences Service, the award of
shares to such Outside Director for such year shall be made in
the month in which his or her Service commences, if his or her
Service commences after January 31 of such year. All awards of
shares made hereunder shall be subject to the restrictions set
forth in Section 5.
(c) Subject to the provisions of Section 5, certificates
representing shares of GPU Common Stock awarded hereunder shall
be issued in the name of the respective Participants. During the
period of time such shares are subject to the restrictions set
forth in Section 5, such certificates shall be endorsed with a
legend to that effect, and shall be held by GPU or an agent
therefor. The Participant shall, nevertheless, have all the
other rights of a shareholder, including the right to vote and
the right to receive all cash dividends paid with respect to such
shares.
Subject to the requirements of applicable law, certificates
representing such shares shall be delivered to the Participant
within 30 days after the lapse of the restrictions to which they
are subject.
(d) If as a result of a stock dividend, stock split,
recapitalization (or other adjustment in the stated capital of
GPU), or as the result of a merger, consolidation, or other
reorganization, the common shares of GPU are increased, reduced,
or otherwise changed, the number of shares available and to be
awarded hereunder shall be appropriately adjusted, and if by
virtue thereof a Participant shall be entitled to new or
additional or different shares, such shares to which the
Participant shall be entitled shall be subject to the terms,
conditions, and restrictions herein contained relating to the
original shares. In the event that warrants or rights are
awarded with respect to shares awarded hereunder, and the
recipient exercises such rights or warrants, the shares or
securities issuable upon such exercise shall be likewise subject
to the terms, conditions, and restrictions herein contained
relating to the original shares.
5. Restrictions.
(a) Shares are awarded to a Participant on the condition
that he or she serves or has served as an Outside Director until:
(i) the Participant's death or disability, or
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(ii) the Participant's failure to stand for re-election
at the end of the term during which the Participant reaches age
70; or
(iii) the Participant's resignation or failure to stand
for re-election prior to the end of the term during which the
Participant reaches age 70 with the consent of the Board, i.e.,
approval thereof by a least 80% of the directors voting thereon,
with the affected director abstaining; or
(iv) the Participant's failure to be re-elected after
being duly nominated.
Termination of Service of a Participant for any other reason,
including, without limitation, any involuntary termination
effected by Board action, shall result in forfeiture of all
shares awarded. Notwithstanding the foregoing, upon the
occurrence of a Change in Control, the restrictions set forth in
Section 5(b) hereof to which any shares awarded to a Participant
are then still subject shall lapse, and the termination of the
Participant's Service for any reason at any time after the
occurrence of such Change in Control shall not result in the
forfeiture of any such shares.
(b) Shares awarded hereunder may not be sold, exchanged,
transferred, pledged, hypothecated, or otherwise disposed of
(herein, "Transferred") other than to GPU pursuant to Section
5(a) during the period commencing on the date of the award of
such shares and ending on the date of termination of the Outside
Director's Service; provided, however, that in no event may any
shares awarded hereunder be Transferred for a period of six
months following the date of the award thereof, except in the
case of the recipient's death or disability, other than to GPU
pursuant to Section 5(a) hereof.
(c) Each Participant shall represent and warrant to and
agree with GPU that he or she (i) takes any shares awarded under
the Plan for investment only and not for purposes of sale or
other disposition and will also take for investment only and not
for purposes of sale or other disposition any rights, warrants,
shares, or securities which may be issued on account of ownership
of such shares, and (ii) will not sell or transfer any shares
awarded or any shares received upon exercise of any such rights
or warrants except in accordance with (A) an opinion of counsel
for GPU (or other counsel acceptable to GPU) that such shares,
rights, warrants, or other securities may be disposed of without
registration under the Securities Act of 1933, or (B) an
applicable "no action" letter issued by the Staff of the
Commission.
6. Administrative Committee. An Administrative Committee (the
"Committee") shall have full power and authority to construe and
administer the Plan. Any action taken under the provisions of
the Plan by the Committee arising out of or in connection with
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the administration, construction, or effect of the Plan or any
rules adopted thereunder shall, in each case, lie within the
discretion of the Committee and shall be conclusive and binding
under GPU and upon all Participants, and all persons claiming
under or through any of them. 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. The Committee shall have as members the Chief
Executive Officer of GPU and two officers of GPU or its
Subsidiaries designated by the Chief Executive Officer; in the
absence of such designation, the other members of the Committee
shall be the Chief Financial Officer and the Secretary of GPU.
7. Approval: Effective Date. The Plan is subject to the
approval of a majority of the holders of GPU's Common Stock
present and entitled to vote at a meeting of shareholders, and of
the Securities and Exchange Commission under the Public Utility
Holding Company Act of 1935. The Plan shall be effective January
1, 1989.
8. Termination and Amendment. The Board of Directors of GPU
may suspend, terminate, modify or amend the Plan, provided that
if any such amendment requires shareholder approval to meet the
requirement of the then applicable rules under Section 16(b) of
the Exchange Act, such amendment shall be subject to the approval
of GPU's shareholders; and provided further that no amendment or
modification to Section 2(b), to the penultimate sentence of
Section 6, to the last sentence of Section 5(a), or to this
Section 8, nor any suspension or termination of the Plan,
effectuated (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, shall be
effective if the amendment, modification, suspension or
termination adversely affects the rights of any Participant under
the Plan. If the Plan is terminated, the terms of the Plan
shall, notwithstanding such termination, continue to apply to
awards granted prior to such termination. In addition, no
amendment, modification, suspension or termination of the Plan
shall adversely affect the rights of any Participant with respect
to any award (including without limitation any right with respect
to the timing and method of payment of any award) granted to the
Participant prior to the date of the adoption of such amendment,
modification, suspension or termination without such
Participant's written consent.
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