Exhibit 10-S
DEFERRED REMUNERATION PLAN FOR OUTSIDE DIRECTORSOF GPU, INC.
(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.
(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 in effect
for 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 Account - refers to both Pre-Retirement and Retirement
Accounts established for Directors unless specifically
designated one or the other in the text of this Plan.
3.2 Board of Directors - refers to the Board of Directors
of GPU, Inc.
3.3 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 (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 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:
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(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 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
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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.
3.4 Committee - refers to the Personnel, Compensation and
Nominating Committee of the Corporation.
3.5 Director - refers to a member of the Board of Directors
who is not an employee of the Corporation or any of its
subsidiaries.
3.6 Plan - refers to this Deferred Remuneration Plan for
Outside Directors as described in this document and as it
may be amended in the future.
3.7 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 Corporation contributions to other benefit plans.
3.8 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.
3.9 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 date, as part of the Director's Retirement
Account.
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3.10 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 the
Corporation or any of its subsidiaries.
3.11 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
3.3, this Section 4.1, Section 4.4, the last sentence in the
first paragraph of Section 6 and the last paragraph in
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 Committee.
4.3 The Committee may delegate the daily administration of
this Plan, including the maintenance of appropriate records,
receiving notifications, making filings, and maintaining
related documentation, to the Vice President - Human
Resources of GPU Service Corporation and to the Vice
President's staff.
4.4 All questions concerning the 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 Committee, except that no member of the
Committee shall vote on any matter which affects that member
but not all other members of the Committee. 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
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under the Plan shall be subject to judicial review, under a
"de novo", rather than a deferential, standard.
4.5 All provisions of this Plan, its administration and
interpretation, are intended to be in compliance with
appropriate Internal Revenue Service Rulings and judicial
decisions 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.
4.6 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 Corporation for such purposes, signed and delivered
personally or by first class mail to:
Corporate Secretary
GPU Service Corporation
100 Interpace Parkway
Parsippany, New Jersey 07054
Any such election, selection, designation, or change
therein, shall not become effective unless and until
received by the Corporate Secretary. A change in a
distribution election made after April 30, 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 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.
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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 Pre-Retirement Account.
Except as provided in Section 7.2 or 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 shall, at the time he or
she first elects to have an amount credited to that account,
also elect a distribution commencement date and a
distribution option under Section 7.2 for the distribution
of the Retirement Account. A Director may, subject to the
provisions of Section 4.6, change any election as to the
distribution commencement date and distribution option for
the Retirement Account previously made by the Director. 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 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
Corporation for use as it deems necessary, and will be
subject to the claims of the Corporation's creditors. A
Director shall have the status of a mere 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.
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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 Corporation 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 Corporation 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
Retirement Account shall commence, on the date specified in
the Director's latest effective election.
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.
(c) Other
option, in equal or unequal payments, as specifically
approved by the Committee.
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 said Account on the date the installment is
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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 each
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
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 4.6.
7.3 Except as the Committee 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
his/her Account maintained for the Director has
commenced, but before the entire balance has been fully
distributed, distributions will continue to be made to
the Director's designated beneficiary or contingent
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 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.
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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 Committee, 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. 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 Committee to take
action on his or her request, and shall be mailed or
delivered to the Corporation'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.
8.2 All amounts paid under the Plan, including the interest
equivalents credited to a Director's 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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