Exhibit 10-CC
GPU, INC.
1990 STOCK PLAN FOR EMPLOYEES OF
GPU, INC. AND SUBSIDIARIES
AS AMENDED AND RESTATED
TO REFLECT AMENDMENTS
THROUGH AUGUST 1, 1996
1990 STOCK PLAN FOR EMPLOYEES OF
GPU, INC. AND SUBSIDIARIES
1. Purpose
GPU, Inc. (the "Corporation") desires to attract and retain
employees of outstanding talent. The 1990 Stock Plan for
Employees of GPU, Inc. and Subsidiaries (the "Plan") affords
eligible employees the opportunity to acquire proprietary
interests in the Corporation and thereby encourages their highest
levels of performance.
2. Scope and Duration
(a) Awards under the Plan may be granted in the following
forms:
(i) incentive stock options ("incentive stock
options") as provided in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") and non-qualified
stock options ("non-qualified options") (the term "options"
includes incentive stock options and non-qualified options);
(ii) shares of Common Stock of the Corporation
(the "Common Stock") which are restricted as provided in
paragraph 10 ("restricted shares"); or
(iii) rights to acquire shares of Common Stock
which are restricted as provided in paragraph 10 ("units" or
"restricted units").
Options may be accompanied by stock appreciation rights
("rights").
(b) The maximum aggregate number of shares of Common Stock
as to which awards of options, restricted shares, units or rights
may be made from time to time under the Plan is 1,974,190 shares.
(1) Shares issued pursuant to this Plan may be in whole or in
part, as the Board of Directors of the Corporation (the "Board of
Directors") shall from time to time determine, authorized but
unissued shares or issued shares reacquired by the Corporation.
If for any reason any shares as to which an option has been
granted cease to be subject to purchase thereunder or any
restricted shares or restricted units are forfeited to the
Corporation, or to the extent that any awards under the Plan
denominated in shares or units are paid or settled in cash or are
surrendered upon the exercise of an option,
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(1) Initially, 1,000,000 shares were authorized to be issued
under the Plan. On May 29, 1991, the Corporation effected a
two-for-one stock split by way of a stock dividend, leaving
1,974,190 shares available for issuance under the Plan on
and after that date, after giving effect to shares
previously awarded.
then (unless the Plan shall have been terminated) such shares or
units, and any shares surrendered to the Corporation upon such
exercise, shall become available for subsequent awards under the
Plan unless such shares or units, if so made available for
subsequent awards under the Plan, would not be exempt from
Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act") pursuant to Rule 16b-3, as amended, thereunder;
provided, however, that shares surrendered to the Corporation
upon the exercise of an incentive stock option and shares subject
to an incentive stock option surrendered upon the exercise of a
right shall not be available for subsequent award of additional
stock options under the Plan.
(c) No incentive stock option shall be granted hereunder
after November 30, 1999.
3. Administration
(a) The Plan shall be administered by those members of the
Personnel, Compensation and Nominating Committee, or any
successor thereto, of the Board of Directors who are
"disinterested persons" within the meaning of Rule 16b-3, as
amended, under Section 16(b) of the Exchange Act or by such other
committee consisting of not less than two persons each of whom
shall qualify as "disinterested persons," as may be determined by
the Board of Directors ("the Committee").
(b) The Committee shall have plenary authority in its sole
discretion, subject to and not inconsistent with the express
provisions of this Plan: (i) to grant options, to determine the
purchase price of the Common Stock covered by each option, the
term of each option, the employees to whom, and the time or times
at which, options shall be granted and the number of shares to be
covered by each option; (ii) to designate options as incentive
stock options or non-qualified options and to determine which
options shall be accompanied by rights; (iii) to grant rights and
to determine the purchase price of the Common Stock covered by
each right or related option, the term of each right or related
option, the employees to whom, and the time or times at which,
rights or related options shall be granted and the number of
shares to be covered by each right or related option; (iv) to
grant restricted shares and restricted units and to determine the
term of the Restricted Period (as defined in paragraph 10) and
other conditions applicable to such shares or units, the
employees to whom, and the time or times at which, restricted
shares or restricted units shall be granted and the number of
shares or units to be covered by each grant; (v) to interpret the
Plan; (vi) to prescribe, amend and rescind rules and regulations
relating to the Plan; (vii) to determine the terms and provisions
of the option and rights agreements (which need not be identical)
and the restricted share and restricted unit agreements (which
need not be identical) entered into in connection with awards
under the Plan, including any provisions of such agreements that
may permit a recipient of an award of restricted units to elect,
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prior to the vesting of such units, to defer the payment of cash
and/or the delivery of shares of Common Stock otherwise to be
made upon the vesting of such restricted units, and/or to defer
the payment of any cash compensation awarded to the recipient
with respect to such restricted units, or with respect to any
restricted stock awarded to the recipient, either under this Plan
or the GPU System Companies Deferred Compensation Plan (a
"Deferral"); and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
Without limiting the foregoing, the Committee shall have plenary
authority in its sole discretion, subject to and not inconsistent
with the express provisions of the Plan, (1) to select GPU
Officers (as defined below) for participation in the Plan, (2) to
determine the timing, price and amount of any grant or award
under the Plan to any GPU Officer, (3) either (A) to determine
the form in which payment of any right granted or awarded under
the Plan will be made (i.e., cash, securities or any combination
thereof) or (B) to approve the election of the employee to
receive cash in whole or in part in settlement of any right
granted or awarded under the Plan. As used herein, the term "GPU
Officer" shall mean an officer (other than an assistant officer)
of the Corporation, any member of the Corporation's Corporate
Executive Council (as it may be constituted from time to time),
and any person who may from time to time be designated an
executive officer of the Corporation by its Board of Directors.
The exercise by the Committee of the powers granted in clauses
(i), (ii), (iii), (iv), and (vii) hereof shall be subject to the
approval of a committee of the Board of Directors comprised only
of "disinterested persons" within the meaning of Rule 16b-3, as
amended, under Section 16(b) of the Exchange Act with respect to
a recipient of an award hereunder who is an officer (other than
assistant officer) of the Corporation or the Chairman or
President of any subsidiary (as defined in paragraph 4(a) hereof)
of the Corporation (the "Board Committee"). (The Committee and
the Board Committee are sometimes hereinafter referred to as the
"Committees.")
(c) The Committees may delegate to one or more of their
members or to one or more agents such administrative duties as
they may deem advisable, and the Committees or any person to whom
they have delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the
Committees or such person may have under the Plan; provided, that
the Committees may not delegate any duties to a member of the
Board of Directors who would not qualify as a "disinterested
person" to administer the Plan as contemplated by Rule 16b-3, as
amended, or other applicable rules under the Exchange Act. The
Committees may employ attorneys, consultants, accountants or
other persons and the Committees, the Corporation and its
officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committees
in good faith shall be final and binding upon all employees who
have received awards, the Corporation and all other interested
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persons. Notwithstanding the foregoing, any action taken or any
interpretation or determination made by the Committees after the
occurrence of a "Change in Control" (as defined in paragraph 7(c)
hereof) which adversely affects the rights of any employee with
respect to any award made to the employee hereunder shall be
subject to judicial review under a "de novo" rather than a
deferential standard. No member or agent of the Committees shall
be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or
awards made thereunder, and all members and agents of the
Committees shall be fully protected by the Corporation in respect
of any such action, determination or interpretation.
4. Eligibility; Factors to be Considered in Making Awards
(a) Only employees of the Corporation or its subsidiaries
may receive awards under the Plan. The term "subsidiary" means
any corporation one hundred (100%) percent of the common stock of
which is owned, directly or indirectly, by the Corporation. A
director of the Corporation or of a subsidiary who is not also an
employee will not be eligible to receive an award.
(b) In determining the employees to whom awards shall be
granted and the number of shares or units to be covered by each
award, the Committee shall take into account the nature of the
employee's duties, his or her present and potential contributions
to the success of the Corporation and such other factors as it
shall deem relevant in connection with accomplishing the purposes
of the Plan.
(c) Awards may be granted singly, in combination or in
tandem and may be made in combination or in tandem with or in
replacement of, or as alternatives to, awards or grants under any
other employee plan maintained by the Corporation or its
subsidiaries. An award made in the form of an option, a unit or
a right may provide, in the discretion of the committee, for (i)
the crediting to the account of, or the current payment to, each
employee who has such an award of an amount equal to the cash
dividends and stock dividends paid by the Corporation upon one
share of Common Stock for each restricted unit, or share of
Common Stock subject to an option or right, included in such
award, and for each restricted unit which is the subject of a
Deferral ("Dividend Equivalents"), or (ii) the deemed
reinvestment of such Dividend Equivalents and stock dividends in
shares of Common Stock or the deemed reinvestment of units in
additional units , which deemed reinvestment in each case shall
be deemed to be made in accordance with the provisions of
paragraph 10 and credited to the Employee's account ("Additional
Deemed Shares"). Such Additional Deemed Shares shall be subject
to the same restrictions (including but not limited to provisions
regarding forfeitures) applicable with respect to the option,
unit or right with respect to which such credit is made.
Dividend Equivalents not deemed reinvested as stock dividends
shall not be subject to forfeiture, and may bear amounts
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equivalent to interest or cash dividends as the Committee may
determine. An employee who has been granted incentive stock
options under the Plan may be granted an additional award or
awards, subject to such limitations as may be imposed by the Code
with respect to incentive stock options.
(d) The Committee, in its sole discretion, may grant to an
employee who has been granted an award under the Plan or any
other employee plan maintained by the Corporation, any of its
subsidiaries, or any successor thereto, in exchange for the
surrender and cancellation of such award, a new award in the same
or a different form and containing such terms, including without
limitation a price which is different (either higher or lower)
than any price provided in the award so surrendered and
cancelled, as the Committee may deem appropriate.
5. Option Price
(a) The purchase price of the Common Stock covered by each
option shall be determined by the Committee; provided, however,
that in the case of incentive stock options, the purchase price
shall not be less than 100% of the fair market value of the
Common Stock on the date the option is granted. Fair market
value shall mean the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape for the
date on which the option is granted, or if there are no sales on
such date, on the next preceding day on which there were sales.
Such price shall be subject to adjustment as provided in
paragraph 13. The price so determined shall also be applicable
in connection with the exercise of any related right.
(b) The purchase price of the shares as to which an option
is exercised shall be paid in full at the time of exercise;
payment may be made in cash, which may be paid by check or other
instrument acceptable to the Corporation, in shares of the Common
Stock, valued at the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape for the
date of exercise, or if there were no sales on such date, on the
next preceding day on which there were sales, or (if permitted by
the Committee and subject to such terms and conditions as it may
determine) by surrender of outstanding awards under the Plan. In
addition, the employee shall pay any amount necessary to satisfy
applicable federal, state or local tax requirements promptly upon
notification of the amount due. The Committee may permit such
amount to be paid in shares of Common Stock previously owned by
the employee, or a portion of the shares of Common Stock that
otherwise would be distributed to such employee upon exercise of
the option, or a combination of cash and shares of such Common
Stock.
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6. Term of Options
The term of each incentive stock option granted under the
Plan shall be such period of time as the Committee shall
determine, but not more than ten years from the date of grant,
subject to earlier termination as provided in paragraphs 11 and
12. The term of each non-qualified stock option granted under
the Plan shall be such period of time as the Committee shall
determine, subject to earlier termination as provided in
paragraphs 11 and 12.
7. Exercise of Options
(a) Each option shall become exercisable in whole or in
part, as the Committee shall determine provided, however, that
the Committee may also, in its discretion, accelerate the
exercisability of any option in whole or in part at any time.
(b) Subject to the provisions of the Plan and unless
otherwise provided in the option agreement, an option granted
under the Plan shall become exercisable in full at the earliest
of the employee's death, Eligible Retirement (as defined below),
or Total Disability (as defined in paragraph 12). For purposes
of this Plan, the term "Eligible Retirement" shall mean the date
upon which an employee, having attained an age of not less than
fifty-five, terminates his or employment with the Corporation and
all of its subsidiaries, provided that such employee is
immediately eligible to receive a pension (whether or not he or
she otherwise elects to defer such receipt) under Section 3.1 or
3.3 of the "Employee Pension Plan" maintained by any subsidiary
or subsidiaries of the Corporation for salaried employees, or any
successor plan thereto.
(c) Notwithstanding the foregoing, an option shall become
immediately exercisable as to all shares of Common Stock
remaining subject to the option on or following a "Change in
Control" of the Corporation (the date upon which such event
occurs shall be referred to for purposes of this Plan as an
"Acceleration Date"). A "Change in Control" shall mean the
occurrence during the term of the Plan of:
(1) An acquisition (other than directly from the
Corporation) of any 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,
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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 (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 directors of the Surviving Corporation,
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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, 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) An option may be exercised, at any time or from time to
time (subject, in the case of an incentive stock option, to such
restrictions as may be imposed by the Code), as to any or all
full shares as to which the option has become exercisable,
provided, however, that an option may not be exercised at any one
time as to less than 100 shares (or less than the number of
shares as to which the option is then exercisable, if that number
is less than 100 shares).
(e) Subject to the provisions of paragraphs 11 and 12, in
the case of incentive stock options, no option may be exercised
at any time unless the holder thereof is then an employee of the
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Corporation or any of its subsidiaries. For purposes of this
subparagraph 7(e), subsidiary shall include, as under Treasury
Regulations Section 1.421-7(h)(3) and (4), example (3), any
corporation which is a subsidiary of the Corporation during the
entire portion of the requisite period of employment during which
it is the employer of the holder.
(f) Upon the exercise of an option or portion thereof in
accordance with the Plan, the option agreement and such rules and
regulations as may be established by the Committee, the holder
thereof shall have the rights of a shareholder with respect to
the shares issued as a result of such exercise.
8. Award and Exercise of Rights
(a) A right may be awarded by the Committee in connection
with any option granted under the Plan, either at the time the
option is granted or thereafter at any time prior to the
exercise, termination or expiration of the option ("tandem
right"), or separately ("freestanding right"). Each tandem right
shall be subject to the same terms and conditions as the related
option and shall be exercisable only to the extent the option is
exercisable. No right shall be exercisable for cash by a GPU
Officer within six months from the date the right is awarded (and
then, as to a tandem right, only to the extent the related option
is exercisable) or, if the exercise price of the right is not
fixed on the date of the award, within six months from the date
when the exercise price is so fixed, and in any case only when
the GPU Officer's election to receive cash in full or partial
satisfaction of the right, as well as the GPU Officer's exercise
of the right for cash, is made during a Quarterly Window Period
(as defined below); provided, that a right may be exercised by a
GPU Officer for cash outside a Quarterly Window Period if the
date of exercise is automatic or has been fixed in advance under
the Plan and is outside the GPU Officer's control. The term
"Quarterly Window Period" shall mean the period beginning on the
third business day following the date of release of each of the
Corporation's quarterly and annual summary statements of sales
and earnings and ending on the twelfth business day following
such release; and the date of any such release shall be deemed to
be the date it either (A) appears on a wire service, (B) appears
on a financial news service, (C) appears in a newspaper of
general circulation, or (D) is otherwise made publicly available,
for example, by press releases to a wire service, financial news
service, or newspapers or general circulation. Subject to the
foregoing, a right shall be exercisable (as to a tandem right,
only to the extent the related option is exercisable) on or after
an Acceleration Date.
(b) A right shall entitle the employee upon exercise in
accordance with its terms (subject, in the case of a tandem
right, to the surrender unexercised of the related option or any
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portion or portions thereof which the employee from time to time
determines to surrender for this purpose) to receive, subject to
the provisions of the Plan and such rules and regulations as from
time to time may be established by the Committee, a payment
having an aggregate value equal to the product of (A) the excess
of (i) the fair market value on the exercise date of one share of
Common Stock over (ii) the exercise price per share, in the case
of a tandem right, or the price per share specified in the terms
of the right, in the case of a freestanding right, multiplied by
(B) the number of shares with respect to which the right shall
have been exercised. The payment may be made in the form of all
cash, all shares of Common Stock, or a combination thereof, as
elected by the employee, subject (where the employee is a GPU
Officer) to paragraph 8(a) hereof.
(c) The exercise price per share specified in a right shall
be as determined by the Committee, provided that, in the case of
a tandem right accompanying an incentive stock option, the
exercise price shall be not less than fair market value of the
Common Stock subject to such option on the date of grant.
(d) If upon the exercise of a right the employee is to
receive a portion of the payment in shares of Common Stock, the
number of shares shall be determined by dividing such portion by
the fair market value of a share on the exercise date. The
number of shares received may not exceed the number of shares
covered by any option or portion thereof surrendered. Cash will
be paid in lieu of any fractional share.
(e) No payment will be required from an employee upon
exercise of a right, except that any amount necessary to satisfy
applicable federal, state or local tax requirements shall be
withheld or paid promptly by the employee upon notification of
the amount due and prior to or concurrently with delivery of cash
or a certificate representing shares. The Committee may permit
such amount to be paid in shares of Common Stock previously owned
by the employee, or a portion of the shares of Common Stock that
otherwise would be distributed to such employee upon exercise of
the right, or a combination of cash and shares of such Common
Stock.
(f) The fair market value of a share shall mean the closing
price of the Common Stock as reported on the New York Stock
Exchange Composite Tape for the date of exercise, or if there are
no sales on such date, on the next preceding day on which there
were sales; provided, however, that in the case of rights that
relate to an incentive stock option, the Committee may prescribe,
by rules of general application, such other measure of fair
market value as the Committee may in its discretion determine but
not in excess of the maximum amount that would be permissible
under Section 422 of the Code without disqualifying such option
under Section 422.
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(g) Upon exercise of a tandem right, the number of shares
subject to exercise under the related option shall automatically
be reduced by the number of shares represented by the option or
portion thereof surrendered.
(h) A right related to an incentive stock option may only
be exercised if the fair market value of a share of Common Stock
on the exercise date exceeds the option price.
9. Non-Transferability of Options, Rights and Units;
Holding Periods for GPU Officers
(a) Options, rights, and units granted under the Plan shall
not be transferable by the grantee thereof otherwise than by will
or the laws of descent and distribution; provided, that the
designation of a beneficiary by an employee shall not constitute
a transfer; and options and rights may be exercised during the
lifetime of the employee only by the employee or, unless such
exercise would disqualify an option as an incentive stock option,
by the employee's guardian or legal representative.
(b) Notwithstanding anything contained in this Plan to the
contrary, (i) any shares of Common Stock awarded hereunder to a
GPU Officer may not be transferred or disposed of for at least
six months from the date of award thereof, (ii) any option, right
or unit awarded hereunder to a GPU Officer, or the shares of
Common Stock into which any such option, right or unit is
exercised or converted, may not be transferred or disposed of for
at least six months following the date of acquisition by the GPU
Officer of such option, right or unit, and (iii) the Committee
shall take no action whose effect would cause a GPU Officer to be
in violation of clause (i) or (ii) above.
10. Award and Delivery of Restricted
Shares or Restricted Units
(a) At the time an award of restricted shares or restricted
units is made, the Committee shall establish a period of time
(the "Restricted Period") applicable to such award. Each award
of restricted shares or restricted units may have a different
Restricted Period. The Committee may, in its sole discretion, at
the time an award is made, prescribe conditions for the
incremental lapse of restrictions during the Restricted Period
and for the lapse or termination of restrictions upon the
satisfaction of other conditions in addition to or other than the
expiration of the Restricted Period with respect to all or any
portion of the restricted shares or restricted units. Subject to
Section 9 hereof, the Committee may also, in its sole discretion,
shorten or terminate the Restricted Period, or waive any
conditions for the lapse or termination of restrictions with
respect to all or any portion of the restricted shares or
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restricted units. Notwithstanding the foregoing but subject to
Section 9 hereof, all restrictions shall lapse, and the
Restricted Period shall terminate, with respect to all restricted
shares or restricted units upon the earliest to occur of an
employee's Eligible Retirement, death, Total Disability or the
occurrence of an Acceleration Date.
(b) (1) Unless such shares are issued as uncertificated
shares pursuant to subparagraph (3) below, a stock certificate
representing the number of restricted shares granted to an
employee shall be registered in the employee's name but shall be
held in custody by the Corporation or an agent therefor for the
employee's account. The employee shall generally have the rights
and privileges of a shareholder as to such restricted shares,
including the right to vote such restricted shares, except that,
subject to the provisions of paragraph 11, the following
restrictions shall apply: (i) the employee shall not be entitled
to delivery of the certificate until the expiration or
termination of the Restricted Period and the satisfaction of any
other conditions prescribed by the Committee; (ii) none of the
restricted shares may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restricted Period
and until the satisfaction of any other conditions prescribed by
the Committee at the time of award; and (iii) all of the
restricted shares shall be forfeited and all rights of the
employee to such restricted shares shall terminate without
further obligation on the part of the Corporation unless the
employee has remained an employee of the Corporation or any of
its subsidiaries until the expiration or termination of the
Restricted Period and the satisfaction of any other conditions
prescribed by the Committee at the time of award applicable to
such restricted shares. At the discretion of the Committee, (i)
cash and stock dividends with respect to the restricted shares
may be either currently paid or withheld by the Corporation for
the employee's account, and interest may be paid on the amount of
cash dividends withheld at a rate and subject to such terms as
determined by the Committee or (ii) the Committee may require
that all cash dividends be applied to the purchase of additional
shares of Common Stock, and such purchased shares, together with
any stock dividends related to such restricted shares (such
purchased shares and stock dividends are hereafter referred to as
"Additional Restricted Shares") shall be treated as Additional
Shares, subject to forfeiture on the same terms and conditions as
the original grant of the restricted shares to the employee.
(2) The purchase of any such Additional Restricted Shares
shall be made either (x) through the Corporation's Dividend
Reinvestment and Stock Purchase Plan, in which event the price of
such shares so purchased through the reinvestment of dividends
shall be as determined in accordance with the provisions of that
plan and no stock certificate representing such Additional
Restricted Shares shall be registered in the employee's name or
(y) in accordance with such alternative procedure as is
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determined by the Committee in which event the price of such
purchased shares shall be the closing price of the Common Stock
as reported on the New York Stock Exchange Composite Tape for the
date on which such purchase is made, or if there were no sales on
such date, the next preceding day on which there were sales. In
the event that the Committee shall not require reinvestment, cash
or stock dividends so withheld by the Committee shall not be
subject to forfeiture. Upon the forfeiture of any restricted
shares (including any Additional Restricted Shares), such
forfeited shares shall be transferred to the Corporation without
further action by the employee. The employee shall have the same
rights and privileges, and be subject to the same restrictions,
with respect to any shares received pursuant to paragraph 13.
(3) Not-withstanding anything herein to the contrary,
shares representing Restricted Shares or Additional Restricted
Shares may be issued as uncertificated shares.
(c) Upon the expiration or termination of the Restricted
Period and the satisfaction of any other conditions prescribed by
the Committee at the time of award, or at such earlier time as
provided for in paragraph 11, the restrictions applicable to the
restricted shares (including Additional Restricted Shares) shall
lapse and a stock certificate for the number of restricted shares
(including any Additional Restricted Shares) with respect to
which the restrictions have lapsed shall be delivered, free of
all such restrictions, except any that may be imposed by law, to
the employee or the employee's beneficiary or estate, as the case
may be. The Corporation shall not be required to deliver any
fractional share of Common Stock but will pay, in lieu thereof,
the fair market value (determined as of the date the restrictions
lapse) of such fractional share to the employee or the employee's
beneficiary or estate, as the case may be.
No payment will be required from the employee upon the
issuance or delivery of any restricted shares, except that any
amount necessary to satisfy applicable federal, state or local
tax requirements shall be withheld or paid promptly upon
notification of the amount due and prior to or concurrently with
the issuance or delivery of a certificate representing such
shares. The Committee may permit such amount to be paid in shares
of Common Stock previously owned by the employee, or a portion of
the shares of Common Stock that otherwise would be distributed to
such employee upon the lapse of the restrictions applicable to
the restricted shares, or a combination of cash and shares of
such Common Stock.
(d) In the case of an award of restricted units, no shares
of Common Stock shall be issued at the time the award is made,
and the Corporation shall not be required to set aside a fund for
the payment of any such award.
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(e) Subject to subparagraph (g) below:
(i) Upon the expiration or termination of the
Restricted Period or the occurrence of an Acceleration Date
and the satisfaction of any other conditions prescribed by
the Committee or at such earlier time as provided for in
paragraph 11, the Corporation shall deliver to the employee
or the employee's beneficiary or estate, as the case may be,
one share of Common Stock for each restricted unit with
respect to which the restrictions have lapsed ("vested
unit").
(ii) In addition, if the Committee has not
required the deemed reinvestment of such Dividend
Equivalents pursuant to paragraph 4, at such time the
Corporation shall deliver to the employee cash equal to any
Dividend Equivalents or stock dividends credited with
respect to each such vested unit and, to the extent
determined by the Committee, the interest thereupon.
However, if the Committee has required such deemed
reinvestment in connection with such restricted unit, in
addition to the stock represented by such vested unit, the
Corporation shall deliver the number of Additional Deemed
Shares credited to the employee with respect to such vested
unit.
(iii) Notwithstanding the foregoing, the Committee
may, in its sole discretion, elect to pay cash or part cash
and part Common Stock in lieu of delivering only Common
Stock for the vested units and related Additional Deemed
Shares. If a cash payment is made in lieu of delivering
Common Stock, the amount of such cash payment shall be equal
to the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape for the date on which
the Restricted Period lapsed with respect to such vested
unit and related Additional Deemed Shares, or if there are
no sales on such date, on the next preceding day on which
there were sales.
(f) Upon the occurrence of an Acceleration Date, all
outstanding vested units (including restricted units whose
restrictions have lapsed as a result of the occurrence of such
acceleration date) and credited Dividend Equivalents or related
Additional Deemed Shares shall be payable as soon as practicable
but in no event later than 90 days after such Acceleration Date
in cash, in shares of Common Stock, or part in cash and part in
Common Stock, as the Committee, in its sole discretion, shall
determine.
(i) Subject to subparagraph (g) below, to the extent
that an employee receives cash in payment for his or her
vested units and Additional Deemed Shares, such employees
shall receive an amount equal to the product of (x) the
number of vested units and Additional Deemed Shares credited
to such employee's account for which such employee is
receiving payment in cash multiplied by (y) the highest
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closing price per share of Common Stock occurring during the
ninety (90) day period preceding and the ninety (90) day
period following the Acceleration Date (the "Multiplication
Factor").
(ii) Subject to subparagraph (g) below, to the extent
that an employee receives Common Stock in payment for his or
her vested units and Additional Deemed Shares, such employee
shall receive the number of shares of Common Stock
determined by dividing (x) the product of (I) the number of
vested units and Additional Deemed Shares credited to such
employee's account for which such employee is receiving
payment in Common Stock multiplied by (II) the
Multiplication Factor, by (y) the fair market value per
share of the Common Stock for the day preceding the payment
date, or if there are no sales on such date, on the next
preceding day on which there were sales.
(g) No payment will be required from the employee upon the
award of any restricted units, the crediting or payment of any
Dividend Equivalents or Additional Deemed Shares, or the delivery
of Common Stock or the payment of cash in respect of vested
units, except that any amount necessary to satisfy applicable
federal, state or local tax requirements shall be withheld or
paid promptly upon notification of the amount due. The Committee
may permit such amount to be paid in shares of Common Stock
previously owned by the employee, or a portion of the shares of
Common Stock that otherwise would be distributed to such employee
in respect of vested units and Additional Deemed Shares, or a
combination of cash and shares of such Common Stock.
(h) In addition, the Committee shall have the right, in its
absolute discretion, upon or prior to the vesting of any
restricted shares (including Additional Restricted Shares) and
restricted units (including Additional Deemed Shares) to award
cash compensation to the employee for the purpose of aiding the
employee in the payment of any and all federal, state and local
income taxes payable as a result of such vesting, if the
performance of the Corporation during the Restricted Period meets
such criteria as the Committee shall have prescribed.
(i) Notwithstanding any other provision in this paragraph
10 to the contrary, any payment of cash and/or delivery of any
shares of Common Stock otherwise required to be made hereunder on
any date with respect to any restricted units awarded to an
employee, or with respect to any cash compensation awarded to an
employee pursuant to subparagraph (h) above, may be deferred, at
the employee's election, either under this Plan or under the GPU
System Companies Deferred Compensation Plan for Elected Officers,
to the extent such deferral is permitted under, and upon such
terms and conditions as may be set forth in, the written
agreement between the employee and the Corporation (whether as
initially entered into, or as subsequently amended) evidencing
the award of such units, or cash compensation, to the employee.
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11. Termination of Employment
In the event that the employment of an employee to whom an
option or right has been granted under the Plan shall be
terminated for any reason other than as set forth in paragraph
12, such option or right may, subject to the provisions of the
Plan, be exercised (but only to the extent that the employee was
entitled to do so at the termination of his or her employment) at
any time within three (3) months after such termination, but in
no case later than the date on which the option or right
terminates.
Unless otherwise determined by the Committee, if an employee
to whom restricted shares or restricted units have been granted
ceases to be an employee of the Corporation or of any subsidiary
prior to the end of the Restricted Period and the satisfaction of
any other conditions prescribed by the Committee at the time of
grant for any reason other than as set forth in paragraph 12, the
employee shall immediately forfeit all restricted shares and
restricted units, including all Additional Restricted Shares or
Additional Deemed Shares related thereto.
Any option, right, restricted share or restricted unit
agreement, or any rules and regulations relating to the Plan, may
contain such provisions as the Committee shall approve with
reference to the determination of the date employment terminates
and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be
consistent with the provisions of the Code and any applicable
rules and regulations thereunder. Nothing in the Plan or in any
award granted pursuant to the Plan shall confer upon any employee
any right to continue in the employ of the Corporation of any of
its subsidiaries or interfere in any way with the right of the
Corporation or any such subsidiary to terminate such employment
at any time.
12. Eligible Retirement, Death or Total Disability of Employee
If any employee to whom an option, right, restricted share
or restricted unit has been granted under the Plan shall die, or
suffer a Total Disability, while employed by the Corporation or
any of its subsidiaries or if an employee terminates his or her
employment pursuant to an Eligible Retirement, such option or
right may be exercised, as set forth herein, or such restricted
shares or restricted unit shall be deemed to be vested, whether
or not the employee was otherwise entitled at such time to
exercise such option or right, or be treated as vested in such
share or unit. Subject to the restrictions otherwise set forth
in this Plan, such option or right shall be exercisable by the
employee, a legatee or legatees of the employee under the
employee's last will, or by the employee's personal
representatives or distributees, whichever is applicable, at any
time (but in no case later than the date on which the option or
right terminates in accordance with the terms of grant) within
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three years after the date of the earlier of (i) the employee's
death or Total Disability (if the employee shall have died or
suffered a Total Disability while employed by the Corporation or
its subsidiaries), or (ii) such employee's Eligible Retirement.
For purposes of this paragraph 12, "Total Disability" is
defined as the permanent inability of an employee, as a result of
accident or sickness, to perform any and every duty pertaining
to such employee's occupation or employment for which the
employee is suited by reason of the employee's previous
training, education and experience.
13. Adjustments Upon Changes in Capitalization, etc.
Notwithstanding any other provision of the Plan, the
Committee may at any time make or provide for such adjustments to
the Plan, to the number and class of shares available thereunder
or to any outstanding options, restricted shares or restricted
units as it shall deem appropriate to prevent dilution or
enlargement of rights, including adjustments in the event of
distributions to holders of Common Stock other than a normal cash
dividend, changes in the outstanding Common Stock by reason of
stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations, liquidations and the like. In the event of any
offer to holders of Common Stock generally relating to the
acquisition of their shares, the Committee may make such
adjustment as it deems equitable in respect of outstanding
options, rights, and restricted units including in the
Committee's discretion revision of outstanding options, rights,
and restricted units so that they may be exercisable for or
payable in the consideration payable in the acquisition
transaction. Any such determination by the Committee shall be
conclusive and binding on all parties. No adjustment shall be
made in the minimum number of shares with respect to which an
option may be exercised at any time. Any fractional shares
resulting from such adjustments to options, rights, limited
rights, or restricted units shall be eliminated.
14. Effective Date
The Plan as amended shall become effective as of June 1,
1990, subject to the approval of the Corporation's shareholders
at the Corporation's 1990 Annual Meeting of Shareholders. The
Committee may, in its discretion, grant awards under the Plan,
the grant, exercise or payment of which shall be expressly
subject to the conditions that to the extent required at the time
of grant, exercise or payment (i) the shares of Common Stock
covered by such awards shall be duly listed, upon official notice
of issuance, upon the New York Stock Exchange, and (ii) if the
Corporation deems it necessary or desirable a Registration
Statement under the Securities Act of 1933 with respect to such
shares shall be effective.
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15. Termination and Amendment
The Board of Directors of the Corporation 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 the
Corporation's shareholders; and provided further that no
amendment or modification to the penultimate sentence of Section
3(c), to Section 7(c) or to this Section 15, 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 employee 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 employee 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 employee prior to the date
of the adoption of such amendment, modification, suspension or
termination without such employee's written consent.
16. Written Agreements
Each award of options, rights, restricted shares or
restricted units shall be evidenced by a written agreement,
executed by the employee and the Corporation, which shall contain
such restrictions, terms and conditions as the Committee may
require.
17. Effect on Other Stock Plans
The adoption of the Plan shall have no effect on awards made
or to be made pursuant to other stock plans covering employees of
the Corporation, its subsidiaries, or any successors thereto.
18