EXHIBIT 10-J
DEFERRED REMUNERATION PLAN FOR OUTSIDE DIRECTORS
OF JERSEY CENTRAL POWER & LIGHT COMPANY
(AS AMENDED AND RESTATED EFFECTIVE JUNE 5, 1997)
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 June 5, 1997. The Plan will be implemented
by individual elections by each Director.
2. Plan Summary
2.1 This Plan provides for deferral by Directors of all or a
portion of current Remuneration.
2.2 Funds being deferred will be credited with the equivalent of
interest in accordance with Section 6.
2.3 Each component of the deferred funds will be distributed as
follows:
(a) for a Director who elects deferral until a date or
dates following his or her Retirement, to the
Director, in accordance with his or her latest
effective election, and subject to provisions of
Section 4.5;
(b) for a Director who elects deferral until a date or
dates preceding his or her Retirement, to the
Director, in accordance with his or her initial
election; or
(c) if a Director dies before the deferred funds have been
fully distributed, to his or her designated
beneficiary, in accordance with the option selected by
the Director under Section 7.2 for each component
except as the Board may otherwise determine, based on
the circumstances at the time the distribution is to
commence.
3. Definition of Terms
3.1 Board of Directors refers to the Board of Directors of Jersey
Central Power & Light Company.
3.2 Change in Control - A "Change in Control" shall mean the
occurrence during the term of the Plan of:
(1) An acquisition (other than directly from GPU, Inc. (the
"Corporation")) of any common stock of the Corporation ("Common Stock")
or other voting securities of the Corporation entitled to vote
generally for the election of directors of the Corporation (the "Voting
Securities") by any "Person" (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the then
outstanding shares of Common Stock or the combined voting power of the
Corporation's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting Securities
which are acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a Change
in Control. A "Non-Control Acquisition" shall mean an acquisition by
(A) an employee benefit plan (or a trust forming a part thereof)
maintained by (i) the Corporation or (ii) any corporation or other
Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by the
Corporation (for purposes of this definition, a "Subsidiary"), (B) the
Corporation or its Subsidiaries, or (C) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);
(2) The individuals who, as of August 1, 1996, are members of the board
of directors of the Corporation (the "Incumbent Board"), cease for any
reason to constitute at least seventy percent (70%) of the members of
the board of directors of the Corporation; provided, however, that if
the election, or nomination for election by the Corporation's
shareholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent
Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened "Election
Contest" (as described in Rule 14a-11 promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the board of directors of the
Corporation (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
(3) The consummation of:
(A) A merger, consolidation or reorganization with or into the
Corporation or in which securities of the Corporation are issued,
unless such merger, consolidation or reorganization is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean a merger,
consolidation or reorganization with or into the Corporation or in
which securities of the Corporation are issued 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 reducing the number of shares of Common Stock or
Voting Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of shares of Common Stock or Voting Securities by the Corporation,
and after such share acquisition by the Corporation, the Subject Person becomes
the Beneficial Owner of any additional shares of Common Stock or Voting
Securities which increases the percentage of the then outstanding shares of
Common Stock or Voting Securities Beneficially Owned by the Subject Person, then
a Change in Control shall occur.
3.3 Company - refers to Jersey Central Power & Light Company.
3.4 Director - refers to a member of the Board of Directors who is
not an employee of Jersey Central Power & Light Company or any
of its subsidiaries.
3.5 Plan - refers to this Deferred Remuneration Plan or Outside
Directors as described in this document and as it may be
amended in the future.
3.6 Remuneration - refers to all cash amounts earned during a
calendar year by a Director for services performed as a
Director (including services performed as a member of a
committee of the Board of Directors), but does not include
consulting fees, reimbursement for travel or other expenses or
Company contributions to other benefit plans.
3.7 Pre-Retirement Account refers to the memorandum account which
shall be established and maintained for a Director who elects,
pursuant to Section 5.2, to have payment of any portion of his
or her Remuneration for any Plan Year deferred to a date prior
to his or her Retirement. A separate Pre-Retirement Account
shall be established and maintained for the Remuneration for
each Plan Year which the Director so elects to defer.
3.8 Retirement Account - refers to the memorandum account which
shall be established and maintained for a Director who elects,
pursuant to Section 5.2, to have payment of any portion of his
or her Remuneration for any Plan Year deferred to a date after
his or her Retirement. All amounts deferred pursuant to
elections made on or before December 31, 1985 under the Plan
by a Director, together with all interest equivalents earned
by such election and credited to such amounts prior to
December 31, 1986, shall be treated, on or after such date, as
part of the Director's Retirement Account.
3.9 Retirement - refers to the retirement from service on the
Board of Directors, on account of resignation, death, or any
other reason, without becoming an employee of Jersey Central
Power & Light Company, the Corporation or any of its
subsidiaries.
3.10 Plan Year - refers to the period October 1, 1986 through
December 31, 1986; and each twelve (12) month period from
January 1 through December 31 thereafter.
4. Administration
4.1 The Board of Directors has established this Plan. The Board of
Directors may in its sole discretion modify the provisions of
the Plan from time-to-time, or, may terminate the entire Plan
at any time; provided, however, that Section 3.2, this Section
4.1, Section 4.3, the last sentence of the first paragraph of
Section 6 and the last paragraph of Section 7.2 may not be
amended or modified, and the Plan may not be terminated, (i)
at the request of a third party who has indicated an intention
or taken steps to effect a Change in Control and who
effectuates a Change in Control, (ii) within six (6) months
prior to, or otherwise in connection with, or in anticipation
of, a Change in Control which has been threatened or proposed
and which actually occurs, or (iii) following a Change in
Control, if the amendment, modification or termination
adversely affects the rights of any Director under the Plan.
No modification or termination of the Plan shall adversely
affect the rights of any Director with respect to any amounts
standing to the Director's credit in any Account immediately
prior to the date of the adoption of such
modification or termination, including without limitation any
rights with respect to the time and method of payment of, or
the crediting of interest equivalents with respect to, any
such amounts.
4.2 Responsibility for the ongoing administration of this Plan
rests with the Corporate Secretary's Department.
4.3 All questions concerning the disclosure of information
relating to this Plan, as well as any dispute over accounting
or administrative procedures or interpretation of the Plan,
will be resolved at the sole discretion of the Corporate
Secretary.
The Corporate Secretary will not be liable to any person for
any action taken or omitted in connection with the
interpretation and the administration of the Plan unless
attributable to willful misconduct or lack of good faith.
Notwithstanding the foregoing, any determination made by the
Corporate Secretary after the occurrence of a "Change in
Control" that denies in whole or in part any claim made by any
individual for benefits under the Plan shall be subject to
judicial review, under a "de novo", rather than a deferential,
standard.
4.4 All provisions of this Plan, its administration and
interpretation, are intended to be in compliance with
appropriate Internal Revenue Service Rulings regarding the
construction and operation of a deferred compensation program,
so that deferred Remuneration and interest equivalents thereon
will not constitute income constructively received being
distributed under the terms of this Plan.
4.5 A Director's election to voluntarily defer Remuneration,
selection of a distribution commencement date and distribution
option, and designation of a beneficiary and contingent
beneficiary, made pursuant to this Plan shall be made in
writing, on a form furnished to the Director by the Company
for such purposes, signed and delivered personally or by first
class mail to:
Corporate Secretary
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962
Any such election, selection, designation, or change therein,
shall not become effective unless and until received by the
Corporate Secretary. A distribution election or a change in a
distribution election made after May 31, 1987 will not be
effective unless made at least twenty-four (24) months prior
to his or her Retirement or Disability.
5. Deferral Election
5.1 A Director may elect to defer all or any portion of his or her
Remuneration for any Plan Year, providing such portion is
three thousand dollars ($3,000) or more. A separate deferral
election shall be made with respect to a Director's
Remuneration for each Plan Year. An election to defer
Remuneration for the 1986 amended Plan Year shall be made on
or prior to September 30. In subsequent years, the election
shall be made on or before December 31 of the year preceding
the Plan Year. Notwithstanding, the foregoing, (a) Directors
who are initially elected prior to December 1st of any Plan
Year may, within 30 days of such initial election, make a
deferral election for the then current Plan Year, and (b)
Directors who are initially elected after December 1st of any
Plan Year may immediately make a deferral election for both
the then current Plan Year and for the immediately succeeding
Plan Year; provided, however, that any deferral election made
pursuant to clause (a) or (b) hereof shall be effective only
with respect to Remuneration earned after such election has
become effective. All elections under this Section 5.1 shall
be irrevocable.
5.2 In his or her election to defer Remuneration for any Plan
Year, a Director shall specify the amount or portion of the
Remuneration to be deferred, and shall indicate whether the
Remuneration so deferred is to be credited to a Pre-Retirement
Account, or to a Retirement Account.
5.3 With respect to Remuneration deferred hereunder for a Plan
Year which a Director elects to have credited to his or her
Pre-Retirement Account, the Director shall specify in the
election form the date on which distribution of the
Pre-Retirement Account shall be made or commence. The date so
selected shall be no earlier than 24 months from the close of
the Plan Year. In the election form for the Plan Year, the
Director shall also select an option under Section 7.2 for the
distribution of the account. Except as provided in Section
7.4, the date so specified, and the option so
selected, may not thereafter be changed by the Director.
5.4 With respect to any Remuneration deferred hereunder which a
Director elects to have credited to his or her Retirement
Account, the Director may elect a distribution commencement
date and a distribution option under Section 7.2 for the
distribution of the account, and may change, subject to the
provisions of Section 4.5, any election as to the distribution
commencement date and distribution option for the account
previously made by the Director, at any time prior to his or
her Retirement. The distribution commencement date so elected
shall be either January 15 of the calendar year following the
Director's Retirement, or January 15 of any subsequent
calendar year.
5.5 In the case of a Director who, prior to January 1, 1986, made
a deferral election under the Plan with respect to his or her
Remuneration for the calendar year 1986, any deferral election
made by the Director hereunder with respect to the period
commencing October 1, 1986 and ending December 31, 1986 shall
be effective, for that period, only with respect to the
excess, if any, of the amount he or she so elects to defer for
said period over the amount of Remuneration for said period
deferred pursuant to the Director's prior election.
5.6 The amounts which are deferred, including interest
equivalents, will be credited to a Director's Account. Prior
to distribution, all amounts deferred including interest
equivalents, will constitute general assets of the Company for
use as it deems necessary, and will be subject to the claims
of the Company's creditors. A Director shall have the status
of a mere unsecured creditor of the Company with respect to
his or her right to receive any payment under the Plan. The
Plan shall constitute a mere promise by the Company to make
payments in the future of the benefits provided for herein. It
is intended that the arrangements reflected in this Plan be
treated as unfunded for tax purposes.
6. Interest
Interest equivalents, compounded monthly on deposits treated as monthly
transactions, will be credited at the end of each quarter in the
calendar year. Such credit will be made to the balance of each account
maintained for a Director hereunder, including the undistributed
balance of any such account from which payments are being made in
installments. The rate used in calculation of interest equivalents will
be no less than the rate equal to the simple average of Citibank N.A.
of New York Prime Rates for the last business day of each of the three
months in the calendar quarter or, if greater, such other rate as
established from time to time by the Committee.
The Company may, but shall not be required to, purchase a life
insurance policy, or policies, to assist it in funding its payment
obligations under the Plan. If a policy, or policies, is so purchased,
it shall, at all times, remain the exclusive property of the Company
and subject to the claims of its creditors. Neither the Director nor
any beneficiary or contingent beneficiary designated by him or her
shall have any interest in, or rights with respect to such policy.
7. Distribution of Deferred Funds
7.1 A Director's Pre-Retirement Account shall be distributed to
the Director, or distributions from such Pre-Retirement
Accounts shall commence, on the date or dates specified in the
elections made by the Director with respect to such accounts.
A Director's Retirement Account shall be distributed to the
Director, or distributions from such accounts shall commence,
on the date specified in the Director's latest effective
election. In such case a distribution election made after May
31, 1987 will not be effective unless selected at least
twenty-four (24) months prior to his or her Retirement.
7.2 The options for distribution are:
(a) A single lump sum payment.
(b) Annual Installments over any fixed number of years
selected by the Director, with a minimum of five annual
installments required for the Retirement Account.
If distribution of a Director's Account is to be made in
annual installments under Option (b) of Section 7.2, the
amount of each installment will equal the total amount in such
account on the date the installment is payable, divided by the
number of installments remaining to be paid. In addition, if
the distributions are made in installments under Option (b) of
Section 7.2, the interest equivalent accrued on the Director's
memorandum account each year after the date the first
installment is payable will be distributed on each anniversary
of such date.
Notwithstanding any other provision of the Plan to
the contrary or any other optional form of distribution
otherwise elected, each Director shall be permitted to make
either one or both of the following special distribution
elections; (x) 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 Director's Retirement following a Change
in Control, or (y) if a Change in Control occurs after the
Director's Retirement but before all payments with respect to
the balances of his or her Accounts have been made in
accordance with the Director's elections under Sections 5.3
and 5.4, to have the entire balance of each of his Accounts
that remains unpaid at the time of such Change in Control
distributed in the form of a single lump sum payment. Any such
election shall be effective only if it is made at least twelve
(12) months prior to such Change in Control and prior to the
Director's Retirement. Any special election made under clause
(x) or (y) above may be revoked and a new special election may
be made thereunder at any time; provided, however, that such
revocation or new election shall be effective only if it is
made within the period specified in the preceding sentence.
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. The lump sum payment to be made pursuant
to a Director's special election hereunder shall be made by no
later than thirty (30) days following the date of the
Director's Retirement or, in the case of a special election
under clause (y) above, the date of the Change in Control.
7.3 Except as the Board may otherwise determine based on the
circumstances at the time the distribution to the beneficiary
is to commence:
(a) If a Director should die after distribution of
any account maintained for the Director has commenced,
but before the entire balance of such account has been
fully distributed, distributions will continue to be
made from such account to the Director's designated
beneficiary or contingent beneficiary, in accordance
with the distribution option in effect for such Account
at the time of the Director's death.
(b) If a Director should die before any distribution from an
account maintained for the Director hereunder has been
made to him or her, distribution of such account to the
Director's designated beneficiary or contingent
beneficiary shall be made, or shall commence, as soon as
practicable after the Director's death, in accordance
with the distribution option in effect for such account
at the time of the Director's death.
Amounts remaining to be paid, after the death of the Director,
to the designated beneficiary and the contingent beneficiary,
will be paid in a lump sum to the estate of the last of such
persons to die.
7.4 Notwithstanding anything herein to the contrary, any account
maintained for a Director hereunder may be distributed, in
whole or in part, to such Director on any date earlier than
the date on which distribution is to be made, or commence,
pursuant to the Director's election if:
(a) the Director requests early distribution, and
(b) the Board, in its sole discretion, determines that
early distribution is necessary to help the Director
meet some severe financial need arising from
circumstances which were beyond the Director's control
and which were not foreseen by the Director at the time
he or she made the election as to the date or dates for
distribution from such account. A request by a Director
for an early distribution shall be made in writing,
shall set forth sufficient information as to the
Director's needs for such distribution to enable the
Board to take action on his or her request, and shall be
mailed or delivered to the Company's Corporate
Secretary.
8. Non-Assignment of Deferred Remuneration
8.1 A Director's rights to payments under this Plan shall not be
subject to any manner to anticipation, alienation, sale,
transfer (other than transfer by will or by the laws of
descent and distribution, in the absence of a beneficiary
designation), assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Director or his or her spouse
or other beneficiary.
8.2 All amounts paid under the Plan, including the interest
equivalents credited to a Director's memorandum account, are
considered to be Remuneration. The crediting of interest
equivalents is intended to preserve the value of the
Remuneration so deferred for the Director.