EXHIBIT 10-Q
GPU, INC.
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
AS AMENDED AND RESTATED AS OF SEPTEMBER 4, 1997
GPU, INC.
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
1. Purpose. The purpose of this restricted Stock Plan for Outside Directors (the
"Plan") is to enable GPU, Inc. ("GPU") to attract and retain persons of
outstanding competence to serve on its Board of Directors by paying such persons
a portion of their compensation in GPU Common Stock ("Common Stock") pursuant to
the terms hereof.
2. Definitions.
(a) The term "Board of Directors" shall mean the board of directors of
GPU.
(b) The term "Change in Control" shall mean the occurrence during the
term of the Plan of:
(1) An acquisition (other than directly from GPU) of any
Common Stock or other voting securities of GPU entitled to vote generally for
the election of directors (the "Voting Securities") by any "Person" (as the term
person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the then outstanding
shares of Common Stock or the combined voting power of GPU's then outstanding
Voting Securities; provided, however, in determining whether a Change in Control
has occurred, Voting Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition" shall mean an
acquisition by (A) an employee benefit plan (or a trust forming a part thereof)
maintained by (i) GPU or (ii) any corporation or other Person of which a
majority of its voting power or its voting equity securities or equity interest
is owned, directly or indirectly, by GPU (for purposes of this definition, a
"Subsidiary"), (B) GPU or its Subsidiaries, or (C) any Person in connection with
a "Non-Control Transaction" (as hereinafter defined);
(2) The individuals who, as of August 1, 1996, are members of
the Board of Directors (the "Incumbent Board"), cease for any reason to
constitute at least seventy percent (70%) of the members of the Board of
Directors; provided, however, that if the election, or nomination for election
by GPU's shareholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for purposes of
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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 with or into
GPU or in which securities of GPU 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 GPU or in
which securities of GPU are issued where:
(i) the shareholders of GPU, immediately before such
merger, consolidation or reorganization, own directly or indirectly immediately
following such merger, consolidation or reorganization, at least sixty percent
(60%) of the combined voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation or
reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at least seventy
percent (70%) of the members of the board of directors of the Surviving
Corporation, or a corporation, directly or indirectly, beneficially owning a
majority of the Voting Securities of the Surviving Corporation, and
(iii) no Person other than (w) GPU, (x) any
Subsidiary, (y) any employee benefit plan (or any trust forming a part thereof)
that, immediately prior to such merger, consolidation or reorganization, was
maintained by GPU or any Subsidiary, or (z) any Person who, immediately prior to
such merger, consolidation or reorganization had Beneficial Ownership of twenty
percent (20%) or more of the then outstanding Voting Securities or Common Stock,
has Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Surviving Corporation's then outstanding voting securities or its
common stock; 2
(B) A complete liquidation or dissolution of GPU; or
(C) The sale or other disposition of all or substantially
all of the assets of GPU to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or Voting
Securities as a result of the acquisition of Common Stock or Voting Securities
by GPU which, by reducing the number of shares of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of shares of Common Stock or Voting Securities by GPU, and after
such share acquisition by GPU, the Subject Person becomes the Beneficial Owner
of any additional shares of Common Stock or Voting Securities which increases
the percentage of the then outstanding shares of Common Stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(c) The term "Outside Director" or "Participant" means a member of the
Board of Directors who is not an employee (within the meaning of the Employee
Retirement Income Security Act of 1974) of GPU or any of its Subsidiaries. A
director of GPU who is also an employee of GPU or any of its Subsidiaries shall
become eligible to participate in this Plan and shall be entitled to receive an
award of restricted stock upon the termination of such employment.
(d) The term "Subsidiary" means, for purposes other than Section 2(b),
any corporation 50% or more of the outstanding Common Stock of which is owned,
directly or indirectly, by GPU.
(e) The term "Service" shall mean service as an Outside Director.
3. Eligibility. All Outside Directors of GPU shall receive stock awards
hereunder.
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4. Stock Awards.
(a) A total of 33,000(1) shares of GPU Common Stock shall be available
for awards under the Plan. Such shares shall be either previously unissued
shares or reacquired shares. Any restricted shares awarded under this Plan with
respect to which the restrictions do not lapse and which are forfeited as
provided herein shall again be available for other awards under the plan.
(b) Each Outside Director shall receive an annual award of 300 shares
of GPU Common Stock with respect to each calendar year or portion thereof,
during which he or she serves as an Outside Director, beginning with the
calendar year 1993. Awards shall be made in January of each year. However, for
the calendar year in which an Outside Director commences Service, the award of
shares to such Outside Director for such year shall be made in the month in
which his or her Service commences, if his or her Service commences after
January 31 of such year. All awards of shares made hereunder shall be subject to
the restrictions set forth in Section 5.
(c) Subject to the provisions of Section 5, certificates representing
shares of GPU Common Stock awarded hereunder shall be issued in the name of the
respective Participants. During the period of time such shares are subject to
the restrictions set forth in Section 5, such certificates shall be endorsed
with a legend to that effect, and shall be held by GPU or an agent therefor. The
Participant shall, nevertheless, have all the other rights of a shareholder,
including the right to vote and the right to receive all cash dividends paid
with respect to such shares.
Subject to the requirements of applicable law, certificates representing such
shares shall be delivered to the Participant within 30 days after the lapse of
the restrictions to which they are subject.
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(1) Initially, 20,000 shares were authorized to be issued under the Plan.
On May 29, 1991, GPU effected a two-for-one stock split by way of a
stock dividend, leaving 33,000 shares available for issuance under the
Plan on and after July 1, 1991 after giving effect to shares previously
awarded.
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(d) If as a result of a stock dividend, stock split, recapitalization
(or other adjustment in the stated capital of GPU), or as the result of a
merger, consolidation, or other reorganization, the common shares of GPU are
increased, reduced, or otherwise changed, the number of shares available and to
be awarded hereunder shall be appropriately adjusted, and if by virtue thereof a
Participant shall be entitled to new or additional or different shares, such
shares to which the Participant shall be entitled shall be subject to the terms,
conditions, and restrictions herein contained relating to the original shares.
In the event that warrants or rights are awarded with respect to shares awarded
hereunder, and the recipient exercises such rights or warrants, the shares or
securities issuable upon such exercise shall be likewise subject to the terms,
conditions, and restrictions herein contained relating to the original shares.
5. Restrictions.
a) Shares are awarded to a Participant on the condition that he or she
serves or has served as an Outside Director until:
(i) the Participant's death or disability, or
(ii) the Participant's retirement not earlier than the first
day of the month following the attainment of the Participant's 72nd birthday ;
or
(iii)the Participant's resignation or retirement prior to the
first day of the month following the attainment of the Participant's 72nd
birthday with the consent of the Board, i.e., approval thereof by a least 80% of
the directors voting thereon, with the affected director abstaining; or
(iv) the Participant's failure to be re-elected after being
duly nominated. Termination of Service of a Participant for any other reason,
including, without limitation, any involuntary termination effected by Board
action, shall result in forfeiture of all shares awarded. Notwithstanding the
foregoing, upon the occurrence of a Change in Control, the restrictions set
forth in Section 5(b) hereof to which any shares awarded to a Participant are
then still subject shall lapse, and the termination of the Participant's Service
for any reason at any time after the occurrence of such Change in Control shall
not result in the forfeiture of any such shares.
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(b) Shares awarded hereunder may not be sold, exchanged, transferred,
pledged, hypothecated, or otherwise disposed of (herein, "Transferred") other
than to GPU pursuant to Section 5(a) during the period commencing on the date of
the award of such shares and ending on the date of termination of the Outside
Director's Service; provided, however, that in no event may any shares awarded
hereunder be Transferred for a period of six months following the date of the
award thereof, except in the case of the recipient's death or disability, other
than to GPU pursuant to Section 5(a) hereof.
(c) Each Participant shall represent and warrant to and agree with GPU
that he or she (i) takes any shares awarded under the Plan for investment only
and not for purposes of sale or other disposition and will also take for
investment only and not for purposes of sale or other disposition any rights,
warrants, shares, or securities which may be issued on account of ownership of
such shares, and (ii) will not sell or transfer any shares awarded or any shares
received upon exercise of any such rights or warrants except in accordance with
(A) an opinion of counsel for GPU (or other counsel acceptable to GPU) that such
shares, rights, warrants, or other securities may be disposed of without
registration under the Securities Act of 1933, or (B) an applicable "no action"
letter issued by the Staff of the Commission.
6. Administrative Committee. An Administrative Committee (the "Committee") shall
have full power and authority to construe and administer the Plan. Any action
taken under the provisions of the Plan by the Committee arising out of or in
connection with the administration, construction, or effect of the Plan or any
rules adopted thereunder shall, in each case, lie within the discretion of the
Committee and shall be conclusive and binding under GPU and upon all
Participants, and all persons claiming under or through any of them.
Notwithstanding the foregoing, any determination made by the Committee after the
occurrence of a Change in Control that denies in whole or in part any claim made
by any individual for benefits under the Plan shall be subject to judicial
review, under a "de novo," rather than a deferential, standard. The Committee
shall have as members the Chief Executive Officer of GPU and two officers of GPU
or its Subsidiaries designated by the Chief Executive Officer; in the absence of
such designation, the other members of the Committee shall be the Chief
Financial Officer and the Secretary of GPU.
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7. Approval: Effective Date. The Plan is subject to the approval of a majority
of the holders of GPU's Common Stock present and entitled to vote at a meeting
of shareholders, and of the Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935. The Plan shall be effective January 1,
1989.
8. Termination and Amendment. The Board of Directors of GPU may suspend,
terminate, modify or amend the Plan, provided that no amendment or modification
to Section 2(b), to the penultimate sentence of Section 6, to the last sentence
of Section 5(a), or to this Section 8, nor any suspension or termination of the
Plan, effectuated (I) at the request of a third party who has indicated an
intention or taken steps to effect a Change in Control and who effectuates a
Change in Control, (ii) within six (6) months prior to, or otherwise in
connection with, or in anticipation of, a Change in Control which has been
threatened or proposed and which actually occurs, or (iii) following a Change in
Control, shall be effective if the amendment, modification, suspension or
termination adversely affects the rights of any Participant under the Plan. If
the Plan is terminated, the terms of the Plan shall, notwithstanding such
termination, continue to apply to awards granted prior to such termination. In
addition, no amendment, modification, suspension or termination of the Plan
shall adversely affect the rights of any Participant with respect to any award
(including without limitation any right with respect to the timing and method of
payment of any award) granted to the Participant prior to the date of the
adoption of such amendment, modification, suspension or termination without such
Participant's written consent.
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