EXHIBIT 10-S
DEFERRED REMUNERATION PLAN FOR OUTSIDE DIRECTORS
OF GPU, INC.
(AS AMENDED AND RESTATED EFFECTIVE October 8, 19997)
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 October 8, 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.
(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
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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:
(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
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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
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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.
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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, Inc. and to the Vice President=s staff or to any one or
more other officers or employees of GPU Service, Inc. or any
other subsidiary of GPU, Inc.
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 AChange 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.
4.5 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 Inc., 100 Interpace Parkway,
Parsippany, New Jersey 07054, or to such other address as may be
specified in such form.
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Any such election, selection, designation, or change therein,
shall not become effective unless and until received by the
Corporate Secretary. Except as otherwise provided in Section 7.2
or 7.4, any change in a Director's election as to the
distribution commencement date or distribution option for his or
her Retirement Account shall be effective only if such change is
made at least twenty-four (24) months prior to such Director's
Retirement.
Notwithstanding the foregoing, in the case of any Director who,
as a result of a change in the Corporation's mandatory retirement
policy for Directors adopted by the Board of Directors, is
required to retire within twenty-four (24) months after the date
of adoption of such change, any change of election as to the
distribution commencement date or distribution option for such
Director's Retirement Account shall be effective if such change
of election is made by the Director no later than forty-five (45)
days after the date of adoption of such change in policy by the
Board of Directors.
5. Deferral Election
5.1A 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
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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 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.
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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. 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.
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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 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
for the Retirement Account.
(c) Other options, 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 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.
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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 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 any 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 Change in Control.
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.
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(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.
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.
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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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