Exhibit 10-F
SEVERANCE PROTECTION AGREEMENT
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THIS AGREEMENT made as of the 5th day of June, 1997, by and
between GPU, Inc. (the "Corporation"), GPU International, Inc. (the "Company")
and Bruce L. Levy (the "Executive") amends and restates the former Severance
Protection Agreement dated February 6, 1997.
WHEREAS, the Board of Directors of the Corporation and the Board
of Directors of the Company (the "Boards") recognize that the possibility of a
Change in Control (as hereinafter defined) exists and that the threat or the
occurrence of a Change in Control can result in significant distraction of the
Company's key management personnel because of the uncertainties inherent in such
a situation;
WHEREAS, the Boards have determined that it is essential and in
the best interest of the Company, and the Corporation and its stockholders, for
the Company to retain the services of the Executive in the event of a threat or
occurrence of a Change in Control and to ensure the Executive's continued
dedication and efforts in such event without undue concern for the Executive's
personal financial and employment security; and
WHEREAS, in order to induce the Executive to remain in the
employ of the Company, particularly in the event of a threat or the occurrence
of a Change in Control, the Company desires to enter into this Agreement with
the Executive to provide the Executive with certain benefits in the event the
Executive's employment is terminated as a result of, or in connection with, a
Change in Control.
NOW, THEREFORE, in consideration of the respective agreements of
the parties contained herein, it is agreed as follows:
1. Term of Agreement. This Agreement shall commence as of
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November 1, 1996, and shall continue in effect until October 31, 1998 (the
"Term"); provided, however, that on November 1, 1997, and on each November 1
thereafter, the Term shall automatically be extended for one (1) year unless
either the Executive or the Company shall have given written notice to the other
at least ninety (90) days prior thereto that the Term shall not be so extended;
provided, further, however, that following the occurrence of a Change in
Control, the Term shall not expire prior to the expiration of twenty-four (24)
months after such occurrence.
2. Termination of Employment. If, during the Term, the
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Executive's employment with the Company and with all other Affiliates of the
Corporation shall be terminated within twenty-four (24) months following a
Change in Control, the Executive shall be entitled to the following compensation
and benefits:
(a) If the Executive's employment with the Company and with
all other Affiliates of the Corporation shall be terminated (1) by the Company
for Cause or Disability, (2) by reason of the Executive's death, or (3) by the
Executive other than for Good Reason, the Company shall pay to the Executive his
Accrued Compensation. In addition to the foregoing, if the Executive's
employment is terminated by the Company for Disability or by reason of the
Executive's death, the Company shall pay to the Executive or his beneficiaries a
Pro Rata Bonus. The Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee benefits
plans and other applicable programs and practices then in effect.
(b) If the Executive's employment with the Company and with
all other Affiliates of the Corporation shall be terminated for any reason other
than as specified in Section 2(a), the Executive shall be entitled to the
following:
(1) the Company shall pay the Executive all Accrued
Compensation and a Pro Rata Bonus;
(2) the Company shall pay the Executive as severance pay
and in lieu of any further compensation for periods subsequent to the
Termination Date, an amount determined by multiplying (A) two times the sum of
(i) the Executive's Base Amount and (ii) the Executive's Bonus Amount, by (B) a
fraction, the numerator of which is the number of months, not to exceed
twenty-four (24), in the period beginning on the Termination Date and ending on
the Executive's Normal Retirement Date (as defined in the Company's Employee
Pension Plan), and the denominator of which is twenty-four (24).
(3)for a number of months equal to twenty-four (24), or
if earlier, until the Executive's Normal Retirement Date (as defined in the
Company's Employee Pension Plan) (the "Continuation Period"), the Company shall
at its expense continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental and
hospitalization coverages and benefits provided to the Executive immediately
prior to the Change in Control or, if greater, the coverages and benefits
provided at any time thereafter. The coverages and benefits (including
deductibles and costs) provided in this Section 2(b)(3) during the Continuation
Period shall be no less favorable to the Executive
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and his dependents and beneficiaries, than the most favorable of such coverages
and benefits referred to above. The Company's obligation hereunder with respect
to the foregoing coverages and benefits shall be reduced to the extent that the
Executive obtains any such coverages and benefits pursuant to a subsequent
employer's benefit plans, in which case the Company may reduce any of the
coverages or benefits it is required to provide the Executive hereunder so long
as the aggregate coverages and benefits of the combined benefit plans is no less
favorable to the Executive than the coverages and benefits required to be
provided hereunder. This Section 2(b)(3) shall not be interpreted so as to limit
any benefits to which the Executive, his dependents or beneficiaries may be
entitled under any of the Company's employee benefit plans, programs or
practices following the Executive's termination of employment, including without
limitation, retiree medical and life insurance benefits;
(4) the Company shall pay or reimburse the Executive for the
costs, fees and expenses of outplacement assistance services (not to exceed
twenty percent (20%) of the sum of (A) the Executive's Base Amount and (B) the
Executive's Bonus Amount) provided by any outplacement agency selected by the
Executive; and
(5) the Company shall provide to the Executive the use of a
Company-leased vehicle, at no cost to the Executive, until the earlier of (A)
the date occurring six (6) months after the Termination Date or (B) the
Executive's sixty-fifth (65th) birthday, after which date the Executive shall
have the option to purchase the vehicle at its "blue book" value.
(c) If the Executive's employment is terminated by the Company
without Cause (1) within twelve (12) months prior to a Change in Control or (2)
prior to the date of a Change in Control but the Executive reasonably
demonstrates that such termination (A) was at the request of a third party who
has indicated an intention or taken steps reasonably calculated to effect a
Change in Control (a "Third Party") and who effectuates a Change in Control or
(B) otherwise arose in connection with, or in anticipation of, a Change in
Control which has been threatened or proposed and which actually occurs, such
termination shall be deemed to have occurred after a Change in Control, provided
a Change in Control shall actually have occurred.
(d) (1) Gross-Up Payment. In the event it shall be
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determined that any payment or distribution of any type to or for the benefit of
the Executive, by the Company, the Corporation, any Affiliate, any Person (as
defined in Section 15.6(a) hereof) who acquires ownership or effective control
of the Corporation or ownership of a substantial portion of the
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Corporation's assets (within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations thereunder) or any
affiliate of such Person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the "Total
Payments"), is or will be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Total Payments.
(2) Determination By Accountant. All mathematical
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determinations, and all determinations as to whether any of the Total Payments
are "parachute payments" (within the meaning of Section 280G of the Code), that
are required to be made under this Section 2(d), including determinations as to
whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and
amounts relevant to the last sentence of this Section 2(d)(2), shall be made by
an independent accounting firm selected by the Executive from among the six (6)
largest accounting firms in the United States (the "Accounting Firm"), which
shall provide its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to the Company and the Executive by no later than
ten (10) days following the Termination Date, if applicable, or such earlier
time as is requested by the Company or the Executive (if the Executive
reasonably believes that any of the Total Payments may be subject to the Excise
Tax). If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive and the Company with a written
statement that such Accounting Firm has concluded that no Excise Tax is payable
(including the reasons therefor) and that the Executive has substantial
authority not to report any Excise Tax on his federal income tax return. If a
Gross-Up Payment is determined to be payable, it shall be paid to the Executive
within twenty (20) days after the Determination (and all accompanying
calculations and other material supporting the Determination) is delivered to
the Company by the Accounting Firm. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive, absent manifest error. As a
result of uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments not made by
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the Company should have been made ("Underpayment"), or that Gross-Up Payments
will have been made by the Company which should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine the
amount of the Underpayment or Overpayment that has occurred. In the case of an
Underpayment, the amount of such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive. In the case of an Overpayment,
the Executive shall, at the direction and expense of the Company, take such
steps as are reasonably necessary (including the filing of returns and claims
for refund), follow reasonable instructions from, and procedures established by,
the Company, and otherwise reasonably cooperate with the Company to correct such
Overpayment, provided, however, that (i) the Executive shall not in any event be
obligated to return to the Company an amount greater than the net after-tax
portion of the Overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (ii) this provision shall be
interpreted in a manner consistent with the intent of Section 2(d)(1), which is
to make the Executive whole, on an after-tax basis, from the application of the
Excise Tax, it being understood that the correction of an Overpayment may result
in the Executive repaying to the Company an amount which is less than the
Overpayment.
(e) The amounts provided for in Sections 2(a) and 2(b)(1), (2) and
(4) shall be paid in a single lump sum cash payment within thirty (30) days
after the Executive's Termination Date (or earlier, if required by applicable
law).
(f) The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 2(b)(3).
(g) The severance pay and benefits provided for in
this Section 2 shall be in lieu of any other severance pay to which the
Executive may be entitled under the GPU System Severance Procedure or any other
plan, agreement or arrangement of the Company or any other Affiliate of the
Corporation.
3. Notice of Termination. Following a Change in Control, any
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intended termination of the Executive's employment by the Company shall be
communicated by a Notice of Termination from the Company to the Executive, and
any intended termination of the Executive's employment by the Executive for Good
Reason shall be communicated by a Notice of Termination from the Executive to
the Company.
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4. Fees and Expenses. The Company shall pay all legal fees and
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related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (a) the termination of the
Executive's employment by the Company or by the Executive for Good Reason
(including all such fees and expenses, if any, incurred in contesting, defending
or disputing the basis for any such termination of employment), (b) the
Executive's hearing before the Board of Directors of the Corporation as
contemplated in Section 15.5 of this Agreement or (c) the Executive seeking to
obtain or enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company under which the Executive is
or may be entitled to receive benefits; provided, however, that the payment of
fees and expenses pursuant to this Section 4(c) shall be made only after, and
only to the extent that, the Executive is unsuccessful in his attempt to obtain
or enforce such right or benefit through the procedures established under the
Legal Defense Fund maintained by the Company under the GPU System Companies
Master Executives' Benefits Protection Trust (or any similar fund under a
successor trust).
5. Transfer of Employment. Notwithstanding any other provision
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herein to the contrary, the Company shall cease to have any further obligation
or liability to the Executive under this Agreement if (a) the Executive's
employment with the Company terminates as a result of the transfer of his
employment to any other Affiliate of the Corporation, (b) this Agreement is
assigned to such other Affiliate, and (c) such other Affiliate expressly assumes
and agrees to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no assignment had taken
place. Any Affiliate to which this Agreement is so assigned shall be treated as
the "Company" for all purposes of this Agreement on or after the date as of
which such assignment to the Affiliate, and the Affiliate's assumption and
agreement to so perform this Agreement, becomes effective.
6. Corporation's Obligation. The Corporation agrees that it will
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take such steps as may be necessary to cause the Company (or any Affiliate that
has become the "Company" pursuant to Section 5 hereof) to meet each of its
obligations to the Executive under this Agreement.
7. Notice. For the purposes of this Agreement, notices and all
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other communications provided for in the Agreement (including any Notice of
Termination) shall be in writing, shall be signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive, and
shall be deemed to have been duly given when personally delivered
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or sent by certified mail, return receipt requested, postage prepaid, addressed
to the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board with
a copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
shall be effective only upon receipt.
8. Nature of Rights. The Executive shall have the status of a
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mere unsecured creditor of the Company and the Corporation with respect to his
right to receive any payment under this Agreement. This Agreement shall
constitute a mere promise by the Company and the Corporation to make payments in
the future of the benefits provided for herein. It is the intention of the
parties hereto that the arrangements reflected in this Agreement shall be
treated as unfunded for tax purposes and, if it should be determined that Title
I of ERISA is applicable to this Agreement, for purposes of Title I of ERISA.
Except as provided in Section 2(g), nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company, the Corporation or
any other Affiliate of the Corporation and for which the Executive may qualify,
nor shall anything herein limit or reduce such rights as the Executive may have
under any other agreements with the Company, the Corporation or any other
Affiliate of the Corporation. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Company, the Corporation or any other Affiliate of the Corporation shall be
payable in accordance with such plan or program, except as explicitly modified
by this Agreement.
9. Settlement of Claims. The Company's obligation to make the
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payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Company may have against the Executive or others.
10. Miscellaneous. No provision of this Agreement may be
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modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive, the Corporation and the
Company. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the
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same or at any prior or subsequent time. No agreement or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by any party which are not expressly set forth in this Agreement.
11. Successors; Binding Agreement.
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(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, the Corporation and their respective Successors and
Assigns. The Company and the Corporation shall require their respective
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company and/or the
Corporation would be required to perform it if no such succession or assignment
had taken place.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal personal representative.
12. Governing Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of New Jersey
without giving effect to the conflict of laws principles thereof. Any action
brought by any party to this Agreement shall be brought and maintained in a
court of competent jurisdiction in Morris County in the State of New Jersey.
13. Severability. The provisions of this Agreement shall be
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deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
14. Entire Agreement. This Agreement constitutes the entire
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agreement between the parties hereto, and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto, with respect to the subject matter hereof.
15. Definitions.
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15.1. Accrued Compensation. For purposes of this Agreement,
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"Accrued Compensation" shall mean all amounts of compensation for services
rendered to the Company or any other Affiliate that have been earned or accrued
through the Termination Date but that have not been paid as of the Termination
Date including (a) base salary, (b) reimbursement for reasonable and necessary
business expenses incurred by the Executive on behalf of the Company during the
period ending on
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the Termination Date, (c) vacation pay and (d) bonuses and incentive
compensation; provided, however, that Accrued Compensation shall not include any
amounts described in clause (a) or clause (d) that have been deferred pursuant
to any salary reduction or deferred compensation elections made by the
Executive.
15.2. Affiliate. For purposes of this Agreement, "Affiliate" means
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any entity, directly or indirectly, controlled by, controlling or under common
control with the Corporation or any corporation or other entity acquiring,
directly or indirectly, all or substantially all the assets and business of the
Corporation, whether by operation of law or otherwise.
15.3. Base Amount. For purposes of this Agreement, "Base Amount"
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shall mean the Executive's annual base salary at the rate in effect as of the
date of a Change in Control or, if greater, at any time thereafter, determined
without regard to any salary reduction or deferred compensation elections made
by the Executive.
15.4. Bonus Amount. For purposes of this Agreement, "Bonus Amount"
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shall mean the greater of (a) the target annual bonus payable to the Executive
under the Incentive Plan in respect of the fiscal year during which the
Termination Date occurs or (b) the highest annual bonus paid or payable under
the Incentive Plan in respect of any of the three full fiscal years ended prior
to the Termination Date or, if greater, the three (3) full fiscal years ended
prior to the Change in Control.
15.5. Cause. For purposes of this Agreement, a termination of
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employment is for "Cause" if the Executive has been convicted of a felony or the
termination is evidenced by a resolution adopted in good faith by two-thirds of
the Board of Directors of the Corporation that the Executive:
(a) intentionally and continually failed substantially to
perform his reasonably assigned duties with the Company (other than a failure
resulting from the Executive's incapacity due to physical or mental illness or
from the assignment to the Executive of duties that would constitute Good
Reason) which failure continued for a period of at least thirty (30) days after
a written notice of demand for substantial performance, signed by a duly
authorized officer of the Company, has been delivered to the Executive
specifying the manner in which the Executive has failed substantially to
perform, or
(b) intentionally engaged in conduct which is demonstrably and
materially injurious to the Corporation or the Company; provided, however, that
no termination of the Executive's employment shall be for Cause as set forth in
this
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Section 15.5(b) until (1) there shall have been delivered to the Executive a
copy of a written notice, signed by a duly authorized officer of the Company,
setting forth that the Executive was guilty of the conduct set forth in this
Section 15.5(b) and specifying the particulars thereof in detail, and (2) the
Executive shall have been provided an opportunity to be heard in person by the
Board of Directors of the Corporation (with the assistance of the Executive's
counsel if the Executive so desires).
No act, nor failure to act, on the Executive's part, shall be
considered "intentional" unless the Executive has acted, or failed to act, with
a lack of good faith and with a lack of reasonable belief that the Executive's
action or failure to act was in the best interest of the Corporation and the
Company. Notwithstanding anything contained in this Agreement to the contrary,
no failure to perform by the Executive after a Notice of Termination is given to
the Company by the Executive shall constitute Cause for purposes of this
Agreement.
15.6. Change in Control. A "Change in Control" shall mean the occurrence
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during the term of the Agreement of:
(a) An acquisition (other than directly from 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 (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 (i)
an employee benefit plan (or a trust forming a part thereof) maintained by (A)
the Corporation or (B) 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 (a "Subsidiary") (ii) the Corporation
or its Subsidiaries, or (iii) any Person in connection with a Non-Control
Transaction (as hereinafter defined);
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(b) 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 Agreement, 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
(c) The consummation of:
(1) 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:
(A) 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,
(B) the individuals who
were members of the Incumbent Board
immediately prior to the execution of the
agreement providing for such merger,
consolidation or
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reorganization constitute at least seventy
percent (70%) of the members of the board of
directors of the Surviving Corporation, or a
corporation beneficially directly or
indirectly owning a majority of the Voting
Securities of the Surviving Corporation, and
(C) no Person other than
(i) the Corporation, (ii) any Subsidiary,
(iii) 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, the Surviving
Corporation, or any Subsidiary, or (iv) 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.
(2) A complete liquidation or
dissolution of the Corporation; or
(3) 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.
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15.7. Company and Corporation. For purposes of this
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Agreement, all references to the Company and the Corporation shall include their
respective Successors and Assigns.
15.8. Disability. For purposes of this Agreement,
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"Disability" shall mean a physical or mental infirmity which impairs the
Executive's ability to substantially perform his duties with the Company for six
(6) consecutive months, and within the time period set forth in a Notice of
Termination given to the Executive (which time period shall not be less than
thirty (30) days), the Executive shall not have returned to full-time
performance of his duties; provided, however, that if the Company's Voluntary
Employees Beneficiary Association Long Term Disability Income Plan, or any
successor plan (the "Disability Plan"), is then in effect, the Executive shall
not be deemed disabled for purposes of this Agreement unless the Executive is
also eligible for "Total Disability" (as defined in the Disability Plan)
benefits (or similar benefits in the event of a successor plan) under the
Disability Plan.
15.9. Good Reason. (a) For purposes of this Agreement,
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"Good Reason" shall mean the occurrence after a Change in Control of any of the
following events or conditions:
(1) a change in the Executive's status, title,
position or responsibilities (including reporting responsibilities) which, in
the Executive's reasonable judgment, represents an adverse change from his
status, title, position or responsibilities as in effect immediately prior
thereto; the assignment to the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are inconsistent with his status,
title, position or responsibilities; or any removal of the Executive from or
failure to reappoint or reelect him to any of such offices or positions, except
in connection with the termination of his employment for Disability, Cause, as a
result of his death or by the Executive other than for Good Reason;
(2) a reduction in the rate of the Executive's
annual base salary;
(3) the relocation of the offices of the Company
at which the Executive is principally employed to a location more than
twenty-five (25) miles from the location of such offices immediately prior to
such relocation, or the Company's requiring the Executive to be based anywhere
other than at such offices, except to the extent the Executive was not
previously assigned to a principal place of duty and except for required travel
on the Company's business to an extent substantially consistent with the
Executive's previous business travel obligations;
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(4) the failure by the Company to pay to the Executive any
portion of the Executive's current compensation or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company in which the Executive participated, within
seven (7) days of the date such compensation is due;
(5) the failure by the Company (A) to continue in effect
(without reduction in benefit level, and/or reward opportunities) any material
compensation or employee benefit plan in which the Executive was participating
immediately prior to such failure by the Company, including, but not limited to,
any of the plans listed in Appendix A hereto, unless a substitute or replacement
plan has been implemented which provides substantially identical compensation or
benefits to the Executive or (B) to continue to provide the Executive with
compensation and benefits, in the aggregate, at least equal (in terms of benefit
levels and/or reward opportunities) to those provided for under each other
compensation or employee benefit plan, program and practice in which the
Executive was participating immediately prior to such failure by the Company;
(6) the failure of the Company to obtain from its
Successors or Assigns the express assumption and agreement required under
Section 11 hereof; or
(7) any purported termination of the Executive's employment
by the Company which is not effected pursuant to a Notice of Termination
satisfying the terms set forth in the definition of Notice of Termination (and,
if applicable, the terms set forth in the definition of Cause).
(b) Any event or condition described in Section 15.9(a)(1)
through (7) which occurs (1) within twelve (12) months prior to a Change in
Control or (2) prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a Third Party who effectuates a Change in
Control or (B) otherwise arose in connection with, or in anticipation of a
Change in Control which has been threatened or proposed and which actually
occurs, shall constitute Good Reason for purposes of this Agreement
notwithstanding that it occurred prior to a Change in Control.
15.10. Incentive Plan. For purposes of this
--------------
Agreement, "Incentive Plan" shall
mean the Annual Performance Award
Plan, or any successor annual
incentive plan, maintained by the
Company or any other Affiliate.
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15.11. Notice of Termination. For purposes of this
---------------------
Agreement, following a Change in Control, "Notice of Termination" shall mean a
written notice of termination of the Executive's employment, signed by the
Executive if to the Company or by a duly authorized officer of the Company if to
the Executive, which indicates the specific termination provision in this
Agreement, if any, relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
15.12. Pro Rata Bonus. For purposes of this Agreement,
--------------
"Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a
fraction the numerator of which is the number of days in such fiscal year
through the Termination Date and the denominator of which is 365; provided,
however, that the Pro Rata Bonus shall be reduced, but not below zero, to the
extent of any bonus the Executive is entitled to receive pursuant to the
Incentive Plan in respect of the fiscal year (denoted a "Performance Period"
under the Incentive Plan) in which the Termination Date occurs.
15.13. Successors and Assigns. For purposes of this
----------------------
Agreement, "Successors and Assigns" shall mean, with respect to the Company or
the Corporation, a corporation or other entity acquiring all or substantially
all the assets and business of the Company or the Corporation, as the case may
be (including this Agreement) whether by operation of law or otherwise.
15.14. Termination Date. For purposes of this Agreement,
----------------
"Termination Date" shall mean (a) in the case of the Executive's death, his date
of death, (b) if the Executive's employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that the Executive
shall not have returned to the performance of his duties on a full-time basis
during such thirty (30) day period) and (c) if the Executive's employment is
terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination for Cause shall not be less than thirty
(30) days, and in the case of a termination for Good Reason shall not be more
than sixty (60) days, from the date such Notice of Termination is given);
provided, however, that if within thirty (30) days after any Notice of
Termination is given the party receiving such Notice of Termination in good
faith notifies the other party that a dispute exists concerning the basis for
the termination, the Termination Date shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, or by the
final judgment, order or decree of a court of competent jurisdiction (the time
for appeal therefrom having expired and no appeal having been taken).
Notwithstanding the pendency of any such
15
dispute, the Company shall continue to pay the Executive his Base Amount and
continue the Executive as a participant in all compensation, incentive, bonus,
pension, profit sharing, medical, hospitalization, dental, life insurance and
disability benefit plans in which he was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with this Section whether or not the dispute is resolved in favor of
the Company, and the Executive shall not be obligated to repay to the Company
any amounts paid or benefits provided pursuant to this sentence.
IN WITNESS WHEREOF, the Corporation and the Company have caused
this Agreement to be executed by their duly authorized officers and the
Executive has executed this Agreement as of the day and year first above
written.
GPU, Inc.
By:/s/ Fred D. Hafer
-----------------
ATTEST: Fred D. Hafer
Chairman, President and
Chief Executive Officer
Secretary
GPU International, Inc.
By:/s/ Fred D. Hafer
-----------------
ATTEST: Fred D. Hafer
Chairman
Secretary
By:/s/ Bruce L. Levy
-----------------
Bruce L. Levy
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