Exhibit 10-▇▇
▇▇▇▇▇▇▇▇▇ PROTECTION AGREEMENT
Severance Protection Agreement, as amended and restated
effective as of February 23, 2000 by and among GPU, Inc. (the "Corporation"),
GPU Service, Inc. (the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Executive"). WHEREAS,
the Corporation and GPU Generation,Inc. ("Genco") entered into a Severance
Protection Agreement with the Executive dated February 6, 1997, which agreement
was subsequently amended and restated effective as of June 5, 1997 (the "Prior
Agreement");
WHEREAS, subsequent to the execution of the Prior Agreement, the
Executive's employment has been transferred from Genco to the Company, Genco has
transferred to the Company all of its rights, interests, obligations and
liabilities with respect to the Prior Agreement, and the Company has accepted
such transfer and has agreed to assume and be solely responsible for all of
Genco's obligations and liabilities with respect to the Prior Agreement; and
WHEREAS, THE Corporation, the Company and the Executive wish to
amend the Prior Agreement in order to reflect the aforesaid transfer of the
Executive's employment from Genco to the Company and the aforesaid transfer by
Genco to the Company of all of Genco's rights, interests, duties and
obligations, as well as to make certain other changes in the terms of the Prior
Agreement.
NOW, THEREFORE, in consideration of the respective agreements of
the parties contained herein, the parties hereto agree that the Prior Agreement
is hereby amended and restated effective as of February 23, 2000 to read in its
entirety as follows:
1. Term of Agreement. This Agreement shall commence as of
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 the 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:
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(a) If the Executive's employment with the
Company and with all other Affiliates of the Corporation shall be terminated for
any 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.
(b) If the Executive's employment with the
Company and with all other Affiliates of the Corporation shall be terminated (i)
by the Company without Cause (other than by reason of the Executive's
Disability), or (ii) by the Executive for Good Reason, 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) three (3) 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 thirty-six (36), in the period beginning on the Termination Date and
ending on the Executive's Normal Retirement Date (as defined in the GPU
Companies Employee Pension Plan), and the denominator of which is thirty-six
(36).
(3) for a number of months equal to
thirty-six (36), or if earlier, until the Executive's Normal Retirement Date (as
defined in the GPU Companies 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 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
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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 (other than by reason of the Executive's
Disability) (1) within twelve (12) months prior to a Change in Control or (2)
any time 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 such termination shall be deemed
to have occurred within twenty-four (24) months following a Change in Control,
provided a Change in Control shall actually have occurred.
(d) (1) Gross-Up Payment. In the event it
shall be 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 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.
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(2) Determination By Accountant. All
mathematical 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 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
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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.
(h) The Executive's entitlement to other
compensation or benefits, pursuant to the Company's employee benefit plans and
other applicable programs and practices shall be determined in accordance with
the terms of those plans, programs and practices as in effect from time to time.
(i) Notwithstanding any other provisions of this
Agreement, any amounts to which the Executive may be entitled pursuant to
Section 2(b)(2) shall be offset and reduced by the "actuarially equivalent"
value of the Supplemental Pension, if any, paid or payable to the Executive (or,
if the Executive has died, by the Survivor's Annuity, if any, paid or payable to
his surviving spouse) pursuant to the Letter Agreement between the Executive and
the Company dated February 23, 2000 (the "Letter Agreement"). For purposes of
this Section 2(i), the term "actuarially equivalent" shall have the same meaning
as assigned to that term in Section 8 of the Letter Agreement; and the actuarial
equivalent value of any amount paid or payable with respect to the Executive
under the Letter Agreement shall be determined (a) as of the first day of the
month following the Executive's Termination Date, or (b), if the Executive has
become entitled to payment under Section 2(b)(2) by reason of Section 2(c), as
of the first day of the month in which such payment is made to the Executive.
3. Notice of Termination. Following a Change in
Control, (i) any 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 (ii) 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 within six (6)
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months of the Executive becoming aware of the event or action constituting Good
Reason or, if later, within six (6) months after the date of the Change in
Control.
4. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) incurred
in good faith 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
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 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 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
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
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
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 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
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11. Successors; Binding Agreement.
(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
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 ▇▇▇▇▇▇ County in the State of New Jersey.
13. Severability. The provisions of this Agreement shall
be 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
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, including the Former
Agreement and the Executive agrees that the Former Agreement is terminated and
shall have no further force or effect.
15. Definitions.
15.1. Accrued Compensation. For purposes of
this Agreement, "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 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.
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15.2. Affiliate. For purposes of this Agreement,
"Affiliate" means 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" 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" 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 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 or the
Corporation (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 or the
Corporation, 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 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 or the Corporation, 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).
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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 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);
(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
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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 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).
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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.
15.7. Company and Corporation. For purposes of
this Agreement, all references to the Company and the Corporation shall include
their respective Successors and Assigns.
15.8. Disability. For purposes of this Agreement,
"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, "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;
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(2) a reduction in the Executive's
annual base salary below the Base Amount;
(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 Change in Control, or the Company's or the Corporation's requiring the
Executive to be based anywhere other than such offices, except to the extent the
Executive was not previously assigned to a principal location and except for
required travel on the Company's or the Corporation's business to an extent
substantially consistent with the Executive's business travel obligations at the
time of the Change in Control;
(4) the failure by the Company or the
Corporation 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 or
the Corporation in which the Executive participated, within seven (7) days of
the date such compensation is due;
(5) the failure by the Company or the
Corporation to (A) 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 the Change in
Control, 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) 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 the
Change in Control;
(6) the failure of the Company or the
Corporation to obtain from its Successors or Assigns the express assumption and
agreements 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 (1) described
in Section 15.9(a)(1), (2), (3), (4), (6) or (7) which occurs within twelve (12)
months prior to a Change in Control or (2) described in Section 15.9(a)(1)
through (7) which occurs prior to a Change in Control but which the Executive
reasonably demonstrates (A)
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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 Incentive Compensation Plan for
Elected Officers, or any successor annual incentive plan, maintained by the
Company or any other Affiliate.
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 (a) For purposes of this
Agreement, "Termination Date" shall mean (i) in the case of the Executive's
death, his date of death, (ii) 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 (iii) 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
14
if within thirty (30) days after a Notice of Termination by the Company for
Cause or a Notice of Termination by the Executive for Good Reason 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
provisions of paragraph (b) shall apply.
(b)(i) If the Executive gives the
Company Notice of Termination for Good Reason and the Company disputes 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) and
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 such Termination Date, provided that if the Executive
continues to perform his duties with the Company during the pendency of such
dispute, the Executive shall not be obligated to repay to the Company any
amounts paid or benefits provided pursuant to this Section 15.14(b), and further
provided that if the Executive ceased performing his duties with the Company
during the pendency of such dispute, and the dispute is resolved in favor of the
Executive, any amount owed to the Executive pursuant to Section 2 of this
Agreement shall be reduced to the extent of any amount the Executive received
pursuant to this Section 15.14(b) during the pendency of such dispute; and (ii)
if the Company gives the Executive Notice of Termination for Cause and the
Executive disputes the basis for the termination, the Termination Date shall be
as determined pursuant to Section 15.14(a) and during the pendency of such
dispute the Executive shall not be entitled to payment of his Base Amount from
the Company and, except as required by law, the Executive's participation in the
Company's benefit plans and programs shall be discontinued.
15
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:-----------------------
ATTEST: ▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, President and
Chief Executive Officer
Secretary
GPU Service, Inc.
By:-----------------------
ATTEST: ▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, President and
Chief Executive officer
Secretary
By:-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
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APPENDIX A
1. 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries
2 The Company's Incentive Plan
3. The GPU Companies Deferred Compensation Plan
4. The GPU Companies Employee Pension Plan
5. The Company's Supplemental and Excess Benefits Plan
6. The GPU Companies Supplemental Executive Retirement Plan
7. The Company's Employee Life Insurance Plan
8. Senior Executive Split-Dollar Life Insurance Program
9. The GPU Companies Accident Insurance Plan
10. The GPU Companies Health Care Plan for Non-Bargaining Employees
and the Company's Health Care Plan for Non-bargaining Retirees, if
applicable
11. The GPU Companies Supplemental Medical Expense Plan for elected
Officers
12. The GPU Companies Flexible Benefits Plan for Non-bargaining
Employees
13. The GPU Companies Group Specified Disease Insurance Plan
14. The GPU Companies Long Term Disability Income Plan
15. The GPU Companies Employee Savings Plan
16. The Company's Vacation Policy for Non-Bargaining Unit Employees