Exhibit 10-L
August 8, 2000
Xx. Xxx X. Xxxxxx
000 Xxxx Xxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xxx:
The purpose of this letter is to amend and restate the letter agreement
dated August 7, 1997 between you, GPU, Inc. (GPU) and GPU Service, Inc. (GPUS).
That letter (the "Prior Agreement") amended and restated a letter agreement
between you, GPU and GPUS, initially dated December 13, 1989 and thereafter
amended and restated on various subsequent dates, that set forth the terms of
your employment, effective January 1, 1990, as Senior Vice President and General
Counsel of GPU and as Executive Vice President and General Counsel of GPUS, as
well as the agreement between you, GPU and GPUS with respect to your pension
arrangements.
Upon your agreement to this amendment and restatement as provided on the
last page hereof, this letter agreement (the "Agreement") shall supersede and
replace, in its entirety, the Prior Agreement.
Section 1. Election to Other GPU Offices and Source of Your
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Compensation.
------------
You will be a director of GPUS.
Your compensation and other benefits from GPU and its subsidiaries (the
"GPU Companies") will be paid to you by GPUS. You will not receive separate or
additional compensation for serving as a director or officer of GPU or any GPU
Company other than GPUS. Payment of your compensation and the other benefits
payable to you pursuant to this Agreement shall be obligations of both GPU and
GPUS. Your other unfunded employee benefits payable by GPUS will be guaranteed
by GPU to the extent covered under the latter's guarantee of unfunded benefits
for all GPUS officers.
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 2
Section 2. Base Salary.
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Your Base Salary will be determined from time to time by the GPU Board
of Directors. As of the date of this amendment and restatement, your Base Salary
is $360,000.00
Section 3. Retirement Provisions.
---------------------
(a) You will be a participant in the GPU Companies Employee Pension Plan
and the GPUS Supplemental and Excess Benefits Plan (the "Retirement Plans") and,
by reason of the services rendered by you in accordance with this Agreement, you
will accrue benefits, commencing as of January 1, 1990, in accordance with the
terms of such Retirement Plans, as the Retirement Plans may be in effect from
time to time.
(b) Under the terms of the present Retirement Plans, your Normal
Retirement Date under those plans is the last day of the month in which you
reach your sixty-fifth birthday (December 12, 2003). It is anticipated that you
will retire on your Normal Retirement Date. If you do retire on or after that
date, you will receive an additional retirement pension from the GPU Companies
equal to the additional pension which would have been paid under the Retirement
Plans if, in addition to your actual years of creditable service, you had an
additional 20 years of past creditable service. Payment of the additional
retirement pension will commence on the first day of the month following the
month in which you so retire.
(c) GPUS has in effect Short-Term and Long-Term Disability Income Plans
that provide coverage, up to your Normal Retirement Date, for employees meeting
the requirements of such Plans. If you are receiving Disability Income under
either such Plan at the time you reach your Normal Retirement Date, you will
thereafter receive an additional retirement pension from the GPU Companies equal
to the additional pension which would have been paid under the Retirement Plans
if, in addition to your actual years of creditable service, you had an
additional 20 years of past creditable service.
(d) If your employment with the GPU Companies shall be terminated (i) as
a result of an "Involuntary Termination" (as defined below) at any time within
two (2) years following the occurrence of a "Change in Control" (as defined in
Appendix A hereto), or (ii) by any GPU Company without "Cause" (as defined in
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August 8, 2000
Page 3
Appendix A hereto), then you will receive from the GPU Companies an additional
retirement pension, equal to the additional pension which would have been paid
under the Retirement Plans if, in addition to your actual years of creditable
service, you had an additional twenty (20) years of past creditable service.
Payment of the additional retirement pension will commence on the first day of
the month following the month in which your employment is so terminated.
For purposes of clause (i) above, "Involuntary Termination" shall mean
(A) the termination of your employment with the GPU Companies by any GPU
Company, or (B) a termination by you (x) for "Good Reason" (as defined in
Appendix A hereto) or (y) as the result of any other material adverse change in
the conditions of your employment with the GPU Companies. If the termination of
your employment by any GPU Company is (1) within twelve (12) months prior to a
Change in Control or (2) prior to the date of a Change in Control but you
reasonably demonstrate that the 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 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.
(e) If your employment with the GPU Companies shall terminate for any
reason, other than by death or retirement or termination in accordance with
paragraphs (b), (c) or (d) above, you will receive from the GPU Companies an
additional retirement pension equal to the additional pension which would have
been paid under the Retirement Plans if, in addition to your actual years of
creditable service, you had an additional number of years of past creditable
service determined in accordance with the following table (employing
straight-line interpolation for fractional years of actual employment with the
GPU Companies):
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 4
Years of Actual Additional Number of Years
GPU Employment of Past Creditable Service
-------------- --------------------------
1 2.0
2 3.5
3 5.0
4 6.0
5 7.0
.6 8.0
.7 8.5
.8 9.0
.9 9.5
10 10.0
11 12.5
12 15.0
13 17.5
14 20.0
Payment of the additional retirement pension payable to you under this paragraph
(e) shall commence on the first day of the month following the month in which
your employment so terminates.
(f) For purposes of determining the amount of the additional retirement
pension payable to you under paragraphs (b), (c), (d) or (e) above, it shall be
assumed that the pension payable to you under the Retirement Plans is payable in
the form of a single life annuity, and that payment of such pension will
commence on the same date as payment of your additional retirement pension
hereunder will commence.
The additional retirement pension payable to you hereunder shall be paid
to you in the form of a single life annuity unless you are married on the date
as of which payment of such pension is to commence, in which event it shall be
paid in the form described as Option 2 in Section 10.1 of the GPUS Employee
Pension Plan, with your spouse as your beneficiary.
(g) If you should die before you start to receive the additional pension
payable to you under paragraph (b), (c), (d) or (e), your surviving spouse, if
any, will receive, for the rest of her life from the GPU System Companies, 100%
of the pension which would have been payable to you under the Retirement Plans
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 5
and 100% of the additional retirement pension which would have been payable to
you in accordance with paragraph (e), had you terminated employment on the date
of your death. Such payments to your surviving spouse shall commence on the
first day of the month following the month of your death.
To the extent your surviving spouse does not receive such pension from
the Retirement Plans, she will receive it from the GPU Companies.
(h) Retirement or pension benefits from prior employers to which you are
now, or may in the future be, entitled will not be applied against the pension
benefits payable to you pursuant to this Section and you are free to elect to
receive such other pension benefits when, and in such manner as, you choose.
Section 4. Supplemental Pension.
--------------------
Upon your retirement on any date subsequent to the date of this letter
(the date as of which you so retire is referred to herein as your "Retirement
Date") you shall be entitled to receive from the GPU Companies, in addition to
the additional retirement pension payable to you pursuant to Section 3 hereof, a
supplemental pension, which shall be payable upon the following terms and
conditions:
(a) The supplemental pension payable to you hereunder, when expressed as
a single life annuity, shall be a monthly amount of income equal to the amount,
if any, by which either (i) $10,825.75 for each month beginning after your
Retirement Date and before the month beginning after your 62nd birthday, or (ii)
$10,325.75 for each month beginning after the later of your Retirement Date or
your 62nd birthday, exceeds (iii) the aggregate pension amount payable to you
for such month under the Retirement Plans and Section 3 hereof, determined for
this purpose without taking into account (x) any Additional Pension amount
payable to you under the GPUS Employee Pension Plan, and (y) the 20% increase in
the pension amounts payable to you under the Retirement Plans and Section 3
hereof during the first 12 months following your retirement. For purposes of the
foregoing, if any part of the aggregate pension amount payable to you under the
Retirement Plans or Section 3 hereof is not payable in the form of a single life
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 6
annuity commencing on the first day of the month following your Retirement Date,
the pension amount referred to in (iii) above shall be determined as if such
part were so payable.
(b) The supplemental pension shall be paid to you in the same form, and
payments shall commence at the same time, as payment of the additional
retirement pension provided for under Section 3 hereof.
(c) If you should die before you start to receive your supplemental
pension, your surviving spouse, if any, shall be entitled to receive from GPU
System sources an annuity payable to her for her lifetime in a monthly amount
equal to 100% of the supplemental pension that would have been payable to you
hereunder if you had not died, if you had retired on the last day of the month
in which your death occurs, and if you had not been married on such last day.
(d) With each monthly payment of the supplemental pension payable to you
during the first 12 months following your Retirement Date, you shall be entitled
to receive an additional amount equal to 20% of the amount of such monthly
payment; provided, however, that if clause (i) of paragraph (a) above applies in
calculating the supplemental pension amount payable for such month, the
additional amount payable to you for such month under this paragraph (d) shall
be equal to 20% of the supplemental pension amount that would be payable to you
for such month if clause (ii) instead of clause (i) of paragraph (a) were
applicable in calculating the amount of your supplemental pension payment for
such month.
Section 5. Regular Benefit Payment Election.
--------------------------------
Notwithstanding any other provision of Section 3 or 4 to the contrary,
you may elect to have the additional retirement pension and the supplemental
pension that become payable to you or your surviving spouse thereunder paid in
the form of a single lump sum payment. The amount of such lump sum payment shall
be determined in the same manner as the amount of the lump sum payment payable
pursuant to an election by you under clause (a) of the first paragraph of
Section 6 would be determined, as provided in the third paragraph of Section 6.
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 7
Subject to Section 10, any election under this Section 5 shall be
effective only if it is made (i) at least twenty-four (24) months prior to the
termination of your employment with the GPU Companies, or (ii), if your
termination of employment constitutes an Involuntary Termination or occurs by
reason of your death, at least twelve (12) months prior to such termination of
your employment. Any election so made may be revoked, and a new election may be
made under this Section 5, at any time; provided, however, that, subject to
Section 10, any such revocation or new election shall be effective only if it is
made within the period specified in the preceding sentence. Any election, or
revocation of an election, that may be made by you under this Section 5 shall be
made in writing, on a form that is furnished to you for such purpose by the
Administrative Committee of the GPUS Employee Pension Plan (the "Administrative
Committee") and that is signed by you and delivered to the Administrative
Committee.
Section 6. Special Benefit Payment Election.
--------------------------------
Notwithstanding any other form of distribution or payment or date for
the payment, (or commencement of payment) of benefits otherwise elected or
provided for under this Agreement or the Retirement Plans, you shall be
permitted to make either one, or both, of the following special payment
elections: (a) to have the additional retirement pension payable pursuant to
Section 3 hereof and the supplemental pension payable pursuant to Section 4
hereof paid in the form of a single lump sum payment in the event of your
termination of employment with the GPU Companies for any reason within the two
(2) year period following the occurrence of a Change in Control, or (b) if a
Change in Control occurs after the termination of your employment with the GPU
Companies but before all payments required to be made hereunder with respect to
your additional retirement pension and supplemental pension have been made, to
have the additional retirement pension and supplemental pension payments that
otherwise would be made hereunder after the date of such Change in Control paid
in the form of a single lump sum payment.
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 8
Subject to Section 10, an election under clause (a) of the preceding
paragraph shall be effective only if it is made either at least twenty-four (24)
months prior to such termination of your employment, or if such termination of
your employment is due to your death or is the result of an Involuntary
Termination as defined in Section 3(d) hereof, at least one year prior to such
Change in Control. Subject to Section 10, an election under clause (b) of the
preceding paragraph shall be effective only if it is made at least one year
prior to the Change in Control, and prior to the termination of your employment.
Any special election made under clause (a) or (b) of the preceding paragraph may
be revoked, and a new special election may be made thereunder, at any time;
provided, however, that, subject to Section 10, any such revocation or new
election shall be effective only if it is made within the election period
specified in this paragraph. Any special election, or revocation of a special
election, that may be made hereunder shall be made in the same manner as
provided in the last sentence of the second paragraph of Section 5.
The lump sum payment to be made to you pursuant to your election under
clause (a) of the second preceding paragraph shall be in an amount that is
"Actuarially Equivalent" (as defined below and determined as of the first day of
the month following the date of your termination of employment) to the
additional retirement pension and supplemental pension that otherwise would be
payable to you hereunder if payment of your additional retirement pension and
supplemental pension and the pension payable to you under the Retirement Plans
(i) were to commence on your Normal Retirement Date or, if earlier, on the
earliest date as of which you could elect to have payment of your pension under
the Retirement Plans commence and (ii) were to be made in the form of a single
life annuity. The lump sum payment to be made to your surviving spouse pursuant
to your election under clause (a) of the second preceding paragraph shall be in
an amount that is "Actuarially Equivalent" (as defined below and determined as
of the first day of the month following the date of your death) to the pension
and the annuity that otherwise would be payable to your surviving spouse
pursuant to Section 3(g) and Section 4(c) hereof. The lump sum payment to be
made to you or your surviving spouse pursuant to your election under clause (a)
of the second preceding paragraph shall be made by no later than thirty (30)
days following the date of your termination of employment.
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 9
The lump sum payment to be made pursuant to your election under clause
(b) of the third preceding paragraph shall be in an amount that is Actuarially
Equivalent (as defined below and determined as of the first day of the month
coincident with or next following the date on which the Change in Control
occurs) to the payments that otherwise would be made hereunder with respect to
your additional retirement pension and supplemental pension after the date of
such Change in Control. Such lump sum payment shall be made by no later than
thirty (30) days following the date on which such Change in Control occurs.
For purposes of this Section 6, "Actuarially Equivalent" shall mean,
with respect to any distribution or payment, an actuarially equivalent amount,
calculated by using the annual interest rate on 30-year Treasury securities for
the second month preceding the calendar year in which such distribution is made
or commences, and the mortality table prescribed for purposes of section
417(e)(3)(A)(ii)(I) of the Internal Revenue Code of 1986, as amended (the
"Code"). Such annual interest rate and mortality table shall be as specified or
prescribed by the Commissioner of the Internal Revenue Service for purposes of
Section 417(e)(3)(A)(ii) of the Code in revenue rulings, notices or other
guidance.
Section 7. Other Benefits.
--------------
To the extent permitted by such plans without requiring prior evidence
of insurability or eligibility, you will participate in all of the benefit plans
maintained by any of the GPU Companies in which senior GPU executives are
eligible to participate, as such plans shall be in effect from time to time. In
the case of each such plan that provides a benefit the amount of which depends,
directly or indirectly, on the number of years of a participant's service with
the GPU Companies, you shall receive the same benefit amount that would be
payable to you under such plan if you were treated as having, in addition to
your actual years of services, the number of years of service determined under
the table in Section 3(e). The number of additional years of service so
determined shall also be taken into account in determining your eligibility to
participate in any benefit plan maintained by any of the GPU Companies in which
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 10
senior GPU executives are eligible to participate that requires, as a condition
for eligibility, the completion of a specified number of years of service with
the GPU Companies.
In addition to the supplemental pension described above, you will also
receive (i) an extension of coverage in your and your family's health care
benefits under the Supplemental and Excess Medical Plan to the third anniversary
of the date of your retirement, or your attainment of age 62, whichever is
later; and (ii) an amended Split-Dollar Agreement with respect to your Senior
Executive Life Insurance policy to provide for eligibility to receive full
benefits under your policy at age 55 with 10 years of service.
Section 8. Nature of Your Rights.
---------------------
With respect to your right to receive an additional retirement pension
pursuant to Section 3 hereof and the supplemental pension provided for under
Section 4 hereof, or to receive a lump sum payment with respect to such pensions
under Section 5 or 6 hereof, you shall have the status of a mere unsecured
creditor of GPUS and GPU; and this letter agreement shall constitute a mere
promise by GPUS and GPU to make payments in the future of such pensions in
accordance with the provisions of Sections 3, 4, 5 and 6. It is the intention of
the parties hereto that the arrangements set forth in Sections 3, 4, 5 and 6 of
this letter agreement regarding your additional retirement pension and
supplemental pension shall be treated as unfunded for tax purposes and, if it
should be determined that Title I of ERISA is applicable to such arrangements,
for purposes of Title I of ERISA.
Section 9. Nonassignability.
----------------
Your rights to receive payments with respect to the additional
retirement pension and supplemental pension provided for under Sections 3 and 4
of this letter agreement shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by your creditors or creditors of your spouse or any other
beneficiary.
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 11
Section 10. Additional Change in Control Provisions.
---------------------------------------
Notwithstanding any other provision of the Plan to the contrary, if the
Personnel, Compensation and Nominating Committee of the Board of Directors of
GPU so directs in connection with any proposed or threatened Change in Control
(A) the regular election provided for under Section 5 and any special
benefit payment election provided for under Section 6 may be made
by you, and any such election previously made by you may be
revoked and a new election made by you under such Sections,
within the period beginning on the date of the first public
announcement of such proposed or threatened Change in Control and
ending on the 45th day following such date; and
(B) you may also elect, within such 45-day period, to have the
additional retirement pension and the supplemental pension that
become payable to you or your surviving spouse under Section 3 or
4 paid in the form of a single lump-sum payment in the event of
your Involuntary Termination or death at any time within the
12-month period following the date of such public announcement,
notwithstanding any other benefit payment election otherwise made
by you under Section 5 and/or Section 6.
The lump-sum payment to be made pursuant to your election under
clause (B) above shall be made no later than 30 days following
the date of your Involuntary Termination or death. The amount of
such lump sum payment shall be determined in the same manner as
the amount of the lump sum payment payable pursuant to an
election by you under clause (a) of the first paragraph of
Section 6 would be determined, as provided in the third paragraph
of Section 6.
Any election, or revocation of an election, that may be made
pursuant to this Section 10 shall be made in the manner set forth
in the last sentence of the second paragraph of Section 5. Any
election, or revocation of an election under Section 5 that is
made pursuant to
Xx. Xxx X. Xxxxxx
August 8, 2000
Page 12
this Section 10, shall be effective only if either (1) the Change
in Control which was proposed or threatened actually occurs or
(2) your employment with the GPU Companies terminates at any time
within the twelve (12) month period following such public
announcement as a result of Involuntary Termination or your
death.
If the foregoing correctly reflects your understanding of the agreement
between you and GPU and GPUS, will you please so indicate on the enclosed
duplicate copy of this letter which will then constitute a binding agreement
between GPU and GPUS, on the one hand, and you, on the other.
GPU, INC.
By:
------------------------------------------
Xxxx X. Xxxxx, Chairman and
Chief Executive Officer
GPU SERVICE, INC.
By:
------------------------------------------
Xxxx X. Xxxxx, Chairman and
Chief Executive Officer
The foregoing is agreed to by me as of the date of this letter.
---------------------------------
Xxx X. Xxxxxx
APPENDIX A
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Cause. For purposes of this Agreement, a termination of employment is
for "Cause" if you have been convicted of a felony or the termination is
evidenced by a resolution adopted in good faith by two-thirds of the GPU Board
of Directors (the "Board") that you:
(a) intentionally and continually failed substantially to perform your
reasonably assigned duties with GPU or GPUS (other than a failure resulting from
your incapacity due to physical or mental illness or from your assignment of
duties that would constitute "Good Reason" as hereinafter defined) 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 GPU,
has been delivered to you specifying the manner in which you have failed
substantially to perform, or
(b) intentionally engaged in conduct which is demonstrably and
materially injurious to GPU; provided, however, that no termination of your
employment shall be for Cause as set forth in this clause (b) until (1) there
shall have been delivered to you a copy of a written notice, signed by a duly
authorized officer of GPU, setting forth that you were guilty of the conduct set
forth in this clause (b) and specifying the particulars thereof in detail, and
(2) you shall have been provided an opportunity to be heard in person by the
Board (with the assistance of your counsel if you so desire).
No act, nor failure to act, on your part, shall be considered
"intentional" unless you have acted, or failed to act, with a lack of good faith
and with a lack of reasonable belief that your action or failure to act was in
the best interest of GPU. Notwithstanding anything contained in this Agreement
to the contrary, no failure to perform by you after a written notice of
termination is given by you shall constitute Cause for purposes of this
Agreement.
Change in Control. "Change in Control" shall mean:
-----------------
(1) An acquisition (other than directly from GPU) of any common
stock of GPU ("Common Stock") or other voting securities of GPU entitled to vote
generally for the election of directors (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
A-1
Act")), immediately after which such Person has "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent
(20%) or more of the then outstanding shares of Common Stock or the combined
voting power of GPU's then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (A) an employee benefit plan (or a
trust forming a part thereof) maintained by (i) GPU or (ii) any corporation or
other Person of which a majority of its voting power or its voting equity
securities or equity interest is owned, directly or indirectly, by GPU (for
purposes of this definition, a "Subsidiary"), (B) GPU or its Subsidiaries, or
(C) any Person in connection with a "Non-Control Transaction" (as hereinafter
defined);
(2) The individuals who, as of August 1, 1996, are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
seventy percent (70%) of the members of the Board; provided, however, that if
the election, or nomination for election by GPU's shareholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of 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 (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
(3) The consummation of:
(A) A merger, consolidation or reorganization with or
into GPU or in which securities of GPU are issued,
unless such merger, consolidation or reorganization
is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization with or into GPU or in which
securities of GPU are issued where:
A-2
(i) the shareholders of GPU, immediately
before such merger, consolidation or
reorganization, own directly or
indirectly immediately following such
merger, consolidation or reorganization,
at least sixty percent (60%) of the
combined voting power of the outstanding
voting securities of the corporation
resulting from such merger or
consolidation or reorganization (the
"Surviving Corporation") in
substantially the same proportion as
their ownership of the Voting Securities
immediately before such merger,
consolidation or reorganization,
(ii) the individuals who were members of the
Incumbent Board immediately prior to the
execution of the agreement providing for
such merger, consolidation or
reorganization constitute at least
seventy percent (70%) of the members of
the board of directors of the Surviving
Corporation, or a corporation, directly
or indirectly, beneficially owning a
majority of the Voting Securities of the
Surviving Corporation, and
(iii) no Person other than (w) GPU, (x) any
Subsidiary, (y) any employee benefit
plan (or any trust forming a part
thereof) that, immediately prior to such
merger, consolidation or reorganization,
was maintained by GPU or any Subsidiary,
or (z) any Person who, immediately prior
to such merger, consolidation or
reorganization had Beneficial Ownership
of twenty percent (20%) or more of the
then outstanding Voting Securities or
common Ownership of twenty percent (20%)
or more of the combined voting
A-3
power of the Surviving Corporation's
then outstanding voting securities or
its common stock.
(B) A complete liquidation or dissolution of GPU; or
(C) The sale or other disposition of all or
substantially all of the assets of GPU to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then outstanding
Common Stock or Voting Securities as a result of the acquisition of Common Stock
or Voting Securities by GPU which, by reducing the number of shares of Common
Stock or Voting Securities then outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Persons, provided that if a Change
in Control would occur (but for the operation of this sentence) as a result of
the acquisition of shares of Common Stock or Voting Securities by GPU, and after
such share acquisition by GPU, the Subject Person becomes the Beneficial Owner
of any additional shares of Common Stock or Voting Securities which increases
the percentage of the then outstanding shares of Common Stock or Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
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 your status, title, position or responsibilities
(including reporting responsibilities) which, in your reasonable judgment,
represents an adverse change from your status, title, position or
responsibilities as in effect immediately prior thereto; the assignment to you
of any duties or responsibilities which, in your reasonable judgment, are
inconsistent with your status, title, position or responsibilities; or any
removal of you from or failure to reappoint or reelect you to any of such
offices or positions, except in connection with the termination of your
employment for disability, Cause, as a result of your death or by you other than
for Good Reason;
A-4
(2) a reduction in the rate of your annual base salary;
(3) any change in location of your place of employment
to a location other than Morristown, New Jersey without your consent,
(4) the failure by the GPU Companies to pay to you any portion of
your current compensation or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of any GPU Company
in which you participated, within seven (7) days of the date such compensation
is due;
(5) the failure by the GPU Companies (A) to continue in effect
(without reduction in benefit level, and/or reward opportunities) any material
compensation or employee benefit plan in which you were participating
immediately prior to such failure by the GPU Companies, unless a substitute or
replacement plan has been implemented which provides substantially identical
compensation or benefits to you or (B) to continue to provide you 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 you were
participating immediately prior to such failure by the GPU Companies;
(6) the failure of GPU or GPUS to obtain a satisfactory agreement
from any successors or assigns to assume and agree to honor and perform their
respective obligations under this Agreement; or
(7) any purported termination of your employment which is not
effected pursuant to a Notice of Termination as that term is defined in your
Severance Agreement dated November 5, 1998.
(b) Any event or condition described in clauses (1) through (7) of
paragraph (a) above of paragraph (a) above which occurs (A) within twelve (12)
months prior to a Change in Control or (B) prior to a Change in Control but
which you reasonably demonstrate (x) was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a Change
in Control and who effectuates a Change in Control or (y) otherwise arose in
connection with, or in anticipation of a Change in Control which has been
threatened or proposed, shall constitute Good Reason for purposes of this
Agreement notwithstanding that it occurred prior to a Change in Control.
A-5
