<PAGE>
LOGO
GPU
GPU, INC. P.O. BOX 1911
300 MADISON AVENUE MORRISTOWN, NJ 07962-
1911
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 7, 1998
Notice is hereby given that the Annual Meeting of Stockholders of GPU, Inc.
will be held at The Morris Museum, Six Normandy Heights Road, Morristown, New
Jersey on Thursday, May 7, 1998 at 10:00 o'clock in the morning (local time):
1. To elect three directors of the Corporation to hold office for three-
year terms beginning upon their election at the 1998 Annual Meeting.
2. To consider amendments to, and take certain action regarding, the
1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries as de-
scribed in the accompanying Proxy Statement.
3. To consider the ratification of the selection by the Board of Direc-
tors of Coopers & Lybrand L.L.P. as independent auditor for the year
1998.
4. To transact such other business as may properly come before the meet-
ing.
During the past year, the Board of Directors adopted an amendment to Section
1 of the By-Laws of the Corporation. In accordance with Section 53 of the By-
Laws, this amendment is summarized on page 26 of the accompanying Proxy State-
ment.
Only holders of record of issued and outstanding shares of Common Stock of
the Corporation at the close of business on March 16, 1998 will be entitled to
vote at the meeting. Such stockholders may vote in person or by proxy. If your
shares are registered in the name of a brokerage firm or trustee and you plan
to attend the meeting, please obtain from the firm or trustee a letter or
other evidence of your beneficial ownership of those shares to facilitate your
admittance to the meeting. The stock transfer books of the Corporation will
not be closed.
By order of the Board of Directors,
MARY A. NALEWAKO, Secretary
March 23, 1998
- -------------------------------------------------------------------------------
The 1997 Annual Report was previously transmitted to stockholders. It is ex-
pected that the annexed Proxy Statement and enclosed form of Proxy will be
first sent to stockholders on or about March 23, 1998.
If you wish to receive, without charge, a copy of the GPU System Statistics
or the Corporation's 1997 Annual Report to the Securities and Exchange Commis-
sion on Form 10-K, direct your request to: Stockholder Relations, GPU, Inc.,
310 Madison Avenue, P.O. Box 1957, Morristown, New Jersey 07962-1957, or call
(973) 455-8204.
- -------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING
If you plan to attend the meeting in person, please mark your Proxy in the
space provided for that purpose. Please bring the lower portion of the form
(the Speaker and Admission Card sections) with you to the meeting.
Whether or not you attend the meeting, we hope that you will sign and return
the enclosed Proxy as promptly as possible. YOUR VOTE IS IMPORTANT.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PROXY STATEMENT
Stockholders Entitled
to Vote.............1
DIRECTORS' PROPOSALS
1. ELECTION OF
DIRECTORS.........2
Standing Committees
of the Board of
Directors..........5
Security Ownership
of Certain
Beneficial Owners
and Management.....7
Remuneration of
Executive
Officers...........9
Personnel,
Compensation and
Nominating
Committee Report...9
Summary Compensation
Table.............13
Long-Term Incentive
Plans -- Awards in
Last Fiscal
Year..............15
Comparison of Five
Year Cumulative
Total Return......16
Employment,
Termination and
Change in Control
Arrangements......17
Severance
Arrangements......17
Lump Sum
Distributions.....17
Benefit Protection
Trusts............18
Retirement Plans...18
Remuneration of
Directors.........20
Deferred Stock Unit
Plan for Outside
Directors.........20
Retirement Plan for
Outside
Directors.........20
Restricted Stock
Plan for Outside
Directors.........20
2. PROPOSED AMENDMENTS
TO THE 1990 STOCK
PLAN FOR EMPLOYEES
OF GPU, INC. AND
SUBSIDIARIES.....21
3.RATIFICATION OF
SELECTION OF
AUDITOR............26
BY-LAW AMENDMENT......26
OTHER MATTERS.........27
ANNEX A..............A-1
</TABLE>
<PAGE>
LOGO
GPU
GPU, INC. P.O. BOX 1911
300 MADISON AVENUE MORRISTOWN, NJ 07962-1911
PROXY STATEMENT FOR ANNUAL MEETING -- MAY 7, 1998
STOCKHOLDERS ENTITLED TO VOTE
Holders of record at the close of business on March 16, 1998 of the outstand-
ing Common Stock (consisting of 127,871,737 shares) are entitled to vote at the
Annual Meeting of Stockholders of the Corporation ("GPU").
Stockholders have cumulative voting rights for the election of directors and
one vote per share for all other purposes. Cumulative voting means that each
stockholder is entitled to as many votes as are equal to the number of shares
owned multiplied by the number of directors to be elected and that the stock-
holder may cast all of such votes for a single director or may distribute them
among the number to be voted for, or any two or more of them, as the stock-
holder may see fit. Elections of directors are determined by a plurality vote.
Other matters are determined by vote of the holders of a majority of the shares
present or represented at the meeting and voting on such matters.
The Proxies hereby solicited vest in the proxy holders cumulative voting
rights with respect to the election of directors (unless the stockholder marks
the Proxy so as to withhold such authority) and all other voting rights of the
stockholders signing such Proxies. The shares represented by each duly executed
Proxy will be voted and, where a choice is specified by the stockholder on the
Proxy, the Proxy will be voted in accordance with the specification so made. As
provided by Pennsylvania law and the Corporation's By-Laws, abstentions, broker
non-votes and withheld votes will not be included in the total number of votes
cast, and therefore will have no effect on the election of directors, the pro-
posed amendments to and other recommended action on the 1990 Stock Plan for Em-
ployees of GPU, Inc. and Subsidiaries, the ratification of the selection of the
auditor or other matters. Signed but unmarked Proxies will be voted in accor-
dance with the directors' recommendations.
The Proxy is revocable, at any time before exercise, by a written instrument
signed in the same manner as the Proxy and received by the Secretary of the
Corporation at or before the Annual Meeting. If you attend the meeting, you
may, if you wish, revoke your Proxy by voting in person.
YOU ARE ENCOURAGED TO VOICE YOUR PREFERENCE BY MARKING THE APPROPRIATE BOXES
ON THE ENCLOSED PROXY. HOWEVER, IT IS NOT NECESSARY TO MARK ANY BOXES IF YOU
WISH TO VOTE IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS; MERELY SIGN,
DATE AND RETURN THE PROXY IN THE ENCLOSED POSTPAID ENVELOPE.
1
<PAGE>
DIRECTORS' PROPOSALS
1.ELECTION OF DIRECTORS
The Board of Directors consists of three classes of directors with overlap-
ping three-year terms. Each year a class of directors is elected for a term
expiring at the third succeeding Annual Meeting after such election.
At the 1998 Annual Meeting, three Class I directors will be elected to hold
office for three-year terms beginning upon their election at the 1998 Annual
Meeting. In accordance with the Corporation's mandatory retirement policy,
however, Mr. Henry F. Henderson, Jr. will resign as director in March 2000,
upon reaching age 72.
The votes applicable to the shares represented by Proxies in the accompany-
ing form received from stockholders will be cast in favor of the election of
the three nominees listed below, except that the proxy holders reserve the
right to exercise cumulative voting rights and to cast their votes in such
manner and for such lesser number of said nominees as they may deem best at
the meeting, in order, so far as possible, to secure the election of said nom-
inees. If any nominee should be unable to serve (an event which is not antici-
pated), the proxy holders reserve the right to vote for a substitute nominee
or nominees designated by the Personnel, Compensation and Nominating Committee
of the Board of Directors.
INFORMATION ABOUT THE NOMINEES AND DIRECTORS
NOMINEES FOR CLASS I DIRECTORS FOR
TERMS EXPIRING IN 2001
Name Age Year first elected a director
HENRY F. HENDERSON, JR. 70 1989
Mr. Henderson is President, Chief Executive Officer and a
director of H. F. Henderson Industries, designers and
manufacturers of process control and engineered systems for
government and industry, including industrial process controls
and defense electronics. He is also President and Chief
Executive Officer of Sanitec, Inc., manufacturer of medical
waste disinfecting systems for commercial and hospital use. He
is a director of the Partnership for New Jersey, the New
Jersey State Chamber of Commerce, the Defense Orientation
Conference Association and Delta Dental Plan. He is also
Chairman of the World Trade Center Club Board of Advisors, a
trustee of Stevens Institute of Technology, New York
Theological Seminary, New Jersey State Employment and Training
Commission and Paterson Economic Development Corporation, and
a member of the Business Executives for National Security.
[PHOTO]
JOHN M. PIETRUSKI 65 1989
Mr. Pietruski served as Chairman of the Board and Chief
Executive Officer of Sterling Drug Inc. from 1985 until his
retirement in 1988. He is Chairman of the Board of Texas
Biotechnology Corporation, a pharmaceutical research and
development company. He also serves as President of Dansara
Company, a management consulting firm. He is a director of
Hershey Foods Corporation, Lincoln National Corporation and
McKesson Corporation. He is also a Regent of Concordia
College.
[PHOTO]
2
<PAGE>
Name Age Year first elected a director
CATHERINE A. REIN 55 1989
Ms. Rein joined Metropolitan Life Insurance Company in 1985
where she is presently Senior Executive Vice President --
Business Services Group and Corporate Services. Ms. Rein is a
director of The Bank of New York, Inc., Corning Inc., New
England Investment Companies, Inc. and INROADS, New York,
Inc., a trustee emeritus of the National Urban League and a
trustee of the New York University Law Center Foundation.
[PHOTO]
Information concerning the other directors of the Corporation whose terms do
not expire at the Annual Meeting is as follows:
CLASS II DIRECTORS WITH
TERMS EXPIRING IN 1999
Name Age Year first elected a director
THEODORE H. BLACK 69 1988
Mr. Black served as Chairman, President and Chief Executive
Officer of Ingersoll-Rand Company from 1988 until his retire-
ment in 1993 and as a director until 1997. He is also a direc-
tor of CPC International Inc. and McDermott International.
[PHOTO]
THOMAS B. HAGEN 62 1997
Mr. Hagen is Chairman of the Board of Custom Engineering Co.,
a custom manufacturer of large metal fabrications and heated
platens. He is also Chairman of the Board of the Team
Pennsylvania Foundation. Mr. Hagen served as Secretary of
Commerce and then as Secretary of Community & Economic
Development of the Commonwealth of Pennsylvania from January
1995 to March 1997. Mr. Hagen, who was first elected as a
director of GPU in 1988, resigned upon his appointment as
Secretary of Commerce in 1995 and returned to the Board in
April 1997. Mr. Hagen is a director of the Erie Insurance
Group --property, casualty and life insurers -- which he
joined in 1953 and served as its Chairman and Chief Executive
Officer from 1990 to 1993. He also serves on the Boards of
Directors of the Pennsylvania Housing Finance Agency and St.
Raymond Wood Products Holdings, Ltd. He is a member and past
chairman of the Council of Fellows of Penn State -- Erie, the
Behrend College, the immediate past President and a director
of The Pennsylvania Society, and a director of the Athenaeum
of Philadelphia and Preservation Pennsylvania.
[PHOTO]
3
<PAGE>
Name Age Year first elected a director
BRYAN S. TOWNSEND 67 1996
Mr. Townsend retired as Chairman of Midlands Electricity plc,
a British regional electric company, in August 1996 following
its acquisition by Avon Energy Partners (Avon), in which the
Corporation owns a 50% interest. He served as Chairman of
Midlands since 1986, becoming Chairman and Chief Executive
upon Midlands' privatization in 1990. He is a director of JBA
International Ltd. (a supplier of computer software business
systems), a past chairman of the British National Committee
and a member of the Scientific Directing and Organising
Committee of CIRED (International Conference on Electricity
Distribution). Mr. Townsend is also past chairman of the
Birmingham Repertory Theatre and West Midlands Confederation
of British Industry.
[PHOTO]
CLASS III DIRECTORS WITH
TERMS EXPIRING IN 2000
Name Age Year first elected a director
FRED D. HAFER 57 1996
Mr. Hafer is Chairman, Chief Executive Officer and President
of GPU, Inc. and GPU Service, Inc. (GPUS) (which he also
serves as a director). He became President and Chief Operating
Officer of GPU and GPUS in July 1996 and was elected to the
additional positions of Chairman and Chief Executive Officer
in May 1997. He is also Chairman of the Board, Chief Executive
Officer and a director of Jersey Central Power & Light Company
(JCP&L), Metropolitan Edison Company (Met-Ed) and Pennsylvania
Electric Company (Penelec) (which do business as GPU Energy);
Chairman of the Board and a director of GPU Nuclear, Inc.
(GPUN); Chairman, Chief Executive Officer and a director of
GPU Generation, Inc.; Chairman and a director of GPU
International, Inc., GPU Power, Inc., GPU Electric, Inc., GPU
Advanced Resources, Inc., and GPU Telcom Services, Inc.; and a
director of Saxton Nuclear Experimental Corporation, all
subsidiaries of GPU. He is a director of Avon Energy Partners
Holdings, Midlands Electricity plc and GPU PowerNet PTY Ltd.
Mr. Hafer, who has been associated with the GPU Companies
since 1962, served as President of Met-Ed from 1986 to 1996,
and as President of Penelec from 1994 to 1996. Mr. Hafer is
also a director of Sovereign Bancorp, Inc., Sovereign Bank and
Utilities Mutual Insurance Company, a director and past
president of the Manufacturers Association of Berks County and
Chairman of the Board of the Pennsylvania Electric
Association. He is a director of Kutztown University
Foundation, Leadership Pennsylvania and the Reading Hospital
and Medical Center. He is also a trustee of the Caron
Foundation and Chairman of the Foundation for a Drug-Free
Pennsylvania.
[PHOTO]
PAUL R. ROEDEL 70 1979
Mr. Roedel retired in 1992 as Chairman and Chief Executive Of-
ficer and in 1997 as director of Carpenter Technology Corpora-
tion, manufacturers, fabricators and marketers of specialty
metals. He joined Carpenter in 1949 and became Chief Executive
Officer in 1981 and Chairman in 1987. He is a director of P.H.
Glatfelter Co. and Berks Packing Co., Inc. He is Chairman of
the Berks Business Education Coalition, President of the
Wyomissing Foundation and a member of ASM International. Mr.
Roedel is also Chairman of the Board of Gettysburg College and
a director and treasurer of the Reading Public Museum.
[PHOTO]
4
<PAGE>
Name Age Year first elected a director
CARLISLE A. H. TROST 68 1990
Admiral Trost served in the United States Navy from 1953 until
his retirement in 1990, including a four-year term from 1986
to 1990 as Chief of Naval Operations. Admiral Trost is also a
member of the Board of Directors of GPUN and Chairman of that
Board's Nuclear Safety and Compliance Committee. He is Chair-
man of the Board of Directors of Bird-Johnson Co. and a direc-
tor of General Dynamics Corporation, Lockheed Martin Corpora-
tion and Precision Components Corporation.
[PHOTO]
PATRICIA K. WOOLF, Ph.D. 63 1983
Dr. Woolf is a consultant, author, and Lecturer in the Depart-
ment of Molecular Biology at Princeton University. Dr. Woolf
is a director of Crompton and Knowles Corporation and the Na-
tional Life Insurance Company of Vermont. She is also a
trustee of the New Economy Fund and a director of the American
Balanced Fund, the Income Fund of America, the Growth Fund of
America, the Small Cap World Fund and Fundamental Investors,
all of The Capital Group of Los Angeles.
[PHOTO]
- ----------------
STANDING COMMITTEES OF THE BOARD OF DIRECTORS
There are four standing committees of the Board, namely, the Audit Commit-
tee, the Corporate and Public Responsibilities Committee, the Finance Commit-
tee and the Personnel, Compensation and Nominating Committee. The membership
and functions of these Committees are as follows:
THE AUDIT COMMITTEE recommends to the Board, subject to ratification by the
stockholders, the engagement of the independent auditor and reviews with the
independent auditor the plan, scope and results of the audit and any comments
by the auditor on the internal accounting control systems of the Corporation
and its subsidiaries. All material non-audit services proposed to be performed
by the independent auditor are reviewed by the Committee. The Committee also
reviews with the Corporation's internal auditor the plan, scope and results of
internal audits and its comments on the internal accounting control systems.
It reviews with the officers of the Corporation, the independent auditor and
the Corporation's internal auditor the following: the accounting principles to
be applied in reporting the financial results of the Corporation as contained
in the financial statements and related footnotes presented in the annual re-
port to stockholders; the results of audits by governmental agencies; and the
reports on audit procedures relating to possible corporate expenditures for
political purposes.
The Chairman of the Audit Committee is Mr. Roedel. The other members are
Messrs. Henderson and Townsend and Ms. Rein. During 1997, the Committee held
four meetings.
THE CORPORATE AND PUBLIC RESPONSIBILITIES COMMITTEE reviews the Corpora-
tion's policies on public issues having broad social significance and the im-
plementation of those policies and reports relating to compliance with the
Corporation's Code of Ethics and the Corporation's conduct as a responsible
corporate citizen.
The Chairman of the Corporate and Public Responsibilities Committee is Mr.
Henderson. The other members are Messrs. Black, Hagen, Leva, Townsend and
Trost. During 1997, the Committee held three meetings.
5
<PAGE>
THE FINANCE COMMITTEE assists the Board in fulfilling the Board's fiduciary
responsibilities relating to the financial policies, plans and programs of the
Corporation and its subsidiaries.
The Committee reviews a range of financial policies and plans including div-
idend policy, capital structure and credit quality goals, financing plans, and
the Corporation's capital and operating budgets. Additionally, the Committee
reviews the investment policies, funding and investment results of the Corpo-
ration's trusteed plans.
The Chairman of the Finance Committee is Mr. Pietruski. The other members
are Messrs. Leva, Roedel and Trost and Dr. Woolf. During 1997, the Committee
held four meetings.
THE PERSONNEL, COMPENSATION AND NOMINATING COMMITTEE recommends to the Board
the election of officers of the Corporation and the presidents of the Corpora-
tion's direct subsidiaries, and the compensation and other benefits of those
officers and of directors of the Corporation and its direct subsidiaries. The
Committee also reviews plans for management succession and executive develop-
ment, compensation and other benefit goals for the GPU Companies.
The Personnel, Compensation and Nominating Committee also recommends to the
Board from time to time, the size and composition of the Board and candidates
for membership on the Board. The Committee also recommends to the Board the
composition and membership of the various Board Committees.
A stockholder proposal for a nominee for election as a director should be
sent by mail, addressed to Secretary, GPU, Inc., 300 Madison Avenue, P.O. Box
1911, Morristown, New Jersey 07962-1911. All such proposals must be received
by the Corporation not later than 30 nor more than 75 days prior to the sched-
uled date of the next annual meeting and must contain certain information re-
garding the identity and background of the stockholder's proposed nominee as
required by Section 10(e) of the Corporation's By-Laws, which also sets forth
additional requirements with respect to such stockholder proposals. A copy of
Section 10(e) of the By-Laws will be furnished to stockholders upon request
made to the Secretary of the Corporation.
The Committee will also consider recommendations by stockholders of candi-
dates for director nominees. Recommendations should be sent to the Secretary
of the Corporation.
The Chairman of the Personnel, Compensation and Nominating Committee is Ms.
Rein. The other members are Messrs. Black, Hagen and Pietruski and Dr. Woolf.
During 1997, the Committee held seven meetings.
There were 10 regular meetings, two special meetings and one organization
meeting of the Board during 1997. All directors attended at least 75% of the
aggregate of (i) the total number of 1997 meetings of the Board and (ii) the
total number of 1997 meetings of all committees of the Board on which he or
she served.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Corporation has been advised that as of December 31, 1997, the following
entities beneficially owned more than 5% of the outstanding shares of the Cor-
poration's voting securities:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP CLASS
------------------- ---------------- ----------------- -------
<S> <C> <C> <C>
AMVESCAP PLC (1)................ GPU Common Stock 6,367,402 direct 5.3%
11 Devonshire Sq.
London EC2M 4YR
England
Morgan Stanley
Dean Witter Discover (2)........ GPU Common Stock 10,729,542 direct 8.9%
1585 Broadway
New York, NY 10036
</TABLE>
- ----------------
(1) AMVESCAP PLC and certain of its subsidiaries, AVZ, Inc., AIM Management
Group, Inc., AMVESCAP Group Services, Inc., INVESCO, Inc., INVESCO North
American Holdings, Inc., INVESCO Capital Management, Inc., INVESCO Funds
Group, Inc. and INVESCO Management & Research, Inc., beneficially own
(with shared voting and dispositive powers) the reported shares.
(2) Morgan Stanley, together with various affiliated investment managers, ben-
eficially owns (with shared voting and dispositive powers) the reported
shares.
7
<PAGE>
The following table sets forth, as of February 2, 1998, the beneficial own-
ership of equity securities (and stock-equivalent units) of the GPU Companies
of each of the GPU directors, nominees for director and each of the executive
officers named in the Summary Compensation Table, and of all directors and ex-
ecutive officers of GPU as a group. The shares of Common Stock owned by all
directors and executive officers as a group constitute less than 1% of the to-
tal shares outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
---------------------------------
SHARES (1)
----------------
TITLE OF STOCK-EQUIVALENT
NAME SECURITY DIRECT INDIRECT UNITS
---- ---------------- ------- -------- ----------------
<S> <C> <C> <C> <C>
Dennis Baldassari.......... GPU Common Stock 2,900 13,198 (2)
Theodore H. Black.......... GPU Common Stock 8,261 866 (3)
Fred D. Hafer.............. GPU Common Stock 7,545 139 18,563 (2)
Thomas B. Hagen............ GPU Common Stock 11,157 866 (3)
Henry F. Henderson, Jr..... GPU Common Stock 3,710 1,200 866 (3)
Ira H. Jolles.............. GPU Common Stock 8,082 15,115 (2)
James R. Leva.............. GPU Common Stock 20,566 100 866 (3)
Bruce L. Levy.............. GPU Common Stock 2,033 9,794 (2)
John M. Pietruski.......... GPU Common Stock 4,600 866 (3)
Catherine A. Rein.......... GPU Common Stock 3,440 866 (3)
Paul R. Roedel............. GPU Common Stock 3,200 866 (3)
Bryan S. Townsend.......... GPU Common Stock 933 866 (3)
Carlisle A. H. Trost....... GPU Common Stock 2,989 866 (3)
Robert L. Wise............. GPU Common Stock 4,111 11,809 (2)
Patricia K. Woolf.......... GPU Common Stock 4,010 866 (3)
All GPU Directors and
Executive Officers as a
Group..................... GPU Common Stock 100,817 3,240 123,189
</TABLE>
- ----------------
(1) The number of shares owned and the nature of such ownership, not being
within the knowledge of GPU, have been furnished by each individual.
(2) Restricted units, which do not have voting rights, represent rights (sub-
ject to vesting) to receive shares of Common Stock under the 1990 Stock
Plan for Employees of GPU and Subsidiaries (the "1990 Stock Plan"). See
footnote 2 to the Summary Compensation Table on page 13.
(3) Each Outside Director receives an annual grant of deferred stock units
which represents an equivalent number of shares of GPU Common Stock. Out-
side Directors who have served at least 54 months will receive payment of
their deferred units upon retirement. See Deferred Stock Unit Plan for
Outside Directors on page 20.
8
<PAGE>
REMUNERATION OF EXECUTIVE OFFICERS
PERSONNEL, COMPENSATION AND NOMINATING COMMITTEE REPORT
In 1997, GPU continued efforts to ensure that the executive compensation
program is strongly linked to business performance and changes in shareholder
value. Thus the basic structure of the program consists of three interrelated
components -- the Base Salary Program, the Incentive Compensation Program, and
the 1990 Stock Plan. The relationship among these components was adjusted in
1997, however, to increase the proportion of total executive pay that is "at
risk" and directly linked to business and stock performance.
COMPENSATION PHILOSOPHY AND MARKET COMPARISONS
The Corporation's compensation philosophy is to provide a program that (1)
encourages talented executives to join and remain with GPU, (2) focuses execu-
tive effort on specific targeted business objectives, and (3) rewards execu-
tives when these objectives are achieved. Actual pay levels reflect both the
achievement of these targeted objectives and the performance of the individual
executive.
The executive compensation program is designed to provide levels of total
pay that, on average, approximate the median of the chosen competitive market
when targeted business objectives have been achieved. The variable components
of the program, the Incentive Compensation Program and the 1990 Stock Plan,
each provide opportunities for actual pay levels to be well above median if
results are exceeded and ensure that total pay will be below median if results
are not achieved.
In defining the competitive market for executive pay, GPU focuses primarily
on the companies in the S&P Electric Utility Index shown on page 16. These
companies are the premier organizations in the industry and, consequently, the
companies competing most directly with GPU for executive talent. To a lesser
extent, other companies, not included in the S&P Index, are considered because
GPU competes in a wider market for executives. In comparing positions at GPU
with positions at other companies and in defining median pay levels, GPU is
assisted by a nationally recognized compensation consulting firm. These con-
sultants meet periodically with the Committee to ensure an objective analysis
and assessment of the market.
Under Section 162(m) of the Internal Revenue Code of 1986, the amount allow-
able as a tax deduction for compensation paid to the chief executive officer
and each of the other highest paid officers of any publicly held corporation
generally is limited to $1 million per year for each such officer. Although
the Committee considers the effect of Section 162(m) in connection with the
Corporation's executive compensation program, the Committee considers it im-
portant to retain the flexibility to design compensation programs that it be-
lieves are in the best interests of GPU and its stockholders, even though the
expense may not be fully deductible. The Committee continues to monitor the
potential impact of Section 162(m) and considers modifications to the execu-
tive compensation program with this impact in mind. In this regard, the Board
has adopted, subject to stockholder approval at the Annual Meeting, amendments
to the 1990 Stock Plan to ensure that compensation resulting from stock op-
tions that may be granted in the future will be deductible.
BASE SALARY PROGRAM
The Base Salary Program provides the most stable portion of executive com-
pensation. A range of salary opportunities is established for each executive
position with the middle of this range approximately equivalent to the median
of the market. Actual salaries for individual executives are determined by
this range and the individual's performance and experience.
The Committee reviews executive salaries annually to determine if any
adjustments are appropriate. This review includes an assessment of market
data, individual executive performance and
9
<PAGE>
contribution, and the Corporation's financial position. In 1997, the Committee
limited executive salary increases, choosing to focus instead on the variable
components of the program. Executive salary increases were granted only if (1)
the executive's salary was determined to have fallen below market median
levels or (2) if the executive had assumed significant new responsibilities.
The salary increase for Mr. Hafer indicated in the table on page 13 reflects
his assumption of the position of chairman and chief executive officer with
the retirement of Mr. Leva.
INCENTIVE COMPENSATION PROGRAM
The Incentive Compensation Program provides executives with opportunities to
earn additional compensation if specific annual objectives are achieved. In
1997, this component of executive pay was modified to increase the emphasis on
financial results. Also in 1997, targeted levels of incentive compensation
were increased to ensure opportunities for fully competitive pay and to in-
crease the proportion of total pay directly tied to financial results.
Objectives for 1997
For named executives other than Mr. Hafer and Mr. Leva, the amount of incen-
tive compensation earned is based on the business results of the GPU company
to which the executive is assigned, the achievement of GPU's return on equity
objective, and the impact of an "earnings test" which limits the amount of in-
centive compensation that may be earned based on non-financial measures. The
"earnings test" also ensures that executive awards do not exceed a fair share
of the earnings given to shareholders. In determining final awards, the Com-
mittee and the Board, using subjective judgment, also assess the individual
executive's personal contribution to overall results.
For GPU Energy, targeted objectives were earnings (60%), all-in price to
customers per kilowatt- hour sold (20%), measures of customer service and in-
ternal performance improvement (15%), and efforts to foster a more competi-
tively focused culture and diverse workforce (5%).
At GPU International, 1997 objectives were net income (50%), measures to im-
prove current operations and optimize new investments (35%), organizational
development efforts designed to prepare the business unit to better respond to
growth opportunities (10%), and compliance with all environmental requirements
(5%). The corporate multiplier is applied to these results but the "earnings
test" is not.
For the corporate functions of GPU Service, 1997 objectives were system-wide
budget management (80%), efforts to respond to regulatory and structural
change and to maximize the Corporation's existing businesses (10%), and ef-
forts to improve the Corporation's competitive position through improvements
to internal processes and the corporate culture (10%).
GPU Generation's 1997 objectives were all-in price per kilowatt-hour sold
(40%), budget management (30%), environmental factors (10%), safety (10%), and
efforts to adjust the company culture and foster diversity (10%).
Objectives for Mr. Hafer and Mr. Leva
For Mr. Hafer and Mr. Leva, 1997 incentive compensation goals were the Cor-
poration's return on equity (65%), nuclear safety (10%) and strategic objec-
tives designed to position the Corporation for the future (25%). The corporate
multiplier is not used in calculating achievement because return on equity is
such a large portion of their overall objectives; the "earnings test", howev-
er, is applied.
Achievement of 1997 Objectives
The GPU corporate objectives for return on equity and the earnings goal were
slightly exceeded. The limits imposed by the newly implemented "earnings test"
served to reduce the levels of incentive pay that might otherwise have been
earned by affected executives. This effect was consistent with the test's ob-
jective.
10
<PAGE>
At GPU Energy, the earnings objective was essentially achieved while the
all-in price to customers objectives were not fully achieved. Measures of cus-
tomer service were well below expectations (principally due to delays in re-
storing service after major storms) while internal performance improvement,
labor relations and culture change objectives were exceeded.
GPU International's net income objective was significantly exceeded. The en-
vironmental objective and the organizational objectives were achieved at
targeted levels. Objectives designed to improve current operations and opti-
mize new investments, however, were not fully achieved.
For the corporate functions of GPU Service, achievement of the system-wide
budget management goal was slightly below the targeted level. Efforts to maxi-
mize existing businesses and to respond to regulatory and structural change
exceeded expectations, as did efforts to improve the Corporation's competitive
position. Cultural change goals were fully achieved.
For GPU Generation, both the all-in price per kilowatt-hour objective and
the budget management objective were exceeded. Environmental factors were be-
low targeted levels while both the safety and culture objectives were exceed-
ed.
Awards for Mr. Hafer and Mr. Leva
The awards for Mr. Hafer and Mr. Leva reflect return on equity that was
above targeted levels as well as overachievement of the objectives designed to
position the Corporation for the future. Of the two nuclear safety goals, one
was exceeded while the other was not fully achieved.
Under the terms of the Incentive Compensation Program, Mr. Leva was eligible
for a pro-rated award based on the portion of 1997 during which he served as
chairman and chief executive officer.
On average, incentive compensation awards were approximately at a median
competitive level reflecting a final calculation that results were achieved at
target levels.
THE 1990 STOCK PLAN
The 1990 Stock Plan, approved by shareholders, provides the Committee and
the Board with the discretion to use any of several stock compensation vehi-
cles based on their judgment of which vehicles are most appropriate.
In 1997, all awards under the Plan were in the form of restricted perfor-
mance units which provide executives with the right to receive shares of GPU
stock (or cash at the discretion of the Committee) provided that targeted per-
formance objectives are achieved. The performance measure for these 1997
grants is GPU's total shareholder return compared to the total return of the
companies in the S&P Electric Utility Index. The percentile ranking of GPU's
total return among Index companies is calculated quarterly over the five year
performance period and averaged. This averaged ranking determines how many
shares of GPU stock, if any, the executive will receive at the end of the per-
formance period.
Each executive who receives an award is granted a specific number of units.
Dividend equivalents are paid on these units and reinvested in additional
units. The number of units that will vest and be paid to the executive is not
known, however, until the end of the performance period. If GPU's total return
is at the 55th percentile of the Index companies, all of the originally
awarded units (plus reinvested dividend equivalents) will vest. If total re-
turn is higher than the 55th percentile, additional units will vest and if to-
tal return is lower, fewer units will vest. No units will vest if total return
is below the 40th percentile.
The size of awards to individual executives is generally targeted to provide
median levels of long-term compensation if the 55th percentile of total return
is achieved. If total return is higher than the
11
<PAGE>
55th percentile, long-term compensation will be above median levels and if it
is lower than the 55th percentile, below median compensation will result. How-
ever, the size of these awards also reflects the Committee and the Board's
subjective assessment of individual contribution, performance and potential.
In 1997, targeted award sizes were increased to keep pace with changes in
the competitive marketplace and to increase the portion of total executive pay
directly linked to shareholder value.
Award for Mr. Hafer
The 1997 award of performance units to Mr. Hafer, shown in the table on page
15, reflects his new position as chairman and chief executive officer and the
other factors described above. His award has the same five year performance
period and total return performance measure as awards to other executives.
Adjustment to Mr. Leva's 1995 Grant
Grants of performance units under the 1990 Stock Plan are typically made an-
nually with a five year performance period. In 1995, however, in anticipation
of his normal retirement in 1997, Mr. Leva received a single grant approxi-
mately equivalent to three annual grants. This grant had a three year perfor-
mance period from 1995 through 1997 and was subject to the same total share-
holder return performance measure described above. No grants were made to Mr.
Leva in 1996 or 1997.
Prior to Mr. Leva's retirement, the Committee determined that it would be
appropriate to adjust the performance period of the 1995 grant to coincide
more closely with the end of Mr. Leva's tenure. Consequently, the Committee
and the Board amended the terms of the 1995 grant so as to end the performance
period on June 30, 1997 and to base payment of the award on results during the
amended period. The earned award was paid in cash with a discount applied to
reflect the shortened time period.
Personnel, Compensation and Nominating
Committee Members
Theodore H. Black
Thomas B. Hagen
John M. Pietruski
Catherine A. Rein
Patricia K. Woolf
12
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION PAYOUTS
--------------------------------------------------------------------
OTHER
NAME AND ANNUAL ALL OTHER
PRINCIPAL COMPEN- LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION (1) PAYOUTS (2) SATION
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James R. Leva 1997 $243,000 $125,000 $90,443 $2,172,813 $242,517 (3)
Chairman and Chief 1996 585,000 445,000 2,510 81,978 163,496
Executive Officer, GPU, Inc. 1995 585,000 333,450 1,499 44,131 125,032
(retired May 1997)
Fred D. Hafer 1997 526,923 275,000 4,279 66,950 114,782 (3)
Chairman, President 1996 365,000 190,000 1,883 61,484 46,731
and Chief Executive 1995 280,000 94,000 1,374 40,454 39,247
Officer, GPU, Inc.
Ira H. Jolles 1997 331,000 100,000 4,948 86,012 58,603 (3)
Senior Vice President 1996 331,000 120,000 2,510 91,087 52,673
and General Counsel, 1995 331,000 116,000 1,749 57,207 47,388
GPU, Inc.
Bruce L. Levy 1997 255,833 165,300 1,985 (4) 20,922 52,119 (3)
President, GPU International, Inc., 1996 233,333 197,000 1,572 (4) 20,495 30,684
GPU Power, Inc. and 1995 188,750 131,000 1,148 (4) 8,826 21,572
GPU Electric, Inc.
Dennis Baldassari 1997 335,000 76,000 3,762 (5) 56,489 75,408 (3)
President, Jersey Central 1996 305,000 110,000 812 (5) 21,724 39,697
Power & Light Company, 1995 275,000 86,000 431 (5) 9,930 32,345
Metropolitan Edison Company,
and Pennsylvania Electric
Company (GPU Energy)
Robert L. Wise 1997 293,000 95,000 4,413 69,042 56,736 (3)
President, GPU 1996 293,000 112,000 57,213 (6) 81,978 53,448
Generation, Inc. 1995 293,000 138,600 1,499 44,131 47,893
</TABLE>
- ---------------
(1) Consists of earnings on "Long-Term Incentive Plan" ("LTIP") compensation
paid in the year the award vests.
(2) Consists of Performance Cash Incentive Awards paid on the 1990, 1991 and
1992 restricted stock awards which have vested under the 1990 Stock Plan.
These amounts are designed to compensate recipients of restricted
stock/unit awards for the amount of federal and state income taxes that are
payable upon vesting of the restricted stock/unit awards. For Mr. Leva,
this amount also includes Performance Cash Incentive Awards paid on his
1993 and 1994 restricted stock awards and the payout for restricted units
awarded in 1995, which vested upon his retirement.
The restricted units issued in 1995, 1996 and 1997 under the 1990 Stock
Plan are performance based. The 1997 awards are shown in "Long-Term Incen-
tive Plans -- Awards in Last Fiscal Year" table (the "LTIP table"). Divi-
dends are paid or accrued on the aggregate restricted stock/units awarded
under the 1990 Stock Plan and reinvested.
13
<PAGE>
The aggregate number and value (based on the stock price per share at De-
cember 31, 1997) of unvested stock-equivalent restricted units (including
reinvested dividends) includes the amounts shown on the LTIP table, and at
the end of 1997 were:
<TABLE>
<CAPTION>
AGGREGATE UNITS AGGREGATE VALUE
--------------- ---------------
<S> <C> <C>
James R. Leva -- $ --
Fred D. Hafer 18,563 781,966
Ira H. Jolles 15,115 636,761
Bruce L. Levy 9,794 412,572
Dennis Baldassari 13,198 555,966
Robert L. Wise 15,684 660,689
</TABLE>
(3) For 1997, (a) the Corporation's matching contributions under the Savings
Plan, (b) the Corporation's matching contributions under the non-qualified
deferred compensation plan, (c) the benefit of interest-free use of the
non-term portion of employer paid premiums for split-dollar life insur-
ance, (d) above-market interest accrued on the retirement portion of de-
ferred compensation, (e) earnings on LTIP compensation not paid in the
current year; and (f) accrued vacation benefits paid in accordance with
the GPU Employee Vacation Program, were as follows:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
------ ------- ------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
James R. Leva $6,400 $21,120 $45,177 $4,445 $ -- $165,375
Fred D. Hafer 6,400 22,277 49,611 419 36,075 --
Ira H. Jolles 6,400 11,640 10,799 487 29,277 --
Bruce L. Levy 6,400 11,713 14,758 257 18,991 --
Dennis Baldassari 6,400 11,400 31,881 151 25,576 --
Robert L. Wise 6,400 9,800 8,956 5,630 25,950 --
</TABLE>
NOTE: The split-dollar life insurance amounts reported in the "All Other
Compensation" column are equal to the present value of the interest-free
use of the current year Corporation paid premiums to the projected date the
premiums will be refunded to the Corporation.
(4) In addition to the earnings on LTIP compensation noted in (1) above, these
amounts include the above-market interest accrued on the pre-retirement
portion of deferred compensation in the amounts of $648, $944 and $848 for
the years 1997, 1996 and 1995 respectively.
(5) In addition to the earnings on LTIP compensation noted in (1) above, these
amounts include the above-market interest accrued on the pre-retirement
portion of deferred compensation in the amounts of $151, $147 and $94 for
the years 1997, 1996 and 1995 respectively.
(6) In addition to the 1996 earnings on LTIP compensation ($2,510) noted in
(1) above, this amount includes $25,953 for a one-time automobile adjust-
ment and $23,447 for related income taxes.
14
<PAGE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE BASED PLANS(1)
---------------------------------
PERFORMANCE
NUMBER OF OR OTHER
SHARES, PERIOD UNTIL
UNITS OR MATURATION THRESHOLD TARGET MAXIMUM
NAME OTHER RIGHTS OR PAYOUT (#) (#) (#)
---- ------------ -------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
Fred D. Hafer 8,500 5 year vesting 4,250 8,500 17,000
Ira H. Jolles 3,500 5 year vesting 1,750 3,500 7,000
Bruce L. Levy 3,000 5 year vesting 1,500 3,000 6,000
Dennis
Baldassari 3,500 5 year vesting 1,750 3,500 7,000
Robert L. Wise 3,100 5 year vesting 1,550 3,100 6,200
</TABLE>
- ----------------
(1) The restricted units awarded in 1997 under the 1990 Stock Plan provide for
a performance adjustment to the aggregate number of units vesting for the
recipient, including the accumulated reinvested dividends, based on the
annualized GPU Total Shareholder Return (TSR) percentile ranking against
all companies in the Standard & Poor's Electric Utility Index for the pe-
riod between the award and vesting dates. With a 55th percentile ranking,
the performance adjustment would be 100% as reflected in the "Target" col-
umn. In the event that the percentile ranking is below the 55th percen-
tile, the performance adjustment would be reduced in steps reaching 0% be-
low the 40th percentile. The minimum payout or "Threshold" begins at the
40th percentile, which results in a payout of 50% of target. A ranking be-
low the 40th percentile would result in no award. Should the TSR percen-
tile ranking exceed the 59th percentile, then the performance adjustment
would be increased in steps reaching 200% at the 90th percentile as re-
flected in the "Maximum" column. Under the 1990 Stock Plan, regular quar-
terly dividends are reinvested in additional units that are subject to the
vesting restrictions of the award. Actual payouts under the Plan would be
based on the aggregate number of units awarded and the units accumulated
through dividend reinvestment at the time the restrictions lapse.
15
<PAGE>
[GRAPHIC]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
GPU, S&P 500 INDEX AND S&P ELECTRIC UTILITY INDEX
- -------------------------------------------------------------------------------
Amount
Invested
1/1/93 1993 1994 1995 1996 1997
- -------------------------------------------------------------------------------
GPU 100 118 107 147 155 205
S&P 500 100 110 112 153 189 252
S&P Electric Utility 100 113 98 128 128 162
- -------------------------------------------------------------------------------
* Assumes $100 invested in GPU Common Stock, S&P 500 Index and S&P Electric
Utility Index. Cumulative Total Return includes reinvestment of dividends.
16
<PAGE>
EMPLOYMENT, TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS
SEVERANCE ARRANGEMENTS
The Corporation has entered into Severance Protection Agreements with
Messrs. Hafer, Jolles, Levy, Baldassari and Wise which provide certain sever-
ance benefits to the executive if his employment is terminated following a
change in control of GPU (as defined). These agreements are intended to induce
the executives to remain in the employ of the Corporation and help ensure that
the Corporation will have the benefit of their services without distraction in
the face of a potential change in control.
Under the agreements, benefits are paid if, in connection with a change in
control, the Corporation terminates the employment of the executive for rea-
sons other than cause or disability or death, or if the executive resigns fol-
lowing certain actions (specified in the agreements) by the Corporation such
as a reduction in salary or change in position. In addition, Mr. Hafer re-
ceives severance benefits if he resigns for any reason within six months fol-
lowing a change in control.
The benefits payable to all executives consist of, in general, (a) the exec-
utive's base salary through the termination date and a pro rata portion of his
target incentive bonus; (b) severance compensation equal to twice the sum of
the executive's base salary and target incentive bonus, provided that if the
executive's normal retirement date is within two years of his termination
date, his benefits will be proportionately reduced; (c) a continuation of in-
surance benefits for up to two years; (d) reimbursement of certain expenses
subject to specified limitations; and (e) such additional amount as is neces-
sary to pay any excise tax under Section 4999 of the Internal Revenue Code
(and any related interest and penalties) on amounts payable under the agree-
ments.
The agreements have an initial term of two years and automatically renew an-
nually unless earlier terminated by the executive or GPU.
Under the Corporation's severance policy for employees, if the employment of
Messrs. Hafer, Jolles, Levy, Baldassari or Wise is involuntarily terminated,
as defined, other than in connection with a change in control, he is entitled
to receive, in general, severance compensation equal to one week's pay for
each full year of service. Premium payments will also be made under the execu-
tive's split-dollar life insurance policy for specified periods following the
executive's termination of employment and following a change in control of
GPU.
LUMP SUM DISTRIBUTIONS
An executive may, prior to retirement and in connection with a change in
control, elect to receive a lump sum distribution of all amounts payable to
him under GPU System supplemental retirement and deferred compensation plans
and arrangements, including those described below for Mr. Jolles, when such
executive terminates, regardless of the circumstances or when the executive
terminates within 24 months following a change in control. Additionally, prior
to termination, an executive may elect to receive such lump sum payment only
in the event of a change in control.
Mr. Jolles
Retirement and Disability -- If Mr. Jolles retires on or after his normal
retirement date (the last day of the month in which he attains age 65), he
will receive (in addition to his benefits under GPUS' employee retirement
plans) a supplemental retirement pension from the GPU Companies equal to the
additional pension he would have received under the GPUS employee retirement
plans as if he had an additional 20 years of past creditable service. If Mr.
Jolles reaches his normal retirement date while he is receiving disability in-
come under GPUS' disability income plans, he will thereafter receive a supple-
mental retirement pension from the GPU Companies equal to the additional pen-
sion he would have been paid under GPUS' employee retirement plans as if he
had an additional 20 years of past
17
<PAGE>
creditable service. Upon retirement, Mr. Jolles will also receive an extension
of health insurance benefits to the third anniversary of retirement.
Termination -- (i) If Mr. Jolles' employment with the GPU Companies termi-
nates "involuntarily," as defined, under circumstances involving a "change in
control" of GPU, as defined, or without cause, he shall receive from the GPU
Companies a supplemental retirement pension which would have been paid to him
under GPUS' employee retirement plans as if he had an additional 20 years of
past creditable service. (ii) If, however, his employment terminates for any
other reason (except upon retirement or death), he will receive from the GPU
Companies a supplemental retirement pension equal to the additional pension he
would have been paid under GPUS' employee retirement plans as if he had addi-
tional years of creditable service ranging, as of December 31, 1997, from nine
years up to a maximum of 20 years depending upon his years of actual employ-
ment by GPUS at the time of termination.
Death -- In the event of Mr. Jolles' death before he begins receiving bene-
fits under GPUS' employee retirement plans, his surviving spouse, if any,
shall receive such benefits during her lifetime, together with the supplemen-
tal retirement pension benefits which would have been payable to him as de-
scribed in paragraph (ii) above.
Other -- To the extent relevant to the level of benefits payable to Mr.
Jolles under other benefit plans provided for senior GPU executives, he will
be treated as having the years of creditable service as described in paragraph
(ii) above.
BENEFIT PROTECTION TRUSTS
The Corporation has entered into benefit protection trust agreements to be
used to fund the Corporation's obligations to executive officers and directors
under deferred compensation and incentive programs and agreements, and with
respect to certain retirement and termination benefits, in the event of a
change in control. The trusts may also be used for the purpose of paying legal
expenses incurred in pursuing benefit claims under such programs and agree-
ments following a change in control. The trusts are currently partially fund-
ed.
RETIREMENT PLANS
The GPU Companies' pension plans provide for pension benefits, payable for
life after retirement, based upon years of creditable service with the GPU
Companies and the employee's career average compensation as defined below.
Federal law limits the amount of an employee's pension benefits that may be
paid from a qualified trust established pursuant to a qualified pension plan
(such as the GPU Companies' plans). The GPU Companies also have adopted non-
qualified plans providing that the portion of a participant's pension benefits
which, by reason of such limitations, cannot be paid from such a qualified
trust shall be paid directly on an unfunded basis by the participant's employ-
er.
18
<PAGE>
The following table illustrates the amount of aggregate annual pension from
funded and unfunded sources resulting from employer contributions to the qual-
ified trust and direct payments payable upon retirement in 1998 (computed on a
single life annuity basis) to persons in specified compensation and years of
service classifications:
ESTIMATED ANNUAL RETIREMENT BENEFITS (2) (3) (4) (5)
BASED UPON CAREER AVERAGE COMPENSATION
--------------------------------------------------
(1998 RETIREMENT)
<TABLE>
<CAPTION>
CAREER AVERAGE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS 45 YEARS
COMPENSATION (1) OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ---------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 9,297 $ 13,945 $ 18,593 $ 23,242 $ 27,890 $ 32,539 $ 36,928 $ 40,928
100,000 19,297 28,945 38,593 48,242 57,890 67,539 76,528 84,528
150,000 29,297 43,945 58,593 73,242 87,890 102,539 116,128 128,128
200,000 39,297 58,945 78,593 98,242 117,890 137,539 155,728 171,728
250,000 49,297 73,945 98,593 123,242 147,890 172,539 195,328 215,328
300,000 59,297 88,945 118,593 148,242 177,890 207,539 234,928 258,928
350,000 69,297 103,945 138,593 173,242 207,890 242,539 274,528 302,528
400,000 79,297 118,945 158,593 198,242 237,890 277,539 314,128 346,128
450,000 89,297 133,945 178,593 223,242 267,890 312,539 353,728 389,728
500,000 99,297 148,945 198,593 248,242 297,890 347,539 393,328 433,328
550,000 109,297 163,945 218,593 273,242 327,890 382,539 432,928 476,928
600,000 119,297 178,945 238,593 298,242 357,890 417,539 472,528 520,528
650,000 129,297 193,945 258,593 323,242 387,890 452,539 512,128 564,128
700,000 139,297 208,945 278,593 348,242 417,890 487,539 551,728 607,728
750,000 149,297 223,945 298,593 373,242 447,890 522,539 591,328 651,328
800,000 159,297 238,945 318,593 398,242 477,890 557,539 630,928 694,928
</TABLE>
- ----------------
(1) Career Average Compensation is the average annual compensation received
from January 1, 1984 to retirement and includes Salary and Bonus. The ca-
reer average compensation amounts for the following named executive offi-
cers differ by more than 10% from the three year average annual compensa-
tion set forth in the Summary Compensation Table and are as follows:
Messrs. Leva -- $474,882; Hafer -- $310,706; Jolles -- $397,950; Levy --
$178,387; Baldassari -- $208,934 and Wise -- $273,799.
(2) Years of Creditable Service at December 31, 1997: Messrs. Leva -- 45 years
(as of May 31, 1997); Hafer -- 35 years; Jolles -- 17 years; Levy -- 17
years; Baldassari -- 28 years and Wise -- 34 years.
(3) Mr. Leva, who retired in 1997, is entitled to receive $603,730 annually
($414,727 basic pension and $189,003 under supplemental pension agree-
ments). Following Mr. Leva's death, his surviving spouse, if any, will re-
ceive an annuity payable for life equal to 50% of the supplemental pen-
sions payable to him.
(4) Based on an assumed retirement at age 65 in 1998. To reduce the above
amounts to reflect a retirement benefit assuming a continual annuity to a
surviving spouse equal to 50% of the annuity payable at retirement, multi-
ply the above benefits by 90%. The estimated annual benefits are not sub-
ject to any reduction for Social Security benefits or other offset
amounts.
(5) Annual retirement benefits under the basic pension per the above table
cannot exceed 55%, as defined in the pension plan, of the average compen-
sation during the highest paid 36 calendar months. As of December 31, 1997
none of the named executive officers exceed the 55% limit.
19
<PAGE>
REMUNERATION OF DIRECTORS
Non-employee directors receive an annual retainer of $20,000, a fee of
$1,000 for each Board meeting attended and a fee of $1,000 for each Committee
meeting attended. Committee Chairmen receive an additional retainer of $3,000
per year.
DEFERRED STOCK UNIT PLAN FOR OUTSIDE DIRECTORS
Under the Corporation's Deferred Stock Unit Plan for Outside Directors ("De-
ferred Stock Unit Plan"), each Outside Director receives an annual grant of
units representing shares of GPU Common Stock equal in value at the time of
grant to one and one-half times the value of the directors' annual cash re-
tainer in effect at the time of grant. Each unit granted under the Deferred
Stock Unit Plan represents one share of GPU Common Stock. Dividend equivalents
paid on outstanding units are invested in additional units.
Outside Directors who have served at least 54 months will receive payment of
their deferred units upon their retirement from the Board. Payment of units
will be in the form of GPU Common Stock, or in cash if authorized by the Per-
sonnel, Compensation and Nominating Committee of the Board. As of December 31,
1997, all outside directors except Mr. Leva and Mr. Townsend had completed 54
months of service.
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
Under the Corporation's Retirement Plan for Outside Directors ("Retirement
Plan"), as amended, an individual who completes 54 months of service as of
June 30, 1997 as a non-employee director is entitled to receive retirement
benefits equal to the product of (A) the number of months of service completed
and (B) the monthly compensation paid to the director at the date of retire-
ment. Retirement benefits under this plan are payable to the directors, at
their election, (or, in the event of death, to designated beneficiaries) in a
lump sum payment or in monthly installments of 1/12 of the sum of (x) the then
annual retainer paid at time of retirement plus (y) the cash value of the
award under the Restricted Stock Plan for Outside Directors for the year pre-
ceding retirement, over a period equal to the director's service as such as of
June 30, 1997, unless otherwise directed by the Personnel, Compensation and
Nominating Committee, commencing at the later of age 60 or upon retirement.
As of December 31, 1997, all Outside Directors except Mr. Leva and Mr.
Townsend were vested in the Retirement Plan. Service following June 30, 1997
will be applied toward the 54-month vesting requirement but will not increase
the amount of benefits. As of June 30, 1997, the following directors had at
least 54 months of service:
<TABLE>
<CAPTION>
DIRECTOR MONTHS OF SERVICE
-------- -----------------
<S> <C>
Theodore H. Black 112
Thomas B. Hagen 93
Henry F. Henderson, Jr. 101
John M. Pietruski 101
Catherine A. Rein 101
Paul R. Roedel 222
Carlisle A. H. Trost 78
Patricia K. Woolf 167
</TABLE>
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
Under the Corporation's Restricted Stock Plan for Outside Directors ("Direc-
tors Plan"), each director who is not an employee of the Corporation or any of
its subsidiaries ("Outside Director") is paid a portion of his or her annual
compensation in the form of 300 shares of GPU Common Stock.
20
<PAGE>
A total of 40,000 shares of GPU Common Stock (subject to adjustment for
stock dividends, stock splits, recapitalizations and other specified events)
has been authorized for issuance under the Directors Plan. Any shares awarded
which are forfeited as provided by the Directors Plan will again be available
for issuance.
Shares of Common Stock are awarded to Outside Directors on the condition
that the director serves or has served as an Outside Director until (i) death
or disability, (ii) retirement not earlier than the first day of the month
following the director's 72nd birthday, (iii) resignation or retirement before
the first day of the month following the director's 72nd birthday with the
consent of the Board, which is defined in the Directors Plan to mean approval
thereof by at least 80% of the directors other than the affected director or
(iv) failure to be re-elected to the Board after being duly nominated. Termi-
nation of service for any other reason, including any involuntary termination
effected by action or inaction of the Board, other than that following a
change in control (as defined) of GPU, will result in forfeiture of all shares
awarded.
Until termination of service, an Outside Director may not dispose of any
shares of Common Stock awarded under the Directors Plan, but has all other
rights of a shareholder with respect to such shares, including voting rights
and the right to receive all cash dividends paid with respect to awarded
shares.
2. PROPOSED AMENDMENTS TO THE 1990 STOCK PLAN FOR EMPLOYEES OF GPU, INC. AND
SUBSIDIARIES
At the 1990 Annual Meeting, the Corporation's shareholders approved adoption
of the 1990 Stock Plan for Employees of GPU, Inc. and Subsidiaries (the "1990
Stock Plan"). The purpose of the 1990 Stock Plan is to enable the Corporation
and its subsidiaries to attract and retain employees of outstanding talent.
Under the 1990 Stock Plan, designated employees may be paid a portion of their
compensation in stock options (including incentive stock options), restricted
shares of, or rights to acquire, GPU Common Stock or stock appreciation rights
("SAR's").
Since adoption of the 1990 Stock Plan, the Corporation has awarded both re-
stricted stock and, more recently, restricted units to designated employees,
but has not granted any stock options. In reviewing recent corporate trends,
however, the Board of Directors has concluded that the use of stock options as
a component of employee compensation has become more prevalent as it more
closely aligns the interests of employees with corporate performance. Accord-
ingly, the Board believes it appropriate to consider awarding stock options
under the 1990 Stock Plan.
To that end, on March 5, 1998, the Board of Directors adopted a number of
amendments to the 1990 Stock Plan. Certain of these amendments would allow the
issuance of stock options to qualify as "performance based" compensation as
defined by Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations thereunder. "Performance based" compensation
is fully tax deductible to the Corporation even if the compensation for any
single executive exceeds $1 million. Internal Revenue Service regulations re-
quire, among other things, however, that for incentive stock options to qual-
ify as "performance based," stockholders must approve certain provisions of
the related plan.
Consequently, the proposed amendments would, in general, (i) add a new Sec-
tion 2(d) to the 1990 Stock Plan in order to limit to 400,000 shares the num-
ber of options which may be granted to any executive during a year and (ii)
amend Section 5(a) to provide that the exercise price for all options granted
under the 1990 Stock Plan may not exceed the fair market value of GPU Common
Stock on the date of grant. The Board has also proposed amending Section 2(c)
of the 1990 Stock Plan to extend the period during which incentive stock op-
tions may be granted from November 30, 1999 to March 4, 2008; in order to in-
sure compliance with Section 422 of the Code, shareholder approval for this
proposed amendment is being requested.
21
<PAGE>
Code Section 422 also requires that shareholders approve the total number of
shares available for issuance under the 1990 Stock Plan and the category of
eligible persons who may participate in the 1990 Stock Plan. The Board has not
proposed any amendments to these plan provisions (which are contained in Sec-
tions 2(b) and 3(b), respectively, of the 1990 Stock Plan) and the sharehold-
ers previously approved these provisions at the 1990 Annual Meeting. Neverthe-
less, in light of the proposed amendment to Section 2(c) extending the period
during which incentive stock options may be granted, Section 422 requires that
the shareholders reapprove these two provisions as well. Consequently, the
Board is requesting shareholders to again approve Sections 2(b) and 3(b) of
the 1990 Stock Plan in their current form in order to satisfy Code require-
ments.
In addition, on March 5, 1998, the Board adopted certain other amendments to
the 1990 Stock Plan to provide greater discretion and flexibility in estab-
lishing terms and conditions of stock options granted under the plan. These
amendments do not require shareholder approval and accordingly such approval
is not being sought.
The material terms of the 1990 Stock Plan, as amended, as well as further
explanation of the proposed amendments for which shareholder approval at the
1998 Annual Meeting is being sought, are discussed below.
GENERAL
Awards under the 1990 Stock Plan consist of the following: (i) incentive
stock options as provided in Section 422 of the Code, and nonqualified stock
options (collectively, "options"); (ii) shares of the Corporation's Common
Stock, which are restricted as provided in the 1990 Stock Plan ("restricted
shares"); (iii) rights to acquire shares of the Corporation's Common Stock,
which also are restricted as provided in the 1990 Stock Plan ("restricted
units"); or (iv) SAR's, which may accompany options.
A maximum of 1,974,190 shares of Common Stock may be awarded under the 1990
Stock Plan. Shares issued under the 1990 Stock Plan may be either authorized
and unissued shares or previously issued and reacquired shares. Any shares
awarded under the 1990 Stock Plan which are forfeited as provided in the 1990
Stock Plan will again be available for issuance, except for any shares surren-
dered upon the exercise of an incentive stock option or a related right. In
the event the Corporation declares a stock dividend, stock split, recapitali-
zation or if the Corporation is a party to a merger, consolidation or other
reorganization, and the number of outstanding shares of Common Stock is
thereby changed, or there is an offer to acquire the shares of the Corpora-
tion's Common Stock, the number of shares under the 1990 Stock Plan subject to
options, rights, restricted units, and restricted shares may be equitably ad-
justed.
If the proposed amendments are adopted, the period during which the Corpora-
tion may grant incentive stock options pursuant to the 1990 Stock Plan would
be extended to March 4, 2008 from November 30, 1999 and the total number of
shares of the Corporation's Common Stock with respect to which options may be
granted under the 1990 Stock Plan to any employee during any calendar year
would be limited to 400,000 shares. The total number of shares which the Cor-
poration may issue under the 1990 Stock Plan, however, would remain at
1,974,190.
ADMINISTRATION
The 1990 Stock Plan is administered by the Personnel, Compensation and Nomi-
nating Committee ("Committee") of the Corporation's Board of Directors. In the
case of an officer of the Corporation, or the chairman or president of certain
of its subsidiaries, however, the Committee's determinations are subject to
approval by the full Board of Directors of the Corporation.
22
<PAGE>
ELIGIBILITY
Only employees of the Corporation or a wholly-owned subsidiary may receive
awards under the 1990 Stock Plan. The Committee may determine, with respect to
each designated employee, the type of award granted and the conditions and re-
strictions covering the award.
OPTIONS
Exercise Price. Presently, the Committee determines the exercise price of
options granted under the 1990 Stock Plan, except that for incentive stock op-
tions, the exercise price may not be less than 100% of the fair market value
of the Corporation's Common Stock on the date of grant. Fair market value is
defined as the closing sale price of the Corporation's Common Stock as re-
ported on the New York Stock Exchange Consolidated Tape on the date of grant,
or if there were no such sales on that day, for the next preceding day on
which sales occurred. The Committee may adjust the option exercise price under
certain circumstances to the extent it deems appropriate to prevent the dilu-
tion or enlargement of rights.
In order to comply with the requirements of Section 162(m) of the Code, the
Board has adopted, subject to shareholder approval, an amendment to Section
5(a) of the 1990 Stock Plan which would require that the exercise price for
all options granted be not less than 100% of fair market value of the Corpora-
tion's Common Stock on the date of grant.
Term. The Committee determines the term of options granted under the 1990
Stock Plan, provided that options may not have a term exceeding 10 years from
their date of grant.
Exercise. Options are exercisable, in whole or from time to time in part, at
such times and in such amounts as the Committee determines. The Committee may,
in its discretion, accelerate the exercisability of any option. The Committee
may determine, in its discretion, whether and to what extent employees may ex-
ercise outstanding options following a termination of their employment. In
general, all outstanding options will be canceled and discharged by a lump sum
cash payment in the event of a "change in control" of the Corporation. A
"change in control" is defined in the 1990 Stock Plan as the occurrence of (1)
an acquisition (other than directly from the Corporation) by a person (other
than, among others, the Corporation, its subsidiaries and employee benefit
plans maintained by the Corporation) of any of the Corporation's Common Stock
immediately following which such person has 20% or more of the outstanding
beneficial ownership of the Corporation's Common Stock; (2) certain changes in
the make-up of the Corporation's Board of Directors; and (3) the consummation
of certain mergers, consolidations or reorganizations with or into the Corpo-
ration.
Transferability. Generally, options granted under the 1990 Stock Plan are
not transferable except by will or the laws of descent and distribution.
RIGHTS
The Committee may also award SAR's under the 1990 Stock Plan to eligible em-
ployees. SAR's may either accompany an option ("tandem right") or be awarded
separately. Employees receiving SAR's will be entitled to receive, subject to
the terms and conditions of the 1990 Stock Plan and such rules and regulations
as the Committee may establish, a payment equal to the product of (A) the ex-
cess of (i) the fair market value on the exercise date of a share of the Cor-
poration's Common Stock over (ii) the per share price specified in the SAR,
multiplied by (B) the number of shares with respect to which the SAR is being
exercised. Payment will be made in the form of cash, shares of the Corpora-
tion's Common Stock or a combination thereof as the Committee may determine.
23
<PAGE>
Exercise Price. The exercise price of a SAR will be determined by the Com-
mittee, except that the exercise price of a SAR accompanying an incentive
stock option may not be less than 100% of the fair market value of the Common
Stock subject to such option on the date of grant.
Tandem Rights. Tandem rights will also be subject to all of the same terms
and conditions regarding exercisability, adjustments, etc. as are contained in
the option to which they relate.
Transferability. Generally, SAR's will not be transferable except by will or
the laws of descent and distribution.
RESTRICTED SHARES AND UNITS
The 1990 Stock Plan provides for the Committee to award, subject to such re-
strictions as the Committee may establish, restricted shares of the Corpora-
tion's Common Stock or restricted units representing shares of the Corpora-
tion's Common Stock. The restricted shares and restricted units are subject to
restrictions on transferability for such period as the Committee may estab-
lish. All such restrictions shall lapse, however, upon the occurrence of a
"change in control" of the Corporation or, if the Committee has so determined,
upon the employee's death, Eligible Retirement or Total Disability. The Com-
mittee also has discretion to permit restrictions to lapse upon termination of
employment for any other reason.
Employees receiving restricted shares generally have all rights and privi-
leges of shareholders regarding those shares, including voting rights and the
right to receive dividends or dividend equivalents subject to such terms and
conditions as the Committee may establish, except that restricted shares may
not be sold or otherwise disposed of prior to the expiration of the restricted
period. In addition, restricted shares are subject to forfeiture in the event
of the employee's termination of employment unless the Committee otherwise de-
termines.
With respect to restricted units, shares will not be issued to the employee
until the lapse of the restricted period and satisfaction of other conditions
which the Committee may establish or upon a "change in control" of the Corpo-
ration or, if the Committee has so determined, upon the employee's death, To-
tal Disability or Eligible Retirement.
AMENDMENTS
The Board may suspend, amend, modify or terminate the 1990 Stock Plan at any
time, except that no amendment or modification to certain portions of the 1990
Stock Plan nor any suspension or termination may be effectuated in connection
with a "change in control" if it adversely affects the rights of any employee
under the 1990 Stock Plan and no such action which adversely affects the
rights of an employee with respect to an award granted under the Plan may be
taken without the consent of the affected employee.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a general summary of the fed-
eral income tax consequences of the 1990 Stock Plan to participating employees
and the Corporation. Because of the complexity of the tax issues involved,
each employee should consult his or her own tax advisor with respect to his or
her participation in the 1990 Stock Plan.
Non-Qualified Options. There will be no federal income tax consequences to
either the employee or the Corporation on the grant of a non-qualified option.
Generally, on the exercise of a non-qualified option, the employee has taxable
ordinary income equal to the difference between the option price of the shares
and the fair market value of the shares on the exercise date and the Corpora-
tion is entitled to a corresponding tax deduction.
24
<PAGE>
Rights. There will be no federal income tax consequences to either the em-
ployee or the Corporation on the grant of a right or while the right remains
outstanding. Generally, on the exercise of a right, the amount which the em-
ployee is paid whether in shares or cash, is taxable to the employee as ordi-
nary income and the Corporation is entitled to a corresponding tax deduction.
Incentive Stock Options. An employee will not realize taxable income by rea-
son of the grant, or upon the exercise, of an incentive stock option ("ISO"),
and the Corporation will not be entitled to any deduction. If certain holding
period requirements are met, the entire gain, if any, realized by the employee
upon a subsequent disposition of the shares acquired under an ISO will be tax-
able to the employee as long-term capital gain. However, the excess of the
fair market value of the ISO shares on the exercise date over the option price
is a tax preference item for purposes of the alternative minimum tax provi-
sions of federal law. If the employee makes a disposition of any shares ac-
quired upon the exercise of an ISO before the holding period requirements have
been met, the employer will realize ordinary income, in an amount equal to the
excess of either the fair market value of such shares on the exercise date or,
if less, the amount realized on the disposition of such shares, over the op-
tion price of such shares. The Corporation will be entitled to a corresponding
tax deduction for the amount so realized by the employee. In addition, the em-
ployee will realize capital gain or loss to the extent that the amount real-
ized on the early disposition of the ISO shares exceeds, or is less than, the
fair market value of the shares on the exercise date.
Restricted Shares. There will be no federal income tax consequences to ei-
ther the employee or the Corporation on the grant of restricted shares in the
absence of an election by the employee as described below. If currently paid
to the employee, dividends on restricted shares will be taxable ordinary in-
come to the employee and deductible by the Corporation. However, if the grant
to the employee requires such dividends to be reinvested in shares subject to
similar restrictions, then the tax treatment of such dividend shares will be
the same as the tax treatment of the initial restricted shares. When the
shares are no longer subject to a substantial risk of forfeiture, the employee
will realize taxable ordinary income in an amount equal to the fair market
value of the shares at that time, and the Corporation will be entitled to a
corresponding deduction. However, an employee may elect to recognize taxable
ordinary income in the year the restricted shares are awarded in an amount
equal to their fair market value at the time of grant, determined without re-
gard to the restrictions, and the Corporation will be entitled to a corre-
sponding tax deduction at that time. In that event, any gain or loss realized
by the employee upon the subsequent disposition of the shares will be capital
gain or loss and will not result in any further deduction to the Corporation.
Dividends on shares no longer subject to a substantial risk of forfeiture, or
with respect to which an election is made as described above, represent ordi-
nary dividend income to the employee and are not deductible to the Corpora-
tion. If the employee elects to be taxed on the restricted shares on the date
of grant and the employee subsequently forfeits the shares, the employee will
not be entitled to a deduction as a consequence of such forfeiture, but the
Corporation must include as ordinary income the amount it previously deducted
in the year of grant with respect to such shares.
Restricted Units. There will be no federal income tax consequences to the
employee or the Corporation when restricted units or related dividend equiva-
lents are credited to the employee's account. The amount payable to the em-
ployee after the restrictions lapse, whether paid in shares or cash will be
taxable as ordinary income in the year or years in which payment is made. Any
cash payments made to the employee as dividend equivalents during the term of
the restrictions also will be taxable as ordinary income. The Corporation will
be entitled to corresponding tax deductions.
Other. The termination of restrictions on restricted shares or restricted
units or the vesting of, or payment with respect to, any portion of an option
or right which is accelerated as a result of a change in control or a similar
event may result in all or a portion of the value of such restricted shares,
restricted units, accelerated options or rights, or payment in respect there-
of, being treated, in the case
25
<PAGE>
of certain officers and highly compensated employees, as "parachute payments"
for federal income tax purposes. Any such parachute payments may be nondeduct-
ible to the Corporation in whole or in part and may subject that employee to a
20% excise tax on all or a portion of such payment.
The text of the amended 1990 Stock Plan is set forth in Annex A to the Proxy
Statement.
The affirmative vote of a majority of the shares of Common Stock present and
voting at the meeting is required to approve the proposed amendments to Sec-
tions 2(c), 2(d) and 5(a) and reapprove Sections 2(b) and 3(b) of the 1990
Stock Plan. In the event shareholders do not vote to approve such amendments
and reapprove Sections 2(b) and 3(b), the 1990 Stock Plan would remain in ef-
fect as currently amended.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR: (1) THE PRO-
POSED AMENDMENTS TO SECTIONS 2(C), 2(D) AND 5(A); AND (2) REAPPROVAL OF SEC-
TIONS 2(B) AND 3(B) OF THE 1990 STOCK PLAN. IF THE STOCKHOLDERS DO NOT ADOPT
THE BOARD'S RECOMMENDATIONS, THE COMMITTEE AND THE BOARD WOULD CONSIDER THE
FUTURE GRANTS OF STOCK OPTIONS ON A CASE BY CASE BASIS.
3. RATIFICATION OF SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
AUDITOR FOR THE YEAR 1998
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P.
("C&L"), independent certified public accountants, to audit the accounts of
the Corporation for 1998. Although submission to stockholders of the appoint-
ment of the independent auditor is not required by law, the Board, in accor-
dance with its long-standing policy of seeking annual stockholder ratification
of the selection of the auditor, believes it appropriate that such selection
be ratified by the stockholders. C&L has acted as the auditor for the Corpora-
tion and its subsidiaries since 1946. C&L has advised the Corporation that
neither that firm nor any of its partners has any direct or indirect material
relationship with the Corporation or its subsidiaries.
The services rendered by C&L for 1997 included an audit of the consolidated
financial statements of the Corporation and its subsidiaries for the year
ending December 31, 1997 contained in the annual report to stockholders and
audits of the individual and consolidated financial statements of the
Corporation and its subsidiaries and related schedules filed annually with the
Securities and Exchange Commission. C&L also performed audits as necessary to
report upon compliance with the accounting requirements of the Federal Energy
Regulatory Commission for certain financial statements included in the reports
which are required to be filed annually with that Commission by the subsidiary
companies.
Fees paid to C&L for 1997 for services aggregated $2,260,000, of which
$1,315,000 related to non-audit services, excluding reimbursement for out-of-
pocket expenses.
It is expected that representatives of C&L will be present at the Annual
Meeting, will be available to respond to appropriate questions and will have
an opportunity to make a statement if they desire to do so.
BY-LAW AMENDMENT
During the past year, the Board of Directors adopted an amendment to Section
1 of the By-Laws of the Corporation to reflect the relocation of the Corpora-
tion's principal office to Morristown, New Jersey.
As amended, Section 1 of the By-Laws now reads as follows:
"1. The principal office of the Corporation shall be in the County of Mor-
ris, the State of New Jersey. The Corporation may also have offices at such
other places as the Board of Directors may from time to time designate or the
business of the Corporation may require."
26
<PAGE>
In accordance with Section 53 of the By-Laws, the foregoing amendment has
been adopted by vote of a majority of the Board of Directors and is not being
submitted to the stockholders for approval. The holders of a majority of the
Corporation's outstanding shares of Common Stock present or represented and
voting at the Annual Meeting may, however, alter, amend or repeal such action
by the Board.
OTHER MATTERS
The Board of Directors does not intend to bring any other matters before the
meeting and it is not informed of any other business which others may bring
before the meeting. However, if any other matters should properly come before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying Proxy to vote on such matters as they, in their dis-
cretion, may determine.
GPU will pay all costs of soliciting Proxies in the accompanying form.
Solicitation will be made by mail, and directors and officers of GPU, and
officers and employees of GPUS, may also solicit Proxies by telephone,
telegraph or personal interview. The Corporation has also retained ChaseMellon
Shareholder Services, L.L.C. to aid in the solicitation of Proxies, at an
estimated cost of $8,000, plus reimbursement of reasonable out-of-pocket
expenses. In addition, GPU will request persons who hold stock in their names
for others to forward copies of this proxy soliciting material to them, and to
request authority to execute Proxies on the accompanying form, and will
reimburse such persons for their out-of-pocket and reasonable clerical
expenses in doing this.
DEADLINE FOR STOCKHOLDER PROPOSALS
If a stockholder wishes to submit a proposal for inclusion in the Proxy
Statement for the 1999 Annual Meeting of Stockholders, such proposal must be
received by the Corporation not later than November 23, 1998.
By order of the Board of Directors,
MARY A. NALEWAKO, Secretary
March 23, 1998
- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
YOU ARE ENCOURAGED TO VOICE YOUR PREFERENCE BY MARKING THE APPROPRIATE BOXES
ON THE ENCLOSED PROXY. HOWEVER, IT IS NOT NECESSARY TO MARK ANY BOXES IF YOU
WISH TO VOTE IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS; MERELY SIGN,
DATE AND RETURN THE PROXY IN THE ENCLOSED POSTPAID ENVELOPE.
- -------------------------------------------------------------------------------
27
<PAGE>
ANNEX A
Set forth below is the text of the 1990 Stock Plan (marked to show (i)
changes to reflect the proposed amendments for which stockholder approval is
being requested (new language is shown by double-underscoring and deleted lan-
guage is shown by strikeouts) and (ii) those portions for which stockholder
reapproval is being requested (shown by italics)).
1990 STOCK PLAN FOR EMPLOYEES
OF
GPU, INC. AND SUBSIDIARIES
1. PURPOSE
GPU, Inc. (the "Corporation") desires to attract and retain employees of
outstanding talent. The 1990 Stock Plan for Employees of GPU, Inc. and Subsid-
iaries (the "Plan") affords eligible employees the opportunity to acquire pro-
prietary interests in the Corporation and thereby encourages their highest
levels of performance.
2. SCOPE AND DURATION
(a)Awards under the Plan may be granted in the following forms:
(i) incentive stock options ("incentive stock options") as provided in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
non-qualified stock options ("non-qualified options") (the term "options" in-
cludes incentive stock options and non-qualified options);
(ii) shares of Common Stock of the Corporation (the "Common Stock") which
are restricted as provided in Section 10 ("restricted shares"); or
(iii) rights to acquire shares of Common Stock which are restricted as
provided in Section 10 ("units" or "restricted units").
Options may be accompanied by stock appreciation rights ("rights").
[BEGIN ITALICS]
(b)The maximum aggregate number of shares of Common Stock as to which awards
of options, restricted shares, units or rights may be made from time to time
under the Plan is 1,974,190 shares./1/ Shares issued pursuant to this Plan may
be in whole or in part, as the Board of Directors of the Corporation (the
"Board of Directors") shall from time to time determine, authorized but
unissued shares or issued shares reacquired by the Corporation. If for any
reason any shares as to which an option has been granted cease to be subject
to purchase thereunder or any restricted shares or restricted units are for-
feited to the Corporation, or to the extent that any awards under the Plan de-
nominated in shares or units are paid or settled in cash or are surrendered
upon the exercise of an option, then (unless the Plan shall have been termi-
nated) such shares or units, and any shares surrendered to the Corporation
upon such exercise, shall become available for subsequent awards under the
Plan unless such shares or units, if so made available for subsequent awards
under the Plan, would not be exempt from Section 16(b) of the Securities Ex-
change Act of 1934 (the "Exchange Act") pursuant to Rule 16b-3, as amended,
thereunder; provided, however, that shares surrendered to the Corporation upon
the exercise of an incentive stock option and shares subject to an incentive
stock option surrendered upon the exercise of a right shall not be available
for subsequent award of additional stock options under the Plan.[END ITALICS]
(c)No incentive stock option shall be granted hereunder after [BEGIN
STRIKEOUT] November 30, 1999[END STRIKEOUT] [BEGIN DOUBLE-UNDERSCORE]March 4,
2008.
(d)The total number of shares of Common Stock with respect to which options
may be granted under the Plan to any employee during any calendar year shall not
exceed 400,000 shares. [END DOUBLE-UNDERSCORE]
/1/ Initially, 1,000,000 shares were authorized to be issued under the Plan. On
May 29, 1991, the Corporation effected a two-for-one stock split by way of
a stock dividend, leaving 1,974,190 shares available for issuance under
the Plan on and after that date, after giving effect to shares previously
awarded.
A-1
<PAGE>
3. ADMINISTRATION
(a)The Plan shall be administered by those members of the Personnel, Compen-
sation and Nominating Committee, or any successor thereto, of the Board of Di-
rectors who are "non-employee directors" within the meaning of Rule 16b-3, as
amended, under Section 16(b) of the Exchange Act or by such other committee
consisting of not less than two persons each of whom shall qualify as "non-em-
ployee directors," as may be determined by the Board of Directors ("the Com-
mittee").
[BEGIN ITALICS]
(b)The Committee shall have plenary authority in its sole discretion, sub-
ject to and not inconsistent with the express provisions of this Plan: (i) to
grant options, to determine the purchase price of the Common Stock covered by
each option, the term of each option, the employees to whom, and the time or
times at which, options shall be granted and the number of shares to be cov-
ered by each option; (ii) to designate options as incentive stock options or
non-qualified options and to determine which options shall be accompanied by
rights; (iii) to grant rights and to determine the purchase price of the Com-
mon Stock covered by each right or related option, the term of each right or
related option, the employees to whom, and the time or times at which, rights
or related options shall be granted and the number of shares to be covered by
each right or related option; (iv) to grant restricted shares and restricted
units and to determine the term of the Restricted Period (as defined in Sec-
tion 10) and other conditions applicable to such shares or units, the employ-
ees to whom, and the time or times at which, restricted shares or restricted
units shall be granted and the number of shares or units to be covered by each
grant; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules
and regulations relating to the Plan; (vii) to determine the terms and provi-
sions of the option and rights agreements (which need not be identical) and
the restricted share and restricted unit agreements (which need not be identi-
cal) entered into in connection with awards under the Plan, including any pro-
visions of such agreements that may permit a recipient of an award of re-
stricted units to elect, prior to the vesting of such units, to defer the pay-
ment of cash and/or the delivery of shares of Common Stock otherwise to be
made upon the vesting of such restricted units, and/or to defer the payment of
any cash compensation awarded to the recipient with respect to such restricted
units, or with respect to any restricted stock awarded to the recipient, ei-
ther under this Plan or the GPU System Companies Deferred Compensation Plan (a
"Deferral"); and to make all other determinations deemed necessary or advis-
able for the administration of the Plan. Without limiting the foregoing, the
Committee shall have plenary authority in its sole discretion, subject to and
not inconsistent with the express provisions of the Plan, (1) to select GPU
Officers (as defined below) for participation in the Plan, (2) to determine
the timing, price and amount of any grant or award under the Plan to any GPU
Officer, (3) either (A) to determine the form in which payment of any right
granted or awarded under the Plan will be made (i.e., cash, securities or any
combination thereof) or (B) to approve the election of the employee to receive
cash in whole or in part in settlement of any right granted or awarded under
the Plan. As used herein, the term "GPU Officer" shall mean an officer (other
than an assistant officer) of the Corporation and any person who may from time
to time be designated an executive officer of the Corporation by its Board of
Directors (the "Board"). The exercise by the Committee of the powers granted
in clauses (i), (ii), (iii), (iv), and (vii) hereof shall be subject to the
approval of the Board with respect to a recipient of an award hereunder who is
an officer (other than assistant officer) of the Corporation or the Chairman
or President of any subsidiary (as defined in Section 4(a) hereof) of the Cor-
poration. (The Committee and the Board are sometimes hereinafter referred to
as the "Grantors.")[END ITALICS]
(c)The Grantors may delegate to one or more of their members or to one or
more agents such administrative duties as they may deem advisable, and the
Grantors or any person to whom they have delegated duties as aforesaid may em-
ploy one or more persons to render advice with respect to any responsibility
the Grantors or such person may have under the Plan; provided, that the Grant-
ors may not delegate any duties to a member of the Board of Directors who
would not qualify as a "non-employee director" to administer the Plan as con-
templated by Rule 16b-3, as amended, or other applicable rules under the Ex-
change Act. The Grantors may employ attorneys, consultants, accountants or
other persons and the Grantors, the Corporation and its officers and directors
shall be entitled
A-2
<PAGE>
to rely upon the advice, opinions or valuations of any such persons. All ac-
tions taken and all interpretations and determinations made by the Grantors in
good faith shall be final and binding upon all employees who have received
awards, the Corporation and all other interested persons. Notwithstanding the
foregoing, any action taken or any interpretation or determination made by the
Grantors after the occurrence of a "Change in Control" (as defined in Section
7(c) hereof) which adversely affects the rights of any employee with respect
to any award made to the employee hereunder shall be subject to judicial re-
view under a "de novo" rather than a deferential standard. No member or agent
of the Grantors shall be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan or awards made
thereunder, and all members and agents of the Grantors shall be fully pro-
tected by the Corporation in respect of any such action, determination or in-
terpretation.
4. ELIGIBILITY; FACTORS TO BE CONSIDERED IN MAKING AWARDS
(a)Only employees of the Corporation or its subsidiaries may receive awards
under the Plan. The term "subsidiary" means any corporation one hundred per-
cent (100%) of the Common Stock of which is owned, directly or indirectly, by
the Corporation. A director of the Corporation or of a subsidiary who is not
also an employee will not be eligible to receive an award.
(b)In determining the employees to whom awards shall be granted and the num-
ber of shares or units to be covered by each award, the Committee shall take
into account the nature of the employee's duties, his or her present and po-
tential contributions to the success of the Corporation and such other factors
as it shall deem relevant in connection with accomplishing the purposes of the
Plan.
(c)Awards may be granted singly, in combination or in tandem and may be made
in combination or in tandem with or in replacement of, or as alternatives to,
awards or grants under any other employee plan maintained by the Corporation
or its subsidiaries. An award made in the form of an option, a unit or a right
may provide, in the discretion of the Committee, for (i) the crediting to the
account of, or the current payment to, each employee who has such an award of
an amount equal to the cash dividends and stock dividends paid by the Corpora-
tion upon one share of Common Stock for each restricted unit, or share of Com-
mon Stock subject to an option or right, included in such award, and for each
restricted unit which is the subject of a Deferral ("Dividend Equivalents"),
or (ii) the deemed reinvestment of such Dividend Equivalents and stock divi-
dends in shares of Common Stock or the deemed reinvestment of units in addi-
tional units, which deemed reinvestment in each case shall be deemed to be
made in accordance with the provisions of Section 10 and credited to the em-
ployee's account ("Additional Deemed Shares"). Such Additional Deemed Shares
shall be subject to the same restrictions (including but not limited to provi-
sions regarding forfeitures) applicable with respect to the option, unit or
right with respect to which such credit is made. Dividend Equivalents not
deemed reinvested as stock dividends shall not be subject to forfeiture, and
may bear amounts equivalent to interest or cash dividends as the Committee may
determine. An employee who has been granted incentive stock options under the
Plan may be granted an additional award or awards, subject to such limitations
as may be imposed by the Code with respect to incentive stock options.
(d)The Committee, in its sole discretion, may grant to an employee who has
been granted an award under the Plan or any other employee plan maintained by
the Corporation, any of its subsidiaries, or any successor thereto, in ex-
change for the surrender and cancellation of such award, a new award in the
same or a different form and containing such terms, including without limita-
tion a price which is different (either higher or lower) than any price pro-
vided in the award so surrendered and cancelled, as the Committee may deem ap-
propriate.
5. OPTION PRICE
(a)The purchase price of the Common Stock covered by each option shall be
determined by the Committee; provided, however, that [BEGIN STRIKEOUT] in the
case of incentive stock options, [END STRIKEOUT] the purchase price shall not
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be less than 100% of the fair market value of the Common Stock on the date the
option is granted. Fair market value shall mean the closing price of the Com-
mon Stock as reported on the New York Stock Exchange Composite Tape for the
date on which the option is granted, or if there are no sales on such date, on
the next preceding day on which there were sales. Such price shall be subject
to adjustment as provided in Section 13. The price so determined shall also be
applicable in connection with the exercise of any related right.
(b)The purchase price of the shares as to which an option is exercised shall
be paid in full at the time of exercise. Payment may be made in cash, which
may be paid by check or other instrument acceptable to the Corporation, in
shares of the Common Stock, valued at the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape for the date of exer-
cise, or if there were no sales on such date, on the next preceding day on
which there were sales, or (if permitted by the Committee and subject to such
terms and conditions as it may determine) by surrender of outstanding awards
under the Plan. In addition, the purchase price may be paid in whole or in
part by delivering a properly executed exercise notice in a form approved by
the Committee together with irrevocable instructions to a broker to promptly
deliver to the Corporation the applicable amount of the proceeds from the sale
or loan securities. The purchase price may also be paid in such other form or
manner as the Committee may from time to time approve.
(c)At the time of any exercise of an option granted to an employee hereun-
der, the employee shall pay any amount determined by the Committee to be nec-
essary to satisfy all applicable federal, state or local tax requirements re-
lating to such exercise. The Committee may permit such amount to be paid in
other shares of Common Stock owned by the employee, or a portion of the shares
of Common Stock that otherwise would be issued to the employee upon such exer-
cise of the option, or a combination of cash and shares of such Common Stock.
6. TERM OF OPTIONS
The term of each option granted under the Plan shall be such period of time
as the Committee shall determine, but not more than ten years from the date of
grant. Unless sooner forfeited pursuant to the terms of the applicable option
agreement or cancelled pursuant to Section 7(c) hereof, each option granted
under the Plan shall expire at the end of its term. Notwithstanding any other
provision in this Plan to the contrary, no option granted hereunder may be ex-
ercised after the expiration of its term.
7. EXERCISE OF OPTIONS
(a)Each option granted under the Plan shall become exercisable, in whole or
in part, at such time or times during its term as the agreement evidencing the
grant of such option shall specify; provided, however, that the Committee may
also, in its discretion, accelerate the exercisability of any option in whole
or in part at any time.
(b)Each option granted under the Plan that has become exercisable pursuant
to Section 7(a) hereof shall remain exercisable thereafter for such period of
time prior to the expiration of its term (including any period subsequent to
the employee's termination of employment with the Corporation and all of its
subsidiaries for any reason) as the option agreement evidencing the grant of
such option shall provide.
(c)Subject to subsection (e) below but notwithstanding any other provision
of the Plan, upon the occurrence of a Change in Control of the Corporation
(the date upon which such event occurs shall be referred to for purposes of
this Plan as an "Acceleration Date"), all options granted under the Plan and
still outstanding on the Acceleration Date shall be cancelled, and the Corpo-
ration's obligation in respect of each option so cancelled shall be discharged
by payment to the holder of such option of a single cash lump sum, in an
amount determined under subsection (d) below. Such amount shall be
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payable as soon as practicable after the Acceleration Date. For purposes of
the Plan, a "Change in Control" shall mean the occurrence during the term of
the Plan of:
(1) An acquisition (other than directly from the Corporation) of any 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 Securi-
ties 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 deter-
mining 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-Con-
trol Acquisition" shall mean an acquisition by (A) an employee benefit plan
(or a trust forming a part thereof) maintained by (i) the Corporation or (ii)
any corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or indirectly,
by the Corporation (for purposes of this definition, a "Subsidiary"), (B) the
Corporation or its Subsidiaries, or (C) any Person in connection with a "Non-
Control Transaction" (as hereinafter defined);
(2) The individuals who, as of August 1, 1996, are members of the Board of Di-
rectors (the "Incumbent Board"), cease for any reason to constitute at least
seventy percent (70%) of the members of the Board of Directors; provided, how-
ever, that if the election, or nomination for election by the Corporation's
shareholders, of any new director was approved by a vote of at least two-
thirds of the Incumbent Board, such new director shall, for purposes of this
Plan, be considered as a member of the Incumbent Board; provided further, how-
ever, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(3) The consummation of:
(A) A merger, consolidation or reorganization with or into the Corporation or
in which securities of the Corporation are issued, unless such merger, consol-
idation or reorganization is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a merger, consolidation or reorganization with or into
the Corporation or in which securities of the Corporation are issued where:
(i) the shareholders of the Corporation, immediately before such merg-
er, 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 owner-
ship of the Voting Securities immediately before such merger, consolidation or
reorganization,
(ii) the individuals who were members of the Incumbent Board immedi-
ately prior to the execution of the agreement providing for such merger, con-
solidation or reorganization constitute at least seventy percent (70%) of the
members of the board of directors of the Surviving Corporation, or a corpora-
tion, directly or indirectly, beneficially owning a majority of the Voting Se-
curities of the Surviving Corporation, and
(iii) no Person other than (w) the Corporation, (x) any Subsidiary,
(y) any employee benefit plan (or any trust forming a part thereof) that, im-
mediately prior to such merger, consolidation or reorganization, was main-
tained by the Corporation or any Subsidiary, or (z) any Person who,
immediately prior to such merger, consolidation or reorganization had Benefi-
cial Ownership of twenty
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<PAGE>
percent (20%) or more of the then outstanding Voting Securities or Common
Stock, has Beneficial Ownership of twenty percent (20%) or more of the com-
bined voting power of the Surviving Corporation's then outstanding voting se-
curities or its common stock.
(B) A complete liquidation or dissolution of the Corporation; or
(C) The sale or other disposition of all or substantially all of the assets of
the Corporation to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Common
Stock or Voting Securities as a result of the acquisition of Common Stock or
Voting Securities by the Corporation which, by reducing the number of shares
of Common Stock or Voting Securities then outstanding, increases the propor-
tional number of shares Beneficially Owned by the Subject Persons, provided
that if a Change in Control would occur (but for the operation of this sen-
tence) as a result of the acquisition of shares of Common Stock or Voting Se-
curities by the Corporation, and after such share acquisition by the Corpora-
tion, 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.
(d)The lump sum payment to be made in respect of any option pursuant to sub-
section (c) above shall be an amount equal to (i) the excess, if any, of the
Determined Value of all shares that are still subject to the option as of the
Acceleration Date (including any shares as to which the option had not other-
wise become exercisable prior to such date) over the aggregate purchase price
of such shares, less (ii) the amount of all federal, state and local taxes re-
quired by law to be withheld with respect to such payment. The "Determined
Value" of the shares still subject to an option as of the Acceleration Date
shall mean the amount determined by multiplying the number of such shares by
the "Multiplication Factor," as defined in Section 10(f)(i) hereof.
(e)Any incentive stock option granted under the Plan and still outstanding
immediately prior to the occurrence of a Change in Control shall, upon the oc-
currence of the Change in Control, become immediately exercisable as to all
shares of Common Stock that are then still subject to the option. The holder
of any such incentive stock option shall be provided an opportunity to exer-
cise such option at such time prior to the time as of which the Change in Con-
trol becomes effective, and in accordance with such procedures, as the Commit-
tee shall determine. To the extent an option is so exercised, the option shall
not be cancelled as provided in subsection (c) above.
(f)An option may be exercised, at any time or from time to time during its
term (subject, in the case of an incentive stock option, to such restrictions
as may be imposed by the Code), as to any or all full shares as to which the
option has become and remains exercisable; provided, however, that an option
may not be exercised at any one time as to less than 100 shares (or less than
the number of shares as to which the option is then exercisable, if that num-
ber is less than 100 shares).
(g)Upon the exercise of an option or portion thereof in accordance with the
Plan, the option agreement and such rules and regulations as may be estab-
lished by the Committee, the holder thereof shall have the rights of a share-
holder with respect to the shares issued as a result of such exercise.
8. AWARD AND EXERCISE OF RIGHTS
(a)A right may be awarded by the Committee in connection with any option
granted under the Plan, either at the time the option is granted or thereafter
at any time prior to the exercise, termination or expiration of the option
("tandem right"), or separately ("freestanding right"). Each tandem right
shall
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<PAGE>
be subject to the same terms and conditions as the related option and shall be
exercisable only to the extent the option is exercisable. A right shall be ex-
ercisable (as to a tandem right, only to the extent the related option is ex-
ercisable) on or after an Acceleration Date.
(b)A right shall entitle the employee upon exercise in accordance with its
terms (subject, in the case of a tandem right, to the surrender unexercised of
the related option or any portion or portions thereof which the employee from
time to time determines to surrender for this purpose) to receive, subject to
the provisions of the Plan and such rules and regulations as from time to time
may be established by the Committee, a payment having an aggregate value equal
to the product of (A) the excess of (i) the fair market value on the exercise
date of one share of Common Stock over (ii) the exercise price per share, in
the case of a tandem right, or the price per share specified in the terms of
the right, in the case of a freestanding right, multiplied by (B) the number
of shares with respect to which the right shall have been exercised. The pay-
ment may be made in the form of all cash, all shares of Common Stock, or a
combination thereof, as elected by the employee.
(c)The exercise price per share specified in a right shall be as determined
by the Committee, provided that, in the case of a tandem right accompanying an
incentive stock option, the exercise price shall be not less than fair market
value of the Common Stock subject to such option on the date of grant.
(d)If upon the exercise of a right the employee is to receive a portion of
the payment in shares of Common Stock, the number of shares shall be deter-
mined by dividing such portion by the fair market value of a share on the ex-
ercise date. The number of shares received may not exceed the number of shares
covered by any option or portion thereof surrendered. Cash will be paid in
lieu of any fractional share.
(e)No payment will be required from an employee upon exercise of a right,
except that any amount necessary to satisfy applicable federal, state or local
tax requirements shall be withheld or paid promptly by the employee upon noti-
fication of the amount due and prior to or concurrently with delivery of cash
or a certificate representing shares. The Committee may permit such amount to
be paid in shares of Common Stock previously owned by the employee, or a por-
tion of the shares of Common Stock that otherwise would be distributed to such
employee upon exercise of the right, or a combination of cash and shares of
such Common Stock.
(f)The fair market value of a share shall mean the closing price of the Com-
mon Stock as reported on the New York Stock Exchange Composite Tape for the
date of exercise, or if there are no sales on such date, on the next preceding
day on which there were sales; provided, however, that in the case of rights
that relate to an incentive stock option, the Committee may prescribe, by
rules of general application, such other measure of fair market value as the
Committee may in its discretion determine but not in excess of the maximum
amount that would be permissible under Section 422 of the Code without dis-
qualifying such option under Section 422.
(g)Upon exercise of a tandem fight, the number of shares subject to exercise
under the related option shall automatically be reduced by the number of
shares represented by the option or portion thereof surrendered.
(h)A right related to an incentive stock option may only be exercised if the
fair market value of a share of Common Stock on the exercise date exceeds the
option price.
9. NON-TRANSFERABILITY OF OPTIONS, RIGHTS AND UNITS; HOLDING PERIODS FOR GPU
OFFICERS
Except as may otherwise be provided in the agreement evidencing the grant of
any option, right or unit hereunder, any option, right, or unit granted under
the Plan shall not be transferable by the
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<PAGE>
grantee thereof otherwise than by will or the laws of descent and distribu-
tion; provided, that the designation of a beneficiary by an employee shall not
constitute a transfer; and options and rights may be exercised during the
lifetime of the employee only by the employee or, unless such exercise would
disqualify an option as an incentive stock option, by the employee's guardian
or legal representative.
10. AWARD AND DELIVERY OF RESTRICTED SHARES OR RESTRICTED UNITS
(a)At the time an award of restricted shares or restricted units is made,
the Committee shall establish a period of time (the "Restricted Period") ap-
plicable to such award. Each award of restricted shares or restricted units
may have a different Restricted Period. The Committee may, in its sole discre-
tion, at the time an award is made, prescribe conditions for the incremental
lapse of restrictions during the Restricted Period and for the lapse or termi-
nation of restrictions upon the satisfaction of other conditions in addition
to or other than the expiration of the Restricted Period with respect to all
or any portion of the restricted shares or restricted units. The Committee may
also, in its sole discretion, shorten or terminate the Restricted Period, or
waive any conditions for the lapse or termination of restrictions with respect
to all or any portion of the restricted shares or restricted units. Notwith-
standing the foregoing, all restrictions shall lapse, and the Restricted Pe-
riod shall terminate, with respect to all restricted shares or restricted
units upon the occurrence of an Acceleration Date or at such earlier time as
provided for in Section 11 or Section 12.
(b) (1) Unless such shares are issued as uncertificated shares pursuant to
paragraph (3) below, a stock certificate representing the number of restricted
shares granted to an employee shall be registered in the employee's name but
shall be held in custody by the Corporation or an agent therefor for the em-
ployee's account. The employee shall generally have the rights and privileges
of a shareholder as to such restricted shares, including the right to vote
such restricted shares, except that, subject to the provisions of Section 11
and Section 12, the following restrictions shall apply: (i) the employee shall
not be entitled to delivery of the certificate until the expiration or termi-
nation of the Restricted Period and the satisfaction of any other conditions
prescribed by the Committee; (ii) none of the restricted shares may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of during
the Restricted Period and until the satisfaction of any other conditions pre-
scribed by the Committee at the time of award; and (iii) all of the restricted
shares shall be forfeited and all rights of the employee to such restricted
shares shall terminate without further obligation on the part of the Corpora-
tion unless the employee has remained an employee of the Corporation or any of
its subsidiaries until the expiration or termination of the Restricted Period
and the satisfaction of any other conditions prescribed by the Committee at
the time of award applicable to such restricted shares. At the discretion of
the Committee, (x) cash and stock dividends with respect to the restricted
shares may be either currently paid or withheld by the Corporation for the em-
ployee's account, and interest may be paid on the amount of cash dividends
withheld at a rate and subject to such terms as determined by the Committee or
(y) the Committee may require that all cash dividends be applied to the pur-
chase of additional shares of Common Stock, and such purchased shares, to-
gether with any stock dividends related to such restricted shares (such pur-
chased shares and stock dividends are hereafter referred to as "Additional Re-
stricted Shares") shall be treated as Additional Shares, subject to forfeiture
on the same terms and conditions as the original grant of the restricted
shares to the employee.
(2) The purchase of any such Additional Restricted Shares shall be made either
(i) through the Corporation's Dividend Reinvestment and Stock Purchase Plan,
in which event the price of such shares so purchased through the reinvestment
of dividends shall be as determined in accordance with the provisions of that
plan and no stock certificate representing such Additional Restricted Shares
shall be registered in the employee's name or (ii) in accordance with such al-
ternative procedure as is determined by the Committee in which event the price
of such purchased shares shall be the closing price of the Common Stock as re-
ported on the New York Stock Exchange Composite Tape for the date on which
such purchase is made, or if there were no sales on such date, the next pre-
ceding day on which
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<PAGE>
there were sales. In the event that the Committee shall not require reinvest-
ment, cash or stock dividends so withheld by the Committee shall not be sub-
ject to forfeiture. Upon the forfeiture of any restricted shares (including
any Additional Restricted Shares), such forfeited shares shall be transferred
to the Corporation without further action by the employee. The employee shall
have the same rights and privileges, and be subject to the same restrictions,
with respect to any shares received pursuant to Section 13.
(3) Notwithstanding anything herein to the contrary, shares representing re-
stricted shares or Additional Restricted Shares may be issued as
uncertificated shares.
(c)Upon the expiration or termination of the Restricted Period and the sat-
isfaction of any other conditions prescribed by the Committee at the time of
award, or at such earlier time as provided for in Section 11 or Section 12,
the restrictions applicable to the restricted shares (including Additional Re-
stricted Shares) shall lapse and a stock certificate for the number of re-
stricted shares (including any Additional Restricted Shares) with respect to
which the restrictions have lapsed shall be delivered, free of all such re-
strictions, except any that may be imposed by law, to the employee or the em-
ployee's beneficiary or estate, as the case may be. The Corporation shall not
be required to deliver any fractional share of Common Stock but will pay, in
lieu thereof, the fair market value (determined as of the date the restric-
tions lapse) of such fractional share to the employee or the employee's bene-
ficiary or estate, as the case may be.
No payment will be required from the employee upon the issuance or delivery
of any restricted shares, except that any amount necessary to satisfy applica-
ble federal, state or local tax requirements shall be withheld or paid
promptly upon notification of the amount due and prior to or concurrently with
the issuance or delivery of a certificate representing such shares. The Com-
mittee may permit such amount to be paid in shares of Common Stock previously
owned by the employee, or a portion of the shares of Common Stock that other-
wise would be distributed to such employee upon the lapse of the restrictions
applicable to the restricted shares, or a combination of cash and shares of
such Common Stock.
(d)In the case of an award of restricted units, no shares of Common Stock
shall be issued at the time the award is made, and the Corporation shall not
be required to set aside a fund for the payment of any such award.
(e)Subject to subsection (g) below:
(i) Upon the expiration or termination of the Restricted Period or the oc-
currence of an Acceleration Date and the satisfaction of any other conditions
prescribed by the Committee or at such earlier time as provided for in Section
11 or Section 12, the Corporation shall deliver to the employee or the employ-
ee's beneficiary or estate, as the case may be, one share of Common Stock for
each restricted unit with respect to which the restrictions have lapsed
("vested unit").
(ii) In addition, if the Committee has not required the deemed reinvest-
ment of such Dividend Equivalents pursuant to Section 4, at such time the Cor-
poration shall deliver to the employee cash equal to any Dividend Equivalents
or stock dividends credited with respect to each such vested unit and, to the
extent determined by the Committee, the interest thereupon. However, if the
Committee has required such deemed reinvestment in connection with such re-
stricted unit, in addition to the stock represented by such vested unit, the
Corporation shall deliver the number of Additional Deemed Shares credited to
the employee with respect to such vested unit.
(iii) Notwithstanding the foregoing, the Committee may, in its sole dis-
cretion, elect to pay cash or part cash and part Common Stock in lieu of de-
livering only Common Stock for the vested units and related Additional Deemed
Shares. If a cash payment is made in lieu of delivering Common Stock, the
amount of such cash payment shall be equal to the closing price of the Common
Stock as reported
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on the New York Stock Exchange Composite Tape for the date on which the Re-
stricted Period lapsed with respect to such vested unit and related Additional
Deemed Shares, or if there are no sales on such date, on the next preceding
day on which there were sales.
(f) Upon the occurrence of an Acceleration Date, all outstanding vested
units (including restricted units whose restrictions have lapsed as a result
of the occurrence of such Acceleration Date) and credited Dividend Equivalents
or related Additional Deemed Shares shall be payable as soon as practicable
after such Acceleration Date in cash, in shares of Common Stock, or part in
cash and part in Common Stock, as the Committee, in its sole discretion, shall
determine.
(i) Subject to subsection (g) below, to the extent that an employee re-
ceives cash in payment for his or her vested units and Additional Deemed
Shares, such employees shall receive an amount equal to the product of (x) the
number of vested units and Additional Deemed Shares credited to such employ-
ee's account for which such employee is receiving payment in cash multiplied
by (y) the highest closing price per share of Common Stock occurring during
the ninety (90) day period preceding and the ninety (90) day period following
the Acceleration Date (the "Multiplication Factor").
(ii) Subject to subsection (g) below, to the extent that an employee re-
ceives Common Stock in payment for his or her vested units and Additional
Deemed Shares, such employee shall receive the number of shares of Common
Stock determined by dividing (x) the product of (I) the number of vested units
and Additional Deemed Shares credited to such employee's account for which
such employee is receiving payment in Common Stock multiplied by (II) the Mul-
tiplication Factor, by (y) the fair market value per share of the Common Stock
for the day preceding the payment date, or if there are no sales on such date,
on the next preceding day on which there were sales.
(g)No payment will be required from the employee upon the award of any re-
stricted units, the crediting or payment of any Dividend Equivalents or Addi-
tional Deemed Shares, or the delivery of Common Stock or the payment of cash
in respect of vested units, except that any amount necessary to satisfy appli-
cable federal, state or local tax requirements shall be withheld or paid
promptly upon notification of the amount due. The Committee may permit such
amount to be paid in shares of Common Stock previously owned by the employee,
or a portion of the shares of Common Stock that otherwise would be distributed
to such employee in respect of vested units and Additional Deemed Shares, or a
combination of cash and shares of such Common Stock.
(h)In addition, the Committee shall have the right, in its absolute discre-
tion, upon or prior to the vesting of any restricted shares (including Addi-
tional Restricted Shares) and restricted units (including Additional Deemed
Shares) to award cash compensation to the employee for the purpose of aiding
the employee in the payment of any and all federal, state and local income
taxes payable as a result of such vesting, if the performance of the Corpora-
tion during the Restricted Period meets such criteria as the Committee shall
have prescribed.
(i)Notwithstanding any other provision in this Section 10 to the contrary,
any payment of cash and/or delivery of any shares of Common Stock otherwise
required to be made hereunder on any date with respect to any restricted units
awarded to an employee, or with respect to any cash compensation awarded to an
employee pursuant to subsection (h) above, may be deferred, at the employee's
election, either under this Plan or under the GPU Companies Deferred Compensa-
tion Plan, to the extent such deferral is permitted under, and upon such terms
and conditions as may be set forth in, the written agreement between the em-
ployee and the Corporation (whether as initially entered into, or as subse-
quently amended) evidencing the award of such units, or cash compensation, to
the employee.
11. TERMINATION OF EMPLOYMENT
Unless otherwise determined by the Committee, if an employee to whom re-
stricted shares or restricted units have been granted ceases to be an employee
of the Corporation or of any of its subsidiaries prior to the end of the Re-
stricted Period applicable to the shares or units so granted and
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prior to the satisfaction of any other conditions prescribed by the Committee
at the time of grant for any reason other than as set forth in Section 12, the
employee shall immediately forfeit all restricted shares and restricted units
so granted, including all Additional Restricted Shares or Additional Deemed
Shares related thereto.
Any option, right, restricted share or restricted unit agreement, or any
rules and regulations relating to the Plan, may contain such provisions as the
Committee shall approve with reference to the determination of the date em-
ployment terminates and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be consistent with
the provisions of the Code and any applicable rules and regulations thereun-
der. Nothing in the Plan or in any award granted pursuant to the Plan shall
confer upon any employee any right to continue in the employ of the Corpora-
tion or any of its subsidiaries or interfere in any way with the right of the
Corporation or any such subsidiary to terminate such employment at any time.
12. ELIGIBLE RETIREMENT, DEATH OR TOTAL DISABILITY OF EMPLOYEE
(a)If the Committee so determines, the agreement evidencing the grant of any
restricted shares or restricted units to any employee may permit the re-
stricted shares or restricted units so granted, or any portion of such re-
stricted shares or restricted units, to become vested upon the employee's
death, Total Disability or Eligible Retirement.
(b)For purposes of this Plan, (i) "Total Disability" shall mean the perma-
nent inability of an employee, as a result of accident or sickness, to perform
any and every duty pertaining to such employee's occupation or employment for
which the employee is suited by reason of the employee's previous training,
education and experience, and (ii) "Eligible Retirement" shall mean the date
upon which an employee, having attained an age of not less than fifty-five,
terminates his or her employment with the Corporation and all of its subsidi-
aries, provided that such employee is immediately eligible to receive a pen-
sion (whether or not he or she otherwise elects to defer such receipt) under
Section 3.1 or 3.3 of the "Employee Pension Plan" maintained by any subsidiary
or subsidiaries of the Corporation for salaried employees, or any successor
thereto.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
Notwithstanding any other provision of the Plan, the Committee may at any
time make or provide for such adjustments to the Plan, to the number and class
of shares available thereunder or to any outstanding options, restricted
shares or restricted units as it shall deem appropriate to prevent dilution or
enlargement of rights, including adjustments in the event of distributions to
holders of Common Stock other than a normal cash dividend, changes in the out-
standing Common Stock by reason of stock dividends, split-ups, recapitaliza-
tions, mergers, consolidations, combinations or exchanges of shares, separa-
tions, reorganizations, liquidations and the like. In the event of any offer
to holders of Common Stock generally relating to the acquisition of their
shares, the Committee may make such adjustment as it deems equitable in re-
spect of outstanding options, rights, and restricted units including in the
Committee's discretion revision of outstanding options, rights, and restricted
units so that they may be exercisable for or payable in the consideration pay-
able in the acquisition transaction. Any such determination by the Committee
shall be conclusive and binding on all parties. No adjustment shall be made in
the minimum number of shares with respect to which an option may be exercised
at any time. Any fractional shares resulting from such adjustments to options,
rights, limited rights, or restricted units shall be eliminated.
14. EFFECTIVE DATE
The Plan as initially adopted became effective as of June 1, 1990. The Com-
mittee may, in its discretion, grant awards under the Plan, the grant, exer-
cise or payment of which shall be expressly subject to the conditions that to
the extent required at the time of grant, exercise or payment (i) the
A-11
<PAGE>
shares of Common Stock covered by such awards shall be duly listed, upon offi-
cial notice of issuance, upon the New York Stock Exchange, and (ii) if the
Corporation deems it necessary or desirable a Registration Statement under the
Securities Act of 1933 with respect to such shares shall be effective.
15. TERMINATION AND AMENDMENT
The Board of Directors of the Corporation may suspend, terminate, modify or
amend the Plan, provided that no amendment or modification to the penultimate
sentence of Section 3(c), to Section 7(c) or to this Section 15, nor any sus-
pension or termination of the Plan, effectuated (i) at the request of a third
party who has indicated an intention or taken steps to effect a Change in Con-
trol and who effectuates a Change in Control, (ii) within six (6) months prior
to, or otherwise in connection with, or in anticipation of, a Change in Con-
trol which has been threatened or proposed and which actually occurs, or (iii)
following a Change in Control, shall be effective if the amendment, modifica-
tion, suspension or termination adversely affects the rights of any employee
under the Plan. If the Plan is terminated, the terms of the Plan shall, not-
withstanding such termination, continue to apply to awards granted prior to
such termination. In addition, no amendment, modification, suspension or ter-
mination of the Plan shall adversely affect the rights of any employee with
respect to any award (including without limitation any right with respect to
the timing and method of payment of any award) granted to the employee prior
to the date of the adoption of such amendment, modification, suspension or
termination without such employee's written consent.
16. WRITTEN AGREEMENTS
Each award of options, rights, restricted shares or restricted units shall
be evidenced by a written agreement, executed by the employee and the Corpora-
tion, which shall contain such restrictions, terms and conditions as the Com-
mittee may require.
17. EFFECT ON OTHER STOCK PLANS
The adoption of the Plan shall have no effect on awards made or to be made
pursuant to other stock plans covering employees of the Corporation, its sub-
sidiaries, or any successors thereto.
A-12
<PAGE>
[MAP]
<PAGE>
GPU, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING TO BE HELD AT 10:00 A.M. MAY 7, 1998
THE MORRIS MUSEUM
SIX NORMANDY HEIGHTS ROAD
MORRISTOWN, NEW JERSEY
The undersigned hereby appoints J. G. Graham, F. A. Donofrio, and M.A.
Nalewako, and each or any of them, proxies to represent the undersigned at the
Annual Meeting of Stockholders, and at any adjournment thereof, and thereat to
vote all the shares of stock which the undersigned would be entitled to vote,
with all the power the undersigned would possess if personally present, with
full power Of substitution, upon the following items as set forth in the Notice
of Annual Meeting and Proxy Statement, each dated March 23, 1998 (receipt of
which is hereby acknowledged), AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS,
IF ANY, AS MAY PROPERLY COME BEFORE THE MEETING.
Said proxies are instructed to vote for or against proposals, as
indicated by the undersigned (OR, IF NO INDICATION IS GIVEN, FOR PROPOSALS 1, 2
AND 3).
You are encouraged to voice your preference by marking the appropriate
boxes on the other side. HOWEVER, YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS; JUST SIGN ON THE OTHER
SIDE.
P
R
O
X
Y
(continued and to be signed on the other side)
DETACH HERE AND MAIL IN THE ENCLOSED ENVELOPE
[MAP]
<PAGE>
Please mark
your votes [X]
as this
THE DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS 1, 2 AND 3:
1 - ELECTION OF THREE CLASS I DIRECTORS. NOMINEES: Henderson,
Pietruski and Rein
FOR all nominees WITHHOLD AUTHORITY (Instruction: To
listed on the to vote for all withhold authority
right (except nominees listed to vote for any
as marked to the on the right individual nominee,
contrary on the print that nominee's
right) name in the space
provided below.)
[_] [_] _____________________
2 - AMENDMENTS TO THE 1990 STOCK 3 - RATIFICATION OF
PLAN FOR EMPLOYEES OF GPU, INC. THE SELECTION
AND SUBSIDIARIES AS SET FORTH OF COOPERS &
IN THE ACCOMPANYING PROXY LYBRAND L.L.P. AS
STATEMENT DATED MARCH 23, 1998. AUDITOR.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[_] [_] [_] [_] [_] [_]
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING. [_]
Dated____________________________________1998
Signature____________________________________
Signature if held jointly____________________
Please date and sign
In case of joint owners, EACH joint owner
should sign. When signing as attorney,
executor, administrator, trustee, guardian,
corporate officer, etc., give full title.
_____________________________________________
DETACH HERE AND MAIL IN THE ENCLOSED ENVELOPE
[UP ARROW] FOLD AND DETACH HERE [UP ARROW]
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE BRING THIS ENTIRE LOWER PORTION
OF THIS CARD (SPEAKER CARD AND ADMISSION CARD) WITH YOU.
IF YOU PLAN TO SPEAK AT THE ANNUAL MEETING, PLEASE COMPLETE THE FOLLOWING:
Stockholder Name___________________________________________________ SPEAKER
(Please print clearly) CARD
City____________________________________________State______________
PLEASE DO NOT DETACH
LOGO
GPU 1998 ANNUAL MEETING OF STOCKHOLDERS
May 7, 1988 - 10:00 a.m.
The Morris Museum
Six Mormandy Heights Road ADMISSION
Morristown, New Jersey CARD
Please bring this card with you
to the meeting. Its presentation
will assure your prompt admittance.
This card is not transferable.
<PAGE>
GPU, INC.
Proxy Solicited by the Board of Directors
for Annual Meeting to be held at 10:00 A.M. May 7, 1998
The Morris Museum
Six Normandy Heights Road
Morristown, New Jersey
LOGO
GPU
The undersigned hereby appoints J.G. Graham, F.A. Donofrio, and M.A.
Nalewako, and each or any of them, proxies to represent the undersigned at the
Annual Meeting of Stockholders, and at any adjournment thereof, and thereat to
vote all the shares of stock which the undersigned would be entitled to vote,
with all the power the undersigned would possess if personally present, with
full power of substitution, upon the following items as set forth in the Notice
of Annual Meeting and Proxy Statement, each dated March 23, 1998 (receipt of
which is hereby acknowledged), AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS,
IF ANY, AS MAY PROPERLY COME BEFORE THE MEETING.
Said proxies are instructed to vote for or against proposals, as
indicated by the undersigned (OR, IF NO INDICATION IS GIVEN, FOR PROPOSALS 1, 2
AND 3).
You are encouraged to voice your preference by marking the appropriate
boxes on the other side. HOWEVER, YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS; JUST SIGN ON THE OTHER
SIDE.
P R O X Y
(continued and to be signed on the other side)
<PAGE>
Please mark
your votes [X]
as this
THE DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS 1, 2 AND 3:
1 - ELECTION OF THREE CLASS I DIRECTORS. NOMINEES: Henderson,
Pietruski and Rein
FOR all nominees WITHHOLD AUTHORITY (Instruction: To
listed on the to vote for all withhold authority
right (except nominees listed to vote for any
as marked to the on the right individual nominee,
contrary on the print that nominee's
right) name in the space
provided below.)
[_] [_] -------------------
2 - AMENDMENTS TO THE 1990 STOCK 3 - RATIFICATION OF
PLAN FOR EMPLOYEES OF GPU, INC. THE SELECTION
AND SUBSIDIARIES AS SET FORTH OF COOPERS &
IN THE ACCOMPANYING PROXY LYBRAND L.L.P. AS
STATEMENT DATED MARCH 23, 1998. AUDITOR.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[_] [_] [_] [_] [_] [_]
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING. [_]
Dated____________________________________1998
Signature____________________________________
Signature if held jointly____________________
Please date and sign
In case of joint owners, EACH joint owner
should sign. When signing as attorney,
executor, administrator, trustee, guardian,
corporate officer, etc., give full title.
_____________________________________________
IF YOU ARE PLANNING TO ATTEND THE MEETING, REMEMBER TO OBTAIN FROM THE
RECORD HOLDER A LETTER OR OTHER EVIDENCE OF YOUR BENEFICIAL OWNERSHIP OF SHARES
IN GPU TO FACILITATE YOUR ADMITTANCE TO THE MEETING.
