<PAGE>
SCHEDULE 14A (Rule 14a-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, For Use of the Commission (as permitted by Rule 14a-6(e)(2))
GPU, INC.
- -------------------------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the Appropriate Box):
/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total Fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
GPU
FRED D. HAFER
Chairman, President and
Chief Executive Officer
GPU, Inc.
300 Madison Avenue
Morristown, NJ 07960
March 22, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to be
held at The F. M. Kirby Shakespeare Theatre, Drew University, 36 Madison Ave-
nue, Madison, New Jersey, on May 6, 1999 at 10:00 a.m.
The enclosed Proxy card lists all items that require your vote. This year,
stockholders will be voting on the annual election of directors and the rati-
fication of the selection of PricewaterhouseCoopers LLP as independent auditor
for 1999. We hope that you will sign and return the Proxy card as soon as pos-
sible to ensure that your shares are represented at the meeting. If you will
be at the meeting, please mark the appropriate box on the Proxy card.
We look forward to seeing you on May 6.
Sincerely,
/s/ Fred D. Hafer
Fred D. Hafer
Chairman, President andChief
Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
-------------
<S> <C>
NOTICE OF ANNUAL
MEETING OF
STOCKHOLDERS........1
PROXY STATEMENT FOR
ANNUAL MEETING......2
GENERAL
INFORMATION........2
Introduction.......2
Stockholders
Entitled to
Vote..............2
Proxies and Voting
at the Annual
Meeting...........2
Proxy Solicitation
Costs.............2
BUSINESS MATTERS TO
BE VOTED UPON......3
Directors'
Proposals.........3
Item 1. Election Of
Directors.........3
Item 2. Ratification
of Selection of
Independent
Auditor...........3
Item 3. Other
Business
Matters...........4
BOARD OF
DIRECTORS..........5
Information About
the Nominees and
Directors.........5
Standing Committees
of the Board of
Directors.........8
Remuneration of
Directors.........9
Deferred Stock Unit
Plan for Outside
Directors.........9
Retirement Plan for
Outside
Directors.........9
Restricted Stock
Plan for Outside
Directors........10
SECURITY
OWNERSHIP.........11
Security Ownership
of Directors,
Nominees and
Executive
Officers.........11
Owners of Five
Percent or More of
GPU Stock........12
EXECUTIVE
COMPENSATION......13
Personnel,
Compensation and
Nominating
Committee
Report...........13
Comparison of Five-
Year Cumulative
Total Return.....17
Remuneration of
Executive
Officers.........18
Summary
Compensation
Table...........18
Option Grants In
Last Fiscal
Year............20
Aggregated Option
Exercises In Last
Fiscal Year and
Fiscal Year-End
Option Value....21
Long-Term Incentive
Plans - Awards In
Last Fiscal
Year............21
Retirement
Plans............21
Employment,
Termination and
Change in Control
Arrangements.....23
Severance
Arrangements....23
Supplemental
Executive
Retirement
Plan............23
Lump Sum
Distributions....23
Benefit Protection
Trusts...........24
DEADLINE FOR
STOCKHOLDER
PROPOSALS.........25
</TABLE>
<PAGE>
GPU
GPU, INC. P.O. Box 1911
300 Madison Avenue Morristown, NJ 07960
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 6, 1999
Notice is hereby given that the Annual Meeting of Stockholders of GPU, Inc.
("GPU") will be held at The F. M. Kirby Shakespeare Theatre, Drew University,
36 Madison Avenue, Madison, New Jersey on Thursday, May 6, 1999 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 1999 Annual Meeting.
2. To consider the ratification of the selection by the Board of Directors
of PricewaterhouseCoopers LLP as independent auditor for the year 1999.
3. To transact such other business as may properly come before the meeting.
Holders of record of shares of Common Stock of the Corporation at the close
of business on March 15, 1999 will be entitled to vote at the meeting in per-
son 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 22, 1999
- -------------------------------------------------------------------------------
The 1998 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 22, 1999.
If you wish to receive, without charge, a copy of the GPU System Statistics
or the Corporation's 1998 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.
1
<PAGE>
PROXY STATEMENT FOR ANNUAL MEETING -- MAY 6, 1999
GENERAL INFORMATION
INTRODUCTION
This Proxy Statement and accompanying Proxy card are furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board") for
use at the Annual Meeting of Stockholders to be held on May 6, 1999 (and at
any and all adjournments thereof) for the purposes referred to below and set
forth in the accompanying Notice of Annual Meeting to Stockholders.
STOCKHOLDERS ENTITLED TO VOTE
Holders of record at the close of business on March 15, 1999 of the out-
standing Common Stock (consisting of 127,344,262 shares) are entitled to vote
at the Annual Meeting of Stockholders of the Corporation ("GPU").
PROXIES AND VOTING AT THE ANNUAL MEETING
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. The stockholder
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. 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 exe-
cuted 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, absten-
tions, 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 di-
rectors, the ratification of the selection of the auditor or other matters.
Signed but unmarked Proxies will be voted in accordance 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.
PROXY SOLICITATION COSTS
GPU will pay all costs of soliciting Proxies in the accompanying form. So-
licitation will be made by mail, and directors and officers of GPU, and offi-
cers and employees of GPU Service, Inc. ("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 Prox-
ies, 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 ex-
penses in doing this.
2
<PAGE>
BUSINESS MATTERS TO BE VOTED UPON
DIRECTORS' PROPOSALS
Item 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 1999 Annual Meeting, three Class II directors will be elected to hold
office for three-year terms beginning upon their election at the 1999 Annual
Meeting. The Class II director nominees are Mr. Theodore H. Black, Mr. Thomas
B. Hagen and Mr. Bryan S. Townsend. In accordance with the Corporation's man-
datory retirement policy, however, Mr. Black will resign in October 2000 and
Mr. Townsend will resign in April 2002, upon their 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, except that the proxy holders reserve the right to exer-
cise 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 nominees. If any
nominee should be unable to serve (an event which is not anticipated), 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.
Biographical information about the nominees and directors begins on page 5.
Item 2. Ratification of Selection of PricewaterhouseCoopers LLP As Independent
Auditor For The Year 1999
Coopers & Lybrand L.L.P. ("C&L") has acted as the auditor for the Corpora-
tion and its subsidiaries since 1946. Effective July 1, 1998, C&L and Price
Waterhouse LLP combined their practices under the name of
PricewaterhouseCoopers LLP ("PwC"). The Board of Directors has selected the
firm of PwC, independent certified public accountants, to audit the accounts
of the Corporation for 1999. Although submission to stockholders of the ap-
pointment of the independent auditor is not required by law, the Board, in ac-
cordance with its long-standing policy of seeking annual stockholder ratifica-
tion of the selection of the auditor, believes it appropriate that such selec-
tion be ratified by the stockholders. PwC has advised the Corporation that
neither it nor any of its partners has any direct or indirect material rela-
tionship with the Corporation or its subsidiaries.
The services rendered by PwC for 1998 included an audit of the consolidated
financial statements of the Corporation and its subsidiaries for the year end-
ing December 31, 1998 contained in the annual report to stockholders and au-
dits of the individual and consolidated financial statements of the Corpora-
tion and its subsidiaries and related schedules filed annually with the Secu-
rities and Exchange Commission. PwC also performed audits as necessary to re-
port 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.
It is expected that representatives of PwC 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.
3
<PAGE>
Item 3. Other Business 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.
The Board of Directors recommends a vote "FOR" Items 1 and 2.
4
<PAGE>
BOARD OF DIRECTORS
INFORMATION ABOUT THE NOMINEES AND DIRECTORS
Nominees for Class II Directors for
Terms Expiring in 2002
Name Age Year first elected a director
[PHOTO] THEODORE H. BLACK 70 1988
Mr. Black served as Chairman, President and Chief Executive
Officer of Ingersoll-Rand Company from 1988 until his
retirement in 1993 and as a director until 1997. He is also a
director of Best Foods (formerly CPC International Inc.) and
McDermott International.
[PHOTO] THOMAS B. HAGEN 63 1988
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 former Chairman and Chief Executive
Officer (1990-1993) of Erie Insurance Group, which he joined
in 1953. He is a director of ANI-Motion, Inc., St. Raymond
Wood Products Holdings, Ltd. and the Pennsylvania Housing
Finance Agency. 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 councillor of The
Pennsylvania Society, a director of the Athenaeum of
Philadelphia and Preservation Pennsylvania, and a trustee of
the Northwest Pennsylvania Technical Institute.
[PHOTO] BRYAN S. TOWNSEND 69 1996
Mr. Townsend retired as Chairman of Midlands Electricity plc
("Midlands"), a British regional electric company, in August
1996 following its acquisition by Avon Energy Partners
Holdings ("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 the West Midlands Confederation of British
Industry.
5
<PAGE>
Information concerning the other directors of the Corporation whose terms do
not expire at the Annual Meeting is as follows:
Class III Directors with
Terms Expiring in 2000
Name Age Year first elected a director
[PHOTO] FRED D. HAFER 58 1996
Mr. Hafer is Chairman, Chief Executive Officer and President
of GPU and GPUS (which he also serves as a director). He be-
came 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"), Metropoli-
tan Edison Company ("Met-Ed") and Pennsylvania Electric Com-
pany ("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 Ad-
vanced Resources, Inc. and GPU Generation, Inc. ("Genco");
Chairman and a director of GPU International, Inc. ("GPUI"),
GPU Power, Inc., GPU Capital, Inc. and its subsidiary, GPU
Electric, Inc. ("GPU Electric"); and a director of GPU Telcom
Services, Inc. and Saxton Nuclear Experimental Corporation,
all subsidiaries of GPU. He is a director of Avon, Midlands
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 Utilities Mutual Insur-
ance Company, a director and past president of the Manufactur-
ers 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 immediate past chairman and a mem-
ber of the Board of Trustees of the Foundation for a Drug-Free
Pennsylvania.
[PHOTO] PAUL R. ROEDEL 71 1979
Mr. Roedel retired in 1992 as Chairman and Chief Executive
Officer and in 1997 as director of Carpenter Technology
Corporation, 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 a member of the Board of
Trustees of Gettysburg College and a director and treasurer of
the Reading Public Museum.
[PHOTO] CARLISLE A. H. TROST 69 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
Chairman of the Board of Directors of Bird-Johnson Co. and a
director of General Dynamics Corporation, Lockheed Martin
Corporation and Precision Components Corporation.
6
<PAGE>
Name Age Year first elected a director
[PHOTO] PATRICIA K. WOOLF, Ph.D 64 1983
Dr. Woolf is a consultant, author, and Lecturer in the
Department of Molecular Biology at Princeton University. Dr.
Woolf is a director of Crompton and Knowles Corporation and
the National Life Holding Company. 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.
Class I Directors with
Terms Expiring in 2001
Name Age Year first elected a director
[PHOTO] HENRY F. HENDERSON, JR. 71 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 a director of the Partnership
for New Jersey, 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 66 1989
Mr. Pietruski served as Chairman of the Board and Chief Execu-
tive Officer of Sterling Drug Inc. from 1985 until his retire-
ment in 1988. He is Chairman of the Board of Texas Biotechnol-
ogy 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 Professional De-
tailing, Inc. He is also a Regent of Concordia College.
[PHOTO] CATHERINE A. REIN 56 1989
Ms. Rein joined Metropolitan Life Insurance Company in 1985
where she has held various executive positions and is pres-
ently President and Chief Executive Officer of Metropolitan
Property and Casualty Insurance Company. Ms. Rein is a direc-
tor of The Bank of New York, Inc., Corning Inc., New England
Financial, Inc., and INROADS, New York, Inc., a trustee emeri-
tus of the National Urban League and a trustee of the New York
University Law Center Foundation.
7
<PAGE>
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, the engagement of the indepen-
dent auditor and reviews with the independent auditor the plan, scope and re-
sults of the audit and any comments by the auditor on the internal accounting
control systems of the Corporation and its subsidiaries. All material non-au-
dit 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 Cor-
poration, the independent auditor and the Corporation's internal auditor 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 report to stockholders, the results of audits by gov-
ernmental 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 1998, 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, Townsend and Trost.
During 1998, the Committee held three meetings.
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. Roedel, Trost and Dr. Woolf. During 1998, the Committee held seven
meetings.
The Personnel, Compensation and Nominating Committee recommends to the Board
the election of officers of the Corporation and the approval of the election
of the presidents of the Corporation's direct subsidiaries, and the compensa-
tion 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 development, 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 and candidates for member-
ship of the Board. The Committee also recommends to the Board the size, compo-
sition and membership of the various Board Committees.
8
<PAGE>
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 the information regard-
ing the identity and background of the stockholder's proposed nominee required
by Section 10(e) of the Corporation's By-Laws. Section 10(e) 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 1998, the Committee held six meetings.
There were 10 regular meetings, two special meetings and one organization
meeting of the Board during 1998. All directors attended at least 75% of the
aggregate of (i) the total number of 1998 meetings of the Board and (ii) the
total number of 1998 meetings of all committees of the Board on which he or
she served.
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.
Admiral Trost also received approximately $67,000 in 1998 for serving as a
member of the Board of Directors of GPUN, a direct subsidiary of GPU, and
chairman of that Board's Nuclear Safety and Compliance Committee.
DEFERRED STOCK UNIT PLAN FOR OUTSIDE DIRECTORS
Under the Deferred Stock Unit Plan for Outside Directors of GPU, Inc. ("De-
ferred Stock Unit Plan"), each director who is not an employee of the Corpora-
tion or any of its subsidiaries (an "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 director's annual
cash retainer in effect at the time of grant. Each unit granted under the De-
ferred 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. As of December 31, 1998, all
outside directors except Mr. Townsend had completed 54 months of service.
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
Under the Retirement Plan for Outside Directors of GPU, Inc. ("Retirement
Plan"), as amended, an individual who completed 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. Benefits under the Retirement 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
9
<PAGE>
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 preceding retirement,
over a period equal to the director's service as such as of June 30, 1997, un-
less otherwise directed by the Personnel, Compensation and Nominating Commit-
tee, commencing at the later of age 60 or upon retirement. Service following
June 30, 1997 will be applied toward the 54-month vesting requirement but will
not increase the amount of benefits. No individual who first becomes an Out-
side Director on or after July 1, 1997 will be entitled to receive any bene-
fits under the Retirement Plan.
As of December 31, 1998, all Outside Directors except Mr. Townsend were
vested in the Retirement Plan. The following directors are entitled to receive
retirement benefits equal to the number of months of service completed at June
30, 1997:
<TABLE>
<CAPTION>
Months of Service
Director as of June 30, 1997
-------- -------------------
<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 GPU, Inc. Restricted Stock Plan for Outside Directors ("Directors
Plan"), each Outside Director is paid a portion of his or her annual compensa-
tion in the form of 300 shares of GPU Common Stock.
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 GPU 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 GPU 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.
10
<PAGE>
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of February 1, 1999, 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 4,766 14,999 (2)
Theodore H. Black........... GPU Common Stock 8,730 1,716 (3)
Fred D. Hafer............... GPU Common Stock 9,795 146 25,677 (2)
Thomas B. Hagen............. GPU Common Stock 12,037 1,716 (3)
Henry F. Henderson, Jr. .... GPU Common Stock 4,182 1,200 1,716 (3)
Ira H. Jolles............... GPU Common Stock 10,230 16,979 (2)
Bruce L. Levy............... GPU Common Stock 3,035 13,277 (2)
John M. Pietruski........... GPU Common Stock 4,900 1,716 (3)
Catherine A. Rein........... GPU Common Stock 3,898 1,716 (3)
Paul R. Roedel.............. GPU Common Stock 3,500 1,716 (3)
Bryan S. Townsend........... GPU Common Stock 1,275 1,716 (3)
Carlisle A. H. Trost........ GPU Common Stock 3,444 1,716 (3)
Robert L. Wise.............. GPU Common Stock 4,111 19,165 (2)
Patricia K. Woolf........... GPU Common Stock 4,479 1,716 (3)
All GPU Directors and
Executive Officers as a
Group...................... GPU Common Stock 85,452 1,990 139,301
</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, Inc. and Subsidiaries (the "1990 Stock Plan").
These amounts also include restricted units which have vested under the
1990 Stock Plan, but which were deferred pursuant to that Plan by the fol-
lowing officers: Mr. Levy-- 619 units and Mr. Wise -- 4,346 units. See
footnote 2 to the Summary Compensation Table on page 18.
(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 9.
11
<PAGE>
OWNERS OF FIVE PERCENT OR MORE OF GPU STOCK
The Corporation has been advised that as of December 31, 1998, 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 Beneficial of
of Beneficial Owner Title of Class Ownership Class
------------------- ---------------- ---------- -------
<S> <C> <C> <C>
AMVESCAP PLC............................. GPU Common Stock 6,602,092(1) 5.2%
11 Devonshire Square
London EC2M 4YR
England
Capital Research and
Management Company
("Capital Research")..................... GPU Common Stock 11,285,400(2) 8.8%
333 South Hope Street
Los Angeles, CA 90071
Morgan Stanley
Dean Witter & Co.
("Morgan Stanley")....................... GPU Common Stock 9,223,144(3) 7.2%
1585 Broadway
New York, NY 10036
Wellington Management
Company, LLP
("Wellington")........................... GPU Common Stock 7,092,846(4) 5.5%
75 State Street
Boston, MA 02109
</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., INVESCO Management & Research, Inc., INVESCO Realty Advisors,
Inc. and INVESCO (NY) Asset Management, Inc. beneficially own (with shared
voting and dispositive powers) the reported shares.
(2) Capital Research, a registered investment adviser, is deemed to be the
beneficial owner (with sole dispositive power and no voting power) of the
reported shares as a result of acting as investment adviser to various
registered investment companies, but has disclaimed such ownership.
(3) Morgan Stanley, a registered investment adviser, beneficially owns (with
shared voting power for 8,965,594 shares and shared dispositive power for
9,223,144 shares) the reported shares as a result of acting as investment
adviser to various registered investment companies.
(4) Wellington, a registered investment adviser, beneficially owns (with
shared voting power for 2,960,948 shares and shared dispositive power for
7,092,846 shares) the reported shares as a result of acting as investment
adviser to various registered investment companies.
12
<PAGE>
EXECUTIVE COMPENSATION
PERSONNEL, COMPENSATION AND NOMINATING COMMITTEE REPORT
While the basic structure of GPU's executive compensation program remained
unchanged in 1998, adjustments were made to strengthen the link between execu-
tive pay and shareholder value through increased use of stock-based compensa-
tion. The overall program consists of three interrelated components--the Base
Salary Program, the Incentive Compensation Program and the 1990 Stock Plan.
Each of these components serves a specific purpose within the objectives of
the overall program.
Compensation Philosophy and Market Comparisons
GPU's compensation philosophy is to maintain a program that (1) attracts and
retains executives with the skills and experience needed to manage the Corpo-
ration, (2) encourages these executives to achieve specific short-term and
long-term objectives that support the Corporation's business strategy, and (3)
rewards executives when these objectives are achieved and shareholder value is
enhanced. The program is designed to ensure that actual pay levels will re-
flect the achievement of specific objectives, changes in shareholder value and
the contribution and performance of individual executives.
When targeted business objectives are achieved, the program provides levels
of compensation that are approximately at the median of the competitive mar-
ket. If objectives are exceeded, the variable components of the program, the
Incentive Compensation Program and the 1990 Stock Plan, should provide levels
of compensation that are above median. Conversely, these variable components
ensure compensation levels below the competitive median if business objectives
are not achieved. With the increased emphasis on stock-based compensation,
changes in the value of the Corporation's stock have a major influence on the
levels of total compensation and the competitive position of the overall pro-
gram.
GPU defines the competitive market for executive pay primarily as companies
of similar size and complexity in the industry since these are the companies
most likely to compete directly with GPU for executive talent. These companies
include most of the companies in the Standard & Poor's Electric Utility Index
(the "S&P Electric Utility Index") shown on page 17. GPU also considers compa-
nies not included in the Index reflecting the need to compete in a broader
market for executives. A major national compensation consulting firm assists
the Committee in developing appropriate comparisons and defining median pay
levels. The Committee meets periodically with these consultants to ensure an
objective analysis.
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.
Base Salary Program
The Base Salary program, which provides the most stable portion of executive
compensation, continues to be de-emphasized within the overall executive com-
pensation program. Each year the Committee reviews salaries to determine if
any adjustments are needed. In conducting this review, the Committee considers
market data, individual performance and the Corporation's financial position.
Because the Committee wishes to emphasize the variable components of the over-
all program, base salaries were increased in 1998 only if the executive's ex-
isting salary had fallen below competitive median or if the executive assumed
additional responsibilities.
13
<PAGE>
Incentive Compensation Program
The Incentive Compensation Program is designed to compensate executives
based on their achievement of short-term business objectives that are aligned
with the Corporation's overall strategy. Executives have the opportunity to
earn additional cash compensation if these objectives are met.
For 1998, the Incentive Compensation Program emphasized financial objec-
tives. Objectives were established for both the Corporation and each GPU com-
pany. In addition, the personal performance and contribution of the individual
executives to the achievement of these objectives was a factor in determining
awards under the program. The Committee and the Board use subjective judgment
in determining the impact of individual contribution.
For the Named Executive Officers other than Mr. Hafer, awards under this
program are based on achievement of GPU corporate objectives, and achievement
of objectives established for the GPU company to which the executive is as-
signed as well as individual contribution. Awards for Mr. Levy and Mr. Wise
for 1998 were based on results of GPUI and Genco respectively, where those ex-
ecutives were assigned for the majority of 1998. Objectives for Mr. Hafer are
established separately reflecting his overall responsibility for the Corpora-
tion's success.
1998 Objectives -- GPU, Inc.
Measures of GPU's performance in 1998 were the Corporation's return on eq-
uity and earnings. Achievement of the return on equity objective served as a
"multiplier" on the achievement of individual company objectives. The earnings
objective was used to establish an "earnings test" designed to limit the
amount of incentive compensation that could be earned based on non-financial
measures. For all GPU Companies other than GPUI, this earnings test is based
on GPU, Inc. earnings; for GPUI, the earnings test is based on a combination
of GPU, Inc. earnings and GPUI earnings reflecting GPUI's proportionate con-
tribution to corporate earnings.
1998 Objectives -- GPU Companies
For GPU Energy, targeted objectives were earnings (80% of total), measures
designed to improve internal processes and employee effectiveness (10%), mea-
sures of customer satisfaction (5%) and efforts to influence restructuring
rulings (5%).
For Genco, objectives were all-in-price per kilowatt hour sold (40% of to-
tal), management of expense budgets (30%), environmental factors (10%), safety
(10%) and efforts to foster diversity (10%).
For GPUS, the corporate functions, objectives were corporate earnings (80%
of total), efforts to maximize existing businesses and respond to regulatory
changes (10%), and efforts to improve the Corporation's competitive position
through changes in internal processes and culture (10%).
For GPUI, objectives were income (65% of total), new business initiatives
(15%), optimization of current projects and environmental compliance (10%),
and efforts to improve the effectiveness of the internal organization (10%).
1998 Objectives -- Mr. Hafer
Mr. Hafer's objectives for 1998 were return on equity (65% of total), ef-
forts to position the Corporation for the future through both internal re-
structuring and competitive initiatives (25%), and nuclear safety (10%). Be-
cause return on equity is the major component of Mr. Hafer's objectives, the
corporate multiplier is not used in calculating results; the "earnings test"
is applied.
Achievement of 1998 Objectives
GPU's 1998 return on equity objective was slightly exceeded. Corporate earn-
ings were also slightly above objective and the earnings test calculation lim-
ited the awards in several GPU Companies. The separate earnings test applied
to GPUI did not limit awards in that company.
14
<PAGE>
At GPU Energy, earnings, the major component of the objectives, were above
targeted levels. Improvements in internal processes and employee effectiveness
exceeded expectations. Customer satisfaction measures and efforts to influence
restructuring were also above targeted levels.
Achievement of Genco's financial measures, all-in-price and management of
expense budgets, were significantly above targeted levels. Environmental and
safety objectives were not fully achieved while efforts to foster diversity
exceeded expectations.
For the corporate functions at GPUS, the corporate earnings measure was
above targeted levels. Efforts to maximize existing businesses and respond to
regulatory changes exceeded expectations while measures of improvements in in-
ternal processes and culture were slightly above targeted levels.
At GPUI, the income objective was significantly exceeded. New business
initiatives were not fully achieved while measures of environmental compliance
and maximizing existing businesses were at targeted levels. Efforts to improve
the effectiveness of the internal organization were above expectations.
Award for Mr. Hafer
The award for Mr. Hafer reflects a return on equity that was above the
targeted level as well as over achievement of measures reflecting efforts to
position the Corporation for the future. Nuclear safety measures were also
above targeted levels.
The 1990 Stock Plan
The 1990 Stock Plan is GPU's long-term incentive program. Awards under the
program are designed to provide executives with opportunities to earn addi-
tional compensation directly linked to shareholder value. The awards also
serve as a retention device since they are typically forfeited if an executive
resigns. Under the provisions of the Plan, which was approved by shareholders,
the Committee and the Board have the discretion to use a variety of stock com-
pensation vehicles.
In 1998, awards under the Plan were in the form of restricted performance
units and non-qualified stock options. Awards of restricted performance units
were granted prior to 1998, when stock options were granted for the first
time.
Restricted performance units provide executives with the right to receive
shares of GPU stock (or cash at the discretion of the Committee) provided that
targeted performance measures are achieved. The performance measure for the
1998 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. The averaged ranking determines how
many shares of GPU stock, if any, the executive will receive at the end of the
performance 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 ultimately vest and be paid to the execu-
tive 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 return is higher than the 59th percentile, additional units will vest;
if total return is lower, fewer units will vest. No units will vest if total
return is below the 40th percentile.
Stock options granted in 1998 have an exercise price equal to the fair mar-
ket value of GPU stock on the date of grant and will become exercisable over a
three-year period. These grants were intended to maintain total compensation
at competitive levels while increasing the focus on shareholder value.
15
<PAGE>
Awards of performance restricted units and stock options to individual exec-
utives are generally targeted to provide median levels of compensation if per-
formance is as expected. Higher levels of performance would result in compen-
sation above median levels and lower levels of performance would result in
compensation below median levels. The size of individual awards also reflects
the Committee's and the Board's subjective assessment of each executive's per-
formance and potential contribution to the Corporation's future success.
Awards for Mr. Hafer
The 1998 awards of performance units and stock options to Mr. Hafer reflect
the factors outlined above as well as his unique role in guiding the Corpora-
tion and enhancing shareholder value. The terms and conditions of his awards
are the same as those described for other executives.
Stock Ownership Guidelines
In conjunction with the initial awards of stock options, the Corporation im-
plemented stock ownership guidelines for all elected officers of GPU and its
subsidiaries in 1998. These guidelines are expressed as a multiple of base
salary and all officers are expected to meet their targeted ownership within
three to five years. Calculations of ownership will include shares directly
owned, vested and deferred restricted performance units and exercisable stock
options.
Members of the Personnel,
Compensation and Nominating
Committee
Theodore H. Black
Thomas B. Hagen
John M. Pietruski
Catherine A. Rein
Patricia K. Woolf
16
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph compares the five-year cumulative total return,
including reinvested dividends, on GPU Common Stock, with the Standard &
Poor's 500 Stock Index (the "S&P 500 Index") and the S&P Electric Utility
Index:
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG GPU, S&P 500 INDEX AND THE S&P ELECTRIC UTILITY
<TABLE>
<CAPTION>
Measurement Period S&P S&P
(Fiscal Year Covered) GPU 500 INDEX ELECTRIC UTILITY
- ------------------- ---------- --------- ----------------
<S> <C> <C> <C>
Measurement Pt-
01/01/1994 $100 $100 $100
FYE 1994 $ 91 $101 $ 87
FYE 1995 $125 $139 $114
FYE 1996 $131 $171 $114
FYE 1997 $174 $229 $144
FYE 1998 $175 $294 $166
</TABLE>
- ----------------
* Assumes $100 invested in GPU Common Stock, S&P 500 Index and S&P Electric
Utility Index. Cumulative Total Return includes reinvestment of dividends.
17
<PAGE>
REMUNERATION OF EXECUTIVE OFFICERS
The following tables present compensation information from the past three
years for the Chief Executive Officer and the four other most highly compen-
sated executive officers ("Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------------------------------------------------------------------------
Awards Payouts
-------------------------------
Other Securities All Other
Name and Annual Underlying Compen-
Principal Compen- Options LTIP sation
Position Year Salary ($) Bonus ($) sation ($)(1) Granted (#) Payouts ($)(2) ($)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fred D. Hafer 1998 $613,077 $375,000 $1,805 95,000 $63,007 $116,823 (3)
Chairman, President and 1997 526,923 275,000 2,123 -- 66,950 106,291
Chief Executive Officer,
GPU 1996 365,000 190,000 1,883 -- 61,484 46,731
Bruce L. Levy 1998 288,875 223,200 997 (4) 37,000 21,002 55,748 (3)
Senior Vice President
and 1997 255,833 165,300 1,312 (4) -- 20,922 49,123
Chief Financial Officer, 1996 233,333 197,000 1,572 (4) -- 20,495 30,684
GPU; President, GPU
Capital, Inc.
Ira H. Jolles 1998 353,085 126,000 2,139 21,000 82,973 59,090 (3)
Senior Vice President 1997 331,000 100,000 2,455 -- 86,012 55,107
and General Counsel, GPU 1996 331,000 120,000 2,510 -- 91,087 52,673
Dennis Baldassari 1998 335,000 95,000 2,081 (5) 17,000 63,007 70,882 (3)
President, JCP&L, 1997 335,000 76,000 1,943 (5) -- 56,489 71,912
Met-Ed, and Penelec 1996 305,000 110,000 812 (5) -- 21,724 39,697
Robert L. Wise 1998 293,000 115,000 -- 17,000 65,808 69,501 (3)
President, GPUI, GPU 1997 293,000 95,000 -- -- 69,042 58,053
Power, Inc. and Genco 1996 293,000 112,000 57,213 (6) -- 81,978 53,448
</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 1991, 1992 and
1993 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.
The restricted units issued in 1995, 1996, 1997 and 1998 under the 1990
Stock Plan are performance based. The 1998 awards are shown in Long-Term
Incentive Plans -- Awards in Last Fiscal Year table (the "LTIP table").
Dividend equivalents are earned on the aggregate restricted units awarded
under the 1990 Stock Plan and reinvested in additional units.
18
<PAGE>
The aggregate number and value (based on the stock price per share at De-
cember 31, 1998) of unvested and deferred vested stock-equivalent re-
stricted units (including reinvested dividend equivalents) include the
amounts shown on the LTIP table, and at the end of 1998 were:
<TABLE>
<CAPTION>
Aggregate Units Aggregate Value
--------------- ---------------
<S> <C> <C>
Fred D. Hafer 25,677 $1,134,602
Bruce L. Levy 13,277 586,677
Ira H. Jolles 16,979 750,260
Dennis Baldassari 14,999 662,768
Robert L. Wise 19,165 846,853
</TABLE>
(3) For 1998, (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 and (e) earnings on LTIP compensation not paid in the
current year, were as follows:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Fred D. Hafer $6,400 $29,062 $36,834 $ 1,139 $43,388
Bruce L. Levy 6,400 11,612 13,291 870 23,575
Ira H. Jolles 6,400 11,688 9,379 964 30,659
Dennis Baldassari 6,400 10,940 26,208 325 27,009
Robert L. Wise 6,400 9,120 8,312 10,050 35,619
</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 $997, $648 and $944 for
the years 1998, 1997 and 1996 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 $276, $151 and $147 for
the years 1998, 1997 and 1996 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 $23,447 for related income taxes.
19
<PAGE>
Option Grants In Last Fiscal Year
The following table summarizes option grants made during 1998 to the Named
Executive Officers. All of these options were granted with an exercise price
equal to the fair market value of GPU stock on the date of grant.
<TABLE>
<CAPTION>
Individual Grants
- ---------------------------------------------------------------------------
Number of
Securities % of
Underlying Total Options
Options Granted to Exercise or Grant Date
Grant Granted Employees in Base Price Expiration Present Value
Name Date (1) (#) Fiscal Year ($/Sh) Date (2) ($)
---- -------- ---------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fred D. Hafer 06/04/98 95,000 28.3% $36.625 06/04/08 $412,300
Bruce L. Levy 06/04/98 17,000 5.1 36.625 06/04/08 73,780
Bruce L. Levy 12/16/98 20,000 6.0 44.250 12/16/08 103,200
Ira H. Jolles 06/04/98 21,000 6.3 36.625 06/04/08 91,140
Dennis Baldassari 06/04/98 17,000 5.1 36.625 06/04/08 73,780
Robert L. Wise 06/04/98 17,000 5.1 36.625 06/04/08 73,780
</TABLE>
- ----------------
(1) Options become exercisable in three equal annual installments beginning on
the first anniversary of the date of the grant. These grants will fully
vest upon termination of employment resulting from death or disability. Op-
tions may be exercised after retirement in accordance with the terms of the
1998 Stock Option Agreement. In the event of a change in control during the
option term, all options will be canceled and the executive officer will
receive a cash payment in an amount equal to the excess of the average cur-
rent market price over the exercise price.
(2) Options are valued using a Black-Scholes option pricing model, a mathemati-
cal formula widely used to value options. The model as applied used the ap-
plicable grant dates and the exercise prices shown on the table, and the
fair market value of Common Stock on the respective grant dates, which was
in each case the same as the exercise price. For the June 4 grant, the
model assumed (i) a risk-free rate of return of 5.78%, which approximates
the rate on 10-year U.S. Treasury zero coupon bonds on the grant date; (ii)
a stock price volatility of 17.26%, based on the average historical vola-
tility for the 36-month period ending on the grant date; (iii) an average
dividend yield of 5.68%, based on the average yield for a 36-month period;
and (iv) the exercise of all options on the final day of their 10-year
terms. For the December 16 grant, the model assumed (i) a risk-free rate of
return of 4.89%, which approximates the rate on 10-year U.S. Treasury zero
coupon bonds on the grant date; (ii) a stock price volatility of 18.32%,
based on the average historical volatility for the 36-month period ending
on the grant date; (iii) an average dividend yield of 5.51%, based on the
average yield for a 36-month period; and (iv) the exercise of all options
on the final day of their 10-year terms. No discount from the theoretical
value was taken to reflect the restrictions on the transfer of the options
and the likelihood of the options being exercised in advance of the final
day of their terms.
20
<PAGE>
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Value
The following table summarizes the number and value of all unexercised op-
tions held by the Named Executive Officers. In 1998, no options were exercised
by any Named Executive Officer.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Fiscal Year-End (#) at Fiscal Year-End ($)
------------------------------------ -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C>
Fred D. Hafer -- 95,000 $-- $718,438
Bruce L. Levy -- 37,000 -- 128,563
Ira H. Jolles -- 21,000 -- 158,813
Dennis Baldassari -- 17,000 -- 128,563
Robert L. Wise -- 17,000 -- 128,563
</TABLE>
Long-Term Incentive Plans -- Awards In Last Fiscal Year
This table shows the LTIP awards made to the Named Executive Officers for
the performance period January 1, 1998 through December 31, 2002.
<TABLE>
<CAPTION>
Performance Estimated Future Payouts Under
Number of or Other Non-Stock Price Based Plans (1)
Shares, Period Until ------------------------------------
Units or Maturation Threshold Target Maximum
Name Other Rights or Payout (#) (#) (#)
---- ------------ -------------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Fred D. Hafer 7,810 5-year vesting 3,905 7,810 15,620
Bruce L. Levy 2,900 5-year vesting 1,450 2,900 5,800
Ira H. Jolles 3,200 5-year vesting 1,600 3,200 6,400
Dennis Baldassari 2,900 5-year vesting 1,450 2,900 5,800
Robert L. Wise 2,600 5-year vesting 1,300 2,600 5,200
</TABLE>
- ----------------
(1) The restricted units awarded in 1998 under the 1990 Stock Plan provide for
a performance adjustment to the aggregate number of units vesting for the
recipient, including the accumulated reinvested dividend equivalents,
based on the annualized GPU Total Shareholder Return (TSR) percentile
ranking against all companies in the Standard & Poor's Electric Utility
Index for the period between the award and vesting dates. With a 55th per-
centile ranking, the performance adjustment would be 100% as reflected in
the "Target" column. In the event that the percentile ranking is below the
55th percentile, the performance adjustment would be reduced in steps
reaching 0% below the 40th percentile. The minimum payout or "Threshold"
begins at the 40th percentile, which results in a payout of 50% of target.
A ranking below the 40th percentile would result in no award. Should the
TSR percentile ranking exceed the 59th percentile, then the performance
adjustment would be increased in steps reaching 200% at the 90th percen-
tile as reflected in the "Maximum" column. Under the 1990 Stock Plan, reg-
ular quarterly dividends are reinvested in additional units that are sub-
ject 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.
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
21
<PAGE>
portion of a participant's pension benefits which, by reason of such limita-
tions, cannot be paid from such a qualified trust shall be paid directly on an
unfunded basis by the participant's employer.
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 1999 (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) (6)
BASED UPON CAREER AVERAGE COMPENSATION
----------------------------------------------------
(1999 Retirement)
<TABLE>
<CAPTION>
Years of Service
Career Average -----------------------------------------------
Compensation (1) 15 20 25 30 35 40
- ---------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $13,879 $18,506 $23,132 $27,759 $32,385 $36,761
100,000 28,879 38,506 48,132 57,759 67,385 76,361
150,000 43,879 58,506 73,132 87,759 102,385 115,961
200,000 58,879 78,506 98,132 117,759 137,385 155,561
250,000 73,879 98,506 123,132 147,759 172,385 195,161
300,000 88,879 118,506 148,132 177,759 207,385 234,761
350,000 103,879 138,506 173,132 207,759 242,385 274,361
400,000 118,879 158,506 198,132 237,759 277,385 313,961
450,000 133,879 178,506 223,132 267,759 312,385 353,561
500,000 148,879 198,506 248,132 297,759 347,385 393,161
550,000 163,879 218,506 273,132 327,759 382,385 432,761
600,000 178,879 238,506 298,132 357,759 417,385 472,361
650,000 193,879 258,506 323,132 387,759 452,385 511,961
700,000 208,879 278,506 348,132 417,759 487,385 551,561
750,000 223,879 298,506 373,132 447,759 522,385 591,161
800,000 238,879 318,506 398,132 477,759 557,385 630,761
</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. Hafer -- $355,761; Levy -- $201,945; Baldassari -- $223,671 and
Wise -- $282,807.
(2) Years of Creditable Service at December 31, 1998: Messrs. Hafer -- 36
years; Levy -- 18 years; Jolles -- 18 years; Baldassari -- 29 years and
Wise -- 35 years.
(3) Based on an assumed retirement at age 65 in 1999. 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.
(4) 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, 1998
none of the Named Executive Officers exceed the 55% limit.
(5) Mr. Wise has agreed to accept the Voluntary Enhanced Retirement Program
("VERP") offered by Genco. Pursuant to the VERP, Mr. Wise's pension will
be calculated by adding five years to his age and five years to his years
of creditable service. Mr. Wise will also receive a Social Security sup-
plement of $500 per month until he reaches age 62.
(6) The estimated annual retirement benefits in this table do not reflect the
retirement benefits which may be provided under the Supplemental Executive
Retirement Plan, described below.
22
<PAGE>
EMPLOYMENT, TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS
Severance Arrangements
The Corporation has entered into Severance Protection Agreements with
Messrs. Hafer, Levy, Jolles, 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 (or, if greater, the highest annual bonus paid to him
in any of the three full fiscal years prior to either termination or the
change in control); (b) severance compensation equal to three times the sum of
the executive's base salary and target incentive bonus, provided that if the
executive's normal retirement date is within three years of his termination
date, his benefits will be proportionately reduced; (c) a continuation of in-
surance benefits for up to three 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, Levy, Jolles, 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.
Supplemental Executive Retirement Plan
The Corporation has established a supplemental executive retirement plan
("SERP") for GPU's senior executives, including the Named Executive Officers,
who retire on or after July 1, 1999. Subject to vesting, the SERP provides a
total retirement benefit equal to 60% of final average pay for executives who
have 30 years of service, with a benefit of 2% per year of service paid to ex-
ecutives who have served for shorter periods. The benefits are offset by other
sources of retirement income, including social security benefits, qualified
and non-qualified pension benefits and any prior employer benefits.
To vest in the SERP, executives must have reached age 55 and have 15 years
of service; to receive full benefits, they must retire after age 62. An execu-
tive would also be eligible for full benefits if he or she is at least 60
years of age and has had 25 years of service.
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 Companies' supplemental retirement and deferred compensation
plans and arrangements when such executive terminates his employment, regard-
less of the circumstances or when the executive terminates his employment
within 24 months
23
<PAGE>
following a change in control. Additionally, prior to termination, an execu-
tive 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 creditable service. Upon retirement, Mr.
Jolles will also receive an extension of his 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, 1998, from nine
and one-half years up to a maximum of 20 years depending upon his years of ac-
tual employment 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 Termination (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 Termina-
tion (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.
24
<PAGE>
DEADLINE FOR STOCKHOLDER PROPOSALS
If a stockholder wishes to submit a proposal for inclusion in the Proxy
Statement for the 2000 Annual Meeting of Stockholders, such proposal must be
received by the Corporation not later than November 23, 1999. A stockholder
may also present a proposal at the 2000 Annual Meeting of Stockholders which
is not included in the Proxy Statement. The persons named in the Proxy will
have the power to vote on any such proposal in their discretion unless notice
of such proposal is received by the Corporation by April 4, 2000.
By order of the Board of Directors,
MARY A. NALEWAKO, Secretary
March 22, 1999
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
25
<PAGE>
DIRECTIONS TO GPU'S ANNUAL MEETING
The F. M. Kirby Shakespeare Theatre
Drew University
36 Madison Avenue
Madison, New Jersey
From Rt. 287:
South towards Morristown: (1) Take Exit 35, "Rt. 124, Madison Ave." Turn left
at the light at the exit ramp onto Rt. 124 (Madison Ave.). Continue with (2)
below.
North towards Morristown: (1) Take Exit 35, "Rt. 124, South St./Madison Ave."
At end of exit ramp, turn left onto South St. Proceed 100 yards and take first
right, following signs to Rt. 124. At the stop sign, turn right onto Rt. 124
(Madison Ave.). Continue with (2) below.
(2) Proceed three miles on Rt. 124 East (Madison Ave.) to Madison. Drew will be
on your right; turn right at light onto Lancaster Rd.
From Route 10:
Take Rt. 10 to Rt. 287 South; continue as above.
From Route 24 West:
Take Exit 7A, Chatham (at the Short Hills Mall), Rt. 124 West. Follow through
Chatham (Main St.) into Madison (Madison Ave.). Drew will be on your left, just
past the center of Madison. Turn left at light onto Lancaster Rd.
From Lincoln and Holland Tunnels:
Follow signs to N.J. Turnpike (south from Lincoln). Take Exit 14 (Newark
Airport). After toll plaza, take
I-78 West to Rt. 24 West; continue as above.
From George Washington Bridge:
Take Rt. 80 West to Rt. 287 South; continue as above.
[MAP APPEARS HERE]
<PAGE>
GPU, INC.
Proxy Solicited by the Board of Directors
for Annual Meeting to be held at 10:00 A.M. May 6, 1999
The F. M. Kirby Shakespeare Theatre
Drew University
36 Madison Avenue
Madison, New Jersey
PROXY
The undersigned hereby appoints B. L. Levy, P. E. Maricondo, 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 22, 1999 (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 and
2).
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.
(continued and to be signed on the other side)
DETACH HERE AND MAIL IN THE ENCLOSED ENVELOPE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DIRECTIONS TO GPU'S ANNUAL MEETING
The F. M. Kirby Shakespeare Theatre
Drew University
36 Madison Avenue
Madison, New Jersey
From Rt. 287:
South towards Morristown: (1) Take Exit 35, "Rt. 124, Madison Ave." Turn left
at the light at the exit ramp onto Rt. 124 (Madison Ave.). Continue with (2)
below.
North towards Morristown: (1) Take Exit 35, "Rt. 124, South St./Madison Ave."
At end of exit ramp, turn left onto South St. Proceed 100 yards and take first
right, following signs to Rt. 124. At the stop sign, turn right onto Rt. 124
(Madison Ave.). Continue with (2) below.
(2) Proceed three miles on Rt. 124 East (Madison Ave.) to Madison. Drew will be
on your right; turn right at light onto Lancaster Rd.
From Route 10:
Take Rt. 10 to Rt. 287 South; continue as above.
From Route 24 West:
Take Exit 7A, Chatham (at the Short Hills Mall), Rt. 124 West. Follow through
Chatham (Main St.) into Madison (Madison Ave.). Drew will be on your left, just
past the center of Madison. Turn left at light onto Lancaster Rd.
From Lincoln and Holland Tunnels:
Follow signs to N.J. Turnpike (south from Lincoln). Take Exit 14 (Newark
Airport). After toll plaza, take
I-78 West to Rt. 24 West; continue as above.
From George Washington Bridge:
Take Rt. 80 West to Rt. 287 South; continue as above.
[MAP APPEARS HERE]
<PAGE>
[X] Please mark
your votes
as this
The Directors Recommend a Vote "FOR" Proposals 1 and 2:
1 - Election of three Class II Directors.
FOR all nominees listed on the right (except
as marked to the contrary on the right) [_]
WITHHOLD AUTHORITY to vote for all nominees
listed on the right [_]
NOMINEES: Black, Hagen and Townsend
(Instruction: To withhold authority to vote
for any individual nominee, print that
nominee's name in the space provided below.)
- ----------------------------------------------
2 - Ratification of the selection of
PricewaterhouseCoopers LLP as auditor.
FOR [_] AGAINST [_] ABSTAIN [_]
Check here if you plan to attend the meeting. [_]
Dated____________________________________________1999
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
. FOLD AND DETACH HERE .
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:
SPEAKER
CARD
Stockholder Name________________________________________________________
(Please print clearly)
City_______________________________________State_________________________
PLEASE DO NOT DETACH
GPU
1999 ANNUAL MEETING OF STOCKHOLDERS
May 6, 1999 - 10:00 A.M.
The F.M. Kirby Shakespeare Theatre
Drew University
36 Madison Avenue
Madison, New Jersey
ADMISSION
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 6, 1999
The F. M. Kirby Shakespeare Theatre
[LOGO] GPU Drew University
36 Madison Avenue
Madison, New Jersey
PROXY
The undersigned hereby appoints B. L. Levy, P. E. Maricondo, 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 22, 1999 (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 and
2).
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.
(continued and to be signed on the other side)
<PAGE>
[X] Please mark
your votes
as this
The Directors Recommend a Vote "FOR" Proposals 1 and 2:
1 - Election of three Class II Directors.
FOR all nominees listed on the right (except
as marked to the contrary on the right) [_]
WITHHOLD AUTHORITY to vote for all nominees
listed on the right [_]
NOMINEES: Black, Hagen and Townsend
(Instruction: To withhold authority to vote
for any individual nominee, print that
nominee's name in the space provided below.)
- ----------------------------------------------
2 - Ratification of the selection of
PricewaterhouseCoopers LLP as auditor.
FOR [_] AGAINST [_] ABSTAIN [_]
Check here if you plan to attend the meeting. [_]
Dated____________________________________________1999
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.
