SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 ss.240.14a-11(c) or ss.240.14a-12
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 [LOGO]
FRED D. HAFER
Chairman, President and
Chief Executive Officer
GPU, Inc.
300 Madison Avenue
Morristown, NJ 07960
March 21, 2000
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
Avenue, Madison, New Jersey, on May 4, 2000,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
ratification of the selection of PricewaterhouseCoopers LLP as independent
auditor for 2000. Shareholders may also view the meeting via the GPU Internet
website, http://www.gpu.com, beginning at 10:00 a.m. Please note that there will
be no provision for webcast viewers to ask questions, and that you will not be
able to vote your shares over the Internet. Therefore, we hope that you will
sign and return the Proxy card as soon as possible 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 4.
Sincerely,
/s/ FRED D. HAFER
---------------------------
Fred D. Hafer
Chairman, President and
Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
PAGE
NUMBER
------
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
Reduced Duplicate Mailings .......................................... 2
Proxy Solicitation Costs ............................................ 3
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 ....................... 9
Compensation Committee Interlocks and Insider Participation ....... 10
Meetings of the Board of Directors ................................ 10
Remuneration of Directors ........................................... 10
Related Transactions ................................................ 10
Deferred Stock Unit Plan for Outside Directors ...................... 11
Retirement Plan for Outside Directors ............................... 11
Restricted Stock Plan for Outside Directors ......................... 12
Estate Enhancement Program .......................................... 12
SECURITY OWNERSHIP .................................................... 13
Security Ownership of Directors, Nominees and Executive Officers .... 13
Owners of Five Percent or More of GPU Stock ......................... 14
EXECUTIVE COMPENSATION ................................................ 15
Personnel, Compensation and Nominating Committee Report ............. 15
Comparison of Five-Year Cumulative Total Return ..................... 18
Remuneration of Executive Officers .................................. 19
Summary Compensation Table ........................................ 19
Option Grants In Last Fiscal Year ................................. 21
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year-End Option Value ................................ 22
Long-Term Incentive Plans-- Awards In Last Fiscal Year ............ 22
Retirement Plans .................................................... 22
Supplemental Pension .............................................. 24
Estate Enhancement Program .......................................... 24
Employment, Termination and Change in Control Arrangements .......... 24
Severance Arrangements ............................................ 24
Supplemental Executive Retirement Plan ............................ 25
Lump Sum Distributions ............................................ 25
Supplemental Agreement ............................................ 25
Benefit Protection Trusts ........................................... 26
BY-LAW AMENDMENT ...................................................... 26
DEADLINE FOR STOCKHOLDER PROPOSALS .................................... 27
<PAGE>
GPU, INC. P.O. Box 1911
300 Madison Avenue Morristown, NJ 07960
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 4, 2000
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 4, 2000 at 10:00 a.m.
(local time):
1. To elect one director of the Corporation to hold office for a two-year
term and to elect three directors to hold office for three-year terms
beginning upon their election at the 2000 Annual Meeting.
2. To consider the ratification of the selection by the Board of
Directors of PricewaterhouseCoopers LLP as independent auditor for the
year 2000.
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 13, 2000 will be entitled to vote at the meeting 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.
Stockholders may also view the annual meeting via the GPU website,
http://www.gpu.com. Please note that there will be no provision for asking
questions at the meeting via the webcast and that stockholders may not vote
their shares over the Internet.
By Order of the Board of Directors,
SCOTT L. GUIBORD, Secretary
March 21, 2000
- --------------------------------------------------------------------------------
The 1999 Summary Annual Report and 1999 Financial Report were previously
transmitted to stockholders. It is expected that the annexed Proxy Statement and
enclosed form of Proxy will be first sent to stockholders on or about March 21,
2000.
If you wish to receive, without charge, a copy of the Corporation's 1999
Annual Report to the Securities and Exchange Commission ("SEC") 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) 401-8204.
- --------------------------------------------------------------------------------
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 4, 2000
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 4, 2000
(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 13, 2000 of the
outstanding Common Stock (consisting of 120,986,653 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 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
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.
REDUCED DUPLICATE MAILINGS
If you are a registered stockholder and have more than one account in your
name or at the same address as other registered stockholders, you may authorize
us to discontinue mailings of multiple Annual Reports to that address. If more
than one copy of the Annual Report is sent to your address, we will discontinue
the mailing of the Report on the account you select if you mark the designated
box on the appropriate Proxy card.
2
<PAGE>
PROXY SOLICITATION COSTS
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 GPU Service, Inc. ("GPUS"), may also solicit Proxies
by telephone, facsimile, 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.
BUSINESS MATTERS TO BE VOTED UPON
DIRECTORS' PROPOSALS
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors consists of three classes of directors with
overlapping 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 2000 Annual Meeting, one Class II director will be elected to hold
office for a two-year term beginning upon his election. In addition, three Class
III directors will be elected to hold office for three-year terms beginning upon
their election at the 2000 Annual Meeting. The Class II director nominee is Mr.
Kenneth L. Wolfe and the Class III director nominees are Mr. Fred D. Hafer,
Admiral Carlisle A. H. Trost, and Dr. Patricia K. Woolf. In accordance with the
Corporation's mandatory retirement policy, however, Admiral Trost will resign
effective May 1, 2002 after he reaches age 72.
The votes applicable to the shares represented by Proxies in the
accompanying form received from stockholders will be cast in favor of the
election of the four nominees, 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 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 200
PricewaterhouseCoopers LLP ("PwC") and its predecessor firms have acted as
the independent auditor for the Corporation and its subsidiaries since 1946. The
Board of Directors has selected the firm of PwC, independent certified public
accountants, to audit the accounts of the Corporation for 2000. Although
submission to stockholders of the appointment of the independent auditor is not
required by law, the Board, in accordance 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. PwC
has advised the Corporation that neither it nor any of its partners has any
direct or indirect material relationship with the Corporation or its
subsidiaries, and that PwC is an independent accountant with respect to the
Corporation and its subsidiaries within the meaning of the federal securities
laws and the requirements of the Independent Standards Board.
The services rendered by PwC for 1999 included an audit of the consolidated
financial statements of the Corporation and its subsidiaries for the year ending
December 31, 1999 as contained in the
3
<PAGE>
Corporation's 1999 financial report and audits of the individual and
consolidated financial statements of the Corporation and its subsidiaries and
related schedules filed annually with the SEC. PwC 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.
It is expected that representatives of PwC will be present at the Annual
Meeting, will be available to respond to questions, and will have an opportunity
to make a statement if they desire to do so.
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
discretion, 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
NOMINEE FOR CLASS II DIRECTOR FOR
TERM EXPIRING IN 2002
Name Age Year first elected a director
KENNETH L. WOLFE 61 1999
P Mr. Wolfe is Chairman and Chief Executive Officer of Hershey
H Foods Corporation, a position he has held since 1994. He is
O currently a director of Hershey Trust Company and a member
T of the Board of Managers of the Milton S. Hershey School and
O the M.S. Hershey Foundation. Mr. Wolfe also serves on the
boards of directors of Bausch & Lomb Incorporated and
Carpenter Technology Corporation. Additionally, Mr. Wolfe is
a board member of the Pennsylvania Chamber of Business and
Industry, a member of the Board of Visitors of the Hershey
Medical Center of Pennsylvania State University and serves
as vice chairman for both the Grocery Manufacturers of
America, Inc. and the Pennsylvania Business Roundtable.
NOMINEES FOR CLASS III DIRECTORS FOR
TERMS EXPIRING IN 2003
Name Age Year first elected a director
FRED D. HAFER 59 1996
P Mr. Hafer is Chairman, Chief Executive Officer and President
H of GPU and GPUS (which he also serves as a director). He
O became President and Chief Operating Officer of GPU and GPUS
T in July 1996 and was elected to the additional positions of
O 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 Advanced Resources, Inc.; Chairman and
a director of GPU Capital, Inc.; a director of GPU
International, Inc. ("GPUI"), GPU Power, Inc., GPU Electric,
Inc., Avon Energy Partners Holdings ("Avon"), Midlands
Electric plc ("Midlands"), GPU Telcom Services, Inc. and
Saxton Nuclear Experimental Corporation, all subsidiaries of
GPU. He is President and Chief Executive Officer of the GPU
Foundation. 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 the U.S. Chamber of Commerce
and Utilities Mutual Insurance Company, a director and past
president of the Manufacturers Association of Berks County,
and a director and past Chairman of the Board of the
Pennsylvania Electric Association. He is a director of the
Reading Hospital and Medical Center, a trustee of the Caron
Foundation, and immediate past chairman and a member of the
Board of Trustees of Drug-Free Pennsylvania.
5
<PAGE>
Name Age Year first elected a director
CARLISLE A. H. TROST 69 1990
P Admiral Trost served in the United States Navy from 1953
H until his retirement in 1990, including a four-year term
O from 1986 to 1990 as Chief of Naval Operations. Admiral
T Trost is also a member of the Board of Directors of GPUN and
O 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.
PATRICIA K. WOOLF, Ph.D 65 1983
P Dr. Woolf is a consultant, author, and Lecturer in the
H Department of Molecular Biology at Princeton University. Dr.
O Woolf is a director of CK Witco and the National Life
T Holding Company. She is also a trustee of the New Economy
O 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.
Information concerning the other directors of the
Corporation whose terms do not expire at the Annual Meeting
is as follows:
CLASS I DIRECTORS WITH
TERMS EXPIRING IN 2001
Name Age Year first elected a director
HENRY F. HENDERSON, JR. 72 1989
P Mr. Henderson is President, Chief Executive Officer and a
H director of H. F. Henderson Industries, designers and
O manufacturers of process control and engineered systems for
T government and industry, including industrial process
O controls and defense electronics. He is a director of the
Partnership for New Jersey, the Defense Orientation
Conference Association, Delta Dental Plan, and Thoreb North
America, LLC. 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. In accordance with the
Corporation's mandatory retirement policy, it is anticipated
that Mr. Henderson will resign as director on April 1, 2000,
after he reaches age 72.
6
<PAGE>
Name Age Year first elected a director
JOHN M. PIETRUSKI 67 1989
P Mr. Pietruski served as Chairman of the Board and Chief
H Executive Officer of Sterling Drug Inc. from 1985 until his
O retirement in 1988. He is Chairman of the Board of Texas
T Biotechnology Corporation, a pharmaceutical research and
O 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 Detailing, Inc. He is also a Regent of
Concordia College.
CATHERINE A. REIN 57 1989
P Ms. Rein joined Metropolitan Life Insurance Company in 1985
H where she has held various executive positions and is
O presently President and Chief Executive Officer of
T Metropolitan Property and Casualty Insurance Company. Ms.
O Rein is a director of The Bank of New York, Inc., Corning
Inc., and New England Financial, Inc., a trustee emeritus of
the National Urban League and a trustee of the New York
University Law Center Foundation.
CLASS II DIRECTORS WITH
TERMS EXPIRING IN 2002
Name Age Year first elected a director
THEODORE H. BLACK 71 1988
P Mr. Black served as Chairman, President and Chief Executive
H Officer of Ingersoll-Rand Company from 1988 until his
O retirement in 1993 and as a director until 1997. He is also
T a former director of Best Foods and McDermott International.
O In accordance with the Corporation's mandatory retirement
policy, it is anticipated that Mr. Black will resign as
director on November 1, 2000, after he reaches age 72.
7
<PAGE>
Name Age Year first elected a director
THOMAS B. HAGEN 64 1988
P Mr. Hagen is Chairman and Chief Executive Officer of Custom
H Group Industries, manufacturers of press platens, metal
O fabrication, precision machining and assembly, and Chairman
T of the Board of both Custom Engineering Co. and Venango
O Machine Company, Inc. 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 and
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 Holdings (U.S.), Inc., Bliley Electric
Company, 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, and a Trustee of the
Northwest Pennsylvania Technical Institute. He is the
immediate past President and a councillor of The
Pennsylvania Society, a director of the Athenaeum of
Philadelphia, Treasurer of Preservation Pennsylvania, and a
director of the Pennsylvania Chamber of Business and
Industry.
BRYAN S. TOWNSEND 69 1996
P Mr. Townsend retired as Chairman of Midlands in August 1996
H following its acquisition by Avon, in which the Corporation
O now owns a 100% interest. He served as Chairman of Midlands
T since 1986 and became Chairman and Chief Executive upon
O Midlands' privatization in 1990. He is a past 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.
8
<PAGE>
STANDING COMMITTEES OF THE BOARD OF DIRECTORS
There are four standing committees of the Board; namely, the Audit
Committee, the Corporate and Public Responsibilities Committee, the Finance
Committee, 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
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 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 governmental agencies, and the reports on audit procedures
relating to possible corporate expenditures for political purposes.
The Chairman of the Audit Committee is Dr. Woolf. The other members are
Messrs. Henderson, Pietruski, and Wolfe and Ms. Rein. During 1999, the Committee
held four meetings.
THE CORPORATE AND PUBLIC RESPONSIBILITIES COMMITTEE reviews the
Corporation's policies on public issues having broad social significance and the
implementation 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.
Hagen. The other members are Messrs. Black, Henderson, and Townsend. Mr. Hafer
serves as a non-voting member of the Committee. During 1999, 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
dividend policy, capital structure and credit quality goals, financing plans,
new business initiatives and ventures, and the Corporation's capital and
operating budgets. Additionally, the Committee reviews the investment policies,
funding, and investment results of the Corporation's trusteed plans.
The Chairman of the Finance Committee is Admiral Trost. The other members
are Messrs. Black, Townsend, and Wolfe, and Ms. Rein. Mr. Hafer serves as a
non-voting member of the Committee. During 1999, the Committee held nine
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
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 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, composition and candidates for membership of
the Board. The Committee also recommends to the Board the size, composition and
membership of the various Board Committees.
The Committee will consider director nominees recommended by the
Corporation's stockholders in accordance with the By-Laws, which provide as
follows:
9
<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 less than 30 nor more than 75 days prior
to the scheduled date of the next annual meeting and must contain the
information regarding 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
candidates for director nominees. Recommendations should be sent to the
Secretary of the Corporation.
The Chairman of the Personnel, Compensation and Nominating Committee is Mr.
Pietruski. The other members are Messrs. Hagen and Trost and Dr. Woolf. During
1999, the Committee held six meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Hafer, the Corporation's Chairman, President and Chief Executive
Officer, sits on the Personnel, Compensation and Nominating Committee of the
Board of Directors as a non-voting member. He does not participate in discussion
of matters that directly affect his compensation.
MEETINGS OF THE BOARD OF DIRECTORS
There were ten regular meetings, three special meetings and one
organization meeting of the Board during 1999. All directors attended at least
75% of the aggregate of (i) the total number of 1999 meetings of the Board (held
during the period for which he or she was a director) and (ii) the total number
of 1999 meetings of all committees of the Board on which he or she served (held
during the period for which he or she was a director).
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 $68,000 in 1999 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.
RELATED TRANSACTIONS
GPU and its subsidiaries have business arrangements with organizations with
which certain GPU directors and certain owners of 5% or more of GPU stock are
affiliated. These arrangements are conducted in the ordinary course of business,
at arms-length, and on standard commercial terms and conditions.
10
<PAGE>
DEFERRED STOCK UNIT PLAN FOR OUTSIDE DIRECTORS
Under the Deferred Stock Unit Plan for Outside Directors of GPU, Inc.
("Deferred Stock Unit Plan"), each director who is not an employee of the
Corporation 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
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
Personnel, Compensation and Nominating Committee. As of December 31, 1999, all
outside directors except Messrs. Townsend and Wolfe 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 retirement.
Benefits under the Retirement Plan are payable to the directors (or, in the
event of death, to designated beneficiaries) at their election 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 preceding
retirement, over a period equal to the director's service 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. 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
Outside Director on or after July 1, 1997 will be entitled to receive any
benefits under the Retirement Plan.
As of December 31, 1999, the following Outside Directors were vested in the
Retirement Plan and are entitled to receive retirement benefits equal to the
number of months of service completed at June 30, 1997:
MONTHS OF SERVICE
DIRECTOR AS OF JUNE 30, 1997
------------ ---------------------
Theodore H. Black 112
Thomas B. Hagen 93
Henry F. Henderson, Jr. 101
John M. Pietruski 101
Catherine A. Rein 101
Carlisle A. H. Trost 78
Patricia K. Woolf 167
11
<PAGE>
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
compensation 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. Termination 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.
ESTATE ENHANCEMENT PROGRAM
The Corporation has adopted an estate enhancement program for the benefit
of outside directors of the Corporation and its subsidiaries and executive
officers of GPU. Under this program, an outside director or GPU executive
officer may, with approval of the Personnel, Compensation and Nominating
Committee, elect to enter into a split dollar life insurance arrangement with
the Corporation and forego a specified amount of payments to which he or she is
then entitled to receive in the future under the Corporation's deferred
compensation plans. If so elected, the Corporation will pay the premiums on a
split dollar life insurance policy on the life of the director (or on the lives
of the director and his or her spouse) or executive officer (or on the lives of
the executive officer and his or her spouse) up to the amount of deferred
compensation the director or executive officer has elected to forego. As of
March 21, 2000, none of the outside directors or GPU executive officers was
participating in this program. The Corporation expects that it will not incur
any significant additional costs as a result of entering into split dollar
insurance arrangements under this program.
12
<PAGE>
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth, as of February 1, 2000, the beneficial
ownership 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
executive 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 total
shares outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
---------------------------------------
SHARES (1)
-------------------- STOCK-EQUIVALENT
NAME TITLE OF SECURITY DIRECT INDIRECT UNITS
---- ----------------- -------- -------- -----
<S> <C> <C> <C> <C>
Theodore H. Black ................. GPU Common Stock 9,246 2,552(3)
T. Gary Broughton ................. GPU Common Stock 1,282 16,464(2)
Fred D. Hafer ..................... GPU Common Stock 12,421 154 34,547(2)
Thomas B. Hagen ................... GPU Common Stock 13,034 2,552(3)
Henry F. Henderson, Jr. ........... GPU Common Stock 4,701 1,200 2,552(3)
Ira H. Jolles ..................... GPU Common Stock 12,621 18,937(2)
Bruce L. Levy ..................... GPU Common Stock 4,954 16,519(2)
John M. Pietruski ................. GPU Common Stock 5,200 2,552(3)
Catherine A. Rein ................. GPU Common Stock 4,401 2,552(3)
Bryan S. Townsend ................. GPU Common Stock 1,637 2,552(3)
Carlisle A. H. Trost .............. GPU Common Stock 3,944 2,552(3)
Robert L. Wise .................... GPU Common Stock 4,111 23,370(2)
Kenneth L. Wolfe .................. GPU Common Stock 1,600 0
Patricia K. Woolf ................. GPU Common Stock 4,993 2,552(3)
All GPU Directors and Executive
Officers as a Group ............. GPU Common Stock 91,012 2,179 151,417
</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
(subject 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
following officers: Messrs. Wise -- 6,765 units; Levy -- 655 units; and
Broughton -- 2,722 units. See footnote 2 to the Summary Compensation Table
on page 19.
(3) Each Outside Director receives an annual grant of deferred stock units
which represents an equivalent number of shares of GPU Common Stock.
Outside 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 11.
13
<PAGE>
OWNERS OF FIVE PERCENT OR MORE OF GPU STOCK
The Corporation has been advised that as of December 31, 1999, the
following entities beneficially owned more than 5% of the outstanding shares of
the Corporation's voting securities:
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP CLASS
------------------- -------------- ---------- -------
AMVESCAP PLC ...................... GPU Common Stock 6,819,742(1) 5.5%
11 Devonshire Square
London EC2M 4YR
England
Capital Research and
Management Company
("Capital Research") -------------- GPU Common Stock 9,923,000 (2) 8.0%
333 South Hope Street
Los Angeles, CA 90071
Morgan Stanley
Dean Witter & Co.
("Morgan Stanley") ---------------- GPU Common Stock 11,638,159 (3) 9.4%
1585 Broadway
New York, NY 10036
- ------------
(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 11,554,389 shares and shared dispositive power for
11,638,159 shares) the reported shares because of the provision of
investment advisory services by Morgan Stanley and its wholly owned
subsidiary, Morgan Stanley Dean Witter Advisors, Inc., to various
registered investment companies.
14
<PAGE>
EXECUTIVE COMPENSATION
PERSONNEL, COMPENSATION AND NOMINATING COMMITTEE REPORT
In 1999, the Corporation continued to maintain a three part program for
executive compensation. The program consists of three interrelated components,
the Base Salary Program, the annual Incentive Compensation Plan and the
long-term stock-based program established in the 1990 Stock Plan. While each
component serves a distinct purpose, together they provide a balanced program
that supports the Corporation's specific business objectives. In recent years,
the program has increasingly made use of stock-based compensation to ensure the
proper emphasis on shareholder value.
COMPENSATION PHILOSOPHY AND MARKET COMPARISONS
The Corporation's compensation philosophy, unchanged in 1999, is to provide
an executive compensation program that allows the Corporation and its individual
business units to attract and retain the services of skilled, experienced
executives, to focus the attention of these executives on the achievement of
specific objectives that will drive the Corporation's success, and to reward
these executives to the extent these objectives are achieved.
The amount of compensation delivered each year varies based on business
results and changes in shareholder value as the major portion of compensation is
delivered through the two variable pay components. The program is designed,
however, to deliver pay approximately at the median of the chosen competitive
market when business objectives are achieved. When targeted business objectives
are exceeded, total pay levels should be above median and, if objectives are not
achieved, total pay should be below median.
In identifying the competitive market for executives, the Corporation
focuses primarily on companies within the industry, particularly those of
comparable size and complexity. These companies include all of the companies in
the S&P Electric Utility Index shown on page 18 for which data are available. To
a lesser extent, the Corporation also considers companies not included in the
Index because it may need to compete in a broader market for executive talent.
To ensure an objective analysis, the Committee is assisted by a major national
compensation consulting firm in developing appropriate comparisons, defining
median pay levels and assessing the overall competitiveness of the program.
Section 162(m) of the Internal Revenue Code of 1986 generally limits the amount
allowable 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 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 important to retain
the flexibility to design compensation programs it believes are in the best
interests of the Corporation and its shareholders, 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 executive compensation
program with this impact in mind.
BASE SALARY PROGRAM
The Base Salary Program provides stable, ongoing compensation. Salaries of
individual executives, including Mr. Hafer, reflect competitive market data as
well as the experience and sustained performance of the executive. Salaries are
reviewed each year by the Committee to determine if any adjustments are needed.
The variable pay components of the overall program are considered the most
significant and, consequently, the Committee approved base salary increases in
1999 only if an increase was necessary to maintain an appropriate competitive
position or if the executive assumed additional responsibilities.
15
<PAGE>
INCENTIVE COMPENSATION PLAN
The Incentive Compensation Plan is the Corporation's annual incentive
program for its executive officers and is designed to compensate the executive
officers based on the achievement of identified short-term business objectives
that are intended to support the Corporation's overall strategy and drive
increases in shareholder value.
As in previous years, the Incentive Compensation Plan in 1999 emphasized
financial results. Awards to individual executives are based on the achievement
of objectives set for the Corporation and, in the cases of Messrs. Wise and
Broughton, for the specific GPU company to which the executive is assigned, GPU
Generation, Inc. in the case of Mr. Wise and GPUN in the case of Mr. Broughton.
Each executive's personal performance and contribution, assessed by the
Committee and the Board, are also factors in determining awards.
In 1999, the objectives for the Corporation were based on its return on
equity and its earnings. The "earnings test" ensures that non-financial measures
do not generate inappropriate total awards. Both the Corporation's return on
equity objective and earnings objective were achieved at levels above those
targeted.
Objectives at the various GPU companies included earnings and other
financial objectives, efficiency and cost management, safety, power production,
business development and acquisitions, and internal and operational performance.
Most of these objectives were achieved at or above the targeted levels.
INCENTIVE COMPENSATION AWARD FOR MR. HAFER
In 1999, Mr. Hafer's Incentive Compensation Award was based 70% on the
Corporation's achievement of return on equity objectives which was well above
the targeted level. His award was also based on the Corporation's above-target
performance in nuclear safety and improvements in the internal functioning of
the organization through multiple projects focused on organizational design and
employee development. However, the Corporation's achievements with respect to
certain strategic initiatives were not at expected levels.
THE 1990 STOCK PLAN
Long-term incentives for the Corporation's executives are provided via the
1990 Stock Plan which was approved by shareholders and allows the Committee and
the Board to grant a variety of stock-based incentive awards. Compensation
opportunities provided under the Plan are directly linked to shareholder value.
Awards in 1999 were in the form of both restricted performance units and
non-qualified stock options.
Awards of restricted performance units and stock options to individual
executives are based on a determination of levels needed to maintain competitive
total compensation as well as on the Committee's and the Board's assessment of
the performance and contribution of the individual executive. Because the value
of both the units and stock options is linked directly to the value of the
Corporation's stock, these awards can provide compensation above or below the
targeted competitive median based on changes in shareholder value. Consideration
is also given to the executives' ownership levels in the Corporation.
16
<PAGE>
AWARDS FOR MR. HAFER
The 1999 awards of performance units and stock options to Mr. Hafer reflect
the factors outlined above as well as his unique role in guiding the
Corporation. The terms and conditions of his awards are the same as those
described for other executives.
RESTRICTED PERFORMANCE UNITS
Restricted performance units give executives the right to receive shares of
the Corporation's stock (or cash at the discretion of the Committee) if specific
performance measures are achieved. 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 actual number of units that will vest
and be paid to the executive is determined at the end of the performance period
based on the achievement of the applicable performance measures.
The performance measure included in the units granted to executives in 1999
is the Corporation's total shareholder return compared to the total return of
companies in the S&P Electric Utility Index. The percentile ranking of the
Corporation's total return among Index Companies is calculated quarterly over
the five-year performance period and averaged. The average ranking determines
how many shares of the Corporation's stock, if any, the executive will receive
at the end of the performance period. If the Corporation'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 75th percentile, additional units will vest up to a maximum of 200 percent.
If total return is lower, fewer units will vest. No units will vest if total
return is below the 40th percentile.
STOCK OPTIONS
All stock options granted in 1999 have an exercise price equal to the fair
market value of the Corporation's stock on the date of grant and will become
exercisable over a three-year period. The options have a ten-year term.
STOCK OWNERSHIP GUIDELINES
Stock ownership guidelines for officers of the Corporation and its
subsidiaries were first implemented in 1998. Officers are expected to meet their
targeted ownership levels, expressed as a percent of base salary, within three
to five years of the implementation of the guidelines. Ownership levels are
calculated by including shares directly owned, vested and deferred restricted
performance units, and exercisable stock options.
Members of the Personnel, Compensation
and Nominating Committee
Thomas H. Hagen
John M. Pietruski
Carlisle A. H. Trost
Patricia K. Woolf
17
<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:
[MOUNTAIN CHART]
- ------------------------------------------------------------------------------
Amount
Invested
1/1/95* 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------
GPU $100 $138 $145 $192 $212 $151
S&P 500 100 138 169 226 290 351
S&P Electric Utility 100 131 131 165 191 154
- ------------------------------------------------------------------------------
- ---------------
* Assumes $100 invested in GPU Common Stock, S&P 500 Index and S&P Electric
Utility Index. Cumulative Total Return includes reinvestment of dividends.
18
<PAGE>
REMUNERATION OF EXECUTIVE OFFICERS
The following tables present compensation information from the past three
years for the Chief Executive Officer and the four other most highly compensated
executive officers ("Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
|--------|-------------------------------------|-----------------------------|---------------|
| | | LONG-TERM | |
| | ANNUAL COMPENSATION | COMPENSATION | |
|--------|-------------------------------------|-----------------------------|---------------|
| | | AWARDS PAYOUTS | |
| | |-----------------------------| |
| | OTHER | SECURITIES | |
NAME AND | | ANNUAL | UNDERLYING | ALL OTHER |
PRINCIPAL | | COMPEN- | OPTIONS LTIP | COMPEN- |
POSITION | YEAR | SALARY ($) BONUS ($) SATION ($)(1) | GRANTED (#) PAYOUTS ($)(2) | SATION ($) |
- ------------------------------|--------|-------------------------------------|-----------------------------|---------------|
| <S> | <C> <C> <C> | <C> <C> | <C> |
Fred D. Hafer | 1999 | $685,288 $660,000 $3,129 | 30,000 $62,923 | $136,454 (3) |
Chairman, President and | 1998 | 613,077 375,000 1,805 | 95,000 63,007 | 116,823 |
Chief Executive Officer, GPU | 1997 | 526,923 275,000 2,123 | -- 66,950 | 106,291 |
| | | | |
Ira H. Jolles | 1999 | 360,000 315,000 3,693 | 6,000 82,522 | 67,922 (3) |
Senior Vice President and | 1998 | 353,085 126,000 2,139 | 21,000 82,973 | 59,090 |
General Counsel, GPU | 1997 | 331,000 100,000 2,455 | -- 86,012 | 55,107 |
| | | | |
Robert L. Wise | 1999 | 293,000 340,000 -- | 5,000 66,224 | 108,057 (3) |
President, JCP&L, | 1998 | 293,000 115,000 -- | 17,000 65,808 | 69,501 |
Met-Ed, and Penelec | 1997 | 293,000 95,000 -- | -- 69,042 | 58,053 |
| | | | |
Bruce L. Levy | 1999 | 360,000 250,000 4,382(4) | 6,000 28,470 | 82,539 (3) |
Senior Vice President and | 1998 | 288,875 223,200 997(4) | 37,000 21,002 | 55,748 |
Chief Financial Officer, GPU | 1997 | 255,833 165,300 1,312(4) | -- 20,922 | 49,123 |
| | | | |
T. Gary Broughton | 1999 | 270,000 250,000 852(5) | 4,500 25,582 | 65,612 (3) |
President, GPUN | 1998 | 270,000 100,000 433(5) | 17,000 23,336 | 58,491 |
| 1997 | 265,154 90,000 305(5) | -- 31,383 | 51,562 |
| | | | |
- -------------- |--------|-------------------------------------|-----------------------------|---------------|
</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 1992, 1993, and
1994 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 each year since 1995 under the 1990 Stock Plan
are performance based. The 1999 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.
19
<PAGE>
The aggregate number and value (based on the stock price per share at
December 31, 1999) of unvested and deferred vested stock-equivalent
restricted units (including reinvested dividend equivalents) include the
amounts shown on the LTIP table, and at the end of 1999 were:
AGGREGATE UNITS AGGREGATE VALUE
--------------- ---------------
Fred D. Hafer 34,547 $1,027,773
Ira H. Jolles 18,937 563,376
Robert L. Wise 23,370 695,258
Bruce L. Levy 16,519 491,440
T. Gary Broughton 16,464 489,804
(3) For 1999, (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
insurance,(d) above-market interest accrued on the retirement portion of
deferred compensation and(e) earnings on LTIP compensation not paid in the
current year, were as follows:
(a) (b) (c) (d) (e)
------ ------- ------- ------- -------
Fred D. Hafer $6,400 $35,908 $29,351 $ 3,612 $61,183
Ira H. Jolles 6,400 13,040 10,533 2,622 35,327
Robert L. Wise 6,400 9,920 22,813 24,199 44,725
Bruce L. Levy 6,400 16,928 25,814 3,020 30,377
T. Gary Broughton 6,400 8,400 16,441 3,325 31,046
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 $2,966, $997, and $648
for the years 1999, 1998, and 1997 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 $852, $433 and $305 for
the years 1999, 1998, and 1997 respectively.
20
<PAGE>
Option Grants In Last Fiscal Year
The following table summarizes option grants made during 1999 to the Named
Executive Officers. All of these options were granted with an exercise price
equal to the fair market value of GPU stock on the date of the grant.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF
UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR GRANT DATE
GRANT GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME DATE (1)(#) FISCAL YEAR ($/SH) DATE (2)($)
---- -------- ---------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Fred D. Hafer 06/03/99 30,000 32.4 $42.9375 06/03/09 $198,000
Ira H. Jolles 06/03/99 6,000 6.5 42.9375 06/03/09 39,600
Robert L. Wise 06/03/99 5,000 5.4 42.9375 06/03/09 33,000
Bruce L. Levy 06/03/99 6,000 6.5 42.9375 06/03/09 39,600
T. Gary Broughton 06/03/99 4,500 4.9 42.9375 06/03/09 29,700
</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.
Options may be exercised after retirement in accordance with the terms of
the 1999 Stock Option Agreement. In the event of a change in control of GPU
during the option term, all options will immediately become exercisable.
(2) Options are valued using a Black-Scholes option pricing model, a
mathematical formula widely used to value options. The model as applied
used the grant date and the exercise price shown on the table, and the fair
market value of Common Stock on the grant date, which was the same as the
exercise price. For the June 1999 grant, the model assumed (i) a risk-free
rate of return of 6.14%, which approximates the yield on 10-year U.S.
Treasury zero coupon bonds on the grant date; (ii) a stock price volatility
of 20.21%, based on the average historical volatility for the 36-month
period ending on the grant date; (iii) an average dividend yield of 5.42%,
based on the average yield for a 36-month period; (iv) the exercise of all
options on the final day of their 10-year terms; and (v) 3% discount for
risk of forfeiture prior to the options becoming exercisable. 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.
21
<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
options held by the Named Executive Officers. In 1999, 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 31,667 93,333 $ 0 $ 0
Ira H. Jolles 7,000 20,000 0 0
Robert L. Wise 5,667 16,333 0 0
Bruce L. Levy 12,333 30,667 0 0
T. Gary Broughton 5,667 15,833 0 0
</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, 1999 through December 31, 2003.
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
SHARES, PERIOD UNTIL NON-STOCK PRICE-BASED PLANS(1)
UNITS OR MATURATION THRESHOLD TARGET MAXIMUM
NAME OTHER RIGHTS OR PAYOUT (#) (#) (#)
---- ------------ -------------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
Fred D. Hafer 9,150 5-year vesting 4,575 9,150 18,300
Ira H. Jolles 3,300 5-year vesting 1,650 3,300 6,600
Robert L. Wise 3,000 5-year vesting 1,500 3,000 6,000
Bruce L. Levy 3,300 5-year vesting 1,650 3,300 6,600
T. Gary Broughton 2,550 5-year vesting 1,275 2,550 5,100
</TABLE>
- ---------------
(1) The restricted units awarded in 1999 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 percentile
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 percentile
as reflected in the "Maximum" column. Regular quarterly dividends are
reinvested in additional units that are subject to the vesting restrictions
of the award. Actual payouts, if any, 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
22
<PAGE>
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
employer.
The following table illustrates the amount of aggregate annual pension from
funded and unfunded sources resulting from employer contributions to the
qualified trust and direct payments payable upon retirement in 2000 (computed on
a single life annuity basis) to persons in specified compensation and years of
service classifications:
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS (2) (3) (4) (5)
BASED UPON CAREER AVERAGE COMPENSATION
----------------------------------------------------
(2000 RETIREMENT)
YEARS OF SERVICE
CAREER AVERAGE --------------------------------------------------------------------------------
COMPENSATION (1) 15 20 25 30 35 40
- --------------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000 $13,810 $18,413 $23,016 $ 27,620 $32,223 $36,585
100,000 28,810 38,413 48,016 57,620 67,223 76,185
150,000 43,810 58,413 73,016 87,620 102,223 115,785
200,000 58,810 78,413 98,016 117,620 137,223 155,385
250,000 73,810 98,413 123,016 147,620 172,223 194,985
300,000 88,810 118,413 148,016 177,620 207,223 234,585
350,000 103,810 138,413 173,016 207,620 242,223 274,185
400,000 118,810 158,413 198,016 237,620 277,223 313,785
450,000 133,810 178,413 223,016 267,620 312,223 353,385
500,000 148,810 198,413 248,016 297,620 347,223 392,985
550,000 163,810 218,413 273,016 327,620 382,223 432,585
600,000 178,810 238,413 298,016 357,620 417,223 472,185
650,000 193,810 258,413 323,016 387,620 452,223 511,785
700,000 208,810 278,413 348,016 417,620 487,223 551,385
750,000 223,810 298,413 373,016 447,620 522,223 590,985
800,000 238,810 318,413 398,016 477,620 557,223 630,585
</TABLE>
- -----------------
(1) Career Average Compensation is the average annual compensation received
from January 1, 1984 to retirement and includes Salary and Bonus. The
Career Average Compensation amounts for the following Named Executive
Officers differ by more than 10% from the three-year average annual
compensation set forth in the Summary Compensation Table and are as
follows: Messrs. Hafer -- $414,320; Jolles -- $433,679; Wise -- $304,694;
Levy -- $230,429; and Broughton -- $196,390.
(2) Years of Creditable Service at December 31, 1999: Messrs. Hafer-- 37 years;
Jolles-- 20 years; Wise-- 36 years; Levy-- 19 years; and Broughton-- 28
years.
(3) Based on an assumed retirement at age 65 in 2000. 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,
multiply the above benefits by 90%. The estimated annual benefits are not
subject 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
compensation during the highest paid 36 calendar months. As of December 31,
1999, none of the Named Executive Officers exceed the 55% limit.
(5) 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.
23
<PAGE>
SUPPLEMENTAL PENSION
MR. WISE
The Corporation has entered into a separate agreement with Mr. Wise which
will provide him with supplemental pension benefits in lieu of benefits to which
he would otherwise have been entitled under the Voluntary Enhanced Retirement
Program. Under the terms of this agreement, Mr. Wise will be entitled to receive
such additional monthly payment, if any, to ensure that the aggregate monthly
pension otherwise payable to him under GPU's retirement plans is not less than
(a) $19,858 for each month beginning after the later of his retirement date and
before the month beginning after his 62nd birthday or (b) $19,358 for each month
beginning after the later of his retirement date and his 62nd birthday. These
figures will be increased by 20% during his first year of retirement. Mr. Wise
will also receive (i) an extension of health insurance benefits to the later of
his 62nd birthday and the third anniversary of retirement and (ii) an amended
split-dollar life insurance supplement to provide for eligibility for full
benefits under his policy at age 55 with ten years of service.
ESTATE ENHANCEMENT PROGRAM
As described on page 12 above, GPU executive officers are eligible to
participate in the Corporation's Estate Enhancement Program.
EMPLOYMENT, TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS
SEVERANCE ARRANGEMENTS
The Corporation has entered into Severance Protection Agreements with the
Named Executive Officers which provide certain severance 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 executive's employment is terminated for reasons other than cause,
disability or death, or if the executive resigns following certain actions
(specified in the agreements) by the Corporation such as a reduction in salary
or change in position. In addition, Mr. Hafer receives severance benefits if he
resigns for any reason within six months following a change in control.
The benefits payable to all executives consist of, in general, (a) the
executive's base salary through the termination date and a pro rata portion of
the executive's target incentive bonus (or, if greater, the highest annual bonus
paid to the executive 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
the executive's termination date, the executive's benefits will be
proportionately reduced; (c) a continuation of insurance benefits for up to
three years; (d) reimbursement of certain expenses subject to specified
limitations; and (e) such additional amount as is necessary to pay any excise
tax under Section 4999 of the Internal Revenue Code (and any related interest
and penalties) on amounts payable under the agreements.
The agreements have an initial term of two years and automatically renew
annually unless earlier terminated by the executive or GPU.
Mr. Wise's agreement provides that any severance compensation he may
receive under the agreement will be offset by the value of the supplemental
pension described above.
24
<PAGE>
Under the Corporation's severance policy for employees, if the employment
of Messrs. Hafer, Jolles, Wise, or Levy 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 executive's split-dollar
life insurance policy for specified periods following the executive's
termination of employment and following a change in control of GPU.
Mr. Broughton is eligible for benefits under the Oyster Creek Retention
Program which was established for all employees of GPUN who are employed at the
Oyster Creek facility or at the company's offices in Parsippany, New Jersey.
Under the terms of this program, if Mr. Broughton's employment is involuntarily
terminated, he will be eligible to receive pension benefits calculated by adding
five years to his age and five years to his years of creditable service as well
as a $500 per month Social Security supplement until he reaches age 62.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Corporation has established a supplemental executive retirement plan
("SERP") for certain GPU 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 executives 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
executive 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 the
executive under GPU Companies' supplemental retirement and deferred compensation
plans and arrangements when such executive terminates employment regardless of
the circumstances, or when the executive terminates employment 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.
SUPPLEMENTAL AGREEMENT
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 income under GPUS'
disability income plans, he will thereafter receive a supplemental retirement
pension from the GPU Companies equal to the additional pension 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.
25
<PAGE>
Termination -- (i) If Mr. Jolles' employment with the GPU Companies
terminates "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
additional years of creditable service ranging, as of December 31, 1999, from
ten years up to a maximum of 20 years depending upon his years of actual
employment by GPUS at the time of termination.
Death -- In the event of Mr. Jolles' death before he begins receiving
benefits under GPUS' employee retirement plans, his surviving spouse, if any,
shall receive such benefits during her lifetime, together with the supplemental
retirement pension benefits which would have been payable to him as described 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 Termination
(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 agreements following
a change in control. The trusts are currently partially funded.
BY-LAW AMENDMENT
During the past year, the Board of Directors adopted an amendment to
Section 20 of the By-Laws of the Corporation eliminating the Chief Executive
Officer's ex officio membership on all Board Committees, thereby permitting
election of the Chief Executive Officer to Committees as the Board deems
appropriate.
As amended, Section 20 of the By-Laws reads as follows:
"20. From time to time the Board of Directors may appoint any other
committee or committees for any purpose or purposes, which committee or
committees shall have such powers and such tenure of office as shall be
specified in the resolution of appointment."
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.
26
<PAGE>
DEADLINE FOR STOCKHOLDER PROPOSALS
If a stockholder wishes to submit a proposal for inclusion in the Proxy
Statement for the 2001 Annual Meeting of Stockholders, such proposal must be
received by the Corporation not later than November 21, 2000. A stockholder may
also present a proposal at the 2001 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 3, 2001.
By Order of the Board of Directors,
SCOTT L. GUIBORD, Secretary
March 21, 2000
- --------------------------------------------------------------------------------
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>
GPU, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING TO BE HELD AT 10:00 A.M. MAY 4, 2000
THE F. M. KIRBY SHAKESPEARE THEATRE
DREW UNIVERSITY
36 MADISON AVENUE
MADISON, NEW JERSEY
[LOGO]
P R O X Y
The undersigned hereby appoints B. L. Levy, P. E. Maricondo, and S. L.
Guibord, 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 21, 2000 (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.) [MAP]
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.
<PAGE>
Please mark
your votes /X/
as this.
THE DIRECTORS RECOMMEND A VOTE "FOR" PROPOSALS 1 AND 2:
1 - ELECTION OF ONE CLASS II DIRECTOR AND THREE
CLASS III DIRECTORS.
FOR all nominees listed on the right (except WITHHOLD AUTHORITY to vote
as marked to the contrary on the right) for all nominees listed on the
right
/ / / /
2 - RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS AUDITOR.
FOR / / AGAINST / / ABSTAIN / /
NOMINEES: Hafer, Trost, Wolfe, and Woolf
(Instruction: To withhold authority to vote for any individual nominee, print
that nominee's name in the space provided below.)
- ------------------------------------------------
CHECK HERE IF YOU PLAN TO ATTEND THE MEETING. / /
SPECIAL ACTION: / /
Discontinue Annual Report mailing for this account; another household member
receives one.
Dated _________________________________ 2000
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:
Stockholder Name _____________________________________________ SPEAKER
(Please print clearly) CARD
City ________________________________________ State _________________________
PLEASE DO NOT DETACH
- --------------------------------------------------------------------------------
[LOGO] 2000 ANNUAL MEETING OF STOCKHOLDERS
May 4, 2000 - 10:00 A.M.
The F. M. Kirby Shakespeare Theatre
Drew University
36 Madison Avenue ADMISSION
Madison, New Jersey CARD
Please bring this card with you
to the meeting. Its presentation
will assure your prompt admittance.
This card is not transferable.
