SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
X EXCHANGE ACT OF 1934.
----- For the fiscal year ended December 31, 1999
-----------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934.
For the transition period from to
------------- ---------------
Commission file number 1-6047
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GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
(FORMERLY JERSEY CENTRAL POWER & LIGHT COMPANY
EMPLOYEE SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES)
Madison Avenue at Punch Bowl Road
Morristown, New Jersey 07960-1911
---------------------------------
(Full Title of the Plan and the Address of the Plan)
GPU, Inc.
300 Madison Avenue
Morristown, New Jersey 07962-1957
---------------------------------
(Name of Issuer of the securities held pursuant to the
Plan and address of its principal executive office)
<PAGE>
GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
INDEX
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Pages
-----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan
Benefits as of December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1999 and 1998 3
Notes to Financial Statements 4-12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of the
GPU Companies Employee Savings Plan
For Employees Represented by IBEW System Council U-3:
We have audited the accompanying statements of net assets available for plan
benefits of GPU Companies Employee Savings Plan for Employees Represented by
IBEW System Council U-3 (the "Plan") as of December 31, 1999 and 1998, and the
related statements of changes in net assets available for plan benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1999 and 1998, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
May 10, 2000
1
<PAGE>
GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
STATEMENTS OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS
December 31, 1999 and 1998
-------
1999 1998
---- ----
Investments in GPU Companies
Master Savings Plan Trust
at fair value $153,058,641 $126,335,946
Participant loans receivable 2,823,481 2,741,223
----------- -----------
Net assets available for
plan benefits $155,882,122 $129,077,169
=========== ===========
The accompanying notes are an integral
Part of the financial statements.
2
<PAGE>
GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
for the years ended December 31, 1999 and 1998
-------
1999 1998
---- ----
Balances, beginning of year $129,077,169 $102,236,914
----------- -----------
Increases:
Contributions:
Employee 8,418,508 8,067,038
Employer 2,355,629 2,125,238
Rollovers 13,703 -
Interest on loans 278,293 209,357
Investment income 3,954,600 5,723,511
Net appreciation in fair
value of investments 17,942,476 15,401,115
---------- -----------
32,963,209 31,526,259
---------- -----------
Decreases:
Transfers to/(from) affiliated
savings plans 39,704 (69,458)
Distributions and
withdrawals 6,118,552 4,755,462
----------- -----------
6,158,256 4,686,004
----------- -----------
Balances, end of year $155,882,122 $129,077,169
=========== ===========
The accompanying notes are an integral
Part of the financial statements.
3
<PAGE>
GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
NOTES TO FINANCIAL STATEMENTS
--------
1. General Description of the Plan:
-------------------------------
The following description of the GPU Companies Employee Savings Plan for
Employees Represented by IBEW System Council U-3 ("Plan"), formerly Jersey
Central Power & Light Company, provides only general information on the
provisions of the Plan in effect on December 31, 1999. Participants should
refer to the Benefits Handbook, Plan document, and prospectus for a more
complete description of the Plan's provisions.
General:
-------
The Plan is a defined contribution plan. In general, all employees
represented by IBEW System Council U-3 ("Company") are eligible to
participate in the Plan if he/she is employed on a full-time basis or if
the employee has completed at least 1,000 hours of service in a
consecutive twelve-month period.
The Plan is intended to qualify as a cash or deferred profit sharing plan
under Sections 401(a) and 401(k) of the Internal Revenue Code. It is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). A participant is eligible to transfer his/her account to
an affiliated savings plan upon a change in his/her employment status.
The Plan contains additional employer contribution and employee savings
features. Participants may "rollover" distributions received from other
qualified plans to the Savings Plan.
Effective October 1, 1998, the Company changed the Plan's trustee from
Fidelity Investments to State Street Bank and Trust Company.
Contributions:
-------------
The Plan provides two contribution options to a participant. Subject to
certain limitations set forth in the Plan, the participant may elect (1)
to have his base compensation reduced by an amount equal to any whole
percentage (before-tax 401(k) contributions) which is contributed on
behalf of the employee by the Company; and/or (2) to contribute by payroll
deduction any whole percentage of base compensation (after-tax).
Matching Program:
----------------
The Company provides a matching contribution to the Plan on behalf of each
participant, except certain temporary employees as defined in the Plan
document. Effective on October 31, 1999 the Company matched 70%, up from
65% for the ten months ended October 31, 1999, of a participant's
aggregate contributions up to 4% of the participant's base compensation.
Continued
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
1. General Description of the Plan, continued:
-------------------------------
Administrative Expenses:
-----------------------
The Company generally absorbs all administrative costs of the Plan, except
for Investment and Trustee Fees, which are paid out of plan assets held in
the trust. Investment gains in the GPU System Companies Master Trust are
shown net of these Investment and Trustee Fees.
Investment Funds:
----------------
Participants may elect to have their Plan accounts invested in one or more
of the following fourteen investment options:
- Fidelity Puritan Fund: The fund seeks to obtain a balance between
-----------------------
capital appreciation, preservation of capital and generation of income.
- Fidelity Retirement Growth Fund: The fund seeks to provide the
-------------------------------
opportunity for significant capital appreciation.
- Fidelity OTC Portfolio Fund: The fund seeks long-term capital
-----------------------------
appreciation by investing in securities that are traded in the
over-the-counter (OTC) securities market.
- Fidelity Overseas Fund: The fund seeks long-term capital
----------------------
appreciation, primarily through investments in foreign securities.
- Interest Income Fund: The return objective of the fund is to provide a
--------------------
higher rate of return over time than the rate of return offered by
money market funds. The fund invests in a diversified portfolio of
investment contracts issued by only high-quality financial institutions
as well as security backed investment contracts supported by high
quality fixed income securities.
- Diversified Bond Fund: The fund seeks to match or exceed the returns of
---------------------
the Lehman Brothers Aggregate Index. The fund invests primarily in
government, corporate, mortgage-backed and asset-backed securities. The
fund invests in only high quality bonds-those rated at least BBB-by
Standard & Poor's or Baa3 by Moody's Investors Service.
- Conservative Growth Portfolio: The investment objective of the
------------------------------
Portfolio is to provide income from fixed income securities and some
growth of principal from stock funds. The Conservative Growth Portfolio
has an asset allocation target of 35% equities and 65% fixed income
securities.
Continued
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
1. General Description of the Plan, continued:
-------------------------------
Investment Funds, continued:
----------------
- Moderate Growth Portfolio: The investment objective of the Portfolio is
-------------------------
to provide growth from stock funds and income from fixed income
securities. The Moderate Growth Portfolio has an asset allocation
target of 60% equities and 40% fixed income securities.
- Aggressive Growth Portfolio: The investment objective of the Portfolio
----------------------------
is to provide growth primarily from stock funds with a small income
component. The Aggressive Growth Portfolio has an asset allocation
target of 80% equities and 20% fixed income securities.
- S&P 500 Index Fund: The Fund seeks to match the performance of the
-------------------
Standard & Poor's 500 Index. The Fund invests in all 500 stocks in the
S&P 500 Index in proportion to their weighting in the Index. The Fund
may also hold 2-5% of its value in futures contracts (an agreement to
buy or sell a specific security by a specific date at an agreed upon
price).
- International Equity Fund: This is an actively managed fund that seeks
--------------------------
to outperform the performance of the Morgan Stanley Capital
International Europe, Australia, and Far East (MSCI EAFE) Index
(unhedged) by investing in common stocks of companies headquartered
outside the United States.
- Small Cap Equity Fund: This is an actively managed fund that seeks to
---------------------
consistently exceed the total return performance of the Russell 2500
Stock Index while maintaining a similar level of risk. The fund
primarily invests in a portfolio of common stock of
small-to-medium-sized domestic companies, which offer above-average
growth potential.
- GPU Stock Fund: The Fund's goal is to provide long-term growth through
---------------
capital appreciation and dividend income. The Fund invests almost
exclusively in GPU, Inc. common stock. A small portion of assets is
invested in money market securities to meet the fund's liquidity needs.
Dividends paid on the GPU stock held in this fund are used to purchase
additional common shares.
- Mutual Fund Window: The Mutual Fund Window (MFW) offers approximately
------------------
3500 mutual funds from more than 200 mutual fund families and
approximately 600 no-transaction fee funds currently offered through
State Street Brokerage Services, Inc.
Continued
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
1. General Description of the Plan, continued:
-------------------------------
Employee Participation in the Plan:
----------------------------------
The number of participating employees with account balances invested in
each investment option at December 31, 1999 and 1998 was as follows:
NUMBER OF PARTICIPANTS
----------------------
FUND #/FUND NAME 1999 1998
---------------- ---- ----
10 Int. Income 804 894
20 Diversified Bond 272 314
30 Conserv. Growth 55 46
35 S&P 500 Index 1,231 1,285
40 Mod. Growth 875 982
45 Fidelity Puritan 274 302
50 Aggress. Growth 194 176
55 Fidelity Ret. Growth 407 337
60 Sm. Cap. Equity 276 312
65 Fidelity OTC 242 143
70 Internat'l Equity 177 177
75 Fidelity Overseas 103 80
80 GPU Stock 355 379
85 Mutual Fund Window 39 6
The total number of participants in the Plan at December 31, 1999 and 1998
was 2,050 and 2,302, respectively, which was less than the sum of the
number of participants shown in the schedule above because many
participants were participating in more than one option.
Participant Accounts:
--------------------
Each participant's account is credited with the participant's own
contribution and with the matching contributions made by the Company with
respect to the participant's contributions. Each account maintained for a
participant also reflects the number of shares of each mutual fund, the
number of shares of GPU stock, and the number of units of interest in the
Interest Income Fund, in which the balance of that account is invested.
All income, gain or loss attributable to the investment of the balance of
any account maintained for a participant is recorded to that account.
Vesting:
-------
Participants are 100% vested at all times in their Plan accounts.
Continued
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
1. General Description of the Plan, continued:
-------------------------------
Distributions and Withdrawals:
-----------------------------
A participant's Plan account balances become distributable upon
termination of the participant's employment for any reason. Distributions
of account balances in excess of $5,000 may be deferred, at the
participant's election, up to age 70 1/2. If distribution of participant's
account balance has not otherwise started, it must begin by April 1st
following the year in which the participant attained age 70 1/2.
Distributions generally are a single lump sum payment. The Plan permits
withdrawals of account balances in the event of financial hardship or
disability as defined in the Plan. A complete description of the Plan's
terms and conditions for distributions and withdrawals can be found in the
Plan document.
Loans to Participants:
---------------------
The Plan provides that loans may be made to a participant from the
participant's account balance subject to certain conditions. The minimum
amount of each loan is $1,000 with the maximum being $50,000, or certain
lesser amounts as described in the Plan. Interest on the loan is credited
to the participant's account. The rate is determined periodically by the
Administrative Committee, based on current commercial rates. The interest
rates for loans in excess of four years and ten months for the period
January 1 through June 30, 1999 was 6.81% and for the period July 1
through December 31, 1999 was 7.59%. This compared to 7.22% for the period
January 1 through December 31, 1998. The interest rates for loans four
years and ten months or less were 7.75% and 8.87% at December 31, 1999 and
1998, respectively.
Plan Termination:
----------------
The Company reserves the right at any time to modify, suspend, amend or
terminate the Plan. However, the Company cannot do so in such a manner
that would cause or permit any part of the Plan's assets to be used for or
diverted to purposes other than for the exclusive benefit of participants
or their beneficiaries.
2. Summary of Significant Accounting Policies:
------------------------------------------
New Accounting Pronouncements:
-----------------------------
Effective for fiscal year 1999, the Plan adopted the American Institute of
Certified Public Accountants' Statement of Position (SOP) 99-3,
"Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters." The SOP eliminates the
requirement for a defined contribution plan to disclose
participant-directed investment programs. Accordingly, the Plan no longer
discloses investment activities by investment option. There was no effect
on the assets available for plan benefits resulting from this accounting
change.
Continued
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
2. Summary of Significant Accounting Policies, continued:
------------------------------------------
Valuation of Investments:
------------------------
The amounts shown herein as the investment in the GPU Companies Master
Savings Plan Trust reflect the fair value of the assets held in such
Trusts and the Plan's relative interest in the Trusts. The Plan's
participation is measured at its value at the beginning of the valuation
period plus net external cash flow (contributions, distributions, etc.)
experienced by the Plan during the valuation period. Investment income,
net realized gain (loss) on investments and net unrealized appreciation
(depreciation) of investments is allocated to each participating plan
based upon its accumulated monthly balance for each investment option (see
Note 3).
Investment income from the GPU Companies Master Savings Plan Trust for the
years ended December 31, 1999 and 1998, consists of interest and dividend
income. The net appreciation (depreciation) in the fair value of
investments consists of realized gains or losses and the unrealized
appreciation (depreciation) on those investments in the GPU Companies
Master Savings Plan Trust.
The fair market value of assets held by the Trust are determined as
follows: Stocks and bonds are valued at their closing market prices on the
last business day of the year. Short-term group trust funds (investment
custodian bank) and insurance contracts are valued at cost plus accrued
interest, which approximates market.
Use of Estimates:
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
Reclassification of 1998 Balances:
---------------------------------
Certain 1998 balances have been reclassified to conform with current year
presentation.
Continued
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
3. Investments:
-----------
The investments reflected in the December 31, 1999 and 1998 Statements of
Net Assets Available for Plan Benefits represent the Plan's 15.08% and
14.23% share, respectively, of total investments held in the GPU Companies
Master Savings Plan Trust at December 31, 1998 and 1997.
At December 31, 1999 and 1998, the total fair value of investments held in
the GPU Companies Master Savings Plan Trust are summarized as follows:
1999 1998
---- ----
Aggressive Growth Portfolio $ 27,008,016 $ 20,216,125
Fidelity Retirement Growth Fund 93,080,073* 59,489,456*
Small Cap. Equity Fund 29,100,202 32,580,387
Fidelity OTC Portfolio Fund 49,287,148 19,301,413
International Equity Fund 12,702,812 10,845,885
Fidelity Overseas Fund 7,901,139 4,402,532
GPU Stock Fund 21,045,689 24,076,904
Mutual Fund Window 11,080,438 2,843,205
Interest Income Fund 197,880,151* 185,931,322*
Diversified Bond Fund 23,034,267 27,650,755
Conservative Growth Portfolio 9,642,224 6,824,143
S&P 500 Index Fund 298,354,475* 257,907,002*
Moderate Growth Portfolio 183,476,471* 178,609,215*
Fidelity Puritan Fund 51,465,946* 57,164,483*
----------- -----------
Total investments at fair value $1,015,059,051 $887,842,827
============= ===========
Total investments at cost $ 834,438,996 $796,813,185
============= ===========
* These investments represent 5% or more of the net assets available for
benefits.
Continued
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
3. Investments, continued:
-----------
Based on participant investment options at December 31, 1999 and 1998 the
Plan's Investments were allocated as follows:
1999 1998
% BY FUND % BY FUND
--------- ---------
Int. Income 18.01% 20.34%
Diversified Bond 2.03% 2.59%
Conserv. Grwth. 1.00% 1.00%
S&P 500 Index 29.56% 29.78%
Mod. Grwth. 14.63% 16.62%
Fidelity Puritan 6.01% 7.99%
Aggress. Grwth. 2.55% 2.17%
Fidelity Ret. Grwth. 13.93% 9.93%
Sm. Cap. Equity 2.00% 2.88%
Fidelity OTC 5.16% 2.23%
Internat'l Equity 0.93% 0.73%
Fidelity Overseas 0.82% 0.54%
GPU Stock 2.37% 3.01%
Mutual Fund Window 1.00% 0.19%
The net investment gains in the GPU Master Savings Plan Trust for the year
ended December 31, 1999 and 1998 were as follows:
1999 1998
---- ----
Dividends $ 21,496,043 $ 32,255,570
Interest Income 18,463 8,291,978
Net appreciation
In fair value of investments 115,945,073 105,588,090
----------- -----------
Net Investment gains $137,495,579 $146,135,638
=========== ===========
Continued
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
4. Party-In-Interest Transactions:
------------------------------
Certain Plan investments are, and were, shares of mutual funds managed by
State Street Bank and formerly Fidelity Investments. State Street Bank is,
and Fidelity Investments was, the trustee as defined by the Plan, and
therefore, these transactions qualify as party-in-interest.
5. Tax Status:
----------
The Plan obtained its latest determination letter on February 4, 1998, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the plan administrator believes that the Plan is currently
designed and being operated in compliance with applicable requirements of
the Internal Revenue Code. Therefore, no provision for income taxes has
been included in the Plan's financial statements.
6. Plan Amendments:
---------------
The Plan was amended and restated in order to incorporate an increased
matching contribution, effective January 1, 1999 and November 1, 1999. The
Company agreed to increase the match from 60% to 65% of an employee's
contributions up to 4% of base compensation for the period of January 1,
1999 through October 31, 1999 and increased the match again to 70% of an
employee's contributions up to 4% of base compensation, thereafter.
12
<PAGE>
GPU, INC.
GPU COMPANIES EMPLOYEE SAVINGS PLAN FOR
EMPLOYEES REPRESENTED BY IBEW SYSTEM COUNCIL U-3
Signature Page 2
Consent of Independent Accountants Exhibit 23
Report on Audits of Financial Statements Exhibit 28
for the Years Ended December 31, 1999
and 1998
1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
GPU, Inc.
GPU Companies Employee Savings Plan
for Employees Represented by
IBEW System Council U-3
Date: June 23, 2000 By: /s/ C. B. Snyder
----------------
C. B. Snyder
Chairperson
Administrative Committee
2
