EXHIBIT 10-BB
STOCK OPTION AGREEMENT
THIS AGREEMENT made as of this day of
, 1998, by and between GPU, Inc. (the "Corporation") and
(the "Recipient"):
WHEREAS, the Corporation maintains the 1990 Stock Plan for Employees of
GPU, Inc. and Subsidiaries (the "Plan") under which the Personnel, Compensation
and Nominating Committee of the Corporation's Board of Directors (the
"Committee") may, among other things, grant options to purchase shares of the
Corporation's common stock to such employees of the Corporation and its
Subsidiaries as the Committee may determine, subject to such terms, conditions
or restrictions as it may deem appropriate;
WHEREAS, pursuant to the Plan, the Committee has granted a stock option
to the Recipient subject to the terms and conditions set forth in this
Agreement; and
WHEREAS, the Plan requires that the grant of a stock option be
evidenced by a written agreement between the Corporation and the Recipient which
contains such restrictions, terms and conditions as the Committee may require;
NOW, THEREFORE, the parties hereto agree as follows:
1. Date of Grant. This Agreement evidences the grant by the Committee
to the Recipient, on , 1998 (the "Date of Grant") of an option (the "Option") to
purchase shares of common stock of the Corporation ("Shares").
2. Purchase Price. The price at which any Shares may be purchased
pursuant to any exercise of this Option shall be $__________ per Share.
3. Exercisability. This Option shall become exercisable in three equal
annual installments, beginning on the first anniversary of the Date of Grant and
continuing each year through the third anniversary of the Date of Grant. Each
annual installment shall include a number of Shares equal to 33-1/3% of
-----------------
1) Insert amount equal to 100% of per share closing price of GPU shares on the
Date of Grant
the total number of Shares specified in Section 1 above. As of any date, the
portion of this Option that is then exercisable, and the portion of this Option
that is not yet exercisable as of such date, are referred to herein,
respectively, as the "Exercisable Portion", and the "Non-Exercisable", of this
Option.
4. Option Term. The term of this Option ("Option Term") shall be the
period beginning on the Date of Grant and ending on the 10th anniversary
thereof. Subject to the provisions of Sections 5, 8 and 11 hereof and the
applicable provisions of the Plan, this Option may be exercised at any time
during the Option Term to purchase any part or all of the Shares included in the
Exercisable Portion of the Option at the time of exercise. Unless sooner
terminated, cancelled or forfeited pursuant to Section 5, 8 or 11 hereof and the
applicable provisions of the Plan, this Option shall expire at, and shall cease
to be exercisable after, the end of the Option Term.
5. Exercise in the Event of Termination of Employment. In the event the
Recipient's employment with the Corporation and its subsidiaries should
terminate, this Option may be exercised in accordance with the following
provisions:
(a) If the Recipient's employment terminates as a result of death, the
Non-Exercisable portion of this Option at the date of the Recipient's death
shall become immediately and fully exercisable, and this Option (including the
portion thereof that becomes exercisable upon the Recipient's death) may be
exercised by the Recipient's Beneficiary (as defined in Section 13 below) at any
time or from time to time during the Recipient's Post-Termination Exercise
Period (as defined in Section 5(f) below).
(b) If the Recipient's employment terminates as a result of Total
Disability (as defined in the Plan), the Non-Exercisable Portion of this Option
at the date of the Recipient's termination of employment shall become
immediately and fully exercisable, and this Option (including the portion
thereof that becomes exercisable upon such termination of the Recipient's
employment) may be exercised by the Recipient at any time and from time to time
during the Recipient's Post-Termination Exercise Period. If the Recipient's
employment has terminated as a result of Total Disability and the Recipient
should thereafter die before the end of the Recipient's Post-Termination
Exercise Period, the Exercisable Portion of this Option at the date of the
Recipient's death shall continue to be exercisable by the Recipient's
Beneficiary at any time or from time to time after the date of
-2-
the Recipient's death until the earlier of the second anniversary of such date
of death or the date on which the Option Term expires.
(c) If the Recipient's employment terminates as a result of Eligible
Retirement (as defined in the Plan), this Option may be exercised (i) with
respect to the Exercisable Portion of the Option, at any time or from time to
time during the Recipient's Post-Termination Exercise Period and (ii) with
respect to the Non-Exercisable Portion of the Option, at any time or from time
to time on or after the date or dates during the Recipient's Post-Termination
Exercise Period on which such portion of the Option becomes exercisable, but
only during such Period. If the Recipient should die prior to the end of the
Recipient's Post-Termination Exercise Period, the Non-Exercisable Portion, if
any, of this Option at the date of the Recipient's death shall become
immediately and fully exercisable, and this Option (including the portion
thereof that becomes exercisable upon the Recipient's death) may be exercised by
the Recipient's Beneficiary at any time or from time to time after the
Recipient's death until the earlier of the second anniversary of such date of
death or the date on which the Option Term expires.
(d) If the Recipient's employment terminates for any reason other than
death, Total Disability or Eligible Retirement, this Option (including the
Exercisable Portion of this Option, to the extent it has not been exercised
prior to the date of such termination of the Recipient's employment) shall be
forfeited and cancelled as of the date of the Recipient's termination of
employment.
(e) Notwithstanding the foregoing, the Committee may, in its sole
discretion, determine that any part or all of the Non-Exercisable Portion of
this Option at the date of the Recipient's termination of employment (and any
part or all of the Exercisable Portion at such date, if the Recipient's
employment terminates for any reason other than death, Total Disability or
Eligible Retirement) shall not be forfeited and cancelled, and may be exercised
by the Recipient (or in the event of the Recipient's death by the Recipient's
Beneficiary) for such period after such date of termination of employment and
prior to the expiration of the Option Term, as the Committee shall specify in
such determination.
(f) For purposes of the foregoing, the Recipient's "Post-Termination
Exercise Period" shall mean the period beginning on the date of the Recipient's
termination of employment and ending (i) on the second anniversary of such date,
if the Recipient's
-3-
employment has terminated as a result of the Recipient's death, or (ii) on the
first anniversary of such date, if the Recipient's employment has terminated as
a result of Total Disability, or (iii) on the fifth anniversary of such date, if
the Recipient's employment has terminated as a result of Eligible Retirement.
Notwithstanding the foregoing, the Recipient's Post-Termination Exercise Period
shall end no later than the date on which the Option Term expires.
(g) For purposes of this Agreement, the Recipient's employment shall
not be treated as having terminated unless the Recipient is no longer employed
with the Corporation or any "subsidiary" as defined in the Plan.
6. Manner of Exercise. This Option may be exercised by delivery to the
Corporation of a written notice specifying the number of Shares as to which the
Option is being exercised, accompanied by payment in full of the aggregate
purchase price for such Shares. The Option may be exercised only with respect to
a whole number of Shares, and may not be exercised, at any single time, as to
less than 100 Shares or, if less, the total number of Shares as to which the
Option is then exercisable. Any notice hereunder to the Corporation shall be
addressed to it at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, Attention: Senior Vice President - Corporate Affairs.
7. Manner of Payment. Payment of the purchase price for Shares
purchased pursuant to any exercise of this Option may be made (a) in cash, (b)
by delivery of certificates, duly endorsed or accompanied by appropriate stock
powers, representing Shares previously owned by the Recipient having an
aggregate fair market value equal to the purchase price, or (c) by a combination
of payment in cash and delivery of certificates for Shares, as provided in (a)
and (b) above, having a combined sum and value equal to the purchase price. For
purposes of the foregoing, the fair market value of any Shares included in the
payment of the purchase price shall be determined on the basis of the per share
closing price of the Corporation's common stock as reported on the New York
Stock Exchange Composite Tape for the date of exercise, or if there were no
sales on such date, for the next preceding day on which there were sales. In
addition, the purchase price may be paid in whole or in part by delivering a
properly executed exercise notice in a form approved by the Committee together
with irrevocable instructions to a broker to promptly deliver to the Corporation
the applicable amount of the proceeds from the sale or loan of securities. The
purchase price
-4-
may also be paid in such other form or manner as the Committee may from time to
time approve.
8. Change in Control. Notwithstanding any other provision herein to the
contrary, if a Change in Control (as defined in the Plan) occurs at any time
during the Option Term, this Option shall be cancelled upon the occurrence of
the Change in Control. In the event of such cancellation, the Corporation's
obligation in respect of this Option shall be discharged by payment to the
Recipient of a single cash lump sum (reduced by any taxes withheld pursuant to
Section 12) in an amount equal to the excess, if any, of the Determined Value
(as defined in the Plan) of all Shares that are still subject to this Option
(including both the Exercisable Portion and the Non-Exercisable Portion thereof)
as of the date of the occurrence of the Change in Control, over the aggregate
purchase price of such shares. Such amount shall be payable as soon as
practicable following the Change in Control.
9. Tax Status of Option. This Option shall be treated as a
"non-qualified option", as defined in the Plan.
10. Nontransferability. This Option shall be nontransferable and may be
exercised during the Recipient's lifetime only by the Recipient. Notwithstanding
the foregoing, the Recipient may transfer this Option (or any portion thereof)
by gift to a "Permitted Transferee" as defined below, subject to the following:
(i) such transfer shall be permitted only if the Recipient
does not receive any consideration for the transfer;
(ii) such transfer shall not be effective unless and until
the Recipient has furnished the Committee with written notice of the
transfer and copies of all documents evidencing the transfer;
(iii) any portion of this Option that is transferred by the
Recipient to a Permitted Transferee may be exercised by the Permitted
Transferee to the same extent as the Recipient would have been entitled
to exercise it, and shall remain subject to all of the terms and
conditions that would have applied to this Option or portion thereof
under the provisions of this Agreement and the Plan if the Recipient
-5-
had not transferred the Option or portion thereof to the Permitted
Transferee;
(iv) any portion of this Option that is transferred by the
Recipient to a Permitted Transferee may not be further transferred by
the Permitted Transferee other than by will or the laws of descent and
distribution.
For purposes of the foregoing, a Permitted Transferee shall mean (i) one or more
members of the Recipient's Immediate Family (as hereinafter defined), (ii) a
trust solely for the benefit of the Recipient and/or one or more members of his
[her] Immediate Family, or (iii) a partnership or limited liability company
whose only partners or members are the Recipient and/or one or more members of
his [her] Immediate Family. For this purpose, members of the Recipient's
"Immediate Family" shall include his [her] parents, spouse, children or
grandchildren (including adopted children and grandchildren and step-children
and step-grandchildren).
11. Other Terms and Conditions. This Option is subject to the following
additional terms and conditions:
(a) Notwithstanding any other provisions herein to the contrary, this
Option (including both the Exercisable Portion and the Non-Exercisable Portion
thereof) may be cancelled by the Committee at any time, and upon such
cancellation the Recipient shall cease to have any further right to exercise
this Option, if the Committee determines that the Recipient has been discharged
from employment with the Corporation or any of its subsidiaries for cause.
(b) The Recipient shall not have any rights as a shareholder with
respect to any Shares that are subject to this Option prior to the date as of
which such Shares are issued to the Recipient pursuant to his exercise of this
Option.
(c) The Recipient's rights under this Option shall be subject to all
applicable provisions of the Plan, as in effect from time to time at and after
the Date of Grant.
12. Taxes. The Corporation or any of its subsidiaries may make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of all federal, state and local taxes required by law to be withheld
with respect to this Option and the exercise thereof including, but not limited
to,
-6-
(a) deducting the amount so required to be withheld from any other amount then
or thereafter payable to the Recipient, and/or (b) requiring the Recipient or
the Recipient's Permitted Transferee or Beneficiary to pay to the Corporation or
any of its subsidiaries the amount so required to be withheld as a condition of
the issuance, delivery, distribution or release of any Shares. Such payment
shall be made in cash unless, and except to the extent that, the Corporation
permits such payment to be made in Shares.
13. Designation of Beneficiary. The Recipient shall file with the
Committee a written designation of one or more persons (the "Beneficiary") who
shall be entitled to exercise this Option after the Recipient's death, to the
extent such exercise is otherwise permitted hereunder. The Recipient may, from
time to time, revoke or change the Recipient's Beneficiary designation without
the consent of any previously designated Beneficiary by filing a new designation
with the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Recipient's death, and in no event shall it be effective as of a date prior to
such receipt. If at the date of the Recipient's death there is no designation of
a Beneficiary in effect for the Recipient pursuant to the provisions of this
Section 13, or if no Beneficiary designated by the Recipient in accordance with
the provisions hereof survives to exercise this Option, the Recipient's estate
shall be treated as the Recipient's Beneficiary for all purposes.
Notwithstanding any other provision herein to the contrary, if any portion of
this Option is transferred to a Permitted Transferee pursuant to Section 10, the
Permitted Transferee shall be treated, at all times after such transfer, as the
Recipient's Beneficiary with respect to the portion so transferred.
14. Governing Laws. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania applicable to contracts made, and to be enforced,
within the Commonwealth of Pennsylvania.
15. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Corporation and its successors and assigns, and the
Recipient, the Recipient's Beneficiary and the Recipient's estate.
-7-
16. Entire Agreement. This Agreement contains the entire understanding
of the parties and shall not be modified or amended except in writing and duly
signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date set forth above.
GPU, INC.
By:
▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, President and
Chief Executive Officer
[Print Name of Recipient]
