Master Directors' Benefits Protection Trust

Exhibit10-B


GPU SYSTEM COMPANIES


MASTER DIRECTORS' BENEFITS PROTECTION TRUST


As Adopted Effective September 1, 1995


TABLE OF CONTENTS


Article Title Page No.


ARTICLE 1 Definitions 1


ARTICLE 2 Establishment of the Trusts 3


ARTICLE 3 Contributions and Accounts 4


ARTICLE 4 Payments to Participants and Beneficiaries 6


ARTICLE 5 Legal Defense Fund 10


ARTICLE 6 Insolvency 13


ARTICLE 7 Payments to Company 14


ARTICLE 8 Investment Authority and Disposition of Income 15


ARTICLE 9 General Powers and Duties of Trustee 16


ARTICLE 10 Taxes, Expenses, and Compensation of Trustee 19


ARTICLE 11 Accounting by Trustee 20


ARTICLE 12 Communications 21


ARTICLE 13 Resignation or Removal of Trustee 22


ARTICLE 14 Amendments and Termination 23


ARTICLE 15 Miscellaneous 23


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THIS TRUST AGREEMENT, made as of the 1st day of September, 1995 by and between GENERAL PUBLIC UTILITIES CORPORATION, a Pennsylvania corporation (the "Corporation"), JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation, and GPU NUCLEAR CORPORATION, a New Jersey corporation, (each such corporation is hereinafter referred to individually as a "Company", and all such corporations are hereinafter referred to collectively as the "Com- panies"), and UNITED JERSEY BANK, a New Jersey state chartered bank (hereinafter referred to as the "Trustee").


W I T N E S S E T H :


WHEREAS, each Company has adopted one or more Plans (as hereinafter defined) under which it has incurred or expects to incur liability under the terms of such Plans with respect to Benefits (as hereinafter defined) payable to individuals participating in such Plans; and


WHEREAS, each Company wishes to establish a trust (hereinafter called the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency (as hereinafter defined) until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plans; and


WHEREAS, it is the intention of the parties that each Trust shall constitute an unfunded arrangement and shall not affect the status of each of the Plans as unfunded for federal income tax purposes; and


WHEREAS, it is the intention of each Company to make contributions to its Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under its Plans; and


WHEREAS, the Trustee is not a party to any of the Plans and makes no representations with respect thereto;


NOW, THEREFORE, each Company and the Trustee agree as follows:


ARTICLE 1


Definitions


1.1 As used herein, the following terms shall have the following meanings, unless the context clearly indicates a contrary meaning:


(a) "Agreement" shall mean this instrument, as the same may
be amended from time to time as permitted herein.


(b) "Applicable Company" shall mean, with respect to any
Trust established hereunder, or any Plan, the Company that
established such Trust, or that has adopted or maintains such
Plan.


(c) "Beneficiary", with respect to a Participant, shall
mean the person or entity designated by such Participant under a
Plan, or such other person or entity with respect to such
Participant as may be designated under the terms of such Plan, to
receive the Benefits, if any, payable from such Plan following
such Participant's death.
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(d) "Benefits" shall mean those amounts specified in
Exhibit B that are payable under a Plan to (or with respect to) a
Participant, or, upon his death, to his Beneficiary.


(e) "Benefit Valuation Date" shall mean the first day of each
calendar year.


(f) "Change in Control"--For purposes of this Agreement, a
"Change in Control" shall be deemed to occur at the time when
either (i) any entity, person (within the meaning of Section 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (other than any Company, or any
subsidiary of any Company, or any savings, pension or other plan
for the benefit of employees of any Company or its subsidiaries)
which theretofore was beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of less than 20% of the Corporation's then
outstanding Common Stock either (x) acquires shares of Common
Stock of the Corporation in a transaction or series of
transactions that results in such entity, person or group directly
or indirectly owning beneficially 20% or more of the outstanding
Common Stock of the Corporation, or (y) acquires by proxy or
otherwise the right to vote for the election of directors, for any
merger, combination or consolidation of the Corporation or any of
its direct or indirect subsidiaries, or for any other matter or
question more than 20% of the then outstanding voting securities
of the Corporation (except where such acquisition is made by a
person or persons appointed by at least a majority of the Board of
Directors of the Corporation to act as proxy for any purpose); or
(ii) the election or appointment, within a twelve-month period, of
persons to the Corporation's Board of Directors who were not
directors of the Corporation at the beginning of such twelve-month
period, and whose election or appointment was not approved by a
majority of those persons who were directors at the beginning of
such period, where such newly elected or appointed directors
constitute 30% or more of the directors of the Board of Directors
of the Corporation.


Promptly upon learning of the occurrence of a Change in
Control, as defined above, the person who, immediately prior to
the Change in Control, served as either the Chief Executive
Officer or the Senior Vice President and General Counsel of the
Corporation shall furnish the Trustee with written notice that a
Change in Control has occurred. Notwithstanding any provision
herein to the contrary, a Change in Control shall not be treated
as having occurred for purposes of this Agreement, unless and
until the Trustee has received such written notice.


(g) "Code" shall mean the Internal Revenue Code of 1986 as
the same may be amended from time to time.


(h) "Insolvent"--A Company shall be considered "Insolvent"
for purposes of this Agreement if (i) the Company is unable to pay
its debts as they become due, or (ii) the Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy
Code.


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(i) "Participant" shall mean any person who is or may
become entitled to receive Benefits under a Plan and who is
included in the list of persons who are to be treated as
Participants for purposes of this Agreement, as set forth in
Exhibit A hereto.


(j) "Permitted Investments" shall mean direct obligations
of the United States of America or agencies or instrumentalities
thereof or obligations unconditionally and fully guaranteed as to
principal and interest by the United States of America ("Obliga-
tions"), and certificates of deposit and bankers' acceptances of a
bank organized and existing under the laws of the United States of
America or any State thereof that has a combined capital and
surplus of at least $100,000,000, all having respective maturities
of not more than one year when purchased. The term "Permitted
Investments" shall also mean any fund or portfolio maintained by
any open-end investment company registered under the Investment
Company Act of 1940, the assets of which are invested exclusively
in Obligations, certificates of deposit and/or bankers'
acceptances of the kind described in the preceding sentence
including, without limitation, any such fund or portfolio for
which the Trustee or any affiliate of the Trustee serves as
investment adviser.


(k) "Present Value" shall mean, with respect to any Benefit, the
single sum actuarial present value of such Benefit, as determined by an
enrolled actuary on the basis of the actuarial assumptions most recently
adopted by the Applicable Company for use in connection with this Agree-
ment. Notwithstanding the foregoing, any determination of the Present
Value of Benefits to be made hereunder at any time after a Change in
Control shall be made on the basis of the actuarial assumptions that
were used in determining the Present Value of such Benefits as of the
most recent Benefit Valuation Date preceding the Change in Control,
unless the Applicable Company has notified the Trustee in writing prior
to the Change in Control of its adoption of different actuarial
assumptions for use hereunder after the Change in Control.


(l) "Plan" or "Plans" shall mean, with respect to any
Company, any (or if the context requires, all) of the plans,
programs or policies maintained by such Company, and agreements
entered into by such Company, that are included in the list set
forth in Exhibit B hereto.


(m) "Valuation Date" shall mean the last business day of
each calendar quarter.


ARTICLE 2


Establishment of the Trusts


2.1 Each Company hereby establishes with the Trustee, and the Trustee hereby accepts, a Trust consisting of such sums of money and other property acceptable to the Trustee as such Company shall pay or deliver to the Trustee from time to time. All such money and other property, all investments and reinvestments made therewith or proceeds thereof and all earnings and


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profits thereon, less all payments therefrom and charges thereto as authorized herein, are hereinafter referred to as the "Trust Fund" for such Trust. Each Trust Fund shall be held, administered and disposed of by the Trustee as provided in this Agreement.


2.2 Prior to a Change in Control, each Trust established hereunder may be revoked, in whole or in part, by the Applicable Company giving to the Trustee written notice of such revocation. If a Trust is so revoked in its entirety, all of the assets of the Trust (after payment of any unpaid fees and expenses of the Trustee properly chargeable to such Trust) shall be transferred by the Trustee to the Applicable Company or to such other person or entity as the Applicable Company may direct in writing. If a Trust is so revoked in part, the Trustee shall transfer to the Applicable Company such of the assets of the Trust as the Applicable Company shall have specified in its written notice to the Trustee of the partial revocation of such Trust. Upon a Change in Control, each Trust shall become irrevocable.


2.3 Each Trust established hereunder is intended to constitute a "grantor trust", of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Code, and shall be construed accordingly.


2.4 The principal of each Trust, and any earnings thereon, shall be held separate and apart from other funds of the Applicable Company, and shall be used exclusively for the uses and purposes of Participants under such Company's Plans and general creditors of such Company, as herein set forth. Participants and their Beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of any Trust. Any rights created under the Plans and this Agreement shall be mere unsecured contractual rights of Participants and their Beneficiaries against the Applicable Company. Any assets held by each Trust will be subject to the claims of the Applicable Company's general creditors under federal and state law in the event of the Applicable Company's Insolvency, as defined in Section 1.1(h) herein.


2.5 Each Trust established hereunder shall be maintained by the Trustee as a separate trust. However, the assets of any Trust may be commingled with the assets of any other Trust, solely for investment purposes.


ARTICLE 3


Contributions and Accounts


3.1 Prior to a Change in Control, each Company may make contributions to its Trust in such amounts, and at such times, as such Company may determine in its sole discretion. Such contributions may be in the form of cash, or such other property as may be determined by the Company and as may be acceptable to the Trustee.


3.2 Upon the occurrence of a Change in Control, each Company shall be required to make contributions to its Trust as follows:


(a) Upon a Change in Control, the Company shall, as soon as possible but in no event later than 30 days following the Change in Control, make an irrevocable contribution to its Trust in an amount that, when added to the value of the Trust Fund for such Trust (exclusive of the value of the


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Legal Defense Fund, if any, maintained within such Trust Fund) determined as of the most recent Valuation Date preceding such contribution, will equal the sum of (i) the aggregate Present Value of all Benefits accrued for all Participants under all of such Company's Plans determined as of the most recent Benefit Valuation Date preceding the date on which the Change in Control occurred; and (ii) the aggregate Present Value of all other Benefits for all Participants under all of such Company's Plans that accrue as a result of the occurrence of the Change in Control, determined as of the first day of the month coincident with or immediately following the date on which the Change in Control occurred.


(b) Within 60 days after each Benefit Valuation Date following the occurrence of a Change in Control, each Company shall make an irrevocable contribution to its Trust in an amount that, when added to the value of the Trust Fund for such Trust (exclusive of the value of the Legal Defense Fund, if any, maintained within such Trust Fund) determined as of the most recent Valuation Date preceding such contribution, will equal the aggregate Present Value of all Benefits accrued for all Participants under all of such Company's Plans determined as of such Benefit Valuation Date.


3.3 Within the Trust Fund for each Trust, the Trustee shall establish and maintain a separate account (hereinafter referred to as a "Plan Account") for each of the Applicable Company's Plans. The Trustee also shall establish within each Plan Account a separate sub-account (hereinafter referred to as a "Participant Account") for each Participant of such Plan. The Trustee shall hold all Plan Accounts and Participant Accounts maintained within the Trust Fund for any Trust as a single consolidated fund.


3.4 At the time each contribution is made to a Trust prior to a Change in Control, the amount, or property, contributed to such Trust shall be allocated by the Trustee to the Plan Accounts, and to the Participant Accounts, maintained within such Trust in such manner as the Applicable Company directs in written instructions delivered by the Applicable Company to the Trustee at the time of the contribution.


3.5 As of each Valuation Date, the Trust Fund for each Trust shall be revalued by the Trustee at its then current fair market value, as determined by the Trustee. Prior to a Change in Control, the net investment gains and losses of each Trust Fund for each calendar year shall be allocated by the Trustee, as of the last Valuation Date occurring in such year, among the Plan Accounts and Participant Accounts maintained within such Trust, in such manner as the Applicable Company shall specify in written instructions furnished by it to the Trustee. As of each Valuation Date following the occurrence of a Change in Control, the net investment gains and losses of each Trust Fund shall be allocated by the Trustee proportionately among the Plan Accounts and Participant Accounts maintained within such Trust, based on the value of such Accounts as of the immediately preceding Valuation Date. In making the foregoing allocation, the value of Plan Accounts and Participant Accounts in existence on the immediately preceding Valuation Date but not in existence on the current Valuation Date shall be disregarded.


3.6 Notwithstanding the provisions of Sections 3.4 and 3.5, as of each Benefit Valuation Date occurring prior to a Change in Control, the Trustee shall, in accordance with such written instructions as it has received from the Applicable Companies, record adjustments to the balance of each


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Participant Account maintained within a Plan Account to the extent necessary for such balance to equal the amount determined by multiplying (a) the balance of such Plan Account determined as of the most recent Valuation Date preceding such Benefit Valuation Date, by (b) a fraction the numerator of which is the Present Value of the Benefits accrued for the applicable Participant under the Plan in question, determined as of such Benefit Valuation Date, and the denominator of which is the aggregate Present Value of all of the Benefits accrued for all Participants under such Plan, determined as of such Benefit Valuation Date.


3.7 Any contribution made by a Company to its Trust pursuant to Section 3.2(a) or (b) shall be allocated to the Plan Accounts maintained under such Trust in proportion to the respective amounts by which the aggregate Present Value of all Benefits accrued for all Participants under each of the Plans in question, determined as of the dates specified in Section 3.2(a) or (b), exceeds the balance of the Plan Account maintained hereunder with respect to each such Plan, determined as of the Valuation Date immediately preceding such contribution. The amount so allocated to any Plan Account shall be further allocated to the Participant Accounts maintained within such Plan Account in proportion to the respective amounts by which the Present Value of the Benefits accrued for each Participant under the Plan in question, deter- mined as of the dates specified in Section 3.2(a) or (b), exceeds the balance of the Participant Account maintained for such Participant, determined as of the Valuation Date immediately preceding such contribution.


3.8 The determinations of the Present Value of Benefits required to be made hereunder as of any Benefit Valuation Date occurring prior to a Change in Control shall be made by an enrolled actuary selected by the Applicable Companies. As soon as practicable after each such Benefit Valuation Date, each Company shall furnish the Trustee with a schedule setting forth the Present Value so determined of the Benefits accrued for each Participant under each of the Company's Plans. The determinations of the Present Value of Benefits required to be made hereunder as of any Benefit Valuation Date, or other date, occurring after a Change in Control shall be made by an enrolled actuary selected by the Trustee. In making any allocation of contributions the Trustee is required to make under Section 3.7, the Trustee shall be entitled to rely, and shall be fully protected in relying, on any written determination of the Present Value of any Benefit furnished to it in accordance with the provisions of this Section 3.8. In making any allocation of net investment gains and losses pursuant to the second sentence of Section 3.5, and in recording any adjustments to the balance of any Participant Account pursuant to Section 3.6, the Trustee shall be entitled to rely, and shall be fully protected in relying, on any written instructions furnished to it by the Applicable Companies.


ARTICLE 4


Payments to Participants and Beneficiaries


4.1 Prior to a Change in Control, the Trustee shall make payments from the Trust Fund for any Trust to such Participants and Beneficiaries, in such manner, at such times, and in such amounts, as the Applicable Company shall direct in written instructions delivered to the Trustee.


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4.2. After a Change in Control, the Trustee shall make payments from the Trust Fund of any Trust to Participants and Beneficiaries in accordance with the following provisions:


(a) Prior to a Change in Control, each Company shall deliver to the Trustee a schedule ("Payment Schedule") substantially in the form annexed hereto as Exhibit C for each Participant of each Plan whose Benefits under such Plan may be paid from such Company's Trust after a Change in Control. The Payment Schedule shall


(i) describe the events that must occur in order for the
Participant's Benefits to become payable under the terms of the Plan;


(ii) specify the amount of the Participant's Benefits accrued
under the Plan, as of the date on which the Payment Schedule is
furnished to the Trustee, and provide a formula or such other
instructions as will enable the Trustee to determine the amount of the
Participant's Benefits as of the time they become payable under the
terms of the Plan;


(iii) specify the form in which the Participant's Benefits are to
be paid, as provided for or available under the Plan;


(iv) specify the time of commencement for payment of the
Participant's Benefits under the Plan; and


(v) specify the address and social security number of the
Participant as well as the name, address, social security number and
relation to the Participant of the Participant's Beneficiary.


Prior to a Change in Control, the Applicable Company may from time to time substitute a new Payment Schedule for, or amend, an existing Payment Schedule by delivering a new or amended Payment Schedule to the Trustee. Upon receipt of such new or amended Payment Schedule, the previous Payment Schedule shall be deemed revoked. Prior to a Change in Control, any Payment Schedule previously filed with the Trustee may be revoked by the Applicable Company by filing written notice of such revocation with the Trustee without delivering a new or amended Payment Schedule to the Trustee. No Payment Schedule may be revoked after a Change in Control. Notwithstanding any other provision herein to the contrary, after a Change in Control, no payment shall be made from any Trust with respect to a Participant's Benefits under any Plan unless a Payment Schedule for such Participant's Benefits under such Plan (which has not been revoked) is on file with the Trustee at the time a Change in Control occurs. Except as otherwise provided herein, the Trustee shall make payments to Participants and their Beneficiaries in accordance with such Payment Schedule.


(b) Any Participant or Beneficiary seeking to obtain payments from the Trust Fund for any Trust after a Change in Control shall first file with the Trustee a written request for payment in substantially the form annexed hereto as Exhibit D ("Payment Request Form"). In the Payment Request Form so filed, the Participant or Beneficiary shall


(i) identify the Plan or Plans under which the Participant or
Beneficiary has become entitled to payment of Benefits;


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(ii) describe the events that entitle the Participant or
Beneficiary to receive payment of Benefits under the terms of the Plan
or Plans, and affirm under oath that such events have occurred;


(iii) affirm under oath that no amount of the Benefits with
respect to which payment from the Trust Fund is sought was previously
paid by the Applicable Company; and


(iv) provide such information (including, without limitation,
information as to the Participant's period of service, compensation and
conditions of employment after a Change in Control) as will enable the
Trustee to determine the amount of the Benefits that the Participant or
Beneficiary is entitled to receive in accordance with the Payment
Schedules furnished to the Trustee with respect to the Participant's
Benefits under the Plan or Plans.


In the case of any Beneficiary seeking payments from a Trust Fund, the Beneficiary shall furnish to the Trustee, along with the Payment Request Form, a certified copy of the death certificate of the Participant, an inheritance tax waiver and such other documents as the Trustee may reasonably require, including, without limitation, certified copies of letters testamentary. For all purposes under this Agreement, the Trustee may rely, and shall be fully protected in relying, on the information contained in any Payment Request Form (and in any documents accompanying such form) filed with it by any Participant or Beneficiary.


(c) As soon as practicable after a Payment Request Form has been filed with it by a Participant or Beneficiary, the Trustee, solely out of the applicable Trust Fund and with no obligation otherwise to make any payments, shall make payments to such Participant or Beneficiary in such manner, and at such times, and in such amounts, as the Trustee shall determine to be payable to such Participant or Beneficiary under the relevant Plan or Plans based on the most recent Payment Schedules applicable to the Participant or Beneficiary that were furnished to the Trustee by the Applicable Company prior to a Change in Control, and on the information contained in the Payment Request Form (and in any documents accompanying such Form) filed by the Participant or Beneficiary. The Trustee is authorized to retain an enrolled actuary to assist it in determining the amount of any Benefits payable to any Participant or Beneficiary pursuant to any Payment Request Form or Payment Schedules filed by or for such Participant or Beneficiary. For all purposes under this Agreement, the Trustee ...