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EXHIBIT 10.3

FIRSTENERGY CORP.

DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS

Effective December 31, 1997

Amended and Restated January 1, 2005

{00100414.DOC;8}DOC\286RL
 
 

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TABLE OF CONTENTS

       
Page
     
ARTICLE 1 – GENERAL
 
1
 
1.1
Preamble
 
1
 
1.2
Purpose
 
1
 
1.3
Payment Method
 
1
 
1.4
Status under Laws
 
1
 
1.5
Definitions
 
2
         
ARTICLE 2 – DEFERRALS
 
7
 
2.1
Written Election to Defer Fees
 
7
 
2.2
Election Upon Becoming a Director
 
7
 
2.3
Election Irrevocable
 
7
 
2.4
Transfers from Other Plans
 
7
         
ARTICLE 3 – ACCOUNTS AND INVESTMENT FUNDS
8
 
3.1
Deferred Fee Account
 
8
 
3.2
Transfer Account
 
8
 
3.3
Other Accounts and Subaccounts
 
9
 
3.4
Investment Funds
 
9
 
3.5
Credits to Investment Funds
 
9
 
3.6
Reporting
 
10
         
ARTICLE 4 – PAYMENT TO DIRECTOR
 
15
 
4.1
Distribution Election – Separation from Service
11
 
4.2
Accelerated Distribution
 
12
 
4.3
Withdrawal
 
12
 
4.4
Financial Hardship Distributions
 
13
 
4.5
Special Circumstance
 
14
 
4.6
Small Accounts
 
14
         
ARTICLE 5 – BENEFICIARY
 
15
 
5.1
Beneficiary Designation
 
15
 
5.2
Distribution Election
 
15
 
5.3
Change of Beneficiary
 
15
 
5.4
Payment of Benefit upon Death
 
15
         
ARTICLE 6 – ASSIGNMENT
 
16
         
ARTICLE 7 – ADMINISTRATION
16
 
7.1
Administrator
 
16
 
7.2
Powers of Administrator
 
17
 
7.3
Delegation
 
17

 
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Page
     
ARTICLE 8 – CLAIMS
 
17
 
8.1
Claim
 
17
 
8.2
Initial Claim Review
 
17
 
8.3
Review of Claim
 
18
 
8.4
Review of Claims on and after a Change in Control
20
         
ARTICLE 9 – AMENDMENT, TERMINATION AND PARTICIPATION
20
 
9.1
Amendment by Board
 
20
 
9.2
Termination by the Company
 
21
 
9.3
Automatic Cessation of Bonus Credit and Dividends
21
 
9.4
Distribution of Benefits on Plan Termination
21
 
9.5
Participation by Affiliates
 
22
         
ARTICLE 10 – UNFUNDED PLAN
23
 
10.1
Bookkeeping Entries
 
23
 
10.2
Trusts, Insurance Contracts or Other Investment
23
         
ARTICLE 11 – MISCELLANEOUS
 
23
 
11.1
Severability
23
 
11.2
Liability for Benefits
 
23
 
11.3
Applicable Law
 
24
 
11.4
Not a Contract
 
24
 
11.5
Successors
 
24
 
11.6
Distribution under Terms of the Trust or in the Event of Taxation
24
 
11.7
Insurance
 
25
 
11.8
Legal Representation
 
25
 
11.9
Code Section 409A
 
26
                   
ATTACHMENT 2.4-A
 
27
         
ATTACHMENT 2.4-B
 
28
         
ATTACHMENT 2.4-C
 
29

 
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FIRSTENERGY CORP.

DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS

 

 
ARTICLE 1  — GENERAL
 

1.1   Preamble
 
The FirstEnergy Corp. Deferred Compensation Plan for Outside Directors (the
“Plan”) was initially established on December 31, 1997 as the FirstEnergy Corp.
Deferred Compensation Plan for Directors. The Ohio Edison Company Deferred
Compensation Plan for Directors was merged into the Plan effective as of
December 31, 1997 and the Centerior Energy Corporation Deferred Compensation
Plan for Directors was merged into the Plan effective as of January 1, 2000. The
Plan was restated as of  November 7, 2001. This restatement of the Plan is
effective as of January 1, 2005 in order to comply with Code Section 409A and
supersedes all prior versions of this Plan and all prior arrangements and
understandings regarding the deferral of fees by Directors.

1.2  Purpose
 
The purpose of this Plan is to provide a benefit to Directors by giving them the
opportunity to defer certain fees in accordance with the provisions of the Plan.
The Plan is also intended to advance the interests of the Company and its
Affiliates by providing a benefit which attracts and retains the services of
qualified persons who are not employees of the Company or its Affiliates to
serve as Directors.

1.3  Payment Method
 
Payment of an equity retainer is in the form of Company common stock, which can
be deferred into a Deferred Stock Fund. Cash retainers, meeting fees,
chairperson fees, and any additional annual cash retainer paid to a non-employee
Chairman of the Board, will be paid in cash, but can be paid in stock or
deferred into a Deferred Fee Account based on an annual election made by the
Director.

1.4   Status under Laws
 
The Plan does not provide benefits to employees of the Company or any Affiliate
and, accordingly, is not subject to the provisions of the Employee Retirement
Income Security Act of 1974. The Plan shall be unfunded for purposes of the Code
and is not intended to qualify under Code Section 401(a).
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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1.5   Definitions
 
As used in the Plan, the following terms shall have the following meanings:

(a) “Accounts” means bookkeeping accounts maintained on behalf of each
Participant and includes a Participant’s Deferred Fee Account, Transfer Account
and such other accounts as may be established in accordance with the directions
of the Committee.
 
(b) “Administrator” means the Committee or such other person or persons
appointed in accordance with Section 7.1.
 
(c) “Affiliate” means a member of the affiliated group of corporations as
defined in Code Section 414(b) and (c) except that in applying Code Section 1563
“50 percent” shall be substituted for “80 percent” that includes the Company. An
Affiliate may elect to participate in this Plan in accordance with Section 9.5
and such election may be approved by the Company.
 
(d) “Appeals Committee” means the committee appointed to review claims denied by
the Administrator and to have such other discretionary powers and duties as
provided by Section 8.3.
 
(e) “Beneficiary” means one or more persons, trust, estates or other entities,
designated in accordance with Article 5, that are entitled to receive benefits
under this Plan upon the death of a Participant. A Beneficiary is a general
unsecured creditor of the Company or of the Affiliate which maintains the
Accounts and provides any benefits under this Plan.
 
(f) “Board” means the board of directors of the Company.
 
(g) “Bonus Credit” means an amount credited to a Participant’s Account as
provided in Section 3.5(b)(1).
 
(h) “Change in Control” means any of the following:
 
  (1) The acquisition by any Person (as such term is used in Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”), as
amended) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent (50%) or more (twenty five percent
(25%) if such Person proposes any individual for election to the Board or any
member of the Board is a representative of such Person) of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
Directors (the “Outstanding Company Voting Securities”); provided, however, that
the following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege); (ii) any acquisition by the Company; (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or (iv)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation (collectively “Reorganization”) if, following such Reorganization
the conditions described in clauses (i), (ii), and (iii) of paragraph (3) of
this Subsection (h) are satisfied; or
 

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  (2) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (within the meaning of
solicitations subject to as such terms are used in Rule 14a 12(c) of Regulation
14A promulgated under the Exchange Act or any such successor rule) or other
actual or threatened solicitation of proxies or consent by or on behalf of a
Person other than the Board; or
 
  (3) Consummation of a Reorganization, merger, or consolidation or sale or
other disposition of all or substantially all of the assets of the Company, in
each case, unless, following such Reorganization (i) more than seventy-five
percent (75%) of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Reorganization, merger or consolidation or
acquiring such assets and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Reorganization, merger,
consolidation or sale or other disposition of assets in substantially the same
proportions as their ownership, immediately prior to such Reorganization of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (ii) no Person (excluding the Company, any holding company
formed by the Company to become the parent of the Company, any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Reorganization and any Person beneficially owning, immediately prior to such
Reorganization directly or indirectly, twenty-five percent (25%) or more of,
respectively, the Outstanding Company Common Stock, or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Reorganization or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the board of directors
of the corporation resulting from such Reorganization were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such Reorganization; or
 
  (4) Approval by the shareholders of the Company of (i) a complete liquidation
or dissolution of the Company. A Change in Control may occur only with respect
to the Company. A change in ownership of common stock of an Affiliate or
subsidiary, change in membership of a board of directors of an Affiliate or
subsidiary, the sale of assets of an Affiliate or subsidiary, or any other event
described in this Subsection (h) that occurs only with respect to an Affiliate
or subsidiary does not constitute a Change in Control.
 
(i) “Code” means the Internal Revenue Code of 1986, as amended and any
regulations or other guidance promulgated thereunder.
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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(j) “Committee” means the Compensation Committee of the Board.
 
(k) “Company” means FirstEnergy Corp., an Ohio corporation.
 
(l) “Corporate Secretary” means the Corporate Secretary of FirstEnergy Corp.
 
(m) “Default” means a failure by the Company or Affiliate to contribute to the
Trust, within thirty (30) days of receipt of written notice from its trustee,
any of the following amounts:
 
  (1) The full amount of any insufficiency in assets of the Trust or any
subtrust of the Trust that is required to pay any Plan benefit payable by the
trustee pursuant to directions by the Administrator or disputed by the
Administrator after a Special Circumstance and determined by the trustee to be
payable; or
 
  (2) Any contribution which is then required to be made by the Company or
Affiliate to the Trust or any subtrust of the Trust.
 
If, after the occurrence of a Default, the Company or Affiliate at any time
cures such Default by contributing to the Trust all amounts which are then
required under paragraphs (1) and (2) above, it shall then cease to be deemed
that a Default has occurred or that a Special Circumstance has occurred by
reason of such Default.

(n) “Deferred Fee Account” means a bookkeeping account established by the
Company or an Affiliate which maintains record of deferred Director’s Fees
including expenses and earnings, gains and losses. All amounts credited to a
Director’s Deferred Fee Account shall constitute a general, unsecured liability
of the Company or of the Affiliate for which the Director serves when Director’s
Fees are deferred.
 
(o) “Deferred Stock Fund” means an Investment Fund which is deemed to be
invested in FirstEnergy Corp. common stock.
 
(p) “Director” means a member of the Board, a member of the board of directors
of any Affiliate and any individual designated as a Director by the Committee
incident to a merger of or acquisition by the Company of an Affiliate. A
Director may not be an employee of the Company or any Affiliate.
 
(q) “Director’s Fees” means the equity retainer fees, cash retainer fees,
meeting fees, chairperson fees, and any additional annual cash retainer for a
non-employee Chairman of the Board, payable for services as a Director whether
payable in cash or in equity instruments.
 
(r) “Disability” means a period of disability during which the Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months. A Participant shall not be considered to be
Disabled unless he or she furnishes proof of the existence of Disability in the
form and manner as required by the Administrator.
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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(s) “Financial Hardship” means a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant,
the Participant’s spouse, or of a Participant’s dependent (as defined in Code
Section 152 without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)), loss of
the Participant’s property due to casualty, or other extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. Financial Hardship shall be determined by the Administrator on
the basis of information supplied by the Participant to the Administrator.
 
(t) “Investment Fund” means an investment fund in which Accounts may be deemed
to be invested. An Investment Fund may be any open-ended fund, closed-end fund,
a fund which is deemed to be invested in a particular stock or other investment,
or a fund which credits a fixed or variable interest rate determined by the
Committee.
 
(u) “Participant” means a Director or former Director who is owed a benefit
under this Plan. A Participant is a general unsecured creditor of the Company or
of the Affiliate which maintains the Accounts and provides any benefits under
this Plan.
 
(v) “Plan” means the FirstEnergy Corp. Deferred Compensation Plan for Outside
Directors.
 
(w) “Plan Year” means the period beginning on each January 1 and ending on the
following December 31.
 
(x) “Potential Change in Control” means any of the following:
 
  (1) Any Person (as defined in Section 13(d)(3) of the Exchange Act) other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company, delivers to the Company a statement containing the information
required by Schedule 13 D under the Exchange Act, or any amendment to any such
statement (or the Company becomes aware that any such statement or amendment has
been filed with the Securities and Exchange Commission pursuant to applicable
Rules under the Exchange Act), that shows that such Person has acquired,
directly or indirectly, the beneficial ownership of (i) more than twenty percent
(20%) of any class of equity security of the Company entitled to vote as single
class in the election or removal from office of directors, or (ii) more than
twenty percent (20%) of the voting power of any group of classes of equity
securities of the Company entitled to vote as a single class in the election or
removal from office of directors;
 
  (2) The Company becomes aware that preliminary or definitive copies of a proxy
statement and information statement or other information have been filed with
the Securities and Exchange Commission pursuant to Rule 14a-6, Rule 14c-5, or
Rule 14f-1 under the Exchange Act relating to a Potential Change in Control of
the Company;
 
  (3) Any Person delivers to the Company pursuant to Rule 14d-3 under the
Exchange Act a Tender Offer Statement relating to Voting Securities of the
Company (or the Company becomes aware that any such statement has been filed
with the Securities and Exchange Commission pursuant to applicable Rules under
the Exchange Act);
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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  (4) Any Person (other than the Company) publicly announces an intention to
take actions which if consummated would constitute a Change in Control;
 
  (5) The Company enters into an agreement or arrangement, the consummation of
which would result in the occurrence of a Change in Control;
 
  (6) The Board approves a proposal, which if consummated would constitute a
Change in Control; or
 
  (7) The Board adopts a resolution to the effect that, for purposes of this
Plan, a Potential Change in Control has occurred.
 
Notwithstanding the foregoing, a Potential Change in Control shall not be deemed
to occur as a result of any event described in paragraphs (1) through (6) above,
if a number of directors (who were serving on the Board immediately prior to
such event and who continue to serve on the Board) equal to a majority of the
members of the Board as constituted prior to such event determines that the
event shall not constitute a Potential Change in Control.

If a Potential Change in Control ceases to exist for any reason except for the
occurrence of a Change in Control, it shall then cease to be deemed that a
Potential Change in Control has occurred as a result of any event described in
paragraphs (1) through (7) above, or that a Special Circumstance has occurred by
reason of such Potential Change in Control.

A Potential Change in Control may occur only with respect to the Company. A
change in ownership of common stock of an Affiliate or subsidiary, change in
membership of a board of directors of an Affiliate or subsidiary, the sale of
assets of an Affiliate or subsidiary, or any other event described in this
Subsection (x) that occurs only with respect to an Affiliate or subsidiary does
not constitute a Change in Control.

(y) “Retirement” means (i) with respect to amounts that were vested and accrued
as of December 31, 2004 including earnings, gains and losses credited thereon
after that date, a Separation from Service on or after the attainment of age
sixty-nine (69), and (ii) with respect to amounts that accrue and vest after
December 31, 2004 including earnings, gains and losses credited thereon after
that date, a Separation from Service on or after the attainment of age
fifty-five (55).
 
(z) “Separation” means (i) with respect to amounts that were accrued and vested
as of December 31, 2004 including earnings, gains and losses credited thereon
after that date, a Separation from Service prior to age sixty-nine (69); and
(ii) with respect to amounts that accrue and vest after December 31, 2004
including earnings, gains and losses credited thereon after that date, a
Separation from Service prior to age fifty-five (55).
 
(aa) “Separation from Service” means the expiration of all contracts under which
the Director performs services for the Company and any Affiliate where
expiration constitutes a good faith and complete termination of the contractual
relationship.
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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(bb) “Special Circumstance” means a Change in Control, a Potential Change in
Control, or a Default.
 
(cc) “Transfer Account” means a bookkeeping account established by the Company
or an Affiliate which maintains record of deferred Directors’ Fees transferred
from another plan including expenses and earnings. All amounts credited to a
Directors’ Transfer Account shall constitute a general, unsecured liability of
the Company or of the Affiliate for which the Director serves.
 
(dd) “Trust” means the FirstEnergy Corp. Trust for Outside Directors.
 
(ee) “Year of Service” means a period of time commencing on a date during a
calendar year and ending on the day immediately preceding such date in the
subsequent calendar year throughout which an individual serves as a Director. A
Year of Service shall commence for specified purposes such as vesting of the
Bonus Credit under Section 3.5(b)(2) on the date as set forth in the Plan.
 

ARTICLE 2  — DEFERRALS
 

2.1   Written Election to Defer Fees
 
A Director may elect, by notice to the Company, either in writing or through
electronic means approved by the Committee, given on or before December 31, to
defer receipt of all or any specified part of his or her Director’s Fees earned
for services performed during the calendar year next following his or her
election to defer.

2.2   Election Upon Becoming a Director
 
Any person who becomes a Director and who was not a Director on the preceding
December 31 may elect, by notice to the Company, either in writing or through
electronic means approved by the Committee, given within thirty (30) days after
becoming a Director, to defer receipt of all or any specified part of his or her
Director’s Fees earned for services performed subsequent to such election and
for the balance of that calendar year.

2.3   Election Irrevocable
 
An election to defer Director’s Fees shall be irrevocable as of December 31
preceding the Plan Year for which an election is made or, in the event of an
election made upon becoming a Director pursuant to Section 2.2, as of the
thirtieth (30th) day after become a Director.

2.4  Transfers from Other Plans
 
If permitted by the Committee and the provisions of this Plan, a Director may
transfer his or her benefits from another nonqualified plan to this Plan as
provided in this Section.

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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(a) An individual who was a member of a board of directors of a corporation
which is merged into the Company, who was not an employee of such corporation,
who is not an employee of the Company or any Affiliate, and who is either
selected to serve as a member of the Board or designated as a Director with
respect to the Company for purposes of this Plan by the Committee may elect to
transfer his or her benefit under a nonqualified plan sponsored by the
corporation merged into the Company. Any account balance transferred shall be
credited to a Transfer Account established and maintained under this Plan and
shall be a liability of the Company. Any other benefit transferred shall be
identified in Attachment 2.4.
 
(b) An individual who was a member of a board of directors of a corporation
which is merged into an Affiliate or which is acquired and becomes an Affiliate,
who was not an employee of such corporation, who is not an employee of the
Company or any Affiliate and who is either a member of the board of directors of
an Affiliate after such merger or acquisition or designated as a Director with
respect to an Affiliate for purposes of this Plan by the Committee may elect to
transfer his or her benefit under a nonqualified plan sponsored by the
corporation merged into an Affiliate or acquired by the Company. Any account
balance transferred shall be credited to a Transfer Account established and
maintained under this Plan and shall be a liability of the Affiliate into which
the corporation is merged or which the corporation becomes. Any other benefit
transferred shall be identified in Attachment 2.4.
 
(c) Any balance transferred shall become payable under the terms and conditions
of this Plan; provided however, that the Director’s beneficiary elections made
under the plan from which the benefit is transferred shall continue to be
effective under this Plan unless such designation is amended or changed under
the terms of this Plan.
 
(d) Provisions regarding such transfers and terms of participation in this Plan
by the Director for whom a benefit is transferred shall be established by the
Committee and shall be set forth in Attachment 2.4 of this Plan.
 

ARTICLE 3 — ACCOUNTS AND INVESTMENT FUNDS
 

3.1   Deferred Fee Account
 
Any Director’s Fees earned and deferred while serving as a member of the Board
shall be credited by the Company to the Participant’s Deferred Fee Account
established and maintained by the Company as of the date the Director’s Fees
would otherwise be payable. Any Director’s Fees earned while serving as a member
of the board of directors of an Affiliate shall be credited by the Affiliate to
the Participant’s Deferred Fee Account established and maintained by such
Affiliate as of the date the Director’s Fees would otherwise be payable.

3.2  Transfer Account
 
Any account balances transferred to this Plan pursuant to Section 2.4 shall be
credited to the Participant’s Transfer Account established and maintained by the
Company or the applicable Affiliate.

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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3.3   Other Accounts and Subaccounts
 
The Committee may establish such other Accounts and subaccounts as it may deem
necessary for the administration of the Plan including subaccounts where the
Participant has specified different methods of payment, or where necessary to
maintain the vested portion of a Participant’s Account. Such Accounts and
subaccounts shall be credited in accordance with procedures adopted by the
Committee.

3.4   Investment Funds
 
A Participant’s Accounts shall be adjusted for gains and losses as if the
Accounts held assets and such assets were invested in one or more Investment
Funds selected by the Committee. The Investment Funds in which a Participant is
deemed to be invested shall be determined in accordance with Section 3.5. The
Committee shall have sole discretion in the selection, number and types of
Investment Funds for this Plan and may change or eliminate Investment Funds from
time to time in its sole discretion except that no change may be made that would
constitute a material modification to the Plan under Code Section 409A.

3.5   Credits to Investment Funds
 
The Committee shall credit Director’s Fees deferred under this Plan and
transferred from another plan to Investment Funds in accordance with this
Section unless other rules for transferred amounts are set forth in Attachment
2.4.

(a) Rules and Limitations Regarding Deferrals and Transfers:
 
  (1) Equity Retainer Fees and Transfers Distributable only in Stock. Equity
retainer fees that are deferred under this Plan and any account balance
transferred directly to this Plan from another plan in accordance with Section
2.4 where such account balance may only be distributed in stock from the other
plan upon an event permitting distribution and such stock has been or is to be
exchanged for Company common stock under a plan of merger with the Company shall
be credited to the Deferred Stock Fund.
 
  (2) All Other Deferred Director’s Fees and Transfers. Unless and until another
procedure is established by the Committee for designation of Investment Funds, a
Participant may direct that all deferred Director’s Fees and transfers except
those Director’s Fees and transfers identified in Section 3.5(a)(1) shall be
deemed to be invested in any one or more of the Investment Funds selected by the
Committee. In the event a Participant does not direct the Investment Funds in
which his or her Accounts are deemed to be invested, the deferrals and transfers
shall be deemed to be invested in an Investment Fund that reflects the
investment performance of a money market fund selected by the Committee.
 

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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(b) Rules and Limitations Regarding Bonus Credit:
 
  (1) Bonus Credit.  At the time Director’s Fees are initially deferred under
this Plan and credited for investment into the Deferred Stock Fund, such
Director’s Fees except equity retainer fees shall be increased by a Bonus Credit
equal to twenty percent (20%) of such Director’s Fees credited to the Deferred
Stock Fund. Any account balance transferred to this Plan from another plan in
accordance with Section 2.4 that may be credited to the Deferred Stock Fund
shall not be increased by the Bonus Credit.
 
  (2) Vesting of Bonus Credit.  A Participant shall be fully vested in his or
her Bonus Credit and all associated earnings, gains and losses if he or she has
three (3) Years of Service from the date the Bonus Credit is credited to the
Participant’s Account. In addition, a Participant shall be fully vested in his
or her Bonus Credit and all associated earnings, gains and losses if he or she
has a Separation from Service due to death, Retirement, or Disability.
Furthermore, a Participant shall be fully vested in the Bonus Credit and all
associated earnings, gains and losses upon a Special Circumstance or where such
Participant has a Separation due to ineligibility to stand for reelection due to
circumstances unrelated to the Participant’s performance as a Director.
 
  (3) Forfeiture of Bonus Credit.  If a Participant incurs a Separation for any
reason other than the events set forth in paragraph (2) above, takes an
accelerated distribution under Section 4.2 or withdraws a portion of his
Deferred Stock Fund under Section 4.3, any unvested Bonus Credit attributable to
Director’s Fees to be distributed shall be forfeited.
 
(c) Rules and Limitations Regarding Transfers Among Investment Funds:
 
  (1) Deferred Stock Fund.  No amount credited to the Deferred Stock Fund may be
transferred and credited to any other Investment Fund, and no amount credited to
an Investment Fund other than the Deferred Stock Fund may be transferred and
credited to the Deferred Stock Fund.
 
  (2) All Other Investment Funds.  Any amount credited to an Investment Fund
other than the Deferred Stock Fund may be transferred and credited to any other
Investment Fund except the Deferred Stock Fund at the direction of the
Participant. Any such direction from a Participant will become effective as of
the date it is received by the Committee.
 
(d) Investment Fund Performance.  The earnings, gains and losses of each
Investment Fund shall be determined by the Committee, in its reasonable
discretion, based on the performance of the Investment Funds themselves. The
balance of a Participant’s Accounts shall be credited or debited on a daily
basis based on the performance of each Investment Fund in which a Participants’
Accounts are deemed to be invested, such performance and the crediting of such
performance being determined by the Committee in its sole discretion.
 

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(e) Committee Procedures.  The Committee may establish such rules and procedures
as it determines to be appropriate for the crediting of deferrals and transfers
to Investment Funds, for transfers among Investment Funds and for crediting
earnings, gains and losses of an Investment Fund.
 
3.6   Reporting
 
The Company shall provide a statement to each Director who has any amount
credited to his or her Accounts at least annually.

 
ARTICLE 4 — PAYMENT TO DIRECTOR
 

4.1   Distribution Election—Separation from Service
 
A Participant’s Accounts shall be distributed upon a Separation from Service in
accordance with the Plan and Participants’ elections on file with the Committee.
A Participant’s Accounts allocated to Investment Funds other than the Deferred
Stock Fund shall be paid to the Participant in cash, and the Participant’s
Deferred Stock Fund shall be paid in the form of Company common stock.

(a) Time of Election.  At the time a Participant makes his or her deferral
election pursuant to either Section 2.1 or 2.2 herein, such Participant shall
also make an election as to the time of distribution and form of payment of
benefits by the Plan with respect to that year’s deferrals.
 
Notwithstanding the above, distribution elections made with respect to deferrals
made between January 1, 2005 and December 31, 2007 may be changed no later than
December 31, 2007 in accordance with IRS Notice 2006-79 and Code Section 409A.

(b) Form of Payment.  A Participant may elect to receive benefits under this
Plan in a lump sum or in substantially equal annual installments over a period
not to exceed ten (10) years. In the absence of an election, such Participant’s
Accounts shall be distributed in a lump sum payment in the calendar year next
following the Participant’s Separation, Retirement, death or Disability but not
later than January 31 of such calendar year.
 
(c) Time of Payment.  A Participant may elect to receive benefits under this
Plan in the later of:
 
  (1) the taxable year of the Participant next following the year in which the
Participant has a Separation from Service; or
 

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  (2) the taxable year of the Participant specified by the Participant, but not
later than the taxable year next following the year the Participant attains age
seventy-two (72).
 
  (3) 
 
Payments under subsection (c)(1) and (2) shall be made no later than January 31
of the taxable year elected by the Participant.
 
(d) Amendment of Grandfathered Distribution Election.  Solely with respect to
Accounts that are accrued and vested as of December 31, 2004 and deemed
earnings, gains and losses credited thereon after that date, a Participant may
change the form and/or time of payment of his or her Account by filing a new
superseding election with the Company at any time prior to the 120 day period
ending on the day prior to the day on which the Participant is entitled to
distribution under this Plan. If a Participant requests any change in the date
of the distribution of his Deferred Stock Fund, the request must be approved by
the Committee.
 
(e) Amendment of Other Distribution Elections. Solely with respect to Account
balances that accrue and/or vest after December 31, 2004 including deemed
earnings, gains and losses credited thereon after that date, a Participant may
change his or her elections regarding the time and/or form of benefit payment
provided:
 
  (1) Such election is submitted to the Committee in writing at least twelve
(12) months prior to the date any amount is to be distributed from the Plan;
 
  (2) Such election shall not take effect until twelve (12) months after it is
submitted to the Committee in writing; and
 
  (3) The payment of any benefits under this Plan shall not commence until at
least five (5) years from the date such payment would otherwise have been made.
 
(f) Distribution Election of Transfer Amounts.  Any elections made with respect
to benefits transferred from another nonqualified plan shall be paid and
distributed in accordance with the elections made by the Participant under such
plan and such election shall continue to be in effect under this Plan unless the
Participant submits new elections to the Committee under the provisions and
procedures of this Plan. If such Transfer Amount is subject to the provisions of
Code Section 409A, the elections in effect on the date of transfer shall be
irrevocable.
 
(g) Unvested Bonus Credit. As of January 1, 2005, the unvested portion of the
Bonus Credit shall be segregated from vested Bonus Credit amounts and
distribution of such vested Bonus Credit shall be made according to the
distribution election in effect with respect to the Participant’s Deferred Stock
Fund that was accrued and vested on December 31, 2004. This election may be
changed in accordance with subsection (e) above.
 

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4.2   Accelerated Distribution
 
Solely with respect to Account balances that were accrued and vested as of
December 31, 2004 and deemed earnings, gains and losses credited thereon after
that date, a Participant may at any time request an accelerated distribution of
his or her Accounts, subject to a ten percent (10%) penalty and, if applicable,
forfeiture of the Bonus Credit and associated deemed earnings described above if
the Bonus Credit is not fully vested as provided by Section 3.5(b)(2). The ten
percent (10%) penalty is imposed after any forfeiture of the Bonus Credit and
associated deemed earnings. Such a request must be made in writing, in a form
and manner specified by the Administrator. If the request is approved by the
Administrator, the Company will distribute to the Participant the entire balance
of his or her Accounts minus any forfeitures and minus the ten percent (10%)
penalty as a lump sum within ninety (90) days after the end of the month in
which the Administrator receives the request. Such distribution shall completely
discharge the Company and the applicable Affiliate from all liability with
respect to the Participant’s Accounts. When a Participant elects to receive a
distribution pursuant to this Section, such Participant shall not be permitted
to elect to defer in the Plan Year following the year in which the Participant
receives such distribution.

4.3    Withdrawal
 
(a) Solely with respect to Account balances that were accrued and vested as of
December 31, 2004 and deemed earnings, gains and losses credited thereon after
that date, a Participant who has deferred Director’s Fees under this Plan for
five (5) full years may request to withdraw a portion of the amounts credited to
his or her Accounts subject to forfeiture of the Bonus Credit and associated
deemed earnings and losses as provided by Section 3.5(b)(3). The requisite full
years of deferral to request a withdrawal need not be consecutive but may be
intermittent. Amounts credited to the Deferred Stock Fund will be distributed
only after amounts credited to all other Investment Funds are distributed. Such
request must be made in writing in a form and manner specified by the
Administrator and must specify the amount to be withdrawn and the future date or
dates to be paid. The date(s) must be no earlier than the first of a month in
the second calendar year following the calendar year in which the request was
made. The request will be irrevocable after December 31 of the calendar year in
which it is made unless, prior to payment, the Participant separates from the
Board or the board of directors of an Affiliate, or a Special Circumstance
occurs. In these instances, the request will become null and void and the
Account Balance will be paid as elected by the Participant pursuant to Section
4.2 or as provided in Section 4.5. If the request is approved by the
Administrator, the Company will distribute to the Director the balance of his or
her Accounts except the portion credited to the Deferred Stock Fund as a lump
sum within ninety (90) days after the end of the month in which the
Administrator receives the request and will distribute to the Director the
balance of his or Accounts credited to the Deferred Stock Fund minus any
forfeitures in Company common stock in an administratively reasonable period of
time.
 

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(b) Solely with respect to Account balances that accrue and/or vest after
December 31, 2004 including deemed earnings, gains and losses credited thereon
after that date, a Participant may, at the time such Participant makes a
deferral election pursuant to Sections 2.1 or 2.2, elect to withdraw all or a
portion of such deferred Director’s Fees plus deemed earnings, gains and losses
and vested Bonus Credit on a specified date provided such date is no earlier
than the second January 1 following the Plan Year to which the deferral election
applies. A Participant may elect to withdraw amounts allocated to Investment
Funds other than the Deferred Stock Fund, amounts allocated to the Deferred
Stock Fund, or all Investment Funds. The Account balance for a Plan Year that is
allocated to the Investment Funds other than the Deferred Stock Fund shall be
distributed prior to a distribution from the Deferred Stock Fund. Distributions
pursuant to this Subsection (b) shall be made in a single lump sum within ninety
(90) days after the date selected by the Participant. In the event a Participant
receives a distribution from the Deferred Stock Fund and the associated Bonus
Credit is not yet vested, such Bonus Credit shall be forfeited as of the date
the Deferred Stock Fund is distributed to the Participant.
 
4.4    Financial Hardship Distributions
 
Notwithstanding any other provision of the Plan and solely with respect to
Account balances that accrue and/or vest after December 31, 2004 including
deemed earnings, gains and losses credited thereon after that date, payment from
the Participant’s Account may be made to the Participant, in the sole discretion
of the Administrator, by reason of Financial Hardship. Such payment shall not
exceed the amount necessary to satisfy such emergency plus amounts necessary to
pay taxes reasonably anticipated as a result of the distribution after taking
into account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets, to the extent such liquidation would not itself cause
severe financial hardship. If such a distribution is made, the Participant’s
deferral elections for the Plan Year in which the distribution is made shall be
void and such Participant shall not be eligible to defer Director’s Fees until
the next Plan Year. Payment shall be made in a single lump sum within thirty
(30) days after the date the Financial Hardship is approved by the
Administrator. Distributions shall be made first from the Investment Funds other
than the Deferred Stock Fund and then from the Deferred Stock Fund, excluding
the Bonus Credit.

4.5   Special Circumstance
 
Solely with respect to deferrals that were accrued and vested as of December 31,
2004 and deemed earnings, gains and losses credited thereon after that date, in
the instance of a Special Circumstance, all balances in Investment Funds other
than the Deferred Stock Fund shall be paid out immediately in cash as a lump sum
and the balance of the Deferred Stock Fund shall be distributed in Company
common stock in an administratively reasonable period of time. A Participant may
elect to receive distribution from this Plan in a distribution payment otherwise
permitted by this Plan if such election is made more than 120 days prior to the
Special Circumstance.

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Solely with respect to Account balances that accrue and/or vest after December
31, 2004 and deemed earnings, gains and losses credited thereon after that date,
in the event of a Change in Control that would also qualify as a change in
control event under Code Section 409A(a)(2)(A)(v), all balances in Investment
Funds shall be paid out pursuant to the Participants’ elections not more than
ninety (90) days after the Change in Control. This paragraph shall only apply if
all other plans, programs and arrangements sponsored by the Company or its
Affiliates that must be aggregated pursuant to Code Section 409A are terminated
and liquidated within twelve (12) months of the Change in Control.

4.6   Small Accounts
 
Notwithstanding anything herein to the contrary, if, on the date of the
Participant’s Separation, Retirement, death or Disability, such Participant’s
Account balance with respect to amounts that accrue and/or vest after December
31, 2004 including deemed earnings, gains and losses credited thereon after that
date (plus any amounts that are aggregated with this Plan under Code Section
409A) are worth less that the then-current Code Section 402(g)(1)(B) limit, such
Accounts shall be paid in a lump sum in the next following calendar year, but
not later than January 31 of such calendar year, regardless of any elections the
Participant may have made.

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ARTICLE 5 — BENEFICIARY
 

5.1   Beneficiary Designation
 
Each Participant shall have the right, at any time, to designate his or her
Beneficiary(ies) to receive any benefits payable under the Plan upon his or her
death. A Participant shall designate his or her Beneficiary by completing and
signing a Beneficiary designation form and returning it to the Committee.

5.2   Distribution Election
 
The Participant shall designate, in his or her initial deferral election made
after becoming a Director, the time and the manner of payment to the
Beneficiary, which may be either (a) in a lump sum as soon as practicable after
the date of death, but not later than ninety (90) days after Participant’s date
of death; (b) in a lump sum in the calendar year following the date of the
Participant’s death but not later than January 31 of such calendar year; or (c)
in one or more annual payments the last of which may occur no later than January
1 of the fifth year following the year in which the death occurred. In the
absence of an election, benefits shall be paid to the Beneficiary pursuant to
(a) above. Such election may be changed by a Participant at any time and will
become effective twelve (12) months after the date it is received by the
Committee.

Amounts credited to the Deferred Stock Fund shall be distributed in Company
common stock. In the event the Participant designates distribution in the form
of two or more annual payments, a pro rata portion shall be distributed from
each Investment Fund in which the Participant’s Accounts are credited.

5.3   Change of Beneficiary
 
A Participant shall have the right to file a new Beneficiary designation form.
Upon acceptance of a new Beneficiary designation form, all Beneficiary
designations previously filed shall be cancelled as of the date of the new
Beneficiary designation form.
 
5.4   Payment of Benefit upon Death
 
Upon the death of a Participant prior to the distribution of the entire balance
credited to the Participant’s Accounts, benefits shall be paid to the
Beneficiary or Beneficiaries designated by the Participant in writing filed with
the Administrator. In the event that a Participant fails to designate a
Beneficiary or, if all designated Beneficiaries predecease the Participant or
die prior to complete distribution of the Participant’s benefits, then the
Participant’s benefits under this Plan shall be distributed to his or her
surviving spouse. If the Participant has no surviving spouse, the benefits
remaining under the Plan to be paid shall be paid to the executor or personal
representative of the Participant’s estate.

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ARTICLE 6 — ASSIGNMENT
 

Except to the extent that a Participant may designate a Beneficiary to receive
any payment to be made following his or her death and except by will or the laws
of descent and distribution, no rights or benefits under this Plan shall be
assignable or transferable, or subject to encumbrance or charge of any nature.

ARTICLE 7 — ADMINISTRATION
 

7.1   Administrator
 
Unless another Administrator is selected by the Board or until a Change in
Control, this Plan shall be administered by the Committee. Except as otherwise
provided by action of the Board or the terms of the Plan: (a) a majority of the
members of the Committee shall constitute a quorum for the transaction of
business, and (b) all resolutions or other actions taken by the Committee at a
meeting shall be by the vote of the majority of the Committee members present,
or, without a meeting, by an instrument in writing signed by all members of the
Committee. A Committee member may not vote on any matter which directly affects
only his or her benefit under the Plan.

Upon and after the occurrence of a Change in Control, however, the
“Administrator” shall be at least three (3) independent third parties selected
by the individual who, immediately prior to such event, was the Company’s Chief
Executive Officer or, if not so identified, the Company’s highest ranking
officer (the “Ex-CEO”); provided, however, the Committee, as constituted
immediately prior to a Change in Control, shall continue to act as the
Administrator for this Plan until the date on which the independent third
parties selected by the Ex-CEO accept the responsibilities as the Administrator
of this Plan. Upon and after a Change in Control, the Administrator shall have
all discretionary authorities and powers granted to the Administrator under this
Plan including the discretionary authority to determine all questions arising in
connection with the administration of the Plan and the interpretation of the
Plan except benefit entitlement determinations upon appeal. Upon and after the
occurrence of a Change in Control, the Company must: (1) pay all reasonable
administrative expenses and fees of the Administrator; (2) indemnify the
Administrator against any costs, expenses and liabilities including, without
limitation, attorney’s fees and expenses arising in connection with the
performance of the Administrator hereunder, except with respect to matters
resulting from the gross negligence or willful misconduct of the Administrator
or its employees or agents; and (3) supply full and timely information to the
Administrator on all matters relating to the Plan, the Participants and their
Beneficiaries, the Account balances of the Participants, the date and
circumstances of the Retirement, Disability, death or Separation from Service of
the Participants, and such other pertinent information as the Administrator may
reasonably require. Upon and after a Change in Control, a person serving as a
member of the committee acting as Administrator may only be removed (and a
replacement may only be appointed) by the Ex-CEO.

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7.2   Powers of Administrator
 
The Administrator shall have the full discretion and authority to administer the
Plan including the discretion and authority to construe, interpret, and apply
this Plan, and to render nondiscriminatory rulings or determinations. All
questions regarding the Plan, as well as any dispute over accounting or
administrative procedures or interpretation of the Plan, shall be resolved at
the sole discretion of the Administrator. Constructions, interpretations, and
decisions of the Administrator shall be conclusive and binding on all persons.
The Administrator shall also have the discretion and authority to make, amend,
interpret, and enforce all appropriate rules and regulations for the
administration of this Plan. Any individual serving on a committee acting as
Administrator who is a Participant shall not vote or act on any matter relating
solely to himself or herself. When making a determination or calculation, the
Administrator shall be entitled to rely on information furnished by a
Participant or the Company.

7.3    Delegation
 
The Committee may delegate all or any duties, discretions and responsibilities
under this Plan to the Corporate Secretary.

ARTICLE 8 — CLAIMS
 

8.1   Claim
 
Any person claiming a benefit (“Claimant”) under the Plan shall present the
request in writing to the Administrator.

8.2    Initial Claim Review
 
In the case of a claims regarding Disability, the Administrator will make a
benefit determination within forty-five (45) days of its receipt of an
application for benefits. This period may be extended up to an additional thirty
(30) days, if the Administrator provides the Claimant with a written notice of
the extension within the initial forty-five (45)-day period. The extension
notice will explain the reason for the extension and the date by which the
Administrator expects a decision will be made. The Administrator may obtain a
second thirty (30)-day extension by providing you written notice of such second
extension within the thirty (30)-day extension. The second extension notice must
include an explanation of the special circumstances necessitating the second
extension and the date by which the Administrator’s decision will be made. If
the extension is necessary because additional information is needed to decide
the claim, the extension notice will describe the required information. The
Claimant will have forty-five (45) days after receiving the extension notice to
provide the required information.

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In the case of all other claims, the Administrator will make a benefit
determination within ninety (90) days of its receipt of an application for
benefits. This period may be extended up to an additional ninety (90) days, if
the Administrator provides the Claimant with a written notice of the extension
within the initial ninety (90)-day period. The extension notice will explain the
reason for the extension and the date by which the Administrator expects a
decision will be made.

The Administrator will notify the Claimant in writing, delivered in person or
mailed by first-class mail to the Claimant’s last known address, if any part of
a claim for benefits under the Plan has been denied. The notice of a denial of
any claim will include:

(a) the specific reason for the denial;
 
(b) reference to specific provisions of the Plan upon which the denial is based;
 
(c) a description of any internal rule, guidelines, protocol or similar
criterion relied on in making the denial (or a statement that such internal
criterion will be provided free of charge upon request);
 
(d) a description of any additional material or information deemed necessary by
the Administrator for the Claimant to perfect the claim, and an explanation of
why such material or information is necessary; and
 
(e) an explanation of the claims review procedure under the Plan.
 
If the notice described above is not furnished and if the claim has not been
granted within the time specified above for payment of the claim, the claim will
be deemed denied and will be subject to review as set forth in Section 8.3.

8.3   Review of Claim
 
If a claim for benefits is denied, in whole or in part, the Claimant may request
to have the claim reviewed. The Claimant will have one hundred eighty (180) days
in which to request a review of a claim regarding Disability, and will have
sixty (60) days in which to request a review of all other claims. The request
must be in writing and delivered to the Appeals Committee. If no such review is
requested, the initial decision of the Appeals Committee will be considered
final and binding.

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The request for review must specify the reason the Claimant believes the denial
should be reversed. He or she may submit additional written comments, documents,
records, and other information relating to and in support of the claim; all
information submitted will be reviewed whether or not it was available for the
initial review. The Claimant may request reasonable access to and copies of, all
documents, records, and other information relevant to the Claimant’s claim for
benefits. A member of the Appeals Committee may not participate in the review of
his or her own claim. In addition, if the Claimant requests a review, a member
of the Committee who is a subordinate of the original decision maker shall not
participate in the review of the claim. The review will not defer to the initial
adverse determination. If the denial was based in whole or in part on a medical
judgment, the Appeals Committee will consult with an appropriate health care
professional who was not consulted in the initial determination of his or her
claim and who is not the subordinate of someone consulted in the initial
determination. Names of the health care professionals will be available on
request.

Upon receipt of a request for review, the Appeals Committee may schedule a
hearing within thirty (30) days of its receipt of such request, subject to
availability of the Claimant and the availability of the Appeals Committee, at a
time and place convenient for all parties at which time the Claimant may appear
before the person or committee designated by the Appeals Committee to hear
appeals for a full and fair review of the Administrator’s initial decision. The
Claimant may indicate in writing at the time the Appeals Committee attempts to
schedule the hearing, that he or she wishes to waive the right to a hearing. If
the Claimant does not waive his or her right to a hearing, he or she must notify
the Appeals Committee in writing, at least fifteen (15) days in advance of the
date established for such hearing, of his or her intention to appear at the
appointed time and place. The Claimant must also specify any persons who will
accompany him or her to the hearing, or such other persons will not be admitted
to the hearing. If written notice is not timely provided, the hearing will be
automatically canceled. The Claimant or the Claimant’s duly authorized
representative may review all pertinent documents relating to the claim in
preparation for the hearing and may submit issues, documents, affidavits,
arguments, and comments in writing prior to or during the hearing.

The Appeals Committee will notify the Claimant of its decision following the
reviews. In the case of a claim regarding Disability, the Appeals Committee will
render its final decision within forty-five (45) days of receipt of an appeal or
such shorter period as may be required by law. If the Appeals Committee
determines that an extension of the time for processing the claim is needed, it
will notify the Claimant of the reasons for the extension and the date by which
the Appeals Committee expects a decision will by made. The extended date may not
exceed ninety (90) days after the date of the filing of the appeal.

In the case of all other claims, the Appeals Committee will render its final
decision within sixty (60) days of receipt of an appeal. If the Appeals
Committee determines that an extension of the time for processing the claim is
needed, it will notify the Claimant of the reasons for the extension and the
date by which the Appeals Committee expects a decision will be made. The
extended date may not exceed one hundred twenty (120) days after the date of the
filing of the appeal

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If after the review the claim continues to be denied, the Claimant will be
provided a notice of the denial of the appeal which will contain the following
information:

(a) The specific reasons for the denial of the appeal;
 
(b) A reference to the specific provisions of the Plan on which the denial was
based;
 
(c) A statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claim for benefits;
 
(d) A statement disclosing any internal rule, guidelines, protocol or similar
criterion relied on in making the denial (or a statement that such information
would be provided free of charge upon request); and
 
(e) A statement describing the Claimant’s right to bring a civil suit under
Federal law and a statement concerning other voluntary alternative dispute
resolutions options.
 
8.4   Review of Claims on and after a Change in Control.
 
Upon and after the occurrence of a Change in Control, the Appeals Committee, as
constituted immediately prior to a Change in Control, shall continue to act as
the Appeals Committee. The Appeals Committee shall have responsibility and the
discretionary authority to review denied claims. In the event any member of the
Appeals Committee resigns or is unable to perform the duties of a member of the
Appeals Committee, successors to such members shall be selected by the Ex-CEO.
Upon and after a Change in Control, the Appeals Committee shall have all
discretionary authorities and powers granted the Appeals Committee under this
Plan including the discretionary authority to determine all questions arising in
connection with the review of a denied claim as provided in this Section. Upon
and after the occurrence of a Change in Control, the Company must: (1) pay all
reasonable administrative expenses and fees of the Appeals Committee; (2)
indemnify the Appeals Committee against any costs, expenses and liabilities
including, without limitation, attorney’s fees and expenses arising in
connection with the performance of the Appeals Committee hereunder, except with
respect to matters resulting from the gross negligence or willful misconduct of
the Appeals Committee or its employees or agents; and (3) supply full and timely
information to the Appeals Committee on all matters relating to the Plan, the
Participants and their Beneficiaries, the Account balances of the Participants,
the date and circumstances of the Retirement, Disability, death, Separation or
Separation from Service of the Participants, and such other pertinent
information as the Appeals Committee may reasonably require. Upon and after a
Change in Control, a member of the Appeals Committee may only be removed (and a
replacement may only be appointed) by the Ex-CEO.

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ARTICLE 9 — AMENDMENT, TERMINATION AND PARTICIPATION
 

9.1   Amendment by Board
 
Prior to a Special Circumstance and solely with respect to amounts deferred and
vested as of December 31, 2004 and earnings, gains and losses credited thereon
after that date, the Board may from time to time, amend, suspend, terminate or
reinstate any or all of the provisions of this Plan, retroactive or otherwise,
except that no amendment, suspension, termination or reinstatement shall
adversely affect the Accounts or benefits under this Plan of any Participant as
they existed immediately before the amendment, suspension, termination, merger
or reinstatement or the manner of payments, unless the Participant shall have
consented in writing. In addition, no amendment, suspension, termination or
reinstatement shall be made that would constitute a material modification of the
Plan under Code Section 409A after October 2, 2004.

Prior to a Special Circumstance and solely with respect to amounts that accrue
and/or vest after December 31, 2004 and earnings, gains and losses credited
thereon after that date, the Board may from time to time amend, suspend, or
reinstate any or all of the provisions of this Plan, retroactive or otherwise,
provided such amendment, suspension or reinstatement does not violate Code
Section 409A nor adversely affect the Accounts or benefits under this Plan of
any Participant as they existed immediately before the amendment, suspension or
reinstatement or the manner of payments, unless the Participant shall have
consented in writing.

9.2   Termination by the Company
 
Prior to a Special Circumstance, the Board may at any time terminate this Plan
and/or transfer its liabilities under this Plan to a similar plan it may
establish. Upon the termination of this Plan, amounts credited to the Accounts
of Participants and benefits transferred shall continue to be payable to those
Participants in accordance with the terms of this Plan except as provided in
Section 9.4 herein. Upon termination of this Plan, if the Board should transfer
its liabilities to another plan, such transfer of liabilities shall not
adversely affect the Accounts or benefits of any Participant as they existed
immediately prior to a transfer authorized by the Board or the manner of
payments, unless the Participant shall have consented in writing. In addition,
any transfer of liabilities of this Plan shall not affect the liability of the
Company or any Affiliate responsible to pay the benefit represented by the
Account Balance.

9.3   Automatic Cessation of Bonus Credit and Dividends
 
Unless the Plan is terminated by the Company prior to the following, the
crediting of the 20% Bonus Credit and dividend equivalent features of this Plan
with respect to Company common stock will automatically cease on May 17, 2014 or
earlier if the maximum share reserve of 500,000 shares of Company common stock
is reached, unless shareholders reapprove these features the earlier of the
prior date or prior to the depletion of the maximum share reserve.

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9.4   Distribution of Benefits on Plan Termination
 
In the event the Board elects to terminate the Plan as provided under Section
9.2:

(a) With respect to Accounts that accrued and vested as of December 31, 2004 and
notwithstanding any other provisions of the Plan, if the Plan is terminated, no
subsequent Director’s fees may be deferred under this Plan as of the January 1
next following the date of termination. Upon termination, if the liabilities of
this Plan are not transferred to another plan, the Director’s Accounts shall
continue to be credited with deemed earnings as provided in Section 3.4, and the
entire balance in the Account Balance shall become payable to the Participant in
accordance with the provisions of this Plan and deferral elections regarding the
time and form of payment in effect at the date of termination.
 
(b) Solely with respect to Account balances that accrue and/or vest after
December 31, 2004, including deemed earnings, gains and losses credited thereon
after that date, no right to the payment of benefits shall arise as a result of
a Plan Termination;
 
(c) The Board may, in its discretion, provide by amendment to the Plan a right
to the payment of all such Account balances as a result of the liquidation and
termination of the Plan where:
 
  (1) The termination and liquidation does not occur proximate to a downturn in
the financial health of the Company and the participating Affiliates;
 
  (2) The Plan and all arrangements required to be aggregated with the Plan
under Code Section 409A are terminated and liquidated;
 
  (3) no payments, other than those that would be payable under the terms of the
Plan and the aggregated arrangements if the termination and liquidation had not
occurred, are made within twelve (12) months of the date the Company takes all
necessary action to irrevocably terminate and liquidate the Plan;
 
  (4) All payments are made within twenty-four (24) months of the date the
Company takes all necessary action to irrevocably terminate and liquidate the
Plan; and
 
  (5) The Company and the Affiliates do not adopt a new arrangement that would
be aggregated with any terminated arrangement under Code Section 409A, at any
time within three (3) years following the date the Company takes all necessary
action to irrevocably terminate and liquidate the Plan.
 
(d) Similarly, the Company may, in its discretion, provide by amendment to
liquidate and terminate the Plan where the termination and liquidation occurs
within twelve (12) months of a corporate dissolution taxed under Code Section
331, or with the approval of a bankruptcy court pursuant to 11 United States
Code Section 503(b)(1)(A), provided that all amounts deferred under the Plan are
included in the Participants’ gross incomes in the latest of the following years
(or, if earlier, the taxable year in which the amount is actually or
constructively received):
 

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  (1) The calendar year in which the termination occurs;
 
  (2) The calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or
 
  (3) The first calendar year in which the payment is administratively
practicable.
    
9.5   Participation by Affiliates
 
Affiliates may participate in this Plan as provided in this Section.

(a) An Affiliate may adopt this Plan with the consent of the Company. The
Affiliate shall be liable for the payment of any benefit of a Participant whose
benefits under the Plan relate to Director’s Fees deferred while serving on the
board of directors of the Affiliate or which are transferred to this Plan by the
Participant. Neither the Company nor any other Affiliate shall have any
liability for such benefits.
 
(b) Each Affiliate, by adopting the Plan, appoints the Company as its agent and
fully empowers the Company to act on behalf of all Affiliates as it may deem
appropriate in maintaining or terminating the Plan. The adoption by the Company
of any amendment to the Plan or the termination of all or any part of the Plan
will constitute and represent, without further action on the part of any
Affiliate, the approval, adoption, ratification or confirmation by each
Affiliate of any such amendment or termination and each Affiliate shall be bound
by such amendment or termination.
 
(c) An Affiliate may cease participation in the Plan only upon approval by the
Company and only in accordance with such terms and conditions that may be
required by the Company.

ARTICLE 10 — UNFUNDED PLAN
 

10.1        Bookkeeping Entries
 
The Accounts maintained for purposes of this Plan shall constitute bookkeeping
records of the Company or the applicable Affiliate and shall not constitute any
allocation of any assets of the Company or Affiliate or be deemed to create any
trust or special deposit with respect to any of the assets of the Company or any
Affiliate. Neither the Company nor any Affiliate shall be under any obligation
to any Participant to acquire, segregate or reserve any funds or other assets
for purposes relating to this Plan. No Participant shall have any rights
whatsoever in or with respect to any funds or other assets owned or held by the
Company or any Affiliate. The rights of an Participant under this Plan are
solely those of a general creditor of the Company or any Affiliate to the extent
of the amount credited to his or her Accounts with the Company or the applicable
Affiliate and this Plan is a mere promise to pay benefits to the Participants.

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10.2        Trusts, Insurance Contracts or Other Investment
 
The Company or the Affiliates may, in their respective discretion, establish one
or more trusts, purchase one or more insurance contracts or otherwise invest or
segregate funds for purposes relating to this Plan, but the assets of such
trusts, rights and assets of such insurance contracts or otherwise invested or
held in segregated funds shall at all times remain subject to the claims of the
general creditors of the Company and any Affiliate as provided in such trust or
contract except to the extent and at the time any payment is made to an
Participant under this Plan.

ARTICLE 11— MISCELLANEOUS
 

11.1        Severability
 
The invalidity or unenforceability of any particular provision of this Plan
shall not affect any other provision, and the Plan shall be construed in all
respects as if invalid or unenforceable provisions were omitted.

11.2        Liability for Benefits
 
Except as otherwise agreed in writing, liability for the payment of a
Participant’s benefit under this Plan shall be borne solely by the Company or
the participating Affiliate for which the Participant served as a Director
during the accrual or increase in the benefit. No liability for the payment of
any benefit shall be incurred by reason of Plan sponsorship or participation
except for benefits incurred by the Company for its Directors and for benefits
incurred by an Affiliate for its Directors. Nothing in this Section shall be
interpreted as prohibiting the Company or any participating Affiliate from
expressly agreeing in writing to the assumption of liability or the guarantee of
payment of any benefit under this Plan.

11.3        Applicable Law
 
This Plan shall be construed and governed in accordance with the laws of the
State of Ohio without giving effect to principles of conflicts of laws.

11.4        Not a Contract
 
The terms and conditions of this Plan shall not be deemed to constitute a
contract for services between the Company or any Affiliate and the Participant.
A Director is retained on an “at will” relationship that can be terminated at
any time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written agreement. Nothing in
this Plan shall be deemed to give a Participant the right to be retained as a
Director of the Company and any Affiliate.

DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 7/31/2007
 
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11.5        Successors
 
The provisions of this Plan shall bind and inure to the benefit of the
successors and assigns of the Company and each Affiliate.

11.6        Distribution under Terms of the Trust or in the Event of Taxation
 
(a) If the Trust terminates in accordance with its terms and benefits accrued
and vested as of December 31, 2004 are distributed from the Trust to a
Participant in accordance therewith, the Participant’s benefits accrued and
vested as of December 31, 2004 and deemed earnings, gains and losses thereon
credited after that date under this Plan shall be reduced to the extent of such
distributions.
 
(b) If, for any reason, all or any portion of a Participant’s benefits
attributable to deferrals accrued and vested as of December 31, 2004 and
earnings, gains and losses thereon credited after that date under this Plan
becomes taxable to the Participant prior to receipt, a Participant may petition
the Committee before a Special Circumstance, or the trustee of the Trust after a
Special Circumstance, for a distribution of that portion of his or her benefit
that has become taxable. Upon the grant of such a petition, which grant shall
not be unreasonably withheld (and, after a Special Circumstance, shall be
granted), the Company or applicable Affiliate shall distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her benefit. If the petition is granted, the tax liability
distribution shall be made within ninety (90) days of the date when the
Participant’s petition is granted. Such a distribution shall affect and reduce
the benefits to be paid under this Plan.
 
(c) If this Plan fails to meet the requirements of Code Section 409A and causes
any amounts deferred and/or which became vested after December 31, 2004 to be
included in a Participant’s income prior to distribution, the Participant shall
be paid the amount required to be included in income as a result of the failure
to comply with Code Section 409A and the Participant’s benefits under this Plan
shall be reduced to the extent of such distributions.
 
11.7         Insurance
 
The Company and the Affiliates, on their own behalf or on behalf of the trustee
of the Trust, and, in their sole discretion, may apply for and procure insurance
on the life of the Participant, in such amounts and in such forms as the Trust
may choose. The Company, the Affiliates or the trustee of the Trust, as the case
may be, shall be the sole owner and beneficiary of any such insurance. The
Participant shall have no interest whatsoever in any such policy or policies,
and at the request of the Company or an Affiliate shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Company or Affiliate
have applied for insurance.

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11.8        Legal Representation
 
The Company and each Affiliate is aware that upon the occurrence of a Change in
Control, the Board or the board of directors of an Affiliate (which might then
be composed of new members) or a shareholder of the Company or an Affiliate, or
of any successor corporation might then cause or attempt to cause the Company,
an Affiliate or successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or an Affiliate to
institute, or may institute, litigation seeking to deny Participants the
benefits intended under the Plan. In these circumstances, the purpose of the
Plan could be frustrated. Accordingly, if, following a Change in Control, it
should appear to any Participant that the Company, an Affiliate or any successor
corporation has failed to comply with any of its obligations under the Plan or,
if the Company, an Affiliate or any other person takes any action to declare the
Plan void or unenforceable or institutes any litigation or other legal action
designed to deny, diminish or to recover from any Participant the benefits
intended to be provided, then the Company and the applicable Affiliate
irrevocably authorize such Participant to retain legal counsel of his or her
choice at the expense of the Company and the Affiliate (which shall be jointly
and severally liable) to represent such Participant in connection with the
initiation or defense of any litigation or other legal action, whether by or
against the Company, an Affiliate or any director, officer, shareholder or other
person affiliated with the Company, an Affiliate or any successor thereto in any
jurisdiction. The Company and the Affiliate shall pay all attorney fees and all
expenses and costs that are incurred by the Participant during the twenty-year
period commencing on the date of the Change in Control and that relate to the
collection of benefits under this Plan or to defending against the recovery of
any benefits paid by this Plan. If the Participant elects to pay such fees,
expenses and costs, then the Company and the Affiliate shall reimburse the
Participant. The reimbursement of an eligible fee, expense or cost shall be made
on or before the last day of the Participant’s taxable year following the
taxable year in which the expense was incurred. The amount paid or reimbursed
during a Participant’s taxable year shall not affect the payments made in any
other taxable year of the Participant. The right to payment or reimbursement of
such legal fees, expenses and costs is not subject to liquidation or exchange
for another benefit.

11.9        Code Section 409A
 
Notwithstanding anything to the contrary in the provisions of this Plan
regarding the benefits payable hereunder and the time and form thereof, this
Plan is intended to meet any applicable requirements of Code Section 409A and
this Plan shall be construed and administered in accordance with Section 409A of
the Code, Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the Effective Date. In the event that the
Company determines that any provision of this Plan or the operation thereof may
violate Section 409A of the Code and related Department of Treasury guidance,
the Company may in its sole discretion adopt such amendments to this Plan and
appropriate policies and procedures, including amendments and policies with
retroactive effect, or take such other actions, as the Company determines
necessary or appropriate to comply with the requirements of Section 409A of the
Code.

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ATTACHMENT 2.4-A

Ohio Edison Company Deferred Compensation Plan for Directors

Merger of Plans.  Effective as of December 31, 1997, the Ohio Edison Deferred
Compensation Plan for Directors (“Ohio Edison Plan”) was merged into this Plan.

Definition of Director.  The individuals who made deferral elections under the
Ohio Edison Plan shall be considered “Directors” for purposes of this Plan even
if they have not served on the Board or any board of directors of any Affiliate.

Prior Elections to Defer.  Any election to defer director’s fees made under the
Ohio Edison Plan prior to December 31, 1997 shall, to the extent such deferred
fees and any earnings and losses credited to such deferred fees have not been
paid to the Director or to his or her Beneficiary prior to such date, be treated
as having been made under this Plan and shall be subject to all of the rights
and limitations imposed on elections made under this Plan.

Transfer of Account Balance.  With respect to any Director who had a balance in
his or her account under the Ohio Edison Plan immediately prior to December 31,
1997, the balance of such account shall be transferred to a Transfer Account
under this Plan as of December 31, 1997 and shall be administered in accordance
with this Plan. Such Directors shall be permitted to designate how such
transferred account balances shall be deemed invested as permitted under this
Plan.

Liability for Payment.  All liabilities of the Ohio Edison Plan shall be paid by
the Company.

Transfer of Liabilities and Payment of Accounts.  If any account under the Ohio
Edison Plan is in pay status or is otherwise payable to an Participant as of
such date, it shall continue to be payable to that person under the same terms
and conditions as were provided under the Ohio Edison Plan. The balance of any
account under the Ohio Edison Plan shall become payable under the terms and
conditions of this Plan; provided, however, that the Director’s deferral
elections, commencement date elections, and beneficiary elections made under the
Ohio Edison Plan shall continue to be effective under this Plan unless amended
or changed by the Director under the terms of this Plan.

Crediting of Service.  All service as a director of the Ohio Edison Company or
any affiliate of Ohio Edison Company shall count as Years of Service under this
Plan.

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ATTACHMENT 2.4-B

Centerior Energy Corporation Deferred Compensation Plan for Directors

Merger of Plans.  Effective as of January 1, 2000, the Centerior Energy
Corporation Deferred Compensation Plan for Directors (the “Centerior Plan”) was
merged into this Plan.

Definition of Director.  The individuals who made deferral elections under the
Centerior Plan shall be considered “Directors” for purposes of this Plan even if
they have not served on the Board or any board of directors of any Affiliate.

Prior Elections to Defer.  Any election to defer director’s fees made under the
Centerior Plan prior to January 1, 2000 shall, to the extent such deferred fees
and any earnings and losses credited to such deferred fees have not been paid to
the Director or to his or her Beneficiary prior to such date, be treated as
having been made under this Plan and shall be subject to all of the rights and
limitations imposed on elections made under this Plan.

Transfer of Account Balance.  With respect to any Director who had a balance in
his or her account under the Centerior Plan immediately prior to January 1,
2000, the balance of such account shall be transferred to a Transfer Account
under this Plan as of January 1, 2000 and shall be administered in accordance
with this Plan.  Such Directors shall be permitted to designate how such
transferred account balances shall be deemed invested as permitted under this
Plan.

Liability for Payment.  All liabilities of the Centerior Plan shall be paid by
the Company.

Transfer of Liabilities and Payment of Accounts.  If any account under the
Centerior Plan is in pay status or is otherwise payable to an Participant as of
such date, it shall continue to be payable to that person under the same terms
and conditions as were provided under the Centerior Plan. The balance of any
account under the Centerior Plan shall become payable under the terms and
conditions of this Plan; provided, however, that the Director’s deferral
elections, commencement date elections, and beneficiary elections made under the
Centerior Plan shall continue to be effective under this Plan unless amended or
changed by the Director under the terms of this Plan.

Crediting of Service.  All service as a director of Centerior Energy Corporation
or any affiliate of Centerior Energy Corporation shall count as Years of Service
under this Plan.

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ATTACHMENT 2.4-C

Deferred Remuneration Plan for Outside Directors of GPU, Inc.

And

Deferred Stock Unit Plan for Outside Directors of GPU, Inc.

And

Deferred Remuneration Plan for Outside Directors of
Jersey Central Power & Light

Transfers from GPU Plans.  Any individual who participated in the Deferred
Remuneration Plan for Outside Directors of GPU, Inc., Deferred Stock Unit Plan
for Outside Directors of GPU, Inc., or the Deferred Remuneration Plan for
Outside Directors of Jersey Central Power & Light (collectively the “GPU Plans”)
and who was selected as a member of the board of directors for the Company or
Jersey Central Power & Light after November 7, 2001, may elect to transfer his
or her account under each GPU Plan to this Plan.

Prior Elections.  Any election to defer director’s fees made under any GPU Plan
prior to November 7, 2001 shall, to the extent such deferred fees and any
earnings credited to such deferred fees have not been paid to the director or to
his or her beneficiary prior to such date, be treated as having been made under
this Plan and shall be subject to all of the rights and limitations imposed on
elections made under this Plan.

Transfer of Account Balance.  Any Director who had a balance in his or her
account under a GPU Plan immediately prior to November 7, 2001 may elect to
transfer such account’s balance to a Transfer Account under this Plan as of
November 7, 2001. The Committee shall establish subaccounts within the Transfer
Account to reflect and administer Pre-Retirement and Retirement Accounts
transferred from the GPU Plans. From the date of the election, the Transfer
Account shall be deemed to be invested in the Moody’s Investment Fund. The
Moody’s Investment Fund is an Investment Fund established by the Committee
pursuant to Section 3.4 of the Plan and, the balance transferred from a GPU Plan
shall be adjusted in the same manner as the balances of Accounts of all other
Participants that are deemed to be invested in the Moody’s Investment Fund. In
the event the Committee modifies the interest rate or the measurement period,
amends any feature of the Moody’s Investment Fund, or eliminates the Moody’s
Investment Fund, such modification, amendment or elimination shall apply to all
Participants including any Director that transfers his or her account balance
from a GPU Plan to this Plan. After January 1, 2002, a Director that transfers
his or her account balance from a GPU Plan may direct the Investment Funds in
which his or her Transfer Account is deemed invested as permitted by Section
3.5.

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Liability for Payment.  Liabilities of the GPU Plans transferred to the Company
shall be paid by the Company. Any liability of the GPU Plans transferred to an
Affiliate shall be paid by the Affiliate.

Payment of Accounts.  An account balance of a GPU Plan shall be transferred to
this Plan as of the later of the date of the Director’s election or November 7,
2001. If any account under a GPU Plan is in pay status or is otherwise payable
to an Participant as of such date, it shall continue to be payable to that
person under the same terms and conditions as were provided under the applicable
GPU Plan. The balance of any account under a GPU Plan shall become payable under
the terms and conditions of this Plan; provided, however, that the Director’s
deferral elections, commencement date elections, and beneficiary elections made
under the GPU Plan shall continue to be effective under this Plan unless amended
or changed under the terms of this Plan.

Crediting of Service and Years of Deferral.  All service as a director with GPU,
Inc. or any affiliate of GPU, Inc. shall count as Years of Service under this
Plan. A full year during which a Director deferred fees under a GPU Plan shall
count as a full year of deferral under this Plan for purposes of withdrawals
under Section 4.4.

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