Exhibit 10-C


                         SEVERANCE PROTECTION AGREEMENT
                         ------------------------------


                THIS AGREEMENT made as of the 5th day of June, 1997, by and
between GPU, Inc. (the  "Corporation"),  GPU Service,  Inc. (the  "Company") and
John G.  Graham  (the  "Executive")  amends and  restates  the former  Severance
Protection Agreement dated February 6, 1997.

                WHEREAS, the Board of Directors of the Corporation and the Board
of Directors of the Company (the "Boards")  recognize that the  possibility of a
Change in Control  (as  hereinafter  defined)  exists and that the threat or the
occurrence of a Change in Control can result in  significant  distraction of the
Company's key management personnel because of the uncertainties inherent in such
a situation;

                WHEREAS,  the Boards have determined that it is essential and in
the best interest of the Company, and the Corporation and its stockholders,  for
the Company to retain the services of the  Executive in the event of a threat or
occurrence  of a Change in  Control  and to  ensure  the  Executive's  continued
dedication  and efforts in such event without undue concern for the  Executive's
personal financial and employment security; and

                WHEREAS,  in order to  induce  the  Executive  to  remain in the
employ of the Company,  particularly  in the event of a threat or the occurrence
of a Change in Control,  the Company  desires to enter into this  Agreement with
the  Executive to provide the Executive  with certain  benefits in the event the
Executive's  employment is  terminated as a result of, or in connection  with, a
Change in Control.

                NOW, THEREFORE, in consideration of the respective agreements of
the parties contained herein, it is agreed as follows:

                1.  Term of  Agreement.  This  Agreement  shall  commence  as of
                    ------------------
November  1, 1996,  and shall  continue  in effect  until  October 31, 1998 (the
"Term");  provided,  however,  that on November 1, 1997,  and on each November 1
thereafter,  the Term shall  automatically  be extended  for one (1) year unless
either the Executive or the Company shall have given written notice to the other
at least ninety (90) days prior  thereto that the Term shall not be so extended;
provided,  further,  however,  that  following  the  occurrence  of a Change  in
Control,  the Term shall not expire prior to the expiration of twenty-four  (24)
months after such occurrence.

                2.   Termination  of  Employment.   If,  during  the  Term,  the
                     ---------------------------
Executive's  employment  with the Company and with all other  Affiliates  of the
Corporation  shall be  terminated  within  twenty-four  (24) months  following a
Change in Control, the Executive shall be entitled to the following compensation
and benefits:



<PAGE>




                     (a)    If the Executive's employment with the Company and
with all other  Affiliates of the  Corporation  shall be  terminated  (1) by the
Company for Cause or Disability,  (2) by reason of the Executive's death, or (3)
by the  Executive  other  than for Good  Reason,  the  Company  shall pay to the
Executive  his  Accrued  Compensation.  In  addition  to the  foregoing,  if the
Executive's  employment is terminated by the Company for Disability or by reason
of the  Executive's  death,  the  Company  shall  pay to  the  Executive  or his
beneficiaries  a Pro  Rata  Bonus.  The  Executive's  entitlement  to any  other
compensation  or benefits  shall be determined in accordance  with the Company's
employee  benefits  plans and other  applicable  programs and practices  then in
effect.

                     (b)    If the Executive's employment with the Company and 
with all other Affiliates of the Corporation  shall be terminated for any reason
other than as specified in Section 2(a), the Executive  shall be entitled to the
following:

                            (1)     the Company shall pay the Executive all
Accrued Compensation and a Pro Rata Bonus;

                            (2)     the Company shall pay the Executive as 
severance pay and in lieu of any further  compensation for periods subsequent to
the Termination  Date, an amount determined by multiplying (A) two times the sum
of (i) the Executive's Base Amount and (ii) the Executive's Bonus Amount, by (B)
a  fraction,  the  numerator  of which is the  number of  months,  not to exceed
twenty-four  (24), in the period beginning on the Termination Date and ending on
the Executive's  Normal  Retirement  Date (as defined in the Company's  Employee
Pension Plan), and the denominator of which is twenty-four (24).

                            (3)     for a number of months equal to twenty-four 
(24), or if earlier, until the Executive's Normal Retirement Date (as defined in
the Company's  Employee Pension Plan) (the "Continuation  Period"),  the Company
shall at its expense  continue on behalf of the Executive and his dependents and
beneficiaries   the   life   insurance,    disability,   medical,   dental   and
hospitalization  coverages and benefits  provided to the  Executive  immediately
prior to the  Change in Control  or, if  greater,  the  coverages  and  benefits
provided  at  any  time  thereafter.   The  coverages  and  benefits  (including
deductibles and costs) provided in this Section 2(b)(3) during the  Continuation
Period  shall be no less  favorable  to the  Executive  and his  dependents  and
beneficiaries,  than the most favorable of such coverages and benefits  referred
to above.  The  Company's  obligation  hereunder  with respect to the  foregoing
coverages and benefits shall be reduced to the extent that the Executive obtains
any such  coverages  and benefits  pursuant to a subsequent  employer's  benefit
plans,  in which case the Company may reduce any of the coverages or benefits it
is required to provide

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<PAGE>




the Executive  hereunder so long as the aggregate  coverages and benefits of the
combined  benefit plans is no less favorable to the Executive than the coverages
and benefits required to be provided  hereunder.  This Section 2(b)(3) shall not
be  interpreted  so as to  limit  any  benefits  to  which  the  Executive,  his
dependents or beneficiaries may be entitled under any of the Company's  employee
benefit plans,  programs or practices  following the Executive's  termination of
employment,  including  without  limitation,  retiree medical and life insurance
benefits;

                            (4)     the Company shall pay or reimburse the 
Executive for the costs, fees and expenses of outplacement  assistance  services
(not to  exceed  twenty  percent  (20%) of the sum of (A) the  Executive's  Base
Amount and (B) the Executive's Bonus Amount) provided by any outplacement agency
selected by the Executive; and

                            (5)     the Company shall provide to the Executive
the use of a  Company-leased  vehicle,  at no cost to the  Executive,  until the
earlier of (A) the date occurring six (6) months after the  Termination  Date or
(B) the Executive's sixty-fifth (65th) birthday,  after which date the Executive
shall have the option to purchase the vehicle at its "blue book" value.

                           (c)      If the Executive's employment is terminated
by the Company  without Cause (1) within twelve (12) months prior to a Change in
Control  or (2)  prior to the  date of a Change  in  Control  but the  Executive
reasonably  demonstrates that such termination (A) was at the request of a third
party who has  indicated an intention or taken steps  reasonably  calculated  to
effect a Change in Control (a "Third  Party")  and who  effectuates  a Change in
Control or (B) otherwise  arose in connection  with,  or in  anticipation  of, a
Change in Control  which has been  threatened  or  proposed  and which  actually
occurs,  such  termination  shall be deemed to have  occurred  after a Change in
Control, provided a Change in Control shall actually have occurred.

                           (d) (1)  Gross-Up  Payment.  In the event it shall be
                                    -----------------
determined that any payment or distribution of any type to or for the benefit of
the Executive,  by the Company, the Corporation,  any Affiliate,  any Person (as
defined in Section 15.6(a) hereof) who acquires  ownership or effective  control
of the  Corporation or ownership of a substantial  portion of the  Corporation's
assets (within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"),  and the  regulations  thereunder)  or any affiliate of
such Person, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total  Payments"),  is or will be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise


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<PAGE>


tax (such  excise  tax,  together  with any such  interest  and  penalties,  are
collectively  referred  to as the "Excise  Tax"),  then the  Executive  shall be
entitled to receive an  additional  payment (a "Gross-Up  Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any Excise Tax, imposed
upon the  Gross-Up  Payment,  the  Executive  retains an amount of the  Gross-Up
Payment equal to the Excise Tax imposed upon the Total Payments.

                               (2)   Determination By Accountant.  All
mathematical  determinations,  and all  determinations  as to whether any of the
Total Payments are "parachute  payments"  (within the meaning of Section 280G of
the Code),  that are  required  to be made under this  Section  2(d),  including
determinations as to whether a Gross-Up Payment is required,  the amount of such
Gross-Up  Payment and  amounts  relevant  to the last  sentence of this  Section
2(d)(2),  shall  be made  by an  independent  accounting  firm  selected  by the
Executive from among the six (6) largest  accounting  firms in the United States
(the   "Accounting   Firm"),   which  shall  provide  its   determination   (the
"Determination"),  together with detailed supporting  calculations regarding the
amount of any  Gross-Up  Payment  and any  other  relevant  matter,  both to the
Company  and the  Executive  by no  later  than  ten  (10)  days  following  the
Termination  Date,  if  applicable,  or such earlier time as is requested by the
Company or the Executive (if the Executive  reasonably  believes that any of the
Total  Payments  may be subject  to the  Excise  Tax).  If the  Accounting  Firm
determines that no Excise Tax is payable by the Executive,  it shall furnish the
Executive and the Company with a written statement that such Accounting Firm has
concluded  that no Excise Tax is payable  (including  the reasons  therefor) and
that the Executive has substantial authority not to report any Excise Tax on his
federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid to the Executive  within twenty (20) days after the  Determination
(and  all   accompanying   calculations   and  other  material   supporting  the
Determination)  is  delivered  to  the  Company  by  the  Accounting  Firm.  Any
determination  by the Accounting  Firm shall be binding upon the Company and the
Executive,  absent manifest error. As a result of uncertainty in the application
of  Section  4999 of the Code at the time of the  initial  determination  by the
Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the
Company should have been made  ("Underpayment"),  or that Gross-Up Payments will
have been made by the Company which should not have been made  ("Overpayments").
In either such event,  the  Accounting  Firm shall  determine  the amount of the
Underpayment or Overpayment  that has occurred.  In the case of an Underpayment,
the amount of such Underpayment  shall be promptly paid by the Company to or for
the  benefit of the  Executive.  In the case of an  Overpayment,  the  Executive
shall, at the direction and expense

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<PAGE>


of the  Company,  take such steps as are  reasonably  necessary  (including  the
filing of returns and claims for refund),  follow reasonable  instructions from,
and procedures  established by, the Company,  and otherwise reasonably cooperate
with the Company to correct such Overpayment,  provided,  however,  that (i) the
Executive shall not in any event be obligated to return to the Company an amount
greater than the net after-tax  portion of the Overpayment  that he has retained
or has recovered as a refund from the  applicable  taxing  authorities  and (ii)
this provision  shall be interpreted in a manner  consistent  with the intent of
Section  2(d)(1),  which is to make the Executive  whole, on an after-tax basis,
from the application of the Excise Tax, it being  understood that the correction
of an Overpayment may result in the Executive  repaying to the Company an amount
which is less than the Overpayment.

                           (e)      The amounts provided for in Sections 2(a)
and 2(b)(1),  (2) and (4) shall be paid in a single lump sum cash payment within
thirty (30) days after the Executive's Termination Date (or earlier, if required
by applicable law).

                           (f)      The Executive shall not be required to
mitigate  the amount of any payment  provided  for in this  Agreement by seeking
other  employment or otherwise and no such payment shall be offset or reduced by
the amount of any  compensation  or benefits  provided to the  Executive  in any
subsequent employment except as provided in Section 2(b)(3).

                           (g) The  severance  pay and benefits  provided for in
this  Section  2 shall  be in lieu  of any  other  severance  pay to  which  the
Executive may be entitled under the GPU System Severance  Procedure or any other
plan,  agreement  or  arrangement  of the Company or any other  Affiliate of the
Corporation.

                3. Notice of  Termination.  Following  a Change in Control,  any
                   ----------------------
intended  termination  of the  Executive's  employment  by the Company  shall be
communicated by a Notice of Termination  from the Company to the Executive,  and
any intended termination of the Executive's employment by the Executive for Good
Reason shall be  communicated  by a Notice of Termination  from the Executive to
the Company.

                4. Fees and  Expenses.  The Company shall pay all legal fees and
                   ------------------
related expenses (including the costs of experts, evidence and counsel) incurred
by the  Executive as they become due as a result of (a) the  termination  of the
Executive's  employment  by the  Company  or by the  Executive  for Good  Reason
(including all such fees and expenses, if any, incurred in contesting, defending
or disputing the basis for any such



                                        5



<PAGE>


termination  of  employment),  (b) the  Executive's  hearing before the Board of
Directors of the  Corporation as  contemplated in Section 15.5 of this Agreement
or (c) the Executive  seeking to obtain or enforce any right or benefit provided
by this Agreement or by any other plan or arrangement  maintained by the Company
under which the Executive is or may be entitled to receive  benefits;  provided,
however,  that the payment of fees and  expenses  pursuant to this  Section 4(c)
shall be made  only  after,  and  only to the  extent  that,  the  Executive  is
unsuccessful  in his attempt to obtain or enforce such right or benefit  through
the  procedures  established  under the Legal  Defense  Fund  maintained  by the
Company under the GPU System Companies Master  Executives'  Benefits  Protection
Trust (or any similar fund under a successor trust).

                5. Transfer of Employment.  Notwithstanding  any other provision
                   ----------------------
herein to the contrary,  the Company shall cease to have any further  obligation
or  liability  to the  Executive  under this  Agreement  if (a) the  Executive's
employment  with the  Company  terminates  as a result  of the  transfer  of his
employment  to any other  Affiliate of the  Corporation,  (b) this  Agreement is
assigned to such other Affiliate, and (c) such other Affiliate expressly assumes
and agrees to perform  this  Agreement in the same manner and to the same extent
that the  Company  would be required  to perform it if no  assignment  had taken
place.  Any Affiliate to which this Agreement is so assigned shall be treated as
the  "Company"  for all  purposes of this  Agreement  on or after the date as of
which such  assignment to the  Affiliate,  and the  Affiliate's  assumption  and
agreement to so perform this Agreement, becomes effective.

                6. Corporation's Obligation. The Corporation agrees that it will
                   ------------------------
take such steps as may be necessary to cause the Company (or any Affiliate  that
has  become  the  "Company"  pursuant  to  Section 5 hereof) to meet each of its
obligations to the Executive under this Agreement.

                7. Notice.  For the purposes of this Agreement,  notices and all
                   ------
other  communications  provided for in the  Agreement  (including  any Notice of
Termination)  shall be in writing,  shall be signed by the  Executive  if to the
Company or by a duly authorized officer of the Company if to the Executive,  and
shall be deemed to have been duly given  when  personally  delivered  or sent by
certified mail,  return receipt  requested,  postage  prepaid,  addressed to the
respective  addresses  last given by each party to the other,  provided that all
notices to the Company  shall be directed to the  attention  of the Board with a
copy to the Secretary of the Company.  All notices and  communications  shall be
deemed to have been received on the date of delivery



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<PAGE>


thereof or on the third  business  day after the  mailing  thereof,  except that
notice of change of address shall be effective only upon receipt.

                8. Nature of Rights.  The  Executive  shall have the status of a
                   ----------------
mere unsecured  creditor of the Company and the Corporation  with respect to his
right to  receive  any  payment  under  this  Agreement.  This  Agreement  shall
constitute a mere promise by the Company and the Corporation to make payments in
the future of the  benefits  provided  for herein.  It is the  intention  of the
parties  hereto  that the  arrangements  reflected  in this  Agreement  shall be
treated as unfunded for tax purposes and, if it should be determined  that Title
I of ERISA is  applicable to this  Agreement,  for purposes of Title I of ERISA.
Except as provided in Section 2(g),  nothing in this Agreement  shall prevent or
limit the Executive's continuing or future participation in any benefit,  bonus,
incentive or other plan or program  provided by the Company,  the Corporation or
any other  Affiliate of the Corporation and for which the Executive may qualify,
nor shall anything  herein limit or reduce such rights as the Executive may have
under  any other  agreements  with the  Company,  the  Corporation  or any other
Affiliate of the  Corporation.  Amounts  which are vested  benefits or which the
Executive  is  otherwise  entitled  to receive  under any plan or program of the
Company,  the  Corporation or any other  Affiliate of the  Corporation  shall be
payable in accordance with such plan or program,  except as explicitly  modified
by this Agreement.

                9.  Settlement of Claims.  The Company's  obligation to make the
                    --------------------
payments provided for in this Agreement and otherwise to perform its obligations
hereunder  shall  not be  affected  by  any  circumstances,  including,  without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Company may have against the Executive or others.

                10.  Miscellaneous.  No  provision  of  this  Agreement  may  be
                     -------------
modified, waived or discharged unless such waiver,  modification or discharge is
agreed to in  writing  and  signed by the  Executive,  the  Corporation  and the
Company.  No waiver by any party  hereto at any time of any  breach by any other
party  hereto  of, or  compliance  with,  any  condition  or  provision  of this
Agreement  to be  performed  by such  other  party  shall be  deemed a waiver of
similar or  dissimilar  provisions  or conditions at the same or at any prior or
subsequent time. No agreement or representations,  oral or otherwise, express or
implied,  with respect to the subject  matter hereof have been made by any party
which are not expressly set forth in this Agreement.





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                11. Successors; Binding Agreement.
                ----------------------------------

                    (a)      This Agreement shall be binding upon and shall 
inure to the  benefit  of the  Company,  the  Corporation  and their  respective
Successors  and Assigns.  The Company and the  Corporation  shall  require their
respective  Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company  and/or the
Corporation  would be required to perform it if no such succession or assignment
had taken place.

                    (b)      Neither this Agreement nor any right or interest
hereunder   shall  be  assignable  or   transferable   by  the  Executive,   his
beneficiaries or legal representatives, except by will or by the laws of descent
and  distribution.  This  Agreement  shall  inure  to  the  benefit  of  and  be
enforceable by the Executive's legal personal representative.

                12.  Governing  Law.  This  Agreement  shall be  governed by and
                     --------------
construed  and enforced in  accordance  with the laws of the State of New Jersey
without  giving effect to the conflict of laws  principles  thereof.  Any action
brought by any party to this  Agreement  shall be brought  and  maintained  in a
court of competent jurisdiction in Morris County in the State of New Jersey.

                13.  Severability.  The  provisions of this  Agreement  shall be
                     ------------
deemed severable and the invalidity or  unenforceability  of any provision shall
not affect the validity or enforceability of the other provisions hereof.

                14. Entire  Agreement.  This  Agreement  constitutes  the entire
                    -----------------
agreement between the parties hereto,  and supersedes all prior  agreements,  if
any,  understandings  and  arrangements,  oral or  written,  between the parties
hereto, with respect to the subject matter hereof, it being understood that this
Agreement  shall not supersede or in any way be construed to amend or modify the
provisions of the letter  agreement dated as of June 5, 1997 between the Company
and the Executive.

                15. Definitions.
                    -----------

                    15.1.      Accrued Compensation.  For purposes of this 
Agreement,  "Accrued  Compensation"  shall mean all amounts of compensation  for
services rendered to the Company or any other Affiliate that have been earned or
accrued  through  the  Termination  Date but that  have not been  paid as of the
Termination Date including (a) base salary, (b) reimbursement for reasonable and
necessary  business  expenses incurred by the Executive on behalf of the Company
during the period ending on


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<PAGE>


the   Termination   Date,  (c)  vacation  pay  and  (d)  bonuses  and  incentive
compensation; provided, however, that Accrued Compensation shall not include any
amounts  described in clause (a) or clause (d) that have been deferred  pursuant
to  any  salary  reduction  or  deferred  compensation  elections  made  by  the
Executive.

                    15.2.      Affiliate.  For purposes of this Agreement, 
"Affiliate" means any entity, directly or indirectly, controlled by, controlling
or under common control with the  Corporation or any corporation or other entity
acquiring,  directly  or  indirectly,  all or  substantially  all the assets and
business of the Corporation, whether by operation of law or otherwise.

                    15.3.      Base Amount.  For purposes of this Agreement,
"Base  Amount"  shall mean the  Executive's  annual  base  salary at the rate in
effect  as of the  date of a Change  in  Control  or,  if  greater,  at any time
thereafter,  determined  without  regard to any  salary  reduction  or  deferred
compensation elections made by the Executive.

                    15.4.      Bonus Amount.  For purposes of this Agreement,
"Bonus  Amount" shall mean the greater of (a) the target annual bonus payable to
the  Executive  under the  Incentive  Plan in respect of the fiscal  year during
which the  Termination  Date  occurs or (b) the  highest  annual  bonus  paid or
payable  under the  Incentive  Plan in respect  of any of the three full  fiscal
years ended  prior to the  Termination  Date or, if greater,  the three (3) full
fiscal years ended prior to the Change in Control.

                    15.5.      Cause.  For purposes of this Agreement, a 
termination  of employment is for "Cause" if the Executive has been convicted of
a felony or the  termination is evidenced by a resolution  adopted in good faith
by two-thirds of the Board of Directors of the Corporation that the Executive:

                               (a)     intentionally and continually failed
substantially to perform his reasonably  assigned duties with the Company (other
than a failure  resulting  from the  Executive's  incapacity  due to physical or
mental  illness or from the  assignment  to the  Executive  of duties that would
constitute Good Reason) which failure  continued for a period of at least thirty
(30) days after a written notice of demand for substantial  performance,  signed
by a duly authorized officer of the Company, has been delivered to the Executive
specifying  the  manner in which  the  Executive  has  failed  substantially  to
perform, or
                               (b)     intentionally engaged in conduct which is
demonstrably  and  materially  injurious  to the  Corporation  or  the  Company;
provided,  however,  that no termination of the Executive's  employment shall be
for Cause as set forth in this



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<PAGE>


Section  15.5(b)  until (1) there shall have been  delivered to the  Executive a
copy of a written notice,  signed by a duly  authorized  officer of the Company,
setting  forth that the  Executive  was guilty of the  conduct set forth in this
Section  15.5(b) and specifying the particulars  thereof in detail,  and (2) the
Executive  shall have been provided an  opportunity to be heard in person by the
Board of Directors of the  Corporation  (with the assistance of the  Executive's
counsel if the  Executive  so  desires).  No act,  nor  failure  to act,  on the
Executive's  part,  shall be considered  "intentional"  unless the Executive has
acted, or failed to act, with a lack of good faith and with a lack of reasonable
belief that the Executive's action or failure to act was in the best interest of
the  Corporation  and the Company.  Notwithstanding  anything  contained in this
Agreement to the contrary, no failure to perform by the Executive after a Notice
of Termination is given to the Company by the Executive shall  constitute  Cause
for purposes of this Agreement.

                    15.6.      Change in Control.  A "Change in Control" shall
                               -----------------
mean the occurrence during the term of the Agreement of:

                               (a)     An acquisition (other than directly from
the  Corporation)  of any common stock of the  Corporation  ("Common  Stock") or
other voting  securities of the  Corporation  entitled to vote generally for the
election of  directors  (the "Voting  Securities")  by any "Person" (as the term
person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934,  as amended (the  "Exchange  Act")),  immediately  after which such
Person has "Beneficial  Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the then  outstanding
shares of Common Stock or the combined  voting power of the  Corporation's  then
outstanding  Voting  Securities;  provided,  however,  in determining  whether a
Change in Control  has  occurred,  Voting  Securities  which are  acquired  in a
Non-Control  Acquisition  (as  hereinafter  defined)  shall  not  constitute  an
acquisition which would cause a Change in Control.  A "Non-Control  Acquisition"
shall mean an acquisition by (i) an employee  benefit plan (or a trust forming a
part thereof)  maintained by (A) the Corporation or (B) any corporation or other
Person of which a majority of its voting power or its voting  equity  securities
or equity  interest is owned,  directly or  indirectly,  by the  Corporation  (a
"Subsidiary")  (ii) the Corporation or its Subsidiaries,  or (iii) any Person in
connection with a Non-Control Transaction (as hereinafter defined);






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                               (b)     The individuals who, as of 
August 1, 1996,  are members of the Board of Directors of the  Corporation  (the
"Incumbent Board"),  cease for any reason to constitute at least seventy percent
(70%) of the members of the Board of  Directors  of the  Corporation;  provided,
however,  that if the election,  or nomination for election by the Corporation's
shareholders,  of any new director was approved by a vote of at least two-thirds
of the Incumbent Board, such new director shall, for purposes of this Agreement,
be considered as a member of the Incumbent  Board;  provided  further,  however,
that no individual  shall be considered a member of the Incumbent  Board if such
individual  initially  assumed  office  as a  result  of  either  an  actual  or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened  solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors of the Corporation
(a "Proxy  Contest")  including by reason of any agreement  intended to avoid or
settle any Election Contest or Proxy Contest; or
                               (c)     The consummation of:

                                       (1)  A  merger,   consolidation   or
                         reorganization with or into the Corporation or in which
                         securities of the Corporation  are issued,  unless such
                         merger,    consolidation   or   reorganization   is   a
                         "Non-Control  Transaction." A "Non-Control Transaction"
                         shall mean a merger,  consolidation  or  reorganization
                         with or into the Corporation or in which  securities of
                         the Corporation are issued where:

                                                     (A) the shareholders of the
                                    Corporation, immediately before such merger,
                                    consolidation   or    reorganization,    own
                                    directly or indirectly immediately following
                                    such      merger,      consolidation      or
                                    reorganization, at least sixty percent (60%)
                                    of  the   combined   voting   power  of  the
                                    outstanding   voting   securities   of   the
                                    corporation  resulting  from such  merger or
                                    consolidation   or    reorganization    (the
                                    "Surviving  Corporation")  in  substantially
                                    the same  proportion  as their  ownership of
                                    the  Voting  Securities  immediately  before
                                    such      merger,      consolidation      or
                                    reorganization,






                                       11


<PAGE>



                                                     (B)  the   individuals  who
                                    were   members   of  the   Incumbent   Board
                                    immediately  prior to the  execution  of the
                                    agreement   providing   for   such   merger,
                                    consolidation or  reorganization  constitute
                                    at  least  seventy   percent  (70%)  of  the
                                    members  of the  board of  directors  of the
                                    Surviving  Corporation,   or  a  corporation
                                    beneficially directly or indirectly owning a
                                    majority  of the  Voting  Securities  of the
                                    Surviving Corporation, and

                                                     (C) no  Person  other  than
                                    (i) the  Corporation,  (ii) any  Subsidiary,
                                    (iii)  any  employee  benefit  plan  (or any
                                    trust   forming   a  part   thereof)   that,
                                    immediately    prior    to   such    merger,
                                    consolidation   or    reorganization,    was
                                    maintained by the Corporation, the Surviving
                                    Corporation,  or any Subsidiary, or (iv) any
                                    Person  who,   immediately   prior  to  such
                                    merger,  consolidation or reorganization had
                                    Beneficial Ownership of twenty percent (20%)
                                    or  more  of  the  then  outstanding  Voting
                                    Securities    or   common   stock   of   the
                                    Corporation,  has  Beneficial  Ownership  of
                                    twenty percent (20%) or more of the combined
                                    voting power of the Surviving  Corporation's
                                    then  outstanding  voting  securities or its
                                    common stock.

                                       (2)      A complete liquidation or
                         dissolution of the Corporation; or

                                       (3) The sale or  other  disposition
                         of  all or  substantially  all  of  the  assets  of the
                         Corporation  to any Person  (other than a transfer to a
                         Subsidiary).

                         Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely  because any Person (the  "Subject  Person")
acquired  Beneficial  Ownership  of more than the  permitted  amount of the then
outstanding  common stock or Voting Securities as a result of the acquisition of
Common Stock or Voting  Securities  by the  Corporation  which,  by reducing the
number  of  shares  of  Common  Stock or  Voting  Securities  then  outstanding,
increases the proportional  number of shares  Beneficially  Owned by the Subject
Person, provided that if a Change in Control would



                                       12

<PAGE>


  occur (but for the operation of this sentence) as a result of the  acquisition
  of shares of Common Stock or Voting  Securities by the Corporation,  and after
  such share acquisition by the Corporation, the Subject Person becomes the
 Beneficial Owner of any additional  shares of Common Stock or Voting Securities
 which increases the percentage of the then  outstanding  shares of Common Stock
 or Voting Securities Beneficially Owned by the Subject Person, then a Change
                             in Control shall occur.

                    15.7.      Company and Corporation.  For purposes of this
Agreement, all references to the Company and the Corporation shall include their
respective Successors and Assigns.

                    15.8.      Disability.  For purposes of this Agreement, 
"Disability"  shall  mean a  physical  or mental  infirmity  which  impairs  the
Executive's ability to substantially perform his duties with the Company for six
(6)  consecutive  months,  and within  the time  period set forth in a Notice of
Termination  given to the  Executive  (which time period  shall not be less than
thirty  (30)  days),   the  Executive  shall  not  have  returned  to  full-time
performance of his duties;  provided,  however,  that if the Company's Voluntary
Employees  Beneficiary  Association  Long Term  Disability  Income Plan,  or any
successor plan (the "Disability  Plan"), is then in effect,  the Executive shall
not be deemed  disabled for purposes of this  Agreement  unless the Executive is
also  eligible  for  "Total  Disability"  (as  defined in the  Disability  Plan)
benefits  (or  similar  benefits  in the event of a  successor  plan)  under the
Disability Plan.

                    15.9.      Good Reason.  (a)  For purposes of this
Agreement,  "Good Reason" shall mean the occurrence after a Change in Control of
any of the following events or conditions:

                               (1)     a change in the Executive's status,
title,  position  or  responsibilities  (including  reporting  responsibilities)
which, in the Executive's reasonable judgment, represents an adverse change from
his status,  title,  position or responsibilities as in effect immediately prior
thereto;  the  assignment  to the  Executive  of any duties or  responsibilities
which, in the Executive's reasonable judgment, are inconsistent with his status,
title,  position or  responsibilities;  or any removal of the Executive  from or
failure to reappoint or reelect him to any of such offices or positions,  except
in connection with the termination of his employment for Disability, Cause, as a
result of his death or by the Executive other than for Good Reason;

                               (2)     a reduction in the rate of the 
Executive's annual base salary;





                                       13



<PAGE>


                               (3)     the relocation of the offices of the
Company at which the Executive is  principally  employed to a location more than
twenty-five  (25) miles from the location of such offices  immediately  prior to
such relocation,  or the Company's  requiring the Executive to be based anywhere
other  than  at  such  offices,  except  to the  extent  the  Executive  was not
previously  assigned to a principal place of duty and except for required travel
on the  Company's  business  to an  extent  substantially  consistent  with  the
Executive's previous business travel obligations;

                               (4)     the failure by the Company to pay to the 
Executive any portion of the Executive's  current  compensation or to pay to the
Executive  any  portion of an  installment  of deferred  compensation  under any
deferred   compensation   program  of  the   Company  in  which  the   Executive
participated, within seven (7) days of the date such compensation is due;

                               (5)     the failure by the Company (A) to
continue  in  effect  (without   reduction  in  benefit  level,   and/or  reward
opportunities)  any material  compensation or employee benefit plan in which the
Executive was  participating  immediately  prior to such failure by the Company,
including,  but not  limited  to, any of the plans  listed in Appendix A hereto,
unless a substitute or  replacement  plan has been  implemented  which  provides
substantially  identical  compensation  or benefits to the  Executive  or (B) to
continue  to provide  the  Executive  with  compensation  and  benefits,  in the
aggregate,   at  least  equal  (in  terms  of  benefit   levels   and/or  reward
opportunities)  to those provided for under each other  compensation or employee
benefit  plan,  program and practice in which the  Executive  was  participating
immediately prior to such failure by the Company;

                               (6)     the failure of the Company to obtain from
its Successors or Assigns the express  assumption  and agreement  required under
Section 11 hereof; or

                               (7)     any purported termination of the 
Executive's employment by the Company which is not effected pursuant to a Notice
of  Termination  satisfying  the terms set forth in the  definition of Notice of
Termination  (and,  if  applicable,  the terms set  forth in the  definition  of
Cause).

                               (b)     Any event or condition described in
Section  15.9(a)(1) through (7) which occurs (1) within twelve (12) months prior
to a Change  in  Control  or (2)  prior to a Change  in  Control  but  which the
Executive  reasonably  demonstrates  (A) was at the request of a Third Party who
effectuates a Change in Control or (B) otherwise arose in connection with, or in


                                       14



<PAGE>


anticipation  of a Change in Control  which has been  threatened or proposed and
which  actually  occurs,  shall  constitute  Good  Reason for  purposes  of this
Agreement notwithstanding that it occurred prior to a Change in Control.

                    15.10.       Incentive Plan.  For purposes of this
                                 --------------
Agreement,  "Incentive  Plan"  shall mean the  Incentive  Compensation  Plan for
Elected  Officers,  or any successor  annual  incentive plan,  maintained by the
Company or any other Affiliate.

                    15.11.       Notice of Termination.  For purposes of this
                                 ---------------------
Agreement,  following a Change in Control,  "Notice of Termination" shall mean a
written  notice of  termination  of the  Executive's  employment,  signed by the
Executive if to the Company or by a duly authorized officer of the Company if to
the  Executive,  which  indicates  the  specific  termination  provision in this
Agreement,  if any,  relied upon and which sets forth in  reasonable  detail the
facts and  circumstances  claimed  to  provide a basis  for  termination  of the
Executive's employment under the provision so indicated.

                    15.12.       Pro Rata Bonus.  For purposes of this
                                 --------------
Agreement,  "Pro Rata  Bonus"  shall  mean an amount  equal to the Bonus  Amount
multiplied  by a fraction  the  numerator of which is the number of days in such
fiscal year through the  Termination  Date and the  denominator of which is 365;
provided, however, that the Pro Rata Bonus shall be reduced, but not below zero,
to the extent of any bonus the Executive is entitled to receive  pursuant to the
Incentive  Plan in respect of the fiscal year  (denoted a  "Performance  Period"
under the Incentive Plan) in which the Termination Date occurs.

                    15.13.      Successors and Assigns.  For purposes of this
                                ----------------------
Agreement,  "Successors  and Assigns" shall mean, with respect to the Company or
the  Corporation,  a corporation or other entity  acquiring all or substantially
all the assets and business of the Company or the  Corporation,  as the case may
be (including this Agreement) whether by operation of law or otherwise.

                    15.14.      Termination Date.  For purposes of this
                                ----------------
Agreement,  "Termination  Date"  shall  mean (a) in the case of the  Executive's
death,  his date of death,  (b) if the Executive's  employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
the  Executive  shall not have  returned to the  performance  of his duties on a
full-time  basis during such thirty (30) day period) and (c) if the  Executive's
employment is terminated for any other reason,  the date specified in the Notice
of Termination  (which, in the case of a termination for Cause shall not be less
than thirty (30) days,  and in the case of a  termination  for Good Reason shall
not be more than sixty (60) days, from the date such Notice of


                                       15


<PAGE>


Termination is given); provided,  however, that if within thirty (30) days after
any  Notice  of  Termination  is  given  the  party  receiving  such  Notice  of
Termination  in good  faith  notifies  the other  party  that a  dispute  exists
concerning the basis for the termination, the Termination Date shall be the date
on which the dispute is finally  determined,  either by mutual written agreement
of the  parties,  or by the  final  judgment,  order  or  decree  of a court  of
competent  jurisdiction  (the time for appeal  therefrom  having  expired and no
appeal having been taken). Notwithstanding the pendency of any such dispute, the
Company  shall  continue to pay the  Executive  his Base Amount and continue the
Executive as a  participant  in all  compensation,  incentive,  bonus,  pension,
profit sharing, medical, hospitalization,  dental, life insurance and disability
benefit plans in which he was  participating  when the notice giving rise to the
dispute was given, until the dispute is finally resolved in accordance with this
Section whether or not the dispute is resolved in favor of the Company,  and the
Executive  shall not be  obligated  to repay to the Company any amounts  paid or
benefits provided pursuant to this sentence.

                IN WITNESS WHEREOF,  the Corporation and the Company have caused
this  Agreement  to be  executed  by  their  duly  authorized  officers  and the
Executive  has  executed  this  Agreement  as of the day and  year  first  above
written.

                                           GPU, Inc.


                                           By:          /s/ Fred D. Hafer
                                                 ------------------------------
ATTEST:                                                 Fred D. Hafer
                                                        Chairman, President and
                                                        Chief Executive Officer
                 Secretary

                                           GPU Service, Inc.


                                           By:          /s/ Fred D. Hafer
                                                 ------------------------------
ATTEST:                                                 Fred D. Hafer
                                                        Chairman, President and
                                                        Chief Executive Officer
                 Secretary



                                           By:          /s/ John G. Graham
                                                -------------------------------
                                                        John G. Graham




                                       16