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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 23, 2025
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| | FIRSTENERGY CORP | | |
| Exact name of Registrant as specified in its charter |
| | | | | | | |
| Ohio | | 333-21011 | | 34-1843785 |
State or other jurisdiction
of incorporation | | Commission
File Number | | I.R.S. Employer
Identification No. |
| | | | | | | |
| 341 White Pond Drive |
| | | Akron | OH | 44320 | | | |
| Address of Principal Executive Offices and Zip Code |
| | | | | | | | |
| | (800) | 736-3402 | | | |
| Registrant’s telephone number, including area code: |
| | | | | | | | |
| Not Applicable |
| Former name or former address, if changed since last report: |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.10 par value per share | | FE | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On September 23, 2025, after a thorough review process by the Board of Directors (the “Board”) of FirstEnergy Corp. (the “Company”) and the Compensation Committee of the Board (the “Committee”), with input and advice from the Committee’s independent compensation consultant, the Board, upon recommendation by the Committee, approved (i) amendments and restatements of the FirstEnergy Executive Severance Benefits Plan (the “Executive Severance Plan”) and the FirstEnergy Corp. 2017 Change in Control Severance Plan (the “Change in Control Plan” and, together with the Executive Severance Plan, the “Plans”), and (ii) new forms of time-based restricted stock unit award agreements (the “Time-Based RSU Award Agreements”) and performance-based restricted stock unit award agreements (the “Performance-Based RSU Award Agreements” and, together with the Time-Based RSU Award Agreements, the “RSU Award Agreements”), in each case to be effective January 1, 2026. The Board’s approval of the amended and restated Plans and the new forms of RSU Award Agreements modernizes and aligns the Company’s executive severance compensation program with peer practice. Certain Company executives, including the Company’s President and Chief Executive Officer (“CEO”), Chief Financial Officer, and other named executive officers, are expected to participate in the Plans and to be granted equity awards in the future evidenced by the RSU Award Agreements.
Executive Severance Plan
The Executive Severance Plan provides severance benefits to eligible executives who are involuntarily separated by the Company due to the sale or closing of a facility, corporate restructuring, merger, acquisition, a reduction in the workforce, or job elimination (collectively, “Qualified Separations by the Company”). Benefits under the Executive Severance Plan are also offered if an eligible executive terminates his or her employment with the Company because a new job assignment would result in the occurrence of any one or more of the following events: (i) 15% or greater reduction in the executive’s then current base salary (except with respect to across-the-board salary reductions to similarly-situated Company employees); (ii) a requirement that the executive relocate from his or her current residence; or (iii) the distance from the executive’s current residence to his or her new reporting location being at least 50 miles farther than the distance between such executive’s current residence and previous reporting location (collectively, “Qualified Separations by the Executive” and, together with Qualified Separations by the Company, “Qualified Separations” and each, a “Qualified Separation”).
Prior to the amendment and restatement, the CEO was not included in the Executive Severance Plan and the cash severance benefits under the Executive Severance Plan were calculated using a service-based formula (the “Service-Based Formula”), such that, in the event of a Qualified Separation, an eligible executive was entitled to receive three weeks of base salary for each full year of service (with a minimum benefit of 52 weeks of base salary and a maximum benefit of 104 weeks of base salary). As amended and restated, the Executive Severance Plan includes the CEO as an eligible participant and provides that cash severance benefits (collectively, the “Amended Severance Benefits”) will be determined as follows in the event of a Qualified Separation:
•The CEO, all officers (as defined by Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), and any remaining members of the Company’s Executive Council will be entitled to severance pay equal to one and one-half times such participant’s base salary.
•Tier 3 participants (generally, Presidents and Vice Presidents) will be entitled to severance pay equal to such participant’s base salary.
•Tier 4 participants (generally, Director-level) will be entitled to severance pay based upon the Service-Based Formula, such that an eligible executive will be entitled to receive three weeks of base salary for each full year of service (with a maximum benefit equal to such participant’s base salary).
Notwithstanding the foregoing, the amended and restated Executive Severance Plan provides that eligible executives, as defined therein, will be entitled to receive severance benefits based upon the prior Service-Based Formula as of December 31, 2025, if such amount is greater than the amount that the executive would receive under the Amended Severance Benefits.
Additionally, under the amended and restated Executive Severance Plan, for an executive with a Qualified Separation who is eligible for and elects continuation of health care and/or dental care under COBRA, the Company will waive a portion of the COBRA premium for a period equal to the lesser of (i) 18 months following the date of the Qualified Separation and (ii) the date that such executive ceases to qualify for COBRA coverage.
An executive’s receipt of any severance benefits under the amended and restated Executive Severance Plan is contingent upon such executive’s timely execution and delivery of a valid and irrevocable separation agreement in the form provided by the Company that contains, among other provisions, a general release and waiver of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement provisions (a “Release”) and (ii) the Release becoming irrevocable no later than 60 days following the executive’s separation from the Company. Severance amounts will be paid in a lump sum as soon as administratively possible after the Release is effective, but no later than two and one-half months after the date that the Qualified Separation occurs.
In addition to the aforementioned changes, the Executive Severance Plan, as amended and restated, also incorporate certain clarifying, ministerial, non-substantive, and conforming changes.
Change in Control Plan
The Change in Control Plan provides for severance benefits in the event that an eligible executive experiences a termination of employment (either without “Cause” by the Company or for “Good Reason” by the executive (each as defined in the Change in Control Plan)) within the 24-month period following a change in control of the Company. For the avoidance of doubt, participants in the Change in Control Plan are not permitted to receive severance benefits under the Change in Control Plan and another Company severance plan, program or arrangement.
Prior to the amendment and restatement, all participants were eligible for the same level of benefits under the Change in Control Plan, which included (collectively, the “Change in Control Benefits”):
•Cash severance (the “Change in Control Cash Severance”) equal to two-times the sum of the executive’s (i) base salary and (ii) target award under the Company’s short-term incentive program (“STIP”);
•Payment of the annual STIP for the fiscal year in which the termination occurs, paid at target and prorated for the number of days that the executive worked during such fiscal year;
•Continued health and welfare coverage for two years; and
•Up to $30,000 of outplacement services for the one-year period following the change in control.
The Change in Control Benefits under the amended and restated Change in Control Plan remain the same for all eligible participants, except in the case of the CEO, who under the amended and restated Change in Control Plan, will be entitled to Change in Control Cash Severance equal to two and ninety-nine hundredths (2.99) times the sum of the CEO’s (i) base salary and (ii) target award under the STIP.
The “Change in Control” definition in the amended and restated Change in Control Plan was revised to conform to the corresponding definition in the Company’s 2020 Incentive Compensation Plan (the “2020 ICP”) to ensure consistency and for ease of administration in the event of a change in control. Additionally, the Change in Control Plan required the Board to conduct an annual review of the Change in Control Plan to determine whether the term of the Change in Control Plan should be extended for an additional one-year period. The amended and restated Change in Control Plan will automatically renew for successive one-year terms, unless otherwise terminated by action of the Board.
An executive’s receipt of any benefits under the amended and restated Change in Control Plan is contingent upon such executive’s execution and non-revocation of a general release and waiver of claims in favor of the Company and related persons and entities. Cash amounts under the amended and restated Change in Control Plan will be paid in a lump sum within 60 days of the executive’s termination of employment.
In addition to the aforementioned changes, the Change in Control Plan, as amended and restated, also incorporates certain clarifying, ministerial, non-substantive, and conforming changes.
RSU Award Agreements
The Board approved new forms of RSU Award Agreements for grants of time-based restricted stock units (“RSUs”) and performance-based RSUs made on or after January 1, 2026. The new form of Time-Based RSU Award Agreement provides that outstanding unvested time-based RSUs will vest in full upon a Change in Control (as defined in the 2020 ICP) to the extent such RSUs are not replaced with a “Replacement Award” (as defined in the 2020 ICP). The new form of Performance-Based RSU Award Agreement provides that, in the event of a Change in Control, outstanding unvested performance-based RSUs will vest at target level of performance, to the extent such RSUs are not replaced with a Replacement Award.
The foregoing descriptions of the amendments and restatements of the Plans and the new forms of RSU Award Agreements are summaries and are qualified in their entireties by reference to the full texts of the amended and restated Plans and the new forms of RSU Award Agreements, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3, and 10.4 and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| | | | | | | | |
| Exhibit No. | | Description |
| 10.1 | | |
| 10.2 | | |
| 10.3 | | |
| 10.4 | | |
| 104 | | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
September 29, 2025
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| FIRSTENERGY CORP. |
| Registrant |
| |
| |
| By: | /s/ Jason J. Lisowski |
| Jason J. Lisowski Vice President, Controller and Chief Accounting Officer |
FIRSTENERGY CORP.
EXECUTIVE SEVERANCE BENEFITS PLAN
As Amended and Restated as of January 1, 2026
I. INTRODUCTION
Effective January 1, 2026, certain executives who terminate employment with FirstEnergy Corp. or any of its operating companies to which benefits hereunder have been extended, as set forth below under “Participating Employers” (collectively, the “Company”), on account of a Qualified Separation (as defined below) are eligible to receive severance benefits under this FirstEnergy Executive Severance Benefits Plan (the “Plan”), subject to the terms and conditions set forth herein.
Refer to your employee benefits handbook or contact your local Human Resources representative for specific details regarding benefits availability upon termination of employment not covered by this Plan.
II. ELIGIBILITY
a. Participation and Qualified Separation
If you are an executive of the Company in Compensation Incentive Tier levels one through four, you will be eligible for the severance benefits pursuant to this Plan if you have a “Qualified Separation.” For purposes of this Plan, a “Qualified Separation” means the following:
i. Your employment with the Company is terminated by the Company in connection with circumstances where business conditions require the closing or sale of a facility, corporate restructuring, merger, acquisition, a reduction in workforce, or job elimination, and you and the Company reasonably believe in good faith at the time of separation that your employment or other service to the Company, including service as an independent contractor, has permanently ceased; or
ii. You terminate your employment with the Company because you turn down a job assignment that: (i) would result in a reduction of at least 15% in your current base salary (except for across-the-board salary reductions similarly affecting all or substantially all similarly situated employees of the Company or Company affiliate); (ii) contains a requirement that you must relocate from your current residence; or (iii) results in the distance from your current residence to your new reporting location being at least 50 miles farther than the distance between your current residence and your previous reporting location; provided, however, that in order to receive such severance benefits, you must provide notice to the Company within 30 days following the date you are notified of such job assignment, the Company does not remedy the condition within 30 days following the date you provide notice to the
Company, and your employment from your existing job terminates on the first day immediately following the last day of the Company’s 30-day notice period. Turning down a job assignment with any “Participating Employer” or Company affiliate that did not result in any of the above changes will be considered a voluntary termination of employment and you will not be entitled to severance benefits hereunder. Accepting a position with a Company affiliate before the receipt of a severance benefit under this Plan also will result in ineligibility for benefits.
You will be eligible for severance benefits at the end of a temporary Transitional or Special Assignment (“Assignment”) if you accept the Assignment because of a Qualified Separation and you are notified of your eligibility in writing prior to the commencement of the Assignment.
b. Circumstances Not Covered by the Plan
No severance benefits will be offered to you if you separate employment from the Company for any other reason than a Qualified Separation. These circumstances include, but are not limited to: voluntary resignation; a discharge or demotion for misconduct, poor job performance, or absenteeism; or the failure to return from a leave of absence. In addition, you will not be offered benefits under this Plan if, as a result of a sale, merger or acquisition of the Company or a Participating Employer or any of its assets, your employment with the purchasing, acquiring or merging company is continued consistent with the eligibility requirements set forth above and you do not become unemployed. The Company expressly reserves the right to expand the circumstances under which severance benefits will not be offered or to limit the amount of severance benefits described in this Plan.
c. No Right To Employment
It is not the intent of the Company to confer through this Plan, either expressly or by implication, any rights to employment, any right of rehire or preference in rehire upon any employee. It is further not the intent of the Company to suggest that it may demote or terminate the employment of any employee only upon a showing of misconduct, poor job performance, or absenteeism. The Company specifically reserves the right to demote or terminate the employment of any employee at any time in accordance with applicable law, and/or Company policy.
d. Severance Benefits Contingent Upon Release Agreement
i. Your receipt of severance pay, receipt of any applicable waiver of COBRA premium, and eligibility for the training stipend pursuant to this Plan are contingent in all respects upon (i) your timely execution and delivery of a valid and irrevocable separation agreement in the form provided by the Company that contains, among other provisions, a general release and waiver of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement provisions (a “Release”) and (ii) the Release becoming irrevocable no later
than 60 days following your separation from the Company (or such earlier date set forth therein).
ii. A failure to sign the Release within the applicable time frame set forth therein or a revocation of a signed Release, if applicable, will make you ineligible to receive the severance benefits provided under the Plan. No severance benefits will be paid until after the revocation period has expired, if applicable.
iii. Your receipt of the Employee Assistance Program continuation and career transition services is not contingent upon your signing a Release.
e. Relationship to the Company’s Pension Plans
If you incur a Qualified Separation, you may also be eligible for an early retirement benefit rather than a vested pension benefit, commencing as early as age 55, from the Company’s pension plan(s). In accordance with the terms of the Company’s Master Pension Plan, to be eligible for the early retirement benefit, you must, at the time of a Qualified Separation: (i) be between the ages of 50 and 54, inclusive; (ii) have 10 years of eligible service as defined by the Master Pension Plan; and (iii) be eligible for and have elected severance benefits under this Plan by signing and not revoking the required Release consistent with the provisions of Section II.d above. Eligibility for the early retirement benefit does not determine eligibility for any other retiree benefits, i.e., health care, retiree life insurance, etc.
f. 30 Days’ Paid Notice
If you have a Qualified Separation, you will be provided with 30 calendar days paid notice (the “Notice Period”). For example, you may be notified on August 1 that your employment will terminate effective August 31. Your payroll status will be that of an active employee during the Notice Period. At the discretion of management, you may be required to work during the Notice Period.
III. SEVERANCE BENEFITS
a. Severance Pay
For eligible executives other than Grandfathered Executives (as defined below), the following severance pay will apply:
i. Compensation Incentive Tier Four: If you are an executive who has a Qualified Separation and who falls within Compensation Tier four, you will receive three weeks’ base pay for each full year of service (as such full years of service are calculated in accordance with the formula set forth on Exhibit A attached hereto). The minimum and maximum severance pay amounts are 26 weeks’ pay and 52 weeks’ pay, respectively.
ii. Compensation Incentive Tier Three: If you are an executive who has a Qualified Separation and fall within Compensation Incentive Tier three, you will receive severance pay equal to one times your base salary at the rate in effect immediately prior to the date of your Qualified Separation.
iii. Compensation Incentive Tiers One and Two: If you are an executive who has a Qualified Separation and fall within Compensation Incentive Tiers one or two, you will receive severance pay equal to one and one-half times your base salary at the rate in effect immediately prior to the Qualified Separation date.
b. Grandfathered Executives
If you are an eligible executive who has at least 18 full years of service as of January 1, 2025 (“Grandfathered Executive”), your severance pay will be calculated in accordance with the formulas set forth on Exhibit A attached hereto.
c. Lump Sum Payment
The total severance amount will be paid in a lump sum as soon as administratively possible after the Release is effective, but no later than two and one-half months after the date that the Qualified Separation occurs. Severance payments are subject to income tax withholding at the supplemental federal rate in addition to any applicable state or local withholding. Applicable FICA and Medicare withholding also will apply. Severance payments are not considered compensation for the Company’s pension plan(s) or the FirstEnergy Corp. Savings Plan, or for any other benefits determination, except as set forth above.
d. Integration With Other Payments
Benefits under this Plan are not intended to duplicate such benefits as severance pay or similar benefits under other benefit plans or employment contracts or applicable laws including the Worker Adjustment Retraining Notification Act of 1988. To the extent permitted by law and should such other benefits be payable, your benefits under this Plan will be reduced accordingly. As an alternative, benefits previously paid under this Plan will be treated as having been paid to satisfy such other benefit obligations. In either case, the Plan Administrator will determine how to apply this provision and may override other provisions in this Plan by doing so. The Company further reserves the right to reduce the amount of severance pay to recover any amounts which you may otherwise owe to the Company; provided that, if the severance pay is subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), such reduction shall be done in compliance with Section 409A of the Code (“Section 409A”).
e. COBRA Based Continuation of Health Care and Dental Care
For an executive with a Qualified Separation who is eligible for and elects continuation of health care and/or dental care under COBRA, the Company will waive the COBRA premium for a period equal to the lesser of (i) 18 months following the date of your Qualified Separation and
(ii) the date you cease to be qualify for COBRA coverage(the “COBRA Severance Benefit Period”). This is a waiver of the COBRA premium only. Any monthly premium that would otherwise be due during this period as if you were an active employee will remain your responsibility and is not waived. YOU MUST SPECIFICALLY ELECT AND QUALIFY FOR COBRA COVERAGE IN ORDER TO RECEIVE THIS BENEFIT. If you continue to qualify for COBRA coverage at the expiration of the COBRA Severance Benefit Period, you would be responsible for paying the COBRA premium for the remainder of the COBRA period (for as long as you remain eligible). If an executive elects continuation of benefits under COBRA, the Company provided portion of the premium in excess of the amount generally provided to all salaried employees is taxable income and is subject to income tax withholding at the supplemental federal rate in addition to any applicable state or local withholding. Applicable FICA and Medicare withholding also will apply. The Company reserves the right to pay the COBRA premium in a lump sum.
The COBRA Severance Benefit Period will run concurrently with, and count towards, the maximum COBRA continuation period.
f. Employee Assistance Program Continuation
The behavioral health counseling services of the Work/Life Employee Assistance Program will be continued for you and your eligible dependents for six months following your Qualified Separation. This program provides assessment, treatment and/or referral services for certain personal matters.
g. Career Transition Services
At the Company’s discretion, a professional career counseling agency chosen by the Company may provide a career transition program that emphasizes job search strategies, interview techniques, resume preparation, and self-assessment; provided, however, that such services will not be provided beyond the last day of the second calendar year following your termination of employment.
h. Applying For Benefits
Severance benefits will be offered automatically for those who have a Qualified Separation. It is not necessary for you to submit a claim unless you believe you qualify and have not been notified that you will be offered severance benefits. A claim must be filed with the Plan Administrator within 90 days of your separation of employment date.
IV. BENEFITS CLAIMS AND APPEALS PROCEDURES
The following is an outline of the procedures for the processing of a claim and summarizes the duties and responsibilities of the FirstEnergy Employee Benefit Claims and Appeals Committee (the “Appeals Committee”) established to handle the appeal of any claims determination made by the Plan Administrator relative to the eligibility and entitlement of a participant, beneficiary or other claimant to benefits offered under this Plan.
a. Claims Process
A Claim, as referred to in this Plan, is a request for a Plan benefit. Claims for benefits must be in writing, signed by the participant, beneficiary or other claimant, and submitted on the appropriate form and in a manner acceptable to the Plan Administrator.
i. The Plan Administrator shall process the claim and notify the claimant of the initial determination of entitlement to benefits within 90 days. The Plan Administrator may take up to an additional 90-day period to make the initial determination if required due to extenuating circumstances, provided the claimant is notified in writing of the extension, the extenuating circumstances requiring additional time and the date by which the Plan Administrator expects to make a benefit determination.
ii. If the Plan Administrator denies any part or all of the initial claim for benefits, the claimant will be notified in writing, stating the reason for the denial and the Plan provisions on which the denial is based. The claimant shall be entitled to receive, upon written request, reasonable access to and copies of all documents, records and other information relevant to the claim for benefits. The denial will provide a description of any additional information or material necessary for the claimant to perfect the claim and an explanation as to why the additional information or material is required. The denial will further provide an explanation of the claims appeal procedure and the time limits for filing an appeal. Such notice of denial or any other notice as referred to in this procedure shall be deemed duly given when addressed to the claimant and mailed by first class mail to the address last appearing in the records of the Plan Administrator or Appeals Committee.
iii. The claimant shall have 60 days from the date of the initial benefit determination to file an appeal. The claimant will have the opportunity to submit written comments, documents or other information in support of the claim as part of the appeal. The appeal must be mailed to the FirstEnergy Employee Benefits Claims and Appeals Committee, 341 White Pond Drive, Akron, Ohio 44320.
b. Appeals Committee
The Appeals Committee shall consist of at least three employees of FirstEnergy Service Company representing the Human Resources, Investment Management and Legal Departments, as shall be appointed by the Chief Executive Officer of FirstEnergy Corp. (“CEO”) or the CEO’s designee. Such members may designate others in their respective department to serve in their place at Appeals Committee meetings. The Appeals Committee will meet to review and render a decision on any appeal of a determination on an initial claim for benefits made by the Plan Administrator. In making its decision, the Appeals Committee will have full power and authority to interpret the Plan, resolve ambiguities, inconsistencies and omissions, determine any question
of fact, and determine the right to benefits of, and the amount of benefits, if any, payable to the claimant in accordance with the provisions of the Plan. The Appeals Committee will not defer to the original determination but will independently review the initial claim for benefits and consider all comments, documents and other information submitted as part of the appeal in making its decision. In addition, neither the person who made the initial determination nor that person’s subordinate will participate in the decision on the appeal.
c. Appeals Process
The Appeals Committee will review and make its decision on the appeal and notify the claimant within a reasonable period of time, but not later than 60 days after the receipt of the claim, unless circumstances require an extension of time. In no event shall the extension of time exceed 60 days. If an additional 60-day extension is required, the claimant will be notified in writing of the extension.
i. The claimant will be notified in writing of the Appeal Committee’s decision within five workdays of the decision being made. If the Committee’s decision is to uphold the denial of benefits, the notification will include the reason for the denial and the Plan provisions on which the denial is based. The claimant shall be entitled to receive, upon written request, reasonable access to and copies of all documents, records and other information on which the decision was based.
ii. The claimant must exhaust the above appeals process prior to any action at law, in equity, pursuant to arbitration or otherwise. The claimant shall have 180 days from the date of the decision of the Appeals Committee to file an action in court. No legal action may be commenced against the Plan, the Plan Administrator or the Appeals Committee more than 180 days after the Appeal Committee’s decision has been made with respect to all or any portion of the claim for benefits. Any complaint or court action must be filed in the United States Federal District Court in Northeast Ohio.
V. OTHER FACTS AND INFORMATION
a. Benefits Rights
Severance benefits are not vested. This Plan describes the severance benefits under the Plan available to eligible employees. When it deems it is in the Company’s best interest to do so, the CEO (or the CEO’s designee) may, on a case by case basis, authorize additional severance benefits not contained in this Plan to an eligible employee other than an employee subject to the reporting requirements of Section 16(b) of the Securities Exchange Act of 1934, as amended. Additionally, the CEO (or the CEO’s designee) may not make adjustments to the severance benefits for Executive Council members without advance discussion with the Compensation Committee.
b. Plan Amendment and Termination
The Plan may be amended or terminated by the Compensation Committee of the Board of Directors of FirstEnergy Corp. (“Compensation Committee”). However, any such amendment or termination will not adversely affect an employee who already has qualified for the severance benefits under the terms of the Plan prior to the date of the Plan’s amendment or termination. Severance benefits under this Plan are voluntary on the part of the Company and are not required by any legal obligation other than the Plan itself.
c. Unfunded Plan
This Plan is unfunded. The benefits under this Plan are paid directly by the Company or a Participating Employer, as applicable, from its general assets.
d. Plan Is Not An Employment Contract
The Plan shall not be deemed to constitute a contract between the Company and any employee nor shall anything herein contained be deemed to give any employee any right to be retained in the employ of the Company or to interfere with the right of the Company to demote or discharge any employee at any time and to treat the employee without regard to the effect which such treatment might have upon the employee as a participant in the Plan.
e. Administration.
The Plan is administered by FirstEnergy Service Company, and the Plan Administrator has the sole discretion and exclusive authority to interpret this Plan, determine whether an employee who terminates employment from the Company qualifies for benefits from this Plan, and is responsible for all aspects of administration. All decisions of the Plan Administrator shall be considered final and binding subject to the Appeals process. Inquiries should be made to the Plan Administrator, Executive Severance Benefits Plan, c/o FirstEnergy Corp., 341 White Pond Drive, Akron, OH 44320.
f. Section 409A Compliance
For purposes of eligibility for benefits under this Plan, to the extent required under Section 409A, a Qualified Separation must be a “separation from service” as such term is defined in Treasury regulations issued under Section 409A, and all references to “termination of employment” or a “separation” in this Plan shall refer to events which constitute a “separation from service” as defined under Section 409A, if applicable. Unless provided otherwise below with respect to payments that are subject to Section 409A and made to a “specified employee”, benefits under this Plan will be paid no later than the fifteenth 15th day of the second month of the year following the year in which the Qualified Separation occurs.
It is the intention and purpose of the Company that this Plan shall be, at all relevant times, exempt from (or in compliance with) Section 409A and all other applicable laws, and this Plan shall be so interpreted and administered. Severance pay hereunder is intended to qualify from an exemption to Section 409A under the short-term deferral exemption. In addition to the general amendment rights of the Company with respect to the Plan, the Company specifically retains the unilateral right (but not the obligation) to make, prospectively or retroactively, any amendment to this Plan or any related
document as it deems necessary or desirable to more fully address issues in connection with compliance with (or exemption from) Section 409A and such other laws. In no event, however, shall this section or any other provisions of this Plan be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments under, this Plan and the Company shall have no responsibility for tax or legal consequences to you (or your beneficiaries) resulting from the terms or operation of this Plan.
If any benefits payable under this Plan are subject to, and not exempt from, Section 409A, then the following rules apply:
i. Severance pay shall be paid in a lump sum as soon as practicable following the date of your separation from service but not later than 90 days following your separation from service; provided, however, the lump sum distribution may be made after such date if the regulations under Section 409A so permit or treat a payment made after such date as being made by the designated date of distribution. You are not permitted, directly or indirectly, to designate the taxable year in which payment is made.
ii. If you are a “specified employee” as determined under the Company’s policy for determining specified employees on the date of a separation from service, benefits under this Plan subject to, and not exempt from, Section 409A that would otherwise be paid or provided during the first six months following such separation from Service shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code, in effect on the date of the separation from service) on the first business day following the six-month anniversary of such separation from service. Notwithstanding the foregoing, payments delayed pursuant to this paragraph shall commence as soon as practicable following the date of your death prior to the end of the six-month period but in no event later than 90 days following the date of death.
iii. Any reimbursement of expenses or in-kind benefits provided under this Plan subject to, and not exempt from, Section 409A shall be subject to the following additional rules: (i) any reimbursement of eligible expenses shall be paid as they are incurred (but not prior to the end of the six-month delay period set forth above if applicable) and shall always be paid on or before the last day of your tax year following the tax year in which the expenses were incurred; provided that you first provide documentation of such expenses in reasonable detail not later than 60 days following the end of the calendar year in which the eligible expenses were incurred; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (iii) the right to reimbursement or in-kind benefits or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
iv. Notwithstanding any other provision of this Plan, the Release required by this Plan for payment of your benefits must become irrevocable within 60 days following the involuntary separation from service (or such shorter period set forth in the Release). Any benefit subject to Section 409A will be forfeited if the Release is not effective within such time period. However, to the extent that the period following your involuntary separation from service in which you have to consider whether to execute the Release (as such period is set forth therein) begins in a first taxable year and ends in a second taxable year, any payment to which you would be entitled will be paid (or commence being paid) in the second taxable year.
v. No payments made by the Company through any other plan, program, policy or arrangement shall be a substitute for the payment of any benefits payable under this Plan that are subject to Section 409A.
g. Type of Plan.
The Plan is not intended to be an “employee pension benefit plan” or “pension plan” within the meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Rather, this Plan is unfunded, has no trustee and is administered by the Plan Administrator. This Plan is intended to be a “welfare benefit plan” within the meaning of Section 3(1) of ERISA and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, Section 2510.2(b), and is to be administered as a “top-hat” welfare plan exempt from the substantive requirements of ERISA. In addition, the Plan is intended to be a “separation pay plan” under Section 409A, in accordance with the regulations issued thereunder, to the extent applicable.
h. Plan Administrator.
FirstEnergy Service Company.
i. Contributions.
No contributions are required by employees for the severance benefits covered under this Plan. All contributions to provide these benefits are made by the Company.
j. Clawback of Severance Benefits.
The benefits under this Plan shall be subject to recoupment or clawback as may be required by applicable law or listing standards or as set forth in any compensation adjustment, recoupment or clawback policy of the Company as may be in effect at such time, including, without limitation, the Company’s Executive Compensation Recoupment Policy and Compensation Clawback Policy, as may be amended from time to time.
k. Participating Employers and Identification Numbers:
| | | | | |
American Transmission Systems, Incorporated EIN 34-1882848 | Cleveland Electric Illuminating Company EIN 34-0150020 |
FirstEnergy Pennsylvania Electric Company EIN [•] | FirstEnergy Service Company EIN 34-1968288 |
Jersey Central Power & Light EIN 21-0485010 | Monongahela Power Company EIN 13-5229392 |
Ohio Edison Company EIN 34-0437786 | The Potomac Edison Company EIN 13-5323955 |
Toledo Edison Company EIN 34-4375005 |
|
Additions or deletions to the list of Participating Employers may be made at any time at the sole discretion of the Program Sponsor. An up-to-date listing of Participating Employers may be obtained from the Plan Administrator.
EXHIBIT A
GRANDFATHERED EXECUTIVES
For Grandfathered Executives, the following will apply:
If you are an executive who has a Qualified Separation and who falls within Compensation Incentive Tier four, you will receive severance pay equal to the greater of (a) three weeks’ base pay for each full year of service with minimum and maximum severance pay amounts of 26 weeks’ pay and 65 weeks’ pay, respectively, as of January 1, 2025, and (b) the amount calculated under Section III(a)(i) of the Plan.|
If you are an executive who has a Qualified Separation and falls within Compensation Incentive Tier three, you will receive severance pay equal to the greater of (a) three weeks’ base pay for each full year of service with the minimum and maximum severance pay amounts of 52 weeks’ base pay and 104 weeks’ base pay, respectively, as of January 1, 2025, and (b) the amount calculated under Section III(a)(ii) of the Plan.
If you are an executive who has a Qualified Separation and fall within Compensation Incentive Tier two, you will receive severance pay equal to the greater of (a) three weeks’ base pay for each full year of service with the minimum and maximum severance pay amounts of 52 weeks’ base pay and 104 weeks’ base pay, respectively, as of January 1, 2025, and (b) the amount calculated under Section III(a)(iii) of the Plan.
For the purposes of this Plan and the determination of year of service for a Grandfathered Executive, the number of your full years of service equal your whole years of credited service under the Company’s Pension Plan(s) as of January 1, 2025 plus one year.
FIRSTENERGY CORP.
EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN
As Amended and Restated as of January 1, 2026
FirstEnergy Corp., an Ohio corporation, adopted this FirstEnergy Corp. Executive Change in Control Severance Plan (the “Plan”), originally effective as of January 1, 2017, which is hereby amended and restated, effective January 1, 2026 (the “Effective Date”).
ARTICLE ONE
GENERAL PROVISIONS
1.1 Name. The Plan shall be named the FirstEnergy Corp. Executive Change in Control Severance Plan (formerly, the FirstEnergy Corp. 2017 Change in Control Severance Plan).
1.2 Purpose. This Plan provides certain designated employees of the Company or any Affiliate or Subsidiary with severance benefits in the event of a Termination of Employment following a Change in Control under conditions specified in this Plan.
1.3 Employee Welfare Benefit Plan. This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of ERISA, and is intended only to cover participants who are members of a “select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. This Plan shall be construed and administered in such a manner, and benefits shall be limited by the Administrator in his, her or its discretion, such that, where applicable, this Plan shall not be an “employee pension benefit plan” under Section 3(2) of ERISA. The Plan operates based on the calendar year.
ARTICLE TWO
DEFINITIONS
In this document, each term shall have the meaning set forth below, unless the context clearly indicates otherwise. Other terms may be defined elsewhere within the Plan:
“2020 ICP” means FirstEnergy Corp. 2020 Incentive Compensation Plan or any successor incentive compensation plan, as amended from time to time.
“Administrator” or “Administrative Committee” means the person or entity designated to administer the Plan in Article Eight.
“Affiliate” means, as of any date, any corporation or business organization that would be treated as a single employer with the Company under Section 414(b) or (c) of the Code.
“Appeals Committee” means the Compensation Committee prior to a Change in Control and, after a Change in Control, the committee designated in Section 9.4 of the Plan.
“Applicable Multiplier” means (i) for all Participants other than the CEO, two (2), and (ii) for the CEO, two and ninety-nine hundredths (2.99).
“Base Compensation” means the annual salary (determined in a reasonable manner by the Administrator), as applicable, of a Participant on the date of his or her Termination of Employment. Base Compensation shall not be reduced by elective reductions in compensation pursuant to Sections 125, 132(f), 401(k) of the Code and similar provisions of the Code or any elective deferrals of Base Compensation into the EDCP or any other nonqualified deferred compensation plan, but shall be exclusive of any separation pay, bonuses, incentive pay, special awards, fringe benefits, stock options and other stock-based compensation.
“Board” means the Board of Directors of the Company.
“Cause” means that, prior to any Termination of Employment, a Participant shall have:
(i) committed and been convicted of a criminal violation involving fraud, embezzlement or theft in connection with his or her duties or in the course of his or her employment with the Company, an Affiliate or any Subsidiary;
(ii) committed intentional wrongful damage to property of the Company, an Affiliate or any Subsidiary;
(iii) committed intentional wrongful disclosure of secret processes or confidential information of the Company, an Affiliate or any Subsidiary;
(iv) committed intentional wrongful competition with the Company, an Affiliate or any Subsidiary as set forth in Article Seven below; or
(v) committed gross negligence in the performance of his or her material duties to the Company, an Affiliate or any Subsidiary;
and any such act or omission shall have been demonstrably and materially harmful to the Company, an Affiliate or any Subsidiary. For purposes of this Plan, no act or failure to act on the Participant’s part shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done or omitted to be done by the Participant not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company. Notwithstanding the foregoing, a Participant shall not be deemed to have been terminated for “Cause” hereunder unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three quarters (3/4) of the Board then in office at a meeting of the Board called and held for such purpose, after reasonable notice to the Participant and an opportunity for him or her, together with his or her counsel (if he or she chooses to have counsel present at such meeting), to be heard before the Board, finding that, in the good faith opinion of the Board, the Participant had committed an act constituting “Cause” as herein defined and specifying the particulars thereof in detail. Nothing herein will limit the Participant’s (or his or her beneficiaries’) right to contest the validity or propriety of any such determination.
“CEO” means the Chief Executive Officer of the Company.
“Change in Control” means “Change in Control” as defined under the 2020 ICP.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and regulations and pronouncements promulgated thereunder.
“Commencement Date” means, with respect to each Participant, the date that the Participant commences participation in the Plan.
“Company” means FirstEnergy Corp., an Ohio corporation, and any successor corporation or business organization that succeeds to the duties and rights of FirstEnergy Corp. under this Plan by operation of law or otherwise.
“Compensation Committee” means the Compensation Committee of the Board.
“Director” means a member of the Board.
“Disability” means a disability as defined in the FirstEnergy Corp. Master Pension Plan or successor qualified pension plan under the pertinent provisions of the plan that apply to a Participant, except that, for purposes of this definition, the Participant need not have completed ten (10) years of service with the Company. As of the original adoption of this Plan, a “disability” under the FirstEnergy Corp. Master Pension Plan is defined as qualification for benefits under a participating employer’s long-term disability plan or, if not a participant under a participating employer’s long-term disability plan or if denied benefits under such plan, permanently and totally disabled from any and all gainful employment in the opinion of a participating employer physician.
“EDCP” means the FirstEnergy Corp. Executive Deferred Compensation Plan, as amended from time to time.
“Employee” means any person who is a full-time, regular employee (as determined by the Company regardless of whether a court, agency or other governmental authority makes a different determination) of the Company or any Affiliate or Subsidiary. The word “Employee” shall not include any person who renders service to the Company solely as a Director, temporary employee, seasonal or leased worker or independent contractor.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and regulations and pronouncements promulgated thereunder.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and regulations and pronouncements promulgated thereunder.
“Good Reason” means the initial occurrence, without the Participant’s consent, of one or more of the following events:
(1) a material diminution in the Participant’s Base Compensation;
(2) a material diminution in the Participant’s authority, duties or responsibilities (including, without limitation, the Participant’s reporting relationship);
(3) any reassignment that results in the Participant’s current residence to the Participant’s new reporting location being at least fifty (50) miles farther than the distance between the Participant’s current residence to the Participant’s previous reporting location;
(4) any other action or inaction that constitutes a material breach by the Company of any employment agreement under which the Participant provides services; provided, however, that “Good Reason” shall not be deemed to exist unless:
(A) the Participant has provided notice to the Company of the existence of one or more of the conditions listed in (1) through (4) above within ninety (90) days after the initial occurrence of such condition or conditions;
(B) such condition or conditions have not been cured by the Company within thirty (30) days after receipt of such notice; and
(C) the Participant’s employment terminates within thirty (30) days following the end of the Company’s thirty (30)-day cure period.
“Parachute Payment” means the meaning given to such term in Section 280G(b)(2)(a)(i) of the Code.
“Parachute Payment Limit” means three (3) times the base amount, as defined by Section 280G(b)(3) of the Code.
“Participant” means any individual who: (i) is an Employee of the Company, Affiliate or any Subsidiary as of the Effective Date; and (ii) has been designated by the Compensation Committee as a participant in this Plan and, as such, is eligible to receive Severance Benefits. As of the Effective Date, the Participants are set forth on Schedule A attached hereto.
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
“Potential Change in Control” means when one of the following events occurs on or after the Effective Date:
(a) Any Person, 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 13D 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:
(1) more than twenty percent (20%) of any class of equity security of the Company entitled to vote as a single class in the election or removal from office of Directors, or
(2) 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;
(b) 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;
(c) Any Person delivers 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) to the Company pursuant to Rule 14d-3 under the Exchange Act;
(d) Any Person (other than the Company) publicly announces an intention to take actions which if consummated would constitute a Change in Control;
(e) The Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;
(f) The Board approves a proposal that, if consummated, would constitute a Change in Control; or
(g) The Board adopts a resolution indicating that, for purposes of this Plan, a Potential Change in Control has occurred.
Notwithstanding the foregoing, a “Potential Change in Control” shall not include an event described in (a) through (f), 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 determine that the event shall not constitute a Potential Change in Control and furnish written notice to the CEO of such determination.
If a Potential Change in Control is abandoned, terminated, or withdrawn 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 (a) through (g) above.
“Release and Waiver of Claims” means a written release and waiver by a Participant, to the fullest extent allowable under applicable law and in form reasonably acceptable to the Company. Such Release and Waiver of Claims shall not, however, apply to the obligations of the Company arising under this Plan, any indemnification agreement between a Participant and the Company, any vested and accrued benefits under any retirement plans or any stock option, restricted
stock or unit, performance share or other equity award agreements, COBRA continuation coverage or rights of indemnification a Participant may have under the Company’s articles of incorporation or code of regulations or comparable charter document or by statute.
“Severance Benefits” means the severance benefits described in Section 6.1.
“Specified Employee” means any Employee who is a “specified employee,” as defined in Section 409A of the Code on the date of his or her Termination of Employment.
“Subsidiary” means a corporation, company or other entity (a) more than fifty percent (50%) of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (b) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than fifty percent (50%) of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.
“Termination of Employment” means a separation from service within the meaning of Section 409A of the Code of the Participant from the Company and all of its Subsidiaries and Affiliates, for any reason, including without limitation, quit, discharge, retirement, leave of absence (including military leave, sick leave, or other bona fide leave of absence such as temporary employment by the government if the period of such leave exceeds the greater of six months, or the period for which the Participant’s right to reemployment is provided either by statute or by contract) or permanent decrease in service to a level that is no more than twenty percent (20%) of its prior level. For this purpose, whether a Termination of Employment has occurred is determined based on whether it is reasonably anticipated that no further services will be performed by a Participant after a certain date or that the level of bona fide services a Participant will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)-month period (or the full period of services if the Participant has been providing services for less than thirty-six (36) months).
ARTICLE THREE
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. The Compensation Committee must designate all Participants and (b) the Participant’s Commencement Date.
3.2 Participation. Once the Compensation Committee designates the Employee as a Participant, the Participant shall commence participation in the Plan as of the Participant’s Commencement Date.
3.3 Term.
(a) The term of this Plan commenced as of January 1, 2017, and will continue until December 31, 2026. Upon a Participant’s Commencement Date, this Plan shall supersede in its entirety the terms of any prior change in control severance program or agreement applicable to the Participant. Such former agreements will then be considered null and void as of the Participant’s Commencement Date.
(b) Subject to Subsection 3.3(c) below, unless the Board affirmatively votes on or prior to any December 31 not to extend the Plan, the term of the Plan shall be extended automatically for a period of one (1) year from the previous termination date. Except as provided in Subsection 3.3(c) below, in the event the Board votes not to extend the Plan, the termination date of the Plan shall not be extended and shall remain the same termination date as in effect at the time of the Board’s action not to extend the Plan.
(c) Subsections 3.3(a) and (b) notwithstanding, upon a Potential Change in Control, the Plan shall be automatically extended commencing on the date of such Potential Change in Control through a period of twenty-four (24) full calendar months following the date of the consummation of a Change in Control resulting from such Potential Change in Control. At the end of such twenty-four (24) month period, the Plan shall terminate; provided, however, that any unpaid, but then due and owing, amounts as of such date will be paid in accordance with the terms of the Plan in effect as of the date of expiration of the term. If the Potential Change in Control is abandoned, terminated, or withdrawn, it shall then cease to be deemed that a Potential Change in Control has occurred and, unless the Board has voted not to extend the Plan, the term of the Plan will revert back to, and be extended per, the period described in Subsections 3.3(a) or (b) above subject to Section 10.1, if applicable.
ARTICLE FOUR
FUNDING AND VESTING
4.1 Source of Payments. This Plan is unfunded. The benefits are paid directly from the Company’s general assets. A former Employee entitled to benefits under this Plan shall be a general creditor of the Company and shall have no rights to benefits under this Plan greater than those of such creditors.
ARTICLE FIVE
ENTITLEMENT TO BENEFITS
5.1 Entitlement to Benefits due to Involuntary Termination or Termination for Good Reason. A Participant is entitled to severance benefits pursuant to this Plan, as set forth in Article Six, only if a Change in Control occurs and, at any time during the twenty-four (24) month period following the Change in Control, the Participant incurs: (a) an involuntary Termination of Employment for any reason other than for Cause; or (b) a voluntary Termination of Employment for Good Reason.
5.2 Disability; Death. If a Participant’s Termination of Employment with the Company results from the Participant’s Disability or death, the Participant shall not be entitled to severance benefits under this Plan, regardless of the occurrence of a Change in Control. The
Participant or his or her designated beneficiary, in the case of death, shall receive all accrued or vested benefits of any kind to which the Participant is, or would otherwise have been, entitled through the date the Participant’s employment with the Company is terminated, and the Company shall thereupon have no further obligation to the Participant under this Plan.
5.3 Termination for Cause; Without Good Reason. If prior to or subsequent to a Change in Control, a Participant’s employment is terminated by the Company for Cause or by the Participant without Good Reason, the Company shall pay the Participant’s Base Compensation through the effective date of the Termination of Employment at the rate in effect at the time Notice of Termination is given, and the Participant shall also receive all accrued or vested benefits of any kind to which he or she is, or would otherwise have been, entitled through the effective date of the Termination of Employment, and the Company shall thereupon have no further obligation to the Participant under this Plan.
5.4 Notice of Termination. Any termination by the Company for Cause, or by a Participant for Good Reason, shall be communicated by Notice of Termination to the other party, as applicable, given in accordance with Section 11.11 hereof. For purposes of this Plan, a “Notice of Termination” means a written notice which (a) indicates the specific termination provision in this Plan relied upon, and (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of Employment under the provision so indicated.
ARTICLE SIX
SEVERANCE BENEFITS
6.1 Severance Benefits. If a Participant becomes entitled to Severance Benefits under this Plan pursuant to Section 5.1, then such Participant shall be paid or provided the benefits set forth on, and in accordance with, Exhibit A attached hereto.
Notwithstanding any other provision of Section 6.1 or this Plan, the Company shall have no obligation to make the payments or provide the benefits set forth on Exhibit A or provide any other separation benefits hereunder unless (i) the Participant executes, delivers to the Company and complies with the terms of a Release and Waiver of Claims and (ii) the Participant refrains from revoking, rescinding or otherwise repudiating such Release and Waiver of Claims for any applicable period during which the Participant may revoke it.
6.2 Parachute Payments.
(a) If payments and benefits to or for the benefit of a Participant, whether pursuant to this Plan or otherwise, would result in total Parachute Payments to the Participant with a value equal to or greater than one hundred percent (100%) of the Parachute Payment Limit, the amount payable to the Participant, shall be reduced so that the value of all Parachute Payments to the Participant, whether or not made pursuant to this Plan, is equal to the Parachute Payment Limit minus one dollar ($1.00), accomplished by first reducing any amounts payable pursuant to this Plan, and then reducing other amounts of compensation to the extent necessary; provided that, no such reduction shall be taken if, after reduction for any applicable federal
excise tax imposed on the Participant by Section 4999 of the Code, as well as any federal, state and local income tax imposed on the Participant with respect to the total Parachute Payments, the total Parachute Payments accruing to the Participant would be more than the amount of the total Parachute Payments after (a) taking the reduction described in the first clause of this sentence, and (b) further reducing such payments by any federal, state and local income taxes imposed on the Participant with respect to the total Parachute Payments. The Company agrees to undertake such reasonable efforts as it may determine in its sole discretion to prevent any payment or benefit under this Plan (or any portion thereof) from constituting an “excess parachute payment,” as defined under Section 280G(b)(1) of the Code.
(b) All determinations required to be made under Subsection (a) shall be made in good faith by the Company which shall provide detailed supporting calculations to the Participant within thirty (30) business days after the date of the Participant’s Termination of Employment, if applicable, or such earlier time as is requested by the Company. Any determination by the Company shall be binding upon the Company and the Participant.
6.3 Payment Obligations. Upon a Change in Control the Company’s obligations to pay the severance benefits or make any other payments described in this Article Six shall not be affected by any set-off, counterclaim, recoupment, defense or other right which the Company or any of its Affiliates or Subsidiaries may have against a Participant or anyone else. Nothing in this Plan entitles a Participant to participation or continued participation in any plan, program or arrangement of the Company unless participation is specifically designated under, and in accordance with, the applicable plan, program or arrangement.
ARTICLE SEVEN
NONCOMPETITION & NONDISPARAGEMENT PROVISIONS
7.1 Non-Competition. If, subsequent to a Change in Control of the Company, a Participant incurs a Termination of Employment under circumstances described in Section 5.1 of the Plan, then (i) with respect to subparagraphs (a), (b) and (c) below, for a period of twenty-four (24) months after such Termination of Employment and (ii) with respect to subparagraphs (d) and (e) below, at any time after such Termination of Employment, the Participant shall not on his or her own account without the consent of the Company, or as a shareholder, employee, officer, director, consultant or otherwise, engage directly or indirectly in any business or enterprise which is in competition with the Company, an Affiliate or any Subsidiary in a market located in any state or states in which, on the date of the Participant’s Termination of Employment, the Company sells, has sold or reasonably intends to sell to Customers. For all purposes of this Plan, the words “competition with the Company, an Affiliate or any Subsidiary” shall mean:
(a) Directly participating or engaging, on the behalf of other parties, in the purchase or sale of products, supplies or services of the kind, nature or description of those sold by the Company, an Affiliate or any Subsidiary;
(b) Soliciting, diverting, taking away or attempting to take away any of the Customers with respect to their purchase or sale, or potential purchase or sale, of the products, supplies or services of the kind, nature or description of those sold or reasonably intended to be
sold by the Company, an Affiliate or any Subsidiary or the business or patronage of any such Customers with respect to their purchase or sale, or potential purchase or sale, of the products, supplies or services of the kind, nature or description of those sold or reasonably intended to be sold by the Company, an Affiliate or any Subsidiary;
(c) Soliciting, enticing, luring, employing or endeavoring to employ any employees of the Company, an Affiliate or any Subsidiary;
(d) Divulging to others or using for a Participant’s own benefit any confidential information obtained during the course of a Participant’s employment with the Company, an Affiliate or any Subsidiary relative to sales, services, processes, methods, machines, manufacturers, compositions, ideas, improvements, patents, trademarks, or inventions belonging to or relating to the affairs of the Company, an Affiliate or any Subsidiary;
(e) Divulging to others or using to a Participant’s own benefit any trade secrets belonging to the Company, an Affiliate or any Subsidiary obtained during the course of the Participant’s employment or that the Participant became aware of as a consequence of his or her employment.
The term “Customer” shall mean any person, firm, association, corporation or other entity to which the Company, an Affiliate or any Subsidiary sells, has sold or reasonably intends to sell the products, supplies or services of the Company, an Affiliate or any Subsidiary within the twenty-four (24) month period immediately preceding the date of the Participant’s Termination of Employment.
However, nothing herein contained shall prevent a Participant from purchasing and holding for investment less than five percent (5%) of the shares of any corporation the shares of which are regularly traded either on a national securities exchange or in the over-the-counter market, and notwithstanding any provision hereof, a Participant may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the transactions contemplated by this Plan, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable federal or state securities laws, and except that, with respect to any document or other information that in either case contains information concerning the tax treatment or tax structure of such transactions as well as other information, this paragraph shall apply only to such portions of the document or similar item that is relevant to an understanding of such tax treatment or tax structure.
7.2 Non-Disparagement. If, subsequent to a Change in Control of the Company, a Participant incurs a Termination of Employment under circumstances described in Section 5.1 of the Plan, the Participants and the Company agree that neither party shall disparage the other nor shall either party communicate to any person and/or entity in a manner that is disrespectful, demeaning, and/or insulting toward the other party.
ARTICLE EIGHT
ADMINISTRATION
8.1 Appointment of Administrator. This Plan shall be administered by an Administrative Committee consisting of three (3) or more members who are appointed by the CEO or the CEO’s designee. Members of the Administrative Committee may be Participants in this Plan. However, no member of the Administrative Committee may participate in a review of his or her own claim under Article Nine. The Administrative Committee is the “Administrator” and shall administer the Plan and shall have the power and the duty to take all action and to make all decisions necessary or proper to carry out the Plan. The determination of the Administrative Committee as to any question involving the general administration and interpretation of the Plan shall be final, conclusive, and binding except as otherwise provided in Article Nine. A majority vote of the Administrative Committee members shall control any decision. Without limiting the generality of the foregoing, the Administrative Committee shall have the following discretionary authority, powers and duties:
(a) To require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefit under the Plan;
(b) To make and enforce such rules and regulations and prescribe the use of such forms as it deems necessary for the efficient administration of the Plan;
(c) To interpret the Plan and to resolve ambiguities, inconsistencies and omissions;
(d) To decide all questions concerning the Plan and any questions concerning the eligibility of any employee to participate in the Plan; and
(e) To determine the amount of benefits which will be payable to any person in accordance with the provisions of the Plan.
Upon and after the occurrence of a Change in Control, the “Administrative Committee” shall be at least three (3) individuals selected by the individual who, immediately prior to the Change in Control, was the CEO (or the CEO’s designee) or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”); provided, however, the Administrative Committee, as constituted immediately prior to a Change in Control, shall continue to act as the Administrative Committee for this Plan until the date on which any other individual selected by the Ex-CEO accept the responsibilities as members of the Administrative Committee under this Plan.
Upon and after a Change in Control, the Administrative Committee shall have all discretionary authorities and powers granted the Administrative Committee under this Plan including the discretionary power 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 shall: (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 intentional 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 Participants’ actual or potential severance benefits, the date and circumstances of the Disability, death or the Termination of Employment of the Participants, and such other pertinent information as the Administrative Committee may reasonably require. Upon and after a Change in Control, a member of the Administrative Committee may only be removed (and a replacement may only be appointed) by the Ex-CEO.
8.2 Agents. In the administration of this Plan, the Administrative Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel, who may be counsel to the Company.
8.3 Indemnity of Committees. The Company shall indemnify and hold harmless the members of the Administrative Committee, the Appeals Committee and the Compensation Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan to the extent permitted under applicable law, except in the case of intentional misconduct.
ARTICLE NINE
CLAIMS PROCEDURES
9.1 Claim. Any person claiming a benefit (“Claimant”) under the Plan shall present the request in writing to the Administrative Committee.
9.2 Initial Claim Review. In the case of a claim made by a Participant under the Plan, the Administrative Committee 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 Administrative Committee 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 Administrative Committee expects a decision will be made. The Administrative Committee 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 Administrative Committee 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 9.3.
9.3 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 sixty (60) days in which to request a review of a claim. The request must be in writing and delivered to the Compensation Committee. If no such review is requested, the initial decision of the Administrative Committee will be considered final and binding.
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.
Upon receipt of a request for review, the Compensation 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 Compensation 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 Compensation Committee to hear appeals for a full and fair review of the Administrative Committee’s initial decision. The Claimant may indicate in writing at the time the Compensation 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 Compensation 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 Compensation Committee will notify the Claimant of its decision following its review. The Compensation Committee will render its final decision within sixty (60) days of receipt of an appeal. If the Compensation 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 Compensation 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.
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.
9.4 Review of Claims on and after a Change in Control. Upon and after the occurrence of a Change in Control, the Compensation Committee, as constituted immediately prior to a Change in Control, shall continue to be the Appeals Committee that decides appeals of any 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 Compensation Committee under this Plan to review denied claims as provided in Section 9.3. A member of the Appeals Committee may not participate in the review of his or her own claim and may not participate in the review a claim if he or she is a subordinate of the original decision maker. Upon and after the occurrence of a Change in Control, the Company shall: (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 intentional 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 Participants’ actual or potential severance benefits, the date and circumstances of the Disability, death or Termination of Employment 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.
ARTICLE TEN
AMENDMENT AND TERMINATION
10.1 Procedure for Amendment or Termination. Generally, during the term of the Plan, as set forth in Section 3.3, this Plan may be amended or modified by an instrument in writing signed by the Company, provided, however, that no amendment or modification that materially and adversely affects the rights of the Participants may be adopted for such Plan term then in effect unless at least fifty-one percent (51%) of all Participants have consented to the amendment
or modification. For the avoidance of doubt, the Board may adopt any amendment or modification to the Plan by an instrument in writing without the consent of any Participant, which such amendment or modification will become effective at the beginning of the Plan’s next term immediately following the Plan term then in effect; provided, however, that if a Change in Control occurs after an amendment or modification is approved for the next successive Plan term, such amendment or modification will not become effective and the Plan will remain in effect under its then-current terms; provided, further, that if a Potential Change in Control occurs after an amendment or modification is approved for the next successive Plan term, such amendment or modification will not become effective until such Potential Change in Control is abandoned, terminated, or withdrawn without the occurrence of a Change in Control. Any provision hereof may be waived only by an instrument in writing signed by the Company and any affected Participant against whom or which enforcement of such waiver is sought. The failure of the Company or any Participant at any time to require the performance by the other of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by either the Company or a Participant of a breach of any provision of this Plan be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Plan. Except as provided in this Section 10.1 above, in no event may this Plan be modified, amended or terminated by any person or entity upon a Potential Change in Control through a period of twenty-four (24) full calendar months following the date of the consummation of a Change in Control.
10.2 Power to Terminate. Unless earlier terminated by an amendment to the Plan as set forth above in Section 10.1, this Plan shall automatically terminate upon the expiration of the term of the Plan and such term is not extended as set forth in Section 3.3 above.
10.3 Result of Termination. If the employment of a Participant terminates, whether involuntarily or otherwise, after the effective date of the Plan termination, he or she shall not be eligible to receive any severance benefits under this Plan.
ARTICLE ELEVEN
MISCELLANEOUS
11.1 No Implied Benefits. Nothing herein contained shall be construed as giving to any Employee or any other person any legal or equitable right against the Company or any Affiliate or Subsidiary except by reason of the express provisions of this Plan.
11.2 Withholding. The Company may withhold from any amounts payable under this Plan such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.
11.3 Successor. This Plan shall be binding upon and inure to the benefit of any successors of the Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Plan, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Plan by operation of law, or otherwise. Failure of the Company to obtain such agreement prior to the effectiveness of such succession shall be a breach of this Plan and shall entitle a Participant severance benefits from the Company in the same amount and on the same terms a Participant would be entitled hereunder, but only to the extent that a Participant incurs a Termination of Employment under Section 5.1 of this Plan after a Change in Control.
This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If a Participant should die while any amounts would still be payable to the Participant hereunder if he or she had continued to live, all such amounts, unless otherwise provided herein, shall be paid to such beneficiary or beneficiaries as the Participant shall have designated by written notice delivered to the Company prior to his or her death or, failing such written notice, to his or her estate.
11.4 Entire Agreement. This Plan contains the entire understanding of the Company and the Participants with respect to the subject matter hereof and, upon the Effective Date, supersedes all other agreements of like or similar nature.
11.5 Right of Discharge Reserved. Neither the establishment of the Plan nor anything herein contained shall be construed to confer upon any persons the right to be continued in the employ of the Company or any Affiliate or Subsidiary or to be employed in any particular position therewith nor shall it in any way affect the right of the Company or any Affiliate or Subsidiary to control its Employees and to terminate the service of any Employee at any time, for any reason and with or without notice.
11.6 Satisfaction of Claims. Subject to the claims review procedures of Section 9.3, any payment to any Participant, or to his or her legal representative in accordance with the provisions of this Plan shall to the extent thereof be in full satisfaction of all claims hereunder against the Administrator and the Company or any Affiliate or Subsidiary.
11.7 Validity. The invalidity or unenforceability of any provision or provisions of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect, nor shall the invalidity or unenforceability of a portion of any provision of this Plan affect the validity or enforceability of the balance of such provision. If any provision of this Plan, or portion thereof is so broad, in scope or duration, as to be unenforceable, such provision or portion thereof shall be interpreted to be only so broad as is enforceable.
11.8 Blue Penciling and Severability. If any portion of Article Seven shall be found by a court of competent jurisdiction to be invalid or unenforceable, such court may exercise its discretion in reforming such provisions to the end that a Participant shall be subject to non-disclosure, non-competition, non-solicitation or non-disparagement covenants that are reasonable under the circumstances and enforceable by the Company. In the event that any provision or term of this Plan is found to be void or unenforceable to any extent for any reason, After any modification pursuant to the immediately preceding sentence, it is the agreed upon intent of the
parties hereto that all remaining provisions or terms of the Plan shall remain in full force and effect to the maximum extent permitted and that the Plan shall be enforceable as if such void or unenforceable provision or term had never been a part hereof. If the Participant is employed in any jurisdiction where the restrictions in Article Seven may otherwise be prohibited by law, after any modification pursuant to the first sentence in this Section 11.8, the restrictions in Article Seven that are prohibited by law shall not apply.
11.9 Applicable Law and Venue. The Plan shall be construed in accordance with, and governed by, ERISA in a manner which will assure compliance of the Plan’s operation therewith and, to the extent applicable, the laws of the State of Ohio without respect to conflict of law provisions thereof. Any civil suit brought by a Participant or his or her representatives against the Plan, any member of the Administrative Committee, Appeals Committee or Compensation Committee, or the Company or any of its Affiliates or Subsidiaries or their respective board of directors with respect to this Plan may only be submitted and filed in the United States District Court for the Northern District of Ohio.
11.10 No Assignment. Except as provided in Section 11.3, the interest of a Participant or his or her beneficiary may not be sold, transferred, assigned, or encumbered in any manner, either voluntarily or involuntarily, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and void; neither shall the benefits hereunder be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any person to whom such benefits or funds are payable, nor shall they be subject to garnishment, attachment, or other legal or equitable process.
11.11 Notices. In the event that the Administrator or any committee under the Plan shall be required under the Plan to notify any Participant of any occurrence or action taken under the Plan, such notice requirement shall be satisfied by mailing to the Participant a written notice of such occurrence or action addressed to the Participant at the last address on file with the Company, or by delivering such written notice to the Participant at such address. Any correspondence with the Company or Administrator shall be to:
Administrator, CIC Severance Plan
FirstEnergy Corp.
341 White Pond Drive
Akron, Ohio 44320
11.12 Titles and Headings. The titles and headings are for reference only. In the event of a conflict between a title or heading and the content of an Article or Section, the content of the Article or Section shall control.
11.13 Construction. The use of neuter, masculine and feminine pronouns shall be deemed to include the others. The use of the singular shall be deemed to include the plural, and vice versa. The word “including” and its variants shall be construed as “including, without limitation,” unless the Plan expressly states otherwise.
11.14 Section 409A of the Code.
(a) If a Participant is a Specified Employee, as determined under the Company’s policy for determining specified employees on the date of his or her Termination of Employment, all payments, benefits, or reimbursements provided under this Plan that would otherwise be paid or provided during the first six (6) months following such Termination of Employment (other than payments, benefits, or reimbursements that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations or short-term deferrals) shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(0(2)(A) of Code, in effect on the date of the Termination of Employment) on the first business day following the six (6) month anniversary of such Termination of Employment. Notwithstanding the foregoing, payments delayed pursuant to this Subsection 11.14(a) shall commence on the Participant’s death prior to the end of the six (6) month period.
(b) Any reimbursement of expenses or in-kind benefits provided under this Plan (other than reimbursements or in-kind benefits that are treated as separation pay under Section 1.409A-1(b)(9)(v) of the Treasury Regulations), shall be subject to the following additional rules: (i) any reimbursement of eligible expenses shall be paid as they are incurred (but not prior to the end of the six-month delay period set forth in Subsection 11.14(a)); provided that the Participant first provides documentation thereof in reasonable detail not later than sixty (60) days following the end of the calendar year in which the eligible expenses were incurred: (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
(c) It is intended that the payments and benefits provided under this Plan shall either be exempt from application of, or comply with, the requirements of Section 409A of the Code. This Plan shall be construed, administered, and governed in a manner that effects such intent, and the Company shall not take any action that would be inconsistent with such intent. Without limiting the foregoing, the payments and benefits provided under this Plan may not be deferred, accelerated, extended, paid out, or modified in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon the Participant. Although the Company shall use its best efforts to avoid the imposition of taxation, interest and penalties under Section 409A of the Code, the tax treatment of the benefits provided under this Plan is not warranted or guaranteed. Neither the Company, its Affiliates or Subsidiaries nor their respective boards of directors shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by a Participant or other taxpayers as a result of the Plan. If a Participant is required to execute, submit and not revoke a release of claims against the Company in order to receive the payment of benefits hereunder as a result of the terms of this Plan and the period in which to execute, submit and not revoke the release begins in a first taxable year and ends in a second taxable year, any payment to which the Participant would be entitled hereunder will be paid in the second taxable year, but no later than the end of the payment period specified in the Plan.
11.15 Nonduplication of Benefits. In no event will a Participant receive benefits under both this Plan and another severance plan, severance program or severance arrangement of the Company, including without limitation, the FirstEnergy Executive Severance Benefits Plan. In
the event of a Change in Control, this Plan will provide the sole severance benefits for any Participant subject to the conditions set forth in this Plan. Notwithstanding the foregoing, this Section 11.15 shall not preclude any enhanced benefits based on severance under a qualified retirement plan of the Company, an Affiliate or any Subsidiary.
11.16 Remedies. The Participants and the Company acknowledge and agree that the restrictive covenants contained in Article Seven are of a special nature and that any breach, violation or evasion by a Participant of the terms of Article Seven will result in immediate and irreparable injury and continuing damage to the Company and its business, for which there is no adequate remedy at law, and will cause damage to the Company in amounts difficult to ascertain. Accordingly, the Company, its Affiliates and Subsidiaries and their successors and assigns, shall be entitled to temporary and permanent injunctive relief and to such further relief (without the requirement to post any bond), including damages, as is proper under the circumstances.
[SIGNATURE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, FirstEnergy Corp., by its duly authorized officer, has executed this instrument as of this [__] day of [_____], 2025 and such instrument shall become effective as of January 1, 2026.
| | | | | |
| FIRSTENERGY CORP. |
| By: | |
| Name: |
| Title: |
Exhibit A
Severance Benefits
If a Participant becomes entitled to severance benefits under this Plan pursuant to Section 5.1, then a Participant entitled to Severance Benefits shall be paid or provided the benefits set forth, and in accordance with, the following:
(a) The Company shall pay to the Participant as soon as possible but not later than sixty (60) days following the Termination of Employment a lump sum severance benefit, payable in cash, in the amounts determined as provided below:
(1) The Participant’s Base Compensation through the date of the Participant’s Termination of Employment at the rate in effect at the time Notice of Termination is given.
(2) In lieu of further salary payments to the Participant for periods subsequent to his or her Termination of Employment and, in part, as consideration for the non-competition agreement set forth in Article Seven of the Plan, an amount equal to the Applicable Multiplier multiplied by the sum of (the “Sum”): (i) the Participant’s annual Base Compensation at the rate in effect as of the date of the Termination of Employment (or, if higher, at the rate in effect as of the time of the Change in Control) plus (ii) the target annual Short-Term Incentive Program (“STIP”) amount in effect for the Participant under the 2020 ICP, in the year during which the Termination of Employment occurs whether or not fully paid. Subject to later valuation at the time of a Change in Control, the consideration for the non-competition agreement set forth in Section 7.1 of the Plan is an amount equal to at least one (1.00) times the Sum.
(b) For purposes of the STIP and notwithstanding the terms of the STIP to the contrary, upon such Termination of Employment, and not later than sixty (60) days following the Termination of Employment, Executive shall be entitled to the target amount of any STIP which shall be paid in a lump sum payment. The target amount of the STIP shall be prorated in the same manner as set forth in the Human Resources Letter 504, as may be amended from time to time.
(c) For purposes of any equity, equity-based or cash-based awards granted pursuant to the 2020 ICP or any successor plan, all outstanding awards will follow the terms of the applicable plan and the applicable award agreement(s).
(d) For purposes of the Company’s group health insurance plan:
(1) The Participant shall be entitled to continue to participate, on the same terms and conditions as active employee participants, in such plan for a period of two (2) years after the date of the Participant’s Termination of Employment. During such continuation period, the Participant shall be responsible for paying the normal employee share of the applicable premiums for coverage under the group health insurance plan.
(2) The Company shall have the right to modify, amend or discontinue the Company’s group health insurance plan following the date of any Participant’s Termination of Employment and any Participant’s continued participation therein, and the continued participation of any other person therein under Subsection (e) below, shall be subject to such modification, amendment or discontinuation if such modification, amendment or discontinuation applies generally to the then-current participants in such plan.
(3) If the Company is not permitted to provide continuing coverage under the terms of the Company’s group health insurance plan and related trusts, then the Company may purchase health insurance for the Participant for the period specified in Subsection (d)(1) with coverage comparable to the applicable coverage under the Company’s group health insurance plan then in effect, as the same may have been modified amended or discontinued in accordance with the terms and provisions of the applicable plan under this Subsection (d).
(4) The health benefit continuation provided under this Subsection (d) shall satisfy the Company’s obligations to provide, and any rights that the Participant may have to, COBRA coverage continuation under the health care continuation requirements under the federal Consolidated Omnibus Budget Reconciliation Act, as amended, Part VI of Subtitle B of Title I of ERISA and Section 4980B(f) of the Code, or any successor provisions thereto.
(e) In the event that because of their relationship to the Participant, members of the Participant’s family or other individuals are covered by any plan, program, or arrangement described in Subsection (d) above immediately prior to the date of the Participant’s Termination of Employment, the provisions set forth in Subsection (d) shall apply equally to require the continued coverage of such persons; provided, however, that if under the terms of any such plan, program or arrangement, any such person would have ceased to be eligible for coverage other than because of the Participant’s Termination of Employment during the period in which the Company is obligated to continue coverage for the Participant, nothing set forth herein shall obligate the Company to continue to provide coverage which would have ceased even if the Participant had remained an employee of the Company.
(f) The Company shall pay up to $30,000 for one year of outplacement services provided by an outplacement services firm selected by the Company in connection with the Participant’s search for a new position.
(g) The severance benefits described in Subsections (a), (b), (c), (d). (e) and (f) above shall be payable in addition to, and not in lieu of, all other accrued or vested or earned but deferred compensation, rights, options or other benefits which may be owed to the Participant following his or her Termination of Employment (and are not contingent on any Change in Control preceding such Termination of Employment), including but not limited to, accrued and/or banked vacation, amounts or benefits payable, if any, under any bonus or other compensation plans, stock option plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan or similar plan.
FIRSTENERGY CORP.
2020 Incentive Compensation Plan
2026 Time-Based Restricted Stock Unit Award Agreement
THIS 2026 TIME-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), effective as of #GrantDate#, (the “Grant Date”), is entered into by and between FirstEnergy Corp. (the “Company”) and #ParticipantName# (the “Grantee”) in accordance with the terms of the FirstEnergy Corp. 2020 Incentive Compensation Plan (the “Plan”).
1. Definitions. Unless otherwise specified in this Agreement, capitalized terms shall have the meanings attributed to them under the Plan. For purposes of this Agreement, “Retirement” shall mean the Grantee’s termination of employment (except due to death or by the Company for Cause) on or after attaining age 55 and after providing at least five years of service to the Company or any Subsidiary or affiliate or any predecessor thereof.
2. Grant of Restricted Stock Units. As of the Grant Date, the Company has granted to the Grantee #QuantityGranted# (the “Target Number”) Restricted Stock Units (the “RSUs”), a percentage of which Target Number will vest and become payable in accordance with the terms and conditions of this Agreement. The Target Number shall be adjusted with respect to Dividend Equivalents as provided in Section 8 below. Each RSU that becomes vested and payable hereunder represents the right of the Grantee to receive one Share subject to the terms and conditions of this Agreement. The RSUs are granted in accordance with, and subject to, all the terms, conditions and restrictions of the Plan, which is hereby incorporated by reference in its entirety. The Grantee irrevocably agrees to, and accepts, the terms, conditions and restrictions of the Plan and this Agreement on the Grantee’s own behalf and on behalf of any heirs, successors and assigns.
3. Restrictions on RSUs. Except as otherwise provided herein, the Grantee cannot sell, transfer, assign, hypothecate or otherwise dispose of the RSUs or pledge any RSU as collateral for a loan, other than by will or by the laws of descent and distribution. In no event may any RSU or this Award be transferred for value. In addition, the RSUs, and any payments made with respect to the RSUs, will be subject to such other restrictions as the Committee deems necessary or appropriate, including, without limitation, the Company’s Second Amended and Restated Executive Compensation Recoupment Policy and the Compensation Clawback Policy, each as may be amended (or succeeded) from time to time, to the extent applicable.
4. Vesting and Settlement of RSUs.
(a) Vesting. Except as otherwise provided in Sections 6 and 7 below, the RSUs shall become vested on March 1, 2029 (the “Vesting Date”), provided that the Participant continues to be employed by the Company from the Grant Date until the Vesting Date.
(b) No Fractional Shares. If any prorated vesting in accordance with Section 6 or 7 or the crediting of Dividend Equivalents in accordance with Section 8 would produce fractional RSUs, the number of RSUs that vest shall be rounded up to the nearest whole RSU.
(c) Rights Prior to Vesting. The Grantee will have no rights to the Shares underlying the RSUs until the RSUs have vested and been settled (each RSU that vests pursuant to this Section 4 or Sections 6 and 7 below, a “Vested RSU”). Prior to settlement, each RSU (whether or not a Vested RSU) represents an unfunded and unsecured obligation of the Company.
(d) Settlement. Except as otherwise provided in Sections 6, 7 and 11 below, the Company shall settle each Vested RSU by delivering one Share per Vested RSU to the Grantee as soon as administratively practicable (and no later than 60 days) after the Vesting Date. Notwithstanding the foregoing or any provision in Sections 6 or 7 to the contrary, if the Grantee elects to defer the settlement of the RSUs pursuant to the Company’s Executive Deferred Compensation Plan (or any other non-qualified deferred compensation plan providing for the ability to defer settlement of the RSUs), then the time, form and medium of payment with respect to any deferred RSUs shall be made pursuant to the terms and conditions of the Executive Deferred Compensation Plan (or similar non-qualified deferred compensation plan, as applicable).
5. Forfeiture. Except as otherwise provided in Sections 6 and 7, the Grantee will forfeit the Grantee’s interest in the RSUs if the Grantee terminates the Grantee’s employment with the Company or any Subsidiary prior to the Vesting Date.
6. Certain Events. Notwithstanding any provision in this Agreement to the contrary and in each case subject to Section 6(g) below:
(a) Death. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee dies, then a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below) upon the Grantee’s death. The Company shall settle any RSUs that become Vested RSUs under this Section 6(a) by delivering to the Grantee’s estate one Share for each Vested RSU as soon as administratively
practicable after the date of the Grantee’s death, but in any event within 60 days following the Grantee’s death.
(b) Disability. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Disability, then a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below) upon such termination date. The Company shall settle any RSUs that become Vested RSUs under this Section 6(b) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Grantee’s termination of employment, but in any event within 60 days following the Grantee’s termination of employment.
(c) Termination without Cause. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated by the Company and its Subsidiaries without Cause, then a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below) upon such termination date. Except as otherwise provided in Section 15(k), the Company shall settle any RSUs that become Vested RSUs under this Section 6(c) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Grantee’s termination of employment, but in any event within 60 days following the Grantee’s termination of employment.
(d) Retirement. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Retirement, then a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below) upon such termination date. Except as otherwise provided in Section 15(k), the Company shall settle any RSUs that become Vested RSUs under this Section 6(d) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Grantee’s termination of employment, but in any event within 60 days following the Grantee’s termination of employment.
(e) Change in Position. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee is transferred to a position with the Company or a Subsidiary that is not eligible for an award such as this Award, then a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below) upon such change in position. The Company shall settle any RSUs that become Vested RSUs under this Section 6(e) by delivering to the Grantee one Share for each Vested RSU following the change in position on the earlier of the Grantee’s termination of employment (other than by the Company for Cause) or the Vesting Date.
(f) Prorated Vesting. The Prorated Number of RSUs described in Section 6(a), (b), (c), (d) or (e) above (the “Prorated Number”) shall be determined as follows:
The Prorated Number = X multiplied by (Y/Z), where
X = Target Number of RSUs;
Y = the number of full calendar months the Grantee remained employed (and in an eligible executive position) after the Grant Date; and
Z = 36.
(g) Release Requirement. Notwithstanding any provision herein to the contrary, except as otherwise determined by the Company, in order for the Grantee to receive Shares pursuant to the settlement of Vested RSUs under Section 6(a), (b), (c), (d) or (e) above, the Grantee (or the representative of the Grantee’s estate) must execute and deliver to the Company a general release and waiver of claims against the Company, its Subsidiaries and their directors, officers, employees, shareholders and other affiliates in a form that is satisfactory to the Company (the “Release”). The Release must become effective and irrevocable under applicable law no later than 60 days following the date of the Grantee’s death, termination of employment or transfer of position, as applicable.
7. Change in Control. If a Change in Control occurs, the RSUs shall generally become subject to the terms and conditions of Article 16 of the Plan; provided that if the RSUs subject to this Agreement are not replaced with a Replacement Award, then the Target Number of RSUs shall become Vested RSUs as of the date of the Change in Control and shall be settled no later than 60 days after the Change in Control in the manner set forth in Article 16.1 of the Plan; provided that the Change in Control is a “change in control event” as set forth in Treas. Reg. 1.409A-3(i)(5), if required to comply with Code Section 409A. If the Change in Control is not a “change in control event” as set forth in Treas. Reg. 1-409A(i)(5), then the Vested RSUs shall be settled upon the earlier of the Grantee’s termination of employment upon or following the Change in Control or the Vesting Date, if required to comply with Code Section 409A.
8. Dividend Equivalents. Until the date on which the RSUs are settled for Shares (or cash in the case of RSUs deferred under the Company’s Executive Deferred Compensation Plan), and pursuant to the terms and conditions of this Agreement, the Grantee will be credited (in the manner described in the following sentences) on the books and records of the Company with an amount per each RSU equal to the amount per share of any cash dividends declared by the Board of Directors of the Company with a record date on or after the Grant Date on the outstanding Shares (such amount, a “Dividend Equivalent”). Such Dividend Equivalents will be credited in the form of an additional number of RSUs. The additional number of RSUs will be equal to the aggregate amount of Dividend Equivalents credited under this Agreement on the respective dividend payment date divided by the average of the high and low prices per Share on the
respective dividend payment date. The RSUs attributable to the Dividend Equivalents will be either settled or forfeited, as appropriate, under the same terms and conditions that apply to the other RSUs under this Award Agreement, including any action taken by the Committee. For the avoidance of doubt, if the Grantee defers settlement of any portion of the RSUs pursuant to the Executive Deferred Compensation Plan, then, during the deferral period, the Grantee’s stock account under the Executive Deferred Compensation Plan shall continue to be credited with Dividend Equivalents pursuant to this Section 8 until such deferred RSUs are settled for Shares or cash, as applicable, under the terms of the Executive Deferred Compensation Plan.
9. Continuous Employment. So long as the Grantee continues to be an employee of the Company or any of its Subsidiaries, the Grantee shall not be considered to have experienced a termination of employment because of: (a) any temporary leave of absence approved in writing by the Company or such Subsidiary; or (b) any change of duties or position (including transfer from one Subsidiary to another); provided, however, that, in the case of any change of duties or position that results in the Grantee no longer being an executive of the Company or a Subsidiary, the terms of Section 6(e) shall apply.
10. Delivery of Shares. Upon settlement of any RSUs under this Agreement, the Company will deliver to the Grantee (or the Grantee’s estate) the Shares to which the Grantee is entitled free and clear of any restrictions (except any restrictions under applicable securities laws or otherwise imposed under the Plan or Section 3 hereof).
11. Withholding. Upon settlement of the RSUs, the Company shall withhold a number of Shares (or amount of cash, if applicable) in an amount sufficient to satisfy all federal, state, and local taxes to be withheld in connection with the settlement of RSUs under this Agreement.
12. No Shareholder Rights. The Grantee shall have no shareholder rights (or rights as a beneficial owner), including no voting rights, with respect to any RSU or the Share underlying the RSU unless and until the Grantee receives the Share upon settlement of the RSU.
13. Recoupment. If the Grantee is or has been deemed to be, or becomes, an “officer” for purposes of Section 16 of the Exchange Act, this Agreement will be administered in compliance with Section 10D of the Exchange Act, any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Shares may be traded, and subject to the Company’s Executive Compensation Recoupment and Clawback Policies, as amended (or succeeded) from time to time, or any other Company policy adopted pursuant to such law, rules, or regulations and this Agreement may be amended to further such purpose without the consent of the Grantee.
14. Termination of Agreement. This Agreement will terminate on the earliest of: (a) the date of the Grantee’s termination of employment with the Company, except if such termination of employment is due to death, Disability, Retirement, or a termination by the Company without Cause; (b) the date the RSUs are settled pursuant to the terms of this Agreement; or (c) if no RSUs have become Vested RSUs as of the Vesting Date, the Vesting Date. Any terms or conditions of this Agreement that the Company determines are reasonably necessary to effectuate its purposes shall survive the termination of this Agreement.
15. Miscellaneous Provisions.
(a) Adjustments. In the event of a corporate event or transaction described in Section 4.5 of the Plan, this Award and the RSUs granted hereunder shall be subject to mandatory adjustment as described in Section 4.5 of the Plan.
(b) Successors and Legal Representatives. This Agreement will bind and inure to the benefit of the Company and the Grantee, and their respective successors, assigns and legal representatives.
(c) Integration. This Agreement, together with the Plan, constitutes the entire agreement between the Grantee and the Company with respect to the subject matter hereof. Any waiver of any term, condition or breach thereof will not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach. To the extent a conflict exists between the terms of this Agreement and the provisions of the Plan, the provisions of the Plan shall govern, except with respect to the Committee’s authority to adjust downward the number of RSUs that vest under this Agreement, as provided under Section 15(h) below.
(d) Notice. Any notice relating to this grant must be in writing, which may include an electronic writing.
(e) No Employment Right Created. Nothing in this Agreement will be construed to confer upon the Grantee the right to continue in the employment or service of the Company or any of its Subsidiaries, or to be employed or serve in any particular position therewith or affect any right which the Company or any of its Subsidiaries may have to terminate the Grantee’s employment or service with or without cause.
(f) Severability. In the event of the invalidity of any part or provision of this Agreement, such invalidity will not affect the enforceability of any other part or provision of this Agreement.
(g) Section Headings. The section headings of this Agreement are for convenience of reference only and are not intended to define, extend or limit the contents of the sections.
(h) Amendment. The terms and conditions of this Agreement may be modified by the Committee:
(i) in any case permitted by the terms of the Plan or this Agreement;
(ii) except with respect to an adjustment made pursuant to the last paragraph of this Section 15(h), with the written consent of the Grantee; or
(iii) without the consent of the Grantee if the amendment is either not materially adverse to the interests of the Grantee or is necessary or appropriate in the view of the Committee to conform with, or to take into account, applicable law, including either exemption from or compliance with any applicable tax law.
Notwithstanding any provision in this Agreement or the Plan to the contrary, the Committee shall retain the discretion to adjust the number of RSUs that vest under this Agreement without the Grantee’s consent, either on a formula or discretionary basis or a combination of the two, as the Committee determines in its sole discretion.
(i) Plan Administration. The Plan is administered by the Committee, which has full and exclusive discretionary power to interpret, implement, construe and adopt rules, forms and guidelines for administering the Plan and this Agreement. All actions, interpretations and determinations made by the Committee, the Board of Directors, or any of their delegates as to the provisions of this Agreement and the Plan shall be final, conclusive, and binding on all persons and the Grantee agrees to be bound by such actions, interpretations and determinations.
(j) Governing Law. Except as may otherwise be provided in the Plan, this Agreement will be governed by, construed and enforced in accordance with the internal laws of the State of Ohio, without giving effect to its principles of conflict of laws. By accepting this Award, the Grantee agrees to the exclusive jurisdiction and venue of the courts of the United States District Court for the Northern District of Ohio or the Summit County (Ohio) Court of Common Pleas to adjudicate any and all claims brought with respect to this Agreement.
(k) Internal Revenue Code Section 409A. Notwithstanding anything in the Plan or this Agreement to the contrary, the Award of RSUs granted hereunder is intended to meet any applicable requirements for compliance under, or an exemption from (specifically, the short-term deferral exception under Treasury Regulation § 1.409A-1(b)(4)), Code Section 409A, and this Agreement shall be construed and administered accordingly. Notwithstanding anything in this Agreement to the contrary, if the RSUs become vested and settled upon the Grantee’s termination of employment, payment with respect to the RSUs shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under Code Section 409A (as determined by the Committee) (each, a “Specified Employee”), if required to comply with Code Section 409A. Accordingly, with respect to any Grantee: (i) who is eligible for Retirement prior to the Vesting Date; (ii) whose employment is terminated prior to the Vesting Date due to the Grantee’s Retirement; and (iii) who is a Specified Employee on the date of the Grantee’s termination of employment, payment with respect to all the Grantee’s RSUs shall be delayed for a period of six months after the Grantee’s termination of employment. If payment is delayed, the Shares shall be distributed within 10 days following the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the Shares shall be distributed to the Grantee’s estate within 60 days following the Grantee’s death. Notwithstanding any provision to the contrary herein, payments made with respect to this Award of RSUs may only be made in a manner and upon an event permitted by Code Section 409A, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under Code Section 409A, if the Award of RSUs is deferred compensation subject to Code Section 409A. To the extent that any provision of this Agreement would cause a conflict with the requirements of Code Section 409A or would cause the administration of the RSUs to fail to satisfy the requirements of Code Section 409A, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the RSUs are deferred compensation subject the Code Section 409A, payment of the RSUs is subject to the execution of a Release, and payment with respect to the RSUs that is subject to the execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year. Notwithstanding anything in this Agreement to the contrary, the Company makes no
representations or warranties as to the tax effects of payments made to the Grantee (or the Grantee’s estate) pursuant to this Agreement, and any and all tax consequences incident to such shall solely be the responsibility of the Grantee (or the Grantee’s estate).
(l) Data Privacy. In order to implement, administer and manage the Grantee’s participation in the Plan, the Company and its affiliates may hold certain personal information about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any affiliate, details of all Awards or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the exclusive purpose of implementing, administering and managing the Plan (collectively, the “Personal Data”).
The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s Personal Data as described above, as applicable, to the Company and its affiliates for the sole purpose of administering the Plan. The Grantee understands that Personal Data may be transferred to third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the United States or the Grantee’s state of residence. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Personal Data by contacting the Executive Compensation group of Human Resources. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any Shares received upon vesting of the RSUs. The Grantee understands that Personal Data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan and to comply with Securities and Exchange Commission and/or NYSE reporting obligations, any other applicable law or regulation and any applicable document retention policies of the Company. The Grantee understands that the Grantee may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing the Executive Compensation group of Human Resources. The Grantee understands that refusal or withdrawal of consent may affect the Grantee’s ability to participate in the Plan or to realize benefits from the RSUs. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of
consent, the Grantee understands that the Grantee may contact the Executive Compensation group of Human Resources.
(m) Signatures and Electronic Delivery. This Agreement may be executed electronically and in counterparts, each of which shall be deemed to be an original, and when taken together shall constitute one binding agreement. The Company may, in its sole discretion, deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
[SIGNATURE ON FOLLOWING PAGE]
The Grantee acknowledges receipt of this Agreement and accepts and agrees with the terms and conditions stated above.
#AcceptanceDate# ____#Signature#______
(Date) (Signature of the Grantee)
Exhibit 10.4
(Stock-Based Agreement)
FIRSTENERGY CORP.
2020 Incentive Compensation Plan
2026-2028 Performance-Adjusted Restricted Stock Unit Award Agreement
THIS 2026-2028 PERFORMANCE-ADJUSTED RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), effective as of #GrantDate#, (the “Grant Date”), is entered into by and between the Company and #ParticipantName# (the “Grantee”) in accordance with the terms of the FirstEnergy Corp. 2020 Incentive Compensation Plan (the “Plan”).
1. Definitions. Unless otherwise specified in this Agreement, capitalized terms shall have the meanings attributed to them under the Plan. For purposes of this Agreement, “Retirement” shall mean the Grantee’s termination of employment (except due to death or by the Company for Cause) on or after attaining age 55 and after providing at least five years of service to the Company or any Subsidiary or affiliate or any predecessor thereof.
2. Grant of Restricted Stock Units. As of the Grant Date, the Company has granted to the Grantee #QuantityGranted# (the “Target Number”) Restricted Stock Units (the “RSUs”), a percentage of which Target Number will vest and become payable in accordance with the terms and conditions of this Agreement. The Target Number shall be adjusted with respect to Dividend Equivalents as provided in Section 8 below. Each RSU that becomes vested and payable hereunder represents the right of the Grantee to receive one Share subject to the terms and conditions of this Agreement. The RSUs are granted in accordance with, and subject to, all the terms, conditions and restrictions of the Plan, which is hereby incorporated by reference in its entirety. The Grantee irrevocably agrees to, and accepts, the terms, conditions and restrictions of the Plan and this Agreement on the Grantee’s own behalf and on behalf of any heirs, successors and assigns.
3. Restrictions on RSUs. Except as otherwise provided herein, the Grantee cannot sell, transfer, assign, hypothecate or otherwise dispose of the RSUs or pledge any RSU as collateral for a loan, other than by will or by the laws of descent and distribution. In no event may any RSU or this Award be transferred for value. In addition, the RSUs, and any payments made with respect to the RSUs, will be subject to such other restrictions as the Committee deems necessary or appropriate, including, without limitation, the Company’s Second Amended and Restated Executive Compensation Recoupment Policy and the Compensation Clawback Policy, each as may be amended (or succeeded) from time to time, to the extent applicable.
4. Vesting and Settlement of RSUs.
(a) Vesting. Except as otherwise provided in Sections 6 and 7 below, if and to the extent the performance goals set forth on Exhibit A attached to this Agreement (the “Performance Goals”) are achieved during the performance period set forth on Exhibit A (the “Performance Period”), a percentage of the Target Number of RSUs will vest on [March 1], 2029 (the “Vesting Date”), as long as the Grantee remains continuously employed by the Company or a Subsidiary until such Vesting Date. The number of RSUs that shall vest will range from 0% to 200% of the Target Number, based on the extent to which the Performance Goals are achieved, as determined by the Committee in its sole discretion. The Grantee will have no rights to the Shares underlying the RSUs until the RSUs have vested and been settled (each RSU that vests pursuant to this Section 4 or Sections 6 and 7 below, a “Vested RSU”). Prior to settlement, each RSU (whether or not a Vested RSU) represents an unfunded and unsecured obligation of the Company.
(b) No Fractional Shares. If the number of shares on the Vesting Date would produce fractional RSUs, the number of RSUs that vest shall be rounded up to the nearest whole RSU.
(c) Settlement. Except as otherwise provided in Sections 6, 7 and 11 below, the Company shall settle each Vested RSU by delivering one Share per Vested RSU to the Grantee as soon as administratively practicable (and no later than 60 days) after the Vesting Date. Notwithstanding the foregoing or any provision in Sections 6 or 7 to the contrary, if the Grantee elects to defer the settlement of the RSUs pursuant to the Company’s Executive Deferred Compensation Plan (or any other non-qualified deferred compensation plan providing for the ability to defer settlement of the RSUs), then the time, form and medium of payment with respect to any deferred RSUs shall be made pursuant to the terms and conditions of the Executive Deferred Compensation Plan (or similar non-qualified deferred compensation plan, as applicable).
5. Forfeiture. Except as otherwise provided in Sections 6 and 7, the Grantee will forfeit the Grantee’s interest in the RSUs to the extent the Performance Goals are not achieved during the Performance Period, as determined by the Committee in its sole discretion, or if the Grantee terminates the Grantee’s employment with the Company and its Subsidiaries prior to the Vesting Date.
6. Certain Events. Notwithstanding any provision in this Agreement to the contrary and in each case subject to Section 6(g) below:
(a) Death. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee dies, a prorated number of RSUs shall become Vested RSUs. For purposes of this Section 6(a), the number of RSUs that shall become Vested RSUs due to the Grantee’s death shall be equal to (i) the Target Number of RSUs multiplied by (ii) a fraction (not greater than one), where the numerator is the number of full calendar months the Grantee remained employed after the Grant Date and the denominator is 36. The Company shall settle any RSUs that become Vested RSUs under this Section 6(a) by delivering to the Grantee’s estate one Share for each Vested RSU as soon as administratively practicable after the date of the Grantee’s death, but in any event by March 15th of the calendar year following the calendar year in which the Grantee’s death occurred in order to qualify as exempt from Section 409A of the Code under Treasury Regulation § 1.409A-1(b)(4).
(b) Disability. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Disability, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(b) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Vesting Date, but in any event by March 15th of the calendar year following the calendar year in which the Performance Period ends in order to qualify as exempt from Section 409A of the Code under Treasury Regulation § 1.409A-1(b)(4).
(c) Termination without Cause. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated by the Company and its Subsidiaries without Cause, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(c) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Vesting Date, but in any event by March 15th of the calendar year following the calendar year in which the Performance Period ends in order to qualify as exempt from Section 409A of the Code under Treasury Regulation § 1.409A-1(b)(4).
(d) Retirement. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee’s employment is terminated due to the Grantee’s Retirement, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(d) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Vesting Date, but in any event by March 15th of the calendar year following the calendar year in which the Performance Period ends in order to qualify as exempt from Section 409A of the Code under Treasury Regulation § 1.409A-1(b)(4).
(e) Change in Position. If, at least one month after the Grant Date but prior to the Vesting Date, the Grantee is transferred to a position with the Company or a Subsidiary that is not an executive position eligible for an award such as this Award, then, after the end of the Performance Period, a Prorated Number of RSUs shall become Vested RSUs (as determined in Section 6(f) below). The Company shall settle any RSUs that become Vested RSUs under this Section 6(e) by delivering to the Grantee one Share for each Vested RSU as soon as administratively practicable after the Vesting Date, but in any event by March 15th of the calendar year following the calendar year in which the Performance Period ends in order to qualify as exempt from Section 409A of the Code under Treasury Regulation § 1.409A-1(b)(4).
(f) Prorated Vesting. The Prorated Number of RSUs described in Section 6(b), (c), (d) or (e) above (the “Prorated Number”) shall be determined as follows:
The Prorated Number = X multiplied by (Y/Z), where
X = the number of RSUs that would have become Vested RSUs based on actual performance against the Performance Goals if the Grantee had remained employed (and in an eligible executive position) until the Vesting Date;
Y = the number of full calendar months the Grantee remained employed (and in an eligible executive position) after the Grant Date; and
Z = 36.
(g) Release Requirement. Notwithstanding any provision herein to the contrary, except as otherwise determined by the Company, in order for the Grantee to receive Shares pursuant to the settlement of Vested RSUs under Section 6(a), (b), (c), (d) or (e) above, the Grantee (or the representative of the Grantee’s estate) must execute and
deliver to the Company a general release and waiver of claims against the Company, its Subsidiaries and their directors, officers, employees, shareholders and other affiliates in a form that is satisfactory to the Company (the “Release”). The Release must become effective and irrevocable under applicable law no later than 60 days following the date of the Grantee’s death, termination of employment or transfer of position, as applicable.
7. Change in Control. If a Change in Control occurs, the RSUs shall generally become subject to the terms and conditions of Article 16 of the Plan; provided that if the RSUs subject to this Agreement are not replaced with a Replacement Award, then the Target Number of RSUs shall become Vested RSUs as of the date of the Change in Control and shall be settled no later than 60 days after the Change in Control in the manner set forth in Article 16.1 of the Plan.
8. Dividend Equivalents. Until the date on which the RSUs are settled for Shares (or cash in the case of RSUs deferred under the Company’s Executive Deferred Compensation Plan), and pursuant to the terms and conditions of this Agreement, the Grantee will be credited (in the manner described in the following sentences) on the books and records of the Company with an amount per each RSU equal to the amount per share of any cash dividends declared by the Board of Directors of the Company with a record date on or after the Grant Date on the outstanding Shares (such amount, a “Dividend Equivalent”). Such Dividend Equivalents will be credited in the form of an additional number of RSUs and the Target Number of RSUs shall be adjusted by each additional RSU credited to the Grantee pursuant to the Dividend Equivalents. The additional number of RSUs will be equal to the aggregate amount of Dividend Equivalents credited under this Agreement on the respective dividend payment date divided by the average of the high and low prices per Share on the respective dividend payment date. The RSUs attributable to the Dividend Equivalents will be either settled or forfeited, as appropriate, under the same terms and conditions that apply to the other RSUs under this Award Agreement, including the achievement of the Performance Goals and any action taken by the Committee. For the avoidance of doubt, if the Grantee defers settlement of any portion of the RSUs pursuant to the Executive Deferred Compensation Plan, then, during the deferral period, the Grantee’s stock account under the Executive Deferred Compensation Plan shall continue to be credited with Dividend Equivalents pursuant to this Section 8 until such deferred RSUs are settled for Shares or cash, as applicable, under the terms of the Executive Deferred Compensation Plan.
9. Continuous Employment. So long as the Grantee continues to be an employee of the Company or any of its Subsidiaries, the Grantee shall not be considered to have experienced a termination of employment because of: (a) any temporary leave of absence approved in writing by the Company or such Subsidiary; or (b) any change of duties or position (including transfer from one Subsidiary to another); provided, however, that, in the case of any change of duties or position that results in the Grantee no longer being an executive of the Company or a Subsidiary, the terms of Section 6(e) shall apply.
10. Delivery of Shares. Upon settlement of any RSUs under this Agreement, the Company will deliver to the Grantee (or the Grantee’s estate) the Shares to which the Grantee is entitled
free and clear of any restrictions (except any restrictions under applicable securities laws or otherwise imposed under the Plan or Section 3 hereof).
11. Withholding. Upon settlement of the RSUs, the Company shall withhold a number of Shares (or amount of cash, if applicable) in an amount sufficient to satisfy all federal, state, and local taxes to be withheld in connection with the settlement of RSUs under this Agreement.
12. No Shareholder Rights. The Grantee shall have no shareholder rights (or rights as a beneficial owner), including no voting rights, with respect to any RSU or the Share underlying the RSU unless and until the Grantee receives the Share upon settlement of the RSU.
13. Recoupment. If the Grantee is or has been deemed to be, or becomes, an “officer” for purposes of Section 16 of the Exchange Act, this Agreement will be administered in compliance with Section 10D of the Exchange Act, any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Shares may be traded, and subject to the Company’s Executive Compensation Recoupment and Clawback Policies, as amended (or succeeded) from time to time, or any other Company policy adopted pursuant to such law, rules, or regulations and this Agreement may be amended to further such purpose without the consent of the Grantee.
14. Termination of Agreement. This Agreement will terminate on the earliest of: (a) the date of the Grantee’s termination of employment with the Company, except if such termination of employment is due to death, Disability, Retirement, or a termination by the Company without Cause; (b) the date the RSUs are settled pursuant to the terms of this Agreement; or (c) if no RSUs have become Vested RSUs as of the Vesting Date, the Vesting Date. Any terms or conditions of this Agreement that the Company determines are reasonably necessary to effectuate its purposes shall survive the termination of this Agreement.
15. Miscellaneous Provisions.
(a) Adjustments. In the event of a corporate event or transaction described in Section 4.5 of the Plan, this Award and the RSUs granted hereunder shall be subject to mandatory adjustment as described in Section 4.5 of the Plan.
(b) Successors and Legal Representatives. This Agreement will bind and inure to the benefit of the Company and the Grantee, and their respective successors, assigns and legal representatives.
(c) Integration. This Agreement, together with the Plan, constitutes the entire agreement between the Grantee and the Company with respect to the subject matter hereof. Any waiver of any term, condition or breach thereof will not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach. To the extent a conflict exists between the terms of this Agreement and the provisions of the Plan, the provisions of the Plan shall govern, except with respect to the Committee’s authority to adjust downward the number of RSUs that vest under this Agreement, as provided under Section 15(h) below.
(d) Notice. Any notice relating to this grant must be in writing, which may include an electronic writing.
(e) No Employment Right Created. Nothing in this Agreement will be construed to confer upon the Grantee the right to continue in the employment or service of the Company or any of its Subsidiaries, or to be employed or serve in any particular position therewith or affect any right which the Company or any of its Subsidiaries may have to terminate the Grantee’s employment or service with or without cause.
(f) Severability. In the event of the invalidity of any part or provision of this Agreement, such invalidity will not affect the enforceability of any other part or provision of this Agreement.
(g) Section Headings. The section headings of this Agreement are for convenience of reference only and are not intended to define, extend or limit the contents of the sections.
(h) Amendment. The terms and conditions of this Agreement may be modified by the Committee:
(i) in any case permitted by the terms of the Plan or this Agreement;
(ii) except with respect to an adjustment made pursuant to the last paragraph of this Section 15(h), with the written consent of the Grantee; or
(iii) without the consent of the Grantee if the amendment is either not materially adverse to the interests of the Grantee or is necessary or appropriate in the view of the Committee to conform with, or to take into account, applicable law, including either exemption from or compliance with any applicable tax law.
Notwithstanding any provision in this Agreement or the Plan to the contrary, the Committee shall retain the discretion to adjust the number of RSUs that vest under this Agreement without the Grantee’s consent, notwithstanding the Company’s actual performance against the Performance Goals, either on a formula or discretionary basis or a combination of the two, as the Committee determines in its sole discretion.
(i) Plan Administration. The Plan is administered by the Committee, which has full and exclusive discretionary power to interpret, implement, construe and adopt rules, forms and guidelines for administering the Plan and this Agreement. All actions, interpretations and determinations made by the Committee, the Board of Directors, or any of their delegates as to the provisions of this Agreement and the Plan shall be final, conclusive, and binding on all persons and the Grantee agrees to be bound by such actions, interpretations and determinations.
(j) Governing Law. Except as may otherwise be provided in the Plan, this Agreement will be governed by, construed and enforced in accordance with the internal laws of the State of Ohio, without giving effect to its principles of conflict of laws. By accepting this Award, the Grantee agrees to the exclusive jurisdiction and venue of the courts of the United
States District Court for the Northern District of Ohio or the Summit County (Ohio) Court of Common Pleas to adjudicate any and all claims brought with respect to this Agreement.
(k) Internal Revenue Code Section 409A. Notwithstanding anything in the Plan or this Agreement to the contrary, the Award of RSUs granted hereunder is intended to meet any applicable requirements for compliance under, or exemption from (specifically, the short-term deferral exception under Treasury Regulation § 1.409A-1(b)(4)), Code Section 409A and this Agreement shall be construed and administered accordingly. However, notwithstanding anything in this Agreement to the contrary, the Company makes no representations or warranties as to the tax effects of payments made to the Grantee (or the Grantee’s estate) pursuant to this Agreement, and any and all tax consequences incident to such shall solely be the responsibility of the Grantee (or the Grantee’s estate).
(l) Data Privacy. In order to implement, administer and manage the Grantee’s participation in the Plan, the Company and its affiliates may hold certain personal information about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social security number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company or any affiliate, details of all Awards or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the exclusive purpose of implementing, administering and managing the Plan (collectively, the “Personal Data”).
The Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s Personal Data as described above, as applicable, to the Company and its affiliates for the sole purpose of administering the Plan. The Grantee understands that Personal Data may be transferred to third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the United States or the Grantee’s state of residence. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the Personal Data by contacting the Executive Compensation group of Human Resources. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any Shares received upon vesting of the RSUs. The Grantee understands that Personal Data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan and to comply with Securities and Exchange Commission and/or NYSE reporting obligations, any other applicable law or regulation and any applicable document retention policies of the Company. The Grantee understands that the Grantee may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing the Executive Compensation group of Human Resources. The Grantee understands that refusal or withdrawal of consent may affect the Grantee’s ability to participate in the Plan or to realize benefits from
the RSUs. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that the Grantee may contact the Executive Compensation group of Human Resources.
(m) Signatures and Electronic Delivery. This Agreement may be executed electronically and in counterparts, each of which shall be deemed to be an original, and when taken together shall constitute one binding agreement. The Company may, in its sole discretion, deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
[SIGNATURE ON FOLLOWING PAGE]
The Grantee acknowledges receipt of this Agreement and accepts and agrees with the terms and conditions stated above.
#AcceptanceDate# ____#Signature#______
(Date) (Signature of the Grantee)
EXHIBIT A
Performance Goals
Performance Period
The Performance Period for this Agreement is January 1, 2026 through December 31, 2028.
Performance Goals1
The Performance Goals, as approved by the Committee, for the Performance Period are based on:
1 Notwithstanding any other provision of this Agreement, in addition to any other rights of the Committee under the Plan (as defined in the Agreement), the Committee may, in any evaluation of the Company’s level of achievement with respect to the Performance Goals, include or exclude any of the following events that occur during the Performance Period: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) any reorganization and restructuring programs; (e) extraordinary nonrecurring items; (f) acquisitions or divestitures and/or (g) foreign exchange gains and losses.
