Contract
EXHIBIT
10-49
2010-2012
Performance-Adjusted Restricted Stock Unit Award Agreement
This Restricted
Stock Unit Award Agreement (the “Award Agreement”) is entered into as of March
8, 2010 (the “Grant Date”) between FirstEnergy Corp. and the
Participant. For the purposes of this Award Agreement, the term
“Company” means FirstEnergy Corp., its successors and/or its Subsidiaries,
singularly or collectively.
SECTION
ONE - AWARD
As of the Grant
Date, in accordance with the FirstEnergy Corp. 2007 Incentive
Plan (the “Plan”) and the terms and conditions of this Award
Agreement, the Company grants to the Participant the right to receive, at the
end of the Period of Restriction (as defined below) a number of shares of common
stock of the Company equal to the number of restricted stock units set forth
above (the “Restricted Stock Units”), subject to adjustment based on the
Company’s performance as described below.
Dividend
Equivalents
Until the expiration
of the Period of Restriction pursuant to the terms and conditions of this Award
Agreement, the Participant will be credited on the books and records of the
Company with an amount per each Restricted Stock Unit (the “Dividend
Equivalent”) equal to the amount per share of any cash dividends declared by the
Board with a record date on or after the Grant Date on the outstanding
common stock of the Company. Such Dividend Equivalents will be
credited in the form of an additional number of Restricted Stock Units (which
Restricted Stock Units, from the time of crediting, will be deemed to be in
addition to and part of the base number of Restricted Stock Units awarded by
this Award Agreement for all purposes hereunder). The additional
number of Restricted Stock Units will be equal to the aggregate amount of
Dividend Equivalents credited on this Award on the respective dividend payment
date divided by the average of the high and low prices per share of common stock
on the respective dividend payment date. The Restricted Stock Units
attributable to the Dividend Equivalents will be either delivered or forfeited,
as appropriate, under the same terms and conditions under this Award Agreement
that apply to the other Restricted Stock Units.
SECTION
TWO - GENERAL TERMS
This Award Agreement
is subject to the Plan and the following terms and conditions:
Period
of Restriction
For the purposes of
this Award Agreement, “Period of Restriction” means the period beginning on the
Grant Date set forth above and ending on the earliest of:
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a)
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5:00 p.m.
Akron time on March 8, 2013;
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b)
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The date of
the Participant’s death;
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c)
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The date that
the Participant’s employment is terminated due to Disability;
or
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d)
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The date of an
involuntary termination in connection with and resulting from a Change in
Control within the two-year period following the date of the Change in
Control under conditions in which the Participant qualifies for and
receives any employer severance benefit that may be offered, provided that
the Participant executes and submits an agreement to release the Company
in full against any and all claims as required by the arrangement or plan
providing the employer severance benefit and the statutory period during
which the Participant is entitled to revoke the agreement expires on or
before the 90th
day following the involuntary
termination.
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Notwithstanding that
the Period of Restriction ends upon a termination of employment due to
Disability, Restricted Stock Units awarded pursuant to this Award Agreement
shall be subject to limited restrictions after a termination due to Disability
as provided in this Award Agreement.
Performance
Adjustment
If the Payment Date
(as defined below under "Delivery of Common Stock") is March 8, 2013, the actual
number of shares issuable under the Restricted Stock Units awarded pursuant to
this Award Agreement may be adjusted upward or downward by fifty percent (50%)
from the number of Shares issuable under the Restricted Stock Units (as set
forth in Section One of this Award Agreement), based on the Company’s
performance against three key metrics. The Committee has identified
the three performance metrics as Earnings Per Share, Safety, and Operational
Performance Index.
The Company’s
performance against the three performance metrics will be evaluated, with
respect to each performance metric, by comparing the average of the Company’s
actual annual performance over the three years beginning in the year of grant of
this Award to the average of the annual target performance levels established
over the same period to determine whether the Company has exceeded, met or
fallen below the target performance level for that particular performance
metric. The annual target performance level relating to each metric for each
year will be set by the Committee in February of that year. The following
guidelines will be used to adjust the number of shares issuable under the
Restricted Stock Units awarded pursuant to this Award Agreement:
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If the
Company’s average annual performance meets or exceeds the average of the
target performance levels established by the Committee with respect to all
three of the performance metrics identified above, the number of Shares
issuable under the Restricted Stock Units (as set forth in Section One of
this Award Agreement) will be increased by fifty percent
(50%).
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·
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If the
Company’s average annual performance falls below the average of the target
performance levels established by the Committee with respect to all three
of the performance metrics identified above, the number of Shares issuable
under the Restricted Stock Units (as set forth in Section One of this
Award Agreement) will be decreased by fifty percent
(50%).
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·
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If the
Company’s average annual performance meets or exceeds the average of the
target performance levels established by the Committee with respect to one
or more of the performance metrics identified above, but falls below the
average of the target performance levels with respect to one or more of
the other performance metrics, the number of Shares issuable under the
Restricted Stock Units (as set forth in Section One of this Award
Agreement) will not be
adjusted.
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2
Delivery
of Common Stock
The date that shares
of common stock shall be issued to the Participant (the “Payment Date”) shall be
as follows for each specified event, provided that in no event will the
Participant be permitted directly or indirectly to designate the taxable year of
payment:
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·
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As soon as
practicable, but not later than ninety (90) days after March 8, 2013 if
the payment is on account of: the expiration of the Period of
Restriction set forth in paragraph a) of the subsection entitled “Period
of Restriction” above; the Participant’s termination of employment upon
retirement (as defined under the then established rules of the Company or
any of its Subsidiaries, as the case may be); the Participant’s
termination of employment due to Disability as set forth in paragraph c)
of the subsection entitled “Period of Restriction” above; the
Participant’s involuntary termination that occurs prior to the date of a
Change in Control or later than two years following the date of a Change
in Control under conditions in which the Participant qualifies for and
receives any employer severance benefit that may be offered, provided that
the Participant executes and submits an agreement to release the Company
in full against any and all claims as required by the arrangement or plan
providing the employer severance benefit and the statutory period during
which the Participant is entitled to revoke the agreement expires on or
before the 90th day following March 8, 2013; or if the Participant
continues to be employed by the Company but ceases to be employed in an
executive position during the three-year Period of Restriction;
or
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As soon as
practicable, but not later than ninety (90) days, after the expiration of
the Period of Restriction due to the Participant’s death pursuant to
paragraph b) of the subsection entitled “Period of Restriction” above;
or
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·
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On the 90th
day after the expiration of the Period of Restriction due to the
Participant’s involuntary termination in connection with and resulting
from a Change in Control within the two-year period following the date of
the Change in Control in accordance with, and as described in, paragraph
d) of the subsection entitled “Period of Restriction”
above.
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As soon as
practicable after the Payment Date, the Company shall deliver to the Participant
Shares of common stock under the Restricted Stock Units. The Company
will deliver a number of Shares equal to the number of Restricted Stock Units
awarded under this Award Agreement, as adjusted, less any Shares withheld to
cover the tax obligations in accordance with the subsection entitled
“Withholding Tax” below; provided that, no fractional Shares will be delivered
and any fractional Shares to which the Participant would otherwise be entitled
will be paid in cash. All Shares delivered will be registered in the name of the
Participant and will be transferred to and held in book entry form in a dividend
reinvestment account in the name of the Participant.
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Special
Definitions
For purposes of this
Award, the term “Change in Control” means a change in control that satisfies
both a Change in Control as defined in the Plan and a “change in control event”
as defined in Treasury Regulation Section 1.409A-3(i)(5) and the term
“involuntary termination” (or forms or derivations thereof) means “involuntary
separation from service” as defined in Treasury Regulation Section
1.409A-1(n).
Withholding
Tax
The Company shall
withhold Shares in an amount sufficient to satisfy all federal, state, and local
taxes required by law to be withheld in connection with the delivery of Shares
of common stock granted under this Award Agreement, but in no event shall such
shares exceed the minimum statutory withholding requirements.
Forfeiture
The Participant
shall forfeit all of the Restricted Stock Units and any right under this Award
Agreement to receive Shares of common stock upon the occurrence of any of the
following events before the expiration of the Period of
Restriction:
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Termination of
employment with the Company for any reason; provided, however, that
no forfeiture shall occur if termination of employment occurs due to the
Participant’s involuntary termination in connection with and resulting
from a Change in Control within the two-year period following the date of
the Change in Control and the satisfaction of the conditions as described
in paragraph d) of the subsection entitled “Period of Restriction” above;
and further
provided, that
if the conditions of paragraph d) of the subsection entitled “Period of
Restriction” above are not met, the Restricted Stock Units and any right
under this Award Agreement to receive Shares of common stock will be
forfeited.
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Any attempt to
sell, transfer, pledge, assign or otherwise alienate or hypothecate the
Restricted Stock Units or the right to receive the common stock issuable
under the Restricted Stock Units in violation of this Award
Agreement.
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Notwithstanding the
above, if the Participant dies, has a termination of employment upon retirement
(as defined under the then established rules of the Company or any of its
Subsidiaries, as the case may be), has a termination of employment due to
Disability, is involuntarily terminated prior to the date of a Change in Control
or later than two years following the date of a Change in Control under
conditions in which the Participant qualifies for and receives any employer
severance benefit that may be offered, provided that the Participant executes
and submits an agreement to release the Company in full against any and all
claims as required by the arrangement or plan providing the employer severance
benefit and the statutory period during which the Participant is entitled to
revoke the agreement expires on or before the 90th day
following March 8, 2013; or if the Participant continues to be employed by the
Company until March 8, 2013 but ceases to be employed in an executive position
during the three-year Period of Restriction, the Restricted Stock Units awarded
to the Participant under this Award Agreement will be forfeited and/or payable
as follows:
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If the
Participant dies, terminates employment as described above or ceases to be
employed in an executive position prior to a full month after the Grant
Date, all Restricted Stock Units earned will be forfeited upon the death
or termination.
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If the
Participant dies, terminates employment as described above or ceases to be
employed in an executive position after the lapse of a full month or more
after the Grant Date, the Participant will be entitled to a prorated
number of Restricted Stock Units. The proration will be calculated
by multiplying the number of Restricted Stock Units awarded by the number
of full months served after the Grant Date, divided by thirty-six
months. The prorated Restricted Stock Units will then be adjusted
upward or downward by the performance factors in accordance with the
provisions under the subsection “Performance Adjustment” (as determined by
the Committee), except that no adjustment is made upon death. All
fractional shares will be rounded up to the next full share. The
remaining portion of Restricted Stock Units awarded will be
forfeited.
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Upon the occurrence
of any of the above forfeiture events (for which no exception has been made as
set forth above) before the expiration of the Period of Restriction, the
Restricted Stock Units that are to be forfeited as described above (either in
full or in part), shall be forfeited by the Participant to the
Company. At the time of such forfeiture, the Participant’s interest
in the Restricted Stock Units and the common stock issuable under the Restricted
Stock Units shall terminate, unless such forfeiture is waived in the sole
discretion of the Committee.
Shareholder
Rights
The Participant
shall have no rights as a shareholder of the Company, including voting rights,
with respect to the Restricted Stock Units until the issuance of common stock
upon expiration of the Period of Restriction.
Effect
on the Employment Relationship
The grant of
Restricted Stock Units is voluntary and made on a one-time basis and does not
constitute a commitment to make any future awards. Nothing by this
Award or in this Award Agreement guarantees employment with the Company or any
Subsidiary, nor does this Award or Award Agreement confer any special rights or
privileges to the Participant as to the terms of employment.
Adjustments
In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, stock split, combination, distribution, or other
change in corporate structure of the Company affecting the common stock, the
Committee will adjust the number and class of securities granted under this
Award Agreement in a manner determined by the Committee, in its sole discretion,
to be appropriate to prevent dilution or enlargement of the Restricted Stock
Units granted under this Award Agreement.
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Administration
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1.
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This Award
Agreement is governed by the laws of the State of Ohio without giving
effect to the principles of conflicts of
laws.
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2.
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The
administration of this Award Agreement and the Plan will be performed in
accordance with Article 3 of the
Plan.
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3.
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All
interpretations, determinations and decisions made by the Committee, the
Board, or any delegate of the Committee as to the provisions of the Plan
shall be final, conclusive, and binding on all persons and the Participant
agrees to be bound by such interpretations, determinations and
decisions.
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4.
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The terms of
this Award Agreement are governed at all times by the official text of the
Plan and in no way alter or modify the
Plan.
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5.
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If a term is
capitalized but not defined in this Award Agreement, it has the meaning
given to it in the Plan.
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6.
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To the extent
a conflict exists between the terms of this Award Agreement and the
provisions of the Plan, the provisions of the Plan shall
govern.
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7.
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The terms and
conditions of this Award may be modified by the
Committee:
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(a)
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in any case
permitted by the terms of the Plan or this Award
Agreement;
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(b)
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with the
written consent of the Participant;
or
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(c)
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without the
consent of the Participant if the amendment is either not materially
adverse to the interests of the Participant 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.
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409A
It is intended that
this Award Agreement and the compensation and benefits hereunder either be
exempt from, or comply with, Section 409A of the Internal Revenue Code (“Section
409A”), and this Award Agreement shall be so construed and
administered. In the event that the Committee reasonably determines
that any compensation or benefits payable under this Award Agreement may be
subject to taxation under Section 409A, the Committee shall have the authority
to adopt, prospectively or retroactively, such amendments to this Award
Agreement or to take any other actions it determines necessary or appropriate to
(a) exempt the compensation and benefits payable under this Award Agreement from
Section 409A or (b) comply with the requirements of Section 409A. The
Committee, in its sole discretion, shall determine to what extent, if any, this
Award must be amended, modified or reformed. In no event, however,
shall this section or any other provisions of this Award Agreement be construed
to require the Company to provide any gross-up for the tax consequences of any
provisions of, or payments under, this Award Agreement and the Company shall
have no responsibility for tax consequences to Participant (or the Participant’s
beneficiary) resulting from the terms or operation of this Award
Agreement.
Notwithstanding any
other provision in this Award Agreement to the contrary, in the event a benefit
payable under this Award Agreement is subject to the requirements of Section
409A:
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1.
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A Participant
shall not be treated as having a termination of employment unless the
Participant has a “separation from service” as defined in regulations
under, and for purposes of, Section
409A.
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2.
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If a
Participant is a “specified employee,” as determined under the Company’s
policy for determining specified employees on the date of a “separation
from service,” all payments under this Award Agreement that would
otherwise be paid or provided during the first six (6) months following
such separation from service (other than payments, benefits, or
reimbursements that are treated as separation pay under Section
1.409A-1(b)(9)(v) of the Treasury Regulations, short-term deferrals under
Section 1.409A-1(b)(4) of the Treasury Regulations or other payments
exempted under the Treasury Regulations for Section 409A) shall be
accumulated through and paid or provided (together with interest at the
applicable federal rate under Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended, in effect on the date of the separation
from service) as soon as practicable following the six (6) month
anniversary of such separation from service but not later than the end of
the taxable year in which the six (6) month anniversary occurs.
Notwithstanding the foregoing, payments delayed pursuant to this paragraph
shall commence as soon as practicable following the date of death of the
Participant prior to the end of the 6 month period but in no event later
than ninety (90) days following the date of
death.
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SECTION
THREE - TRANSFER OF AWARD
Neither the
Restricted Stock Units nor the right to receive the common stock issuable under
the Restricted Stock Units are transferable during the life of the
Participant. Only the Participant shall have the right to receive the
common stock issuable under this Award Agreement, unless the Participant is
deceased, at which time the common stock issuable under this Award Agreement may
be issued to the Participant’s beneficiary (as designated under Article 15 of
the Plan), or pursuant to the Participant’s will or the laws of descent and
distribution.
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FirstEnergy
Corp.
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By
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Corporate
Secretary
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I acknowledge
receipt of this Restricted Stock Unit Award Agreement and I accept and agree
with the terms and conditions stated above.
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(Signature of
Participant)
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(Date)
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