FirstEnergy Corp. Executive and Director Incentive Compensation Plan Restricted Stock Unit Agreement (Discretionary)
EXHIBIT
10.9
FirstEnergy
Corp.
Executive
and Director Incentive Compensation Plan
Restricted
Stock Unit Agreement (Discretionary)
Restricted
Stock Unit
Agreement No.: RSUD5
(A)
Number
of Restricted
Stock
Units
Awarded:
________
units
Date
of Grant:
March
1,
2006
Closing
Date: March
25,
2006
This
Restricted
Stock Unit Agreement (the “Agreement”) is entered into as of the 1st
day of March, 2006
between FirstEnergy Corp. and _____________ (the “Grantee”). For the purposes of
this Agreement, the term “Company” or “FE” means FirstEnergy Corp. and/or its
subsidiaries, singularly or collectively.
SECTION
ONE
- AWARD
As
of the date of this Agreement, in accordance with the FirstEnergy Corp.
Executive and Director Incentive Compensation Plan (the “Plan”) and the terms
and conditions of this Agreement, the Company grants to the Grantee the right
to
receive, at the end of the Period of Restriction (as defined below) a number
of
shares common stock of the Company (“Common Stock”) equal to number of
restricted stock units set forth above (the “Restricted Stock Units”).
SECTION
TWO
- GENERAL TERMS
This
agreement is
subject to the Plan and the following terms and conditions:
Period
of
Restriction
For
the purposes of this Agreement, “Period of Restriction” means the period
beginning on the Date of Grant set forth above and ending on the earliest of:
| a) |
5:00
p.m.
Akron Time on March 1, 2011;
|
| b) |
The
date of
the Grantee’s death;
|
| c) |
The
date that
the Grantee’s employment is terminated due to
Disability;
|
| d) |
The
date that
Grantee’s employment is terminated at any time following a Change in
Control, provided that such termination occurs under the conditions
specified in either Section 5(a) or 5(b) of Grantee’s Special Severance
Agreement dated _________, but without regard to the thirty-six (36)
month
period specified in Section 5(a) or 5(b) of Grantee’s Special Severance
Agreement, dated _______________.
|
In
addition, to the extent described under the caption “Forfeiture” below, the
Period of Restriction will end with respect to a pro rata portion of the
Restricted Stock Units if the Grantee’s employment is terminated as a result of
involuntary termination or retirement under certain conditions. Neither the
Restricted Stock Units nor the right to receive the Common Stock issuable under
the Restricted Stock Units may be sold, transferred, pledged or assigned by
the
Grantee until the end of the Period of Restriction, except as set forth in
Section Three of this Agreement.
1
Withholding
Tax
The
Company shall have the right to deduct, withhold, or require the Grantee to
surrender an amount sufficient to satisfy federal (including FICA and Medicare),
state, and/or local taxes required by law to be withheld in connection with
the
grant of the Restricted Stock Units or the issuance of shares of Common Stock
subject to the Restricted Stock Units. Under the terms of the Plan, taxes can
be
paid by check, by payroll withholding, or by withholding shares issuable under
the Restricted Stock Units awarded under this Agreement, as elected by the
Grantee.
Delivery
of
Common Stock
Upon
payment of tax
obligations and as soon as practicable after the end of the Period of
Restriction, the Company shall issue to the Grantee shares of FE Common Stock
under the Restricted Stock Units. The Company will issue a number of shares
of
Common Stock equal to the number of Restricted Stock Units awarded under this
Agreement, as adjusted, less any shares withheld to cover the tax obligations
in
accordance with the preceding paragraph; provided that, no fractional shares
of
Common Stock will be issued under the Restricted Stock Units and any fractional
shares to which the Grantee would otherwise be entitled will be rounded up
to
the next full share. Notwithstanding the foregoing, if the Grantee is a
specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code
and the Period of Restrictions ends as a result of Grantee’s separation from
service (other than as a result of the Grantee’s death or Disability), no
issuance of shares of FE Common Stock under the Restricted Stock Units will
be
made to the Grantee prior to the date which is six months after the date of
the
Grantee’s separation from service within the meaning of that Section, or if
earlier, the date of Grantee’s death. All shares issued will be registered in
the name of the Grantee and will be held in safekeeping with FE.
Share
Value
Protection Rights
| 1. |
If
Grantee’s
employment with the Company or its immediate successor is terminated
at
any time under the conditions specified in either Section 5(a) or
5(b) of
Grantee’s Special Severance Agreement dated XX, but without regard to the
thirty-six (36) month period specified in Section 5(a) or 5(b) of
such
Special Severance Agreement, Grantee shall be entitled to a lump
sum cash
payment within ten (10) days after such termination of employment
determined by subtracting (a) from (b) and multiplying such difference,
if
any, by (c) where:
|
(a)
equals the
Fair Market Value of a Share on the date of such termination of
employment;
(b) equals the greater of (i) or (ii), where:
(i)
is the Fair
Market Value of a Share on March 1, 2006; and
(ii)
is the Fair
Market Value of a Share on the date of the Change in Control; and
(c) equals
___________ Shares.
|
If
the Fair
Market Value of a Share determined under (a) above is equal to or
greater
than the amount determined under (b) above, no payment shall be made
under
this Paragraph 1.
|
| 2. |
If
Grantee’s
employment with the Company or its immediate successor continues
after a
Change in Control without termination until the date that the Restricted
Shares cease to be restricted in accordance with paragraphs a), b)
or c)
of Section 1 of the Restricted Period set forth in the Restricted
Stock
Unit Agreement between the Company and the Grantee dated March 1,
2006,
Grantee or his beneficiary shall be entitled to a lump sum cash payment
within ten (10) days after such date that the Restricted Shares cease
to
be restricted in accordance with such paragraphs determined by subtracting
(a) from (b) and multiplying such difference, if any, by (c)
where:
|
2
(a)
equals the Fair Market Value of a Share on the date such restrictions
lapse;
(b)
equals the
greater of (i) or (ii), where:
(i)
is the Fair Market Value of a Share on March 1, 2006; and
(ii)
is the Fair Market Value of a Share on the date of the Change in Control;
and
(c)
equals
__________ Shares.
|
If
the Fair
Market Value of a Share determined under (a) above is equal to or
greater
than the amount determined under (b) above, no payment shall be made
under
this Paragraph 2.
|
| 3. |
Grantee
shall
be entitled to payment under either paragraph 1 or 2 above and once
a
payment has been made under either paragraph, no further payment
shall be
made under this Section relating to Share Value Protection
Rights.
|
| 4. |
An
adjustment
may be made to the above calculations as determined by the Committee,
in
its sole discretion, to prevent dilution or enlargement in a manner
as
authorized under this Restricted Stock Unit Agreement and Section
4.3 of
the Plan in connection with any events of the type provided for in
said
Section 4.3.
|
| 5. |
Notwithstanding
anything to the contrary in this Section relating to Share Value
Protection Rights, Grantee shall be entitled to the Restricted Shares
upon
satisfaction of the other sections of this Agreement even if there
is no
cash payment made under this Section relating to Share Value Protection
Rights.
|
Forfeiture
The
Grantee shall forfeit all of the Restricted Stock Units and any right under
this
Agreement to receive Common Stock upon the occurrence of any the following
events before the expiration of the Period of Restriction:
| · |
Termination
of
employment with the Company or its subsidiaries for any reason.
Notwithstanding the foregoing, no forfeiture shall occur if termination
of
employment with the Company is due to death, Disability (as defined
under
the then established rules of the Company or any of its subsidiaries,
as
the case may be) or is pursuant to either Section 5(a) or (b) of
Grantee’s
Special Severance Agreement dated
_______________.
|
| · |
Any
attempt to
sell, transfer, pledge, or assign the Restricted Stock Units or the
right
to receive the Common Stock issuable under the Restricted Stock Units
in
violation of this Agreement.
|
If
the Grantee’s employment is involuntary terminated under conditions in which the
Grantee qualifies for and elects benefits under the Company’s Severance Benefits
Plan, or if the Grantee retires (as defined under the then established rules
of
the Company or any of its subsidiaries, as the case may be), the Restricted
Stock Units in this Agreement will be forfeited and payable as follows, subject
to Section 3.8 of the Plan:
| · |
If
the
Grantee’s employment terminates prior to three full years after the Date
of Grant, all Restricted Stock Units and any Restricted Stock Units
earned
as Dividend Equivalents will be forfeited.
|
| · |
If
the
Grantee’s employment terminates three full years or more after the Date of
Grant, the Grantee will be entitled to a prorated number Restricted
Stock
Units. The prorated number of Restricted Stock Units will be determined
by
multiplying the number of shares initially awarded by the number
of full
months served after the date of grant, divided by sixty months.
Additionally, the Grantee will be entitled to all Restricted Stock
Units
earned as Dividend Equivalents on this Award, as of the date of
termination. The remaining portion of Restricted Stock Units initially
granted will be forfeited. The prorated portion will be issued as
soon as
practicable after the termination, subject to satisfying the applicable
tax withholding requirements.
|
3
Upon
the occurrence
of any of the above before the expiration of the Period of Restriction, the
Restricted Stock Units shall be forfeited by the Grantee to the Company and
the
Grantee’s interest in the Restricted Stock Units and the Common Stock issuable
under the Restricted Stock Units, including the right to receive Dividend
Equivalents (as defined below) shall terminate immediately in accordance with
the foregoing, unless such forfeiture is waived in the sole discretion of the
Committee.
Continuing
Transfer Restrictions
Should
Grantee’s
employment with FE continue after expiration of the Period of Restriction,
until
such time as Grantee’s employment with FE and its subsidiaries terminates, the
Grantee will not be permitted to sell, transfer, pledge, or assign
(collectively, “Transfer”) shares of Common Stock issued under this Agreement
(the “Transfer Restricted Securities”) to the extent prohibited in this
paragraph. If Grantee is subject to the employee share ownership guidelines
established by the Committee, then Grantee may not Transfer any Transfer
Restricted Securities to the extent that Grantee’s aggregate ownership of FE
stock immediately before and after the Transfer does not meet or exceed the
ownership level that applies to Grantee under those share ownership guidelines.
In addition, if Grantee is subject to the employee share ownership guidelines
established by the Committee, in no case may Grantee Transfer any Transfer
Restricted Securities to the extent that the Transfer, when aggregated with
all
of Grantee’s other Transfers, would cause Grantee to cease to own directly at
least one-half of the Transfer Restricted Securities. Any attempt to Transfer
any Transfer Restricted Securities in violation of the foregoing shall be void,
and FE shall not record such transfer on its books or treat any purported
transferee of the Transfer Restricted Securities as the owner of such shares
for
any purpose. The Committee may, however, in its sole discretion waive the
foregoing transfer restrictions in whole or in part. In addition, the Grantee
will be permitted to tender shares issuable under the Restricted Stock Units
to
FE under Section 16.2 of the Plan in the amount necessary to satisfy tax
withholding obligations associated with the Restricted Stock Units, and those
shares tendered to FE will not be considered to be Transfer Restricted
Securities.
Grantee
agrees that
FE may maintain custody of the certificate or certificates evidencing the
Transfer Restricted Securities until the expiration of Grantee’s employment with
FE and its subsidiaries in order to enforce the restrictions provided in this
Agreement. Upon the termination of Grantee’s employment with FE and its
subsidiaries for any reason after (or contemporaneous with) termination of
the
Period of Restriction, the Grantee’s shares will be free of all encumbrances,
provided that the Grantee has made the necessary arrangements with FE to satisfy
any withholding obligations.
Dividend
Equivalents
With
respect to the
Restricted Stock Units granted pursuant to this Agreement, the Grantee will
be
credited on the books and records of the Company with an amount per unit (the
“Dividend Equivalent”) equal to the amount per share of any cash dividends
declared by the Board 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 in Section One for all purposes hereunder, except
that such Restricted Stock Units will not be subject to pro rata forfeiture)
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
price per share of Common Stock on the respective dividend payment date. Until
the Period of Restriction lapses or any forfeiture of the Restricted Stock
Units
occurs pursuant to the terms and conditions described above, the Company will
credit, in additional Restricted Stock Units, to the Grantee’s Restricted Stock
Unit award, an amount equal to the Dividend Equivalents in the manner set forth
above.
4
Shareholder
Rights
The
Grantee shall have no rights as a shareholder of the Company, including voting
rights, with respect to the Restricted Stock Units until the issuance of FE
Common Stock upon expiration of the Period of Restriction.
Effect
on
the Employment Relationship
Nothing
in this
Agreement guarantees employment with the Company or any Subsidiary, nor does
it
confer any special rights or privileges to the Grantee 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 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 Agreement.
Administration
| 1. |
This
Agreement
is governed by the laws of the State of Ohio without giving effect
to the
principles of conflicts of laws.
|
| 2 |
The
terms and
conditions
of this Award
may be modified by the Committee
|
| (a) |
In
any case
permitted by the terms of the Plan or this
Agreement,
|
| (b) |
with
the
written consent of the Grantee, or
|
| (c) |
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.
|
| 3. |
The
administration of this Agreement and the Plan will be performed in
accordance with Article 3 of the Plan. All 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.
|
| 4. |
The
terms of
this Agreement are governed at all times by the official text of
the Plan
and in no way alter or modify the
Plan.
|
| 5. |
If
a term is
capitalized but not defined in this Agreement, it has the meaning
given to
it in the Plan.
|
| 6. |
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.
|
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 Grantee. Only the Grantee shall have the right to receive the
Common Stock issuable under the Restricted Stock Units, unless the Grantee
is
deceased, at which time the Common Stock issuable under the Restricted Stock
Units may be received by the Grantee’s beneficiary (as designated under Article
12 of the Plan) or by will or by the laws of descent and
distribution.
5
| FirstEnergy Corp. | ||
| |
|
|
| By: | ||
|
Corporate Secretary |
||
I acknowledge
receipt of this Restricted Stock Unit Agreement and I accept and agree with
the
terms and conditions stated above.
| |
|
|
|
_________________
Date:
|
(Signature of Grantee) |
|
6
