TIER 2 TEMPLATE [Executive] [Address] Special Severance Agreement Dear [Executive]:
Exhibit
10-15
DRAFT OF
3/4/04
December 31,
2003
TIER 2
TEMPLATE
[Executive]
[Address]
Dear
[Executive]:
The Board of
Directors (the "Board") of FirstEnergy Corp. (the "Company") recognizes that, as
is the case with many publicly held corporations, there always exists the
possibility of a change in control of the
Company. This possibility and the uncertainty it creates may result in the loss
or distraction of members of management of the Company and its subsidiaries to
the detriment of the Company and its shareholders.
The Board considers
the establishment, maintenance, and continuity of a sound and vital management
to be essential to protecting and enhancing the best interests of the Company
and its shareholders. The Board also believes that when a change in control is
perceived as imminent, or is occurring, the Board should be able to receive and
rely on disinterested advice from management regarding the best interests of the
Company and its shareholders without concern that members of management might be
distracted or concerned by the personal uncertainties and risks created by their
perception of an imminent or occurring change in control.
Accordingly, the
Board has determined that appropriate steps should be taken to assure the
Company of the continued employment and attention and dedication to duty of
certain members of management of the Company and to ensure the availability of
their disinterested advice, notwithstanding the possibility, threat or
occurrence of a change in control.
Therefore, in order
to fulfill the above purposes, the Board has designated you as eligible for
severance benefits as set forth below.
| 1. |
Offer |
In
order to induce you to remain in the employ of the Company and to provide
continued services to the Company now and in the event that a Change in Control
is imminent or occurring, this letter agreement (the "Agreement") sets forth
severance benefits which the Company offers to pay to you in the event of a
termination of your employment (in the manner described in Section 5 below)
subsequent to a Change in Control of the Company (as defined in Section 4
below).
| 2. |
Operation |
This Agreement
shall become effective as of the date of commencement of the term set forth in
Section 3 below, but anything in this Agreement to the contrary notwithstanding,
neither this Agreement nor any of its provisions shall be operative unless and
until there has been a Change in Control while you are still an employee of the
Company, nor shall this Agreement govern or affect your employment relationship
with the Company except as explicitly set forth herein. Upon a Change in
Control, if you are still employed by the Company, this Agreement and all of its
provisions shall become operative immediately on the later of (a) the date
of the Change in Control or (b) the first day of the term of this
Agreement. If your employment relationship with the Company is terminated before
a Change in Control, you shall have no rights or obligations under this
Agreement.
1
3. Term
(a) Term of
Agreement: The term of this
Agreement shall commence immediately upon the current expiration date of the
Special Severance Agreement you signed on ___________ , that expiration date
being December 31, 2005, and continue until December 31, 2006. As of the date on
which the term of this Agreement commences this Agreement shall supersede all
other agreements of a like or similar nature. Such former agreements are
considered null and void as of the date on which the term of this Agreement
commences.
(b) One-Year
Evergreen Provision: Subject to
Subsection (c) below, this Agreement shall be reviewed annually commencing in
2004 by the Board at a regular meeting held between October 1 and December 31 of
each year. At such yearly review, the Board shall consider whether or not to
extend the term of this Agreement for an additional year. Unless the Board
affirmatively votes not to extend this Agreement at such yearly review, the term
of this Agreement shall be extended for a period of one year from the previous
termination date. In the event the Board so votes not to extend this Agreement,
the termination date of this Agreement shall be the later of December 31, 2006
or thirty-six full calendar months from December 31st of the year in which this
Agreement was last extended.
(c) Subsection (b)
above notwithstanding, upon the occurrence of a Change in Control, this
Agreement shall be automatically extended for a period of thirty-six full
calendar months commencing on the date of such Change in Control. At the end of
such thirty-six month period, this Agreement shall terminate.
4. Change in
Control
For the purpose of
this Agreement, a "Change in Control" shall mean:
(a) The acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% (25% if such Person proposes any
individual for election to the Board or any member of the Board is the
representative of such Person) or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change in Control: (i) any acquisition
directly from the Company (excluding an acquisition by virtue of the exercise of
a conversion privilege), (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of Subsection (c) of this
Section 4 are satisfied; or
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(b) Individuals who, as
of the date hereof, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (within the meaning of solicitations subject to Rule 14a-12(c)
of Regulation 14A promulgated under the Exchange Act or any such successor rule)
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company, in each case, unless, following
such reorganization, merger, consolidation or sale or other disposition of
assets, (i) more than 75% of, respectively, the then outstanding shares of
common stock of the corporation resulting from such reorganization, merger or
consolidation or acquiring such assets and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger,
consolidation or sale or other disposition of assets in substantially the same
proportions as their ownership, immediately prior to such reorganization,
merger, consolidation or sale or other disposition of assets, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding the Company, any employee benefit plan (or related
trust) of the Company or such corporation resulting from such reorganization,
merger, consolidation or acquiring such assets and any Person beneficially
owning, immediately prior to such reorganization, merger, consolidation or sale
or other disposition of assets, directly or indirectly, 25% or more of the
Outstanding Company Common Stock or Outstanding Company Voting Securities, as
the case may be) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or acquiring such
assets or the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or consolidation or
acquiring such assets were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization, merger,
consolidation or sale or other disposition of assets; or
(d) Approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company.
5. Termination
(a) Termination
Following Change in Control: If, within a
period of thirty-six full calendar months after a Change in Control (as defined
above) of the Company, you are discharged without Cause or resign for Good
Reason (each as defined below), you shall be entitled to the benefits provided
by this Agreement as set forth in Section 6 below.
(b) Good
Reason: If any of the
following events occurs without your express consent and within thirty-six full
calendar months after a Change in Control, you may voluntarily terminate your
employment within 30 days of the occurrence of such event and be entitled to the
severance benefits set forth in Section 6 below:
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(1) The Company assigns
any duties to you which are inconsistent with your position, duties, offices,
titles, status (including membership on the Board of Directors) responsibilities
or reporting requirements in effect immediately prior to a Change in Control, or
your removal from or any failure to re-elect you to any of such positions or
offices, except in connection with termination of your employment for Cause,
Disability, death or Normal Retirement (as such terms are defined below), or by
you other than for Good Reason, or;
(2) Changes to your
base salary are inconsistent with your annual performance review and the salary
program applicable to other senior executives of the Company; or
(3) The Company
discontinues any bonus or other compensation plans or any other benefit, stock
ownership plan, stock purchase plan, stock option plan, life insurance plan,
health plan, disability plan or similar plan (as the same existed immediately
prior to the Change in Control) in which you participated or were eligible to
participate in immediately prior to the Change in Control and such
discontinuation is not generally applicable to all participants in any such
plan; or
(4) The Company takes
action which adversely affects your participation in, or eligibility for, or
materially reduces your benefits otherwise earned or payable under, any of the
plans described in (3) above (unless such action is required by law), or which
deprives you of any material fringe benefit enjoyed by you immediately prior to
the Change in Control, or fails to provide you with the number of paid vacation
days to which you were entitled in accordance with normal vacation policy
immediately prior to the Change in Control unless such action by the Company is
generally applicable to all participants in any such plan; or
(5) The Company
requires you to be based at any office or location other than one within a 50
mile radius of the office or location at which you were based immediately prior
to the Change in Control (except for required travel on the Company's business
to an extent substantially consistent with your business travel obligations as
they existed at the time of a Change in Control of the Company); or, in the
event you consent to being based anywhere more than fifty miles from such
location, the failure by the Company to pay (or reimburse you for) all
reasonable moving expenses incurred by you relating to a change of your
principal residence in connection with such relocation and to indemnify you
against any loss (defined as the difference between the actual sale price of
such residence after the deduction of all real estate brokerage charges and
related selling expenses and the higher of (1) your aggregate investment in such
residence or (2) the fair market value of such residence (as determined by a
real estate appraiser designated by you and reasonably satisfactory to the
Company)) realized upon the sale of such residence in connection with any such
change of residence; or
(6) The Company's
requiring you to perform duties or services which necessitate absence overnight
from your place of residence, because of travel involving the business or
affairs of the Company, to a degree not substantially consistent with the extent
of such absence necessitated by such travel during the period of twelve months
immediately preceding a Change in Control of the Company; or
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(7) The Company
purports to terminate your employment otherwise than as expressly permitted by
this Agreement; or
(8) The Company fails
to comply with and satisfy Section 10 below, provided that such successor has
received at least ten days prior written notice from the Company or from you of
the requirements of Section 10 below.
You shall have the
sole right to determine, in good faith, whether any of the above events has
occurred.
(c) Cause: Cause shall mean:
conviction of a felony or crime involving an act of moral turpitude, dishonesty,
or misfeasance.
(d) Notice of
Termination: Any termination
by the Company for Cause, or by you for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
12 hereof. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
your employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the Date of Termination.
(e) Date of
Termination: "Date of
Termination" means (1) if your employment is terminated by the Company for Cause
or without Cause, or by you for Good Reason or other than for Good Reason, the
date of receipt by the other party hereto of the Notice of Termination, and (2)
if your employment is terminated by reason of death, Disability or Normal
Retirement (as defined below), the Date of Termination shall be the date of your
death, the date of your receipt of Notice of Termination, or the first of the
month following the month you reach the normal retirement age for employees in
your position, respectively.
(f) Normal
Retirement: If your
employment is terminated due to Normal Retirement, you shall not be entitled to
severance benefits under this Agreement, regardless of the occurrence of a
Change in Control. A termination by Normal Retirement shall have occurred where
your termination is caused by the fact that you have reached normal retirement
age for employees in your position.
(g) Termination for
Cause: If subsequent to
a Change in Control, your employment is terminated by the Company for Cause, the
Company shall pay you your full base salary through the Date of Termination at
the rate in effect at the time Notice of Termination is given, and you shall
also receive all accrued or vested benefits of any kind to which you are, or
would otherwise have been, entitled throughout the Date of Termination (as
defined in Subsection (e) of this Section 5), and the Company shall thereupon
have no further obligation to you under this Agreement.
5
(h) Disability or
Death: If termination of
your employment results from your Disability or death, you shall not be entitled
to severance benefits under this Agreement, regardless of the occurrence of a
Change in Control. You or your designated beneficiary, in the case of your
death, shall receive all accrued or vested benefits of any kind to which you
are, or would otherwise have been, entitled through the Date of Termination, and
the Company shall thereupon have no further obligation to you under this
Agreement.
"Disability" shall
mean, for the purposes of this Agreement, your total and permanent disability
such that you would be entitled to receive Disability Retirement Income under
the Company's qualified pension plans, except for purposes of this provision you
need not have completed ten (10) years of service with the Company, followed by
the Company giving you thirty days written notice of its intention to terminate
your employment by reason thereof, and your failure because of your Disability
to resume the full-time performance of your duties within such period of thirty
days and thereafter perform the same for a period of two consecutive
months.
6. Severance
Benefits
If, within a period
of thirty-six full calendar months after a Change in Control of the Company, you
are discharged without Cause or resign for Good Reason, the following shall be
applicable:
(a) The Company shall
pay to you within ten business days following the Date of Termination (subject
to delay under Subsection 6(l)) a lump sum severance benefit, payable in cash,
in the amounts determined as provided below:
(1) Your full base
salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given.
(2) In lieu of further
salary payments to you for periods subsequent to the Date of Termination, an
amount equal to 2.00 multiplied by the sum of your annual base salary at the
rate in effect as of the Date of Termination (or, if higher, at the rate in
effect as of the time of the Change in Control) plus the average annual
short-term incentive amount awarded to you under the FirstEnergy System
Executive Incentive Compensation Plan ("EICP") for the three years immediately
preceding the year during which the Date of Termination occurs whether or not
fully paid.
(b) For purposes of the
EICP, you shall be considered to have retired and will be paid the pro rata
portion of any incentive award earned, if any, and any long-term deferred
incentive awards earned, if any, per the terms of the plan.
(c) For purposes of
FirstEnergy stock options issued pursuant to the FirstEnergy Executive and
Director Incentive Compensation Plan, all outstanding options will follow the
terms of the option agreement(s).
(d) For purposes of the
Company's group health and life insurance plans:
(1) If, on the Date of
Termination, the addition of two (2) years to your age would make you eligible
to qualify for retiree health or life insurance coverage under the Company’s
then-in-effect group health or life insurance plans, then you shall be
considered as having retired for purposes of retiree health or life insurance
coverage under such plan or plans for which the addition of two (2) years to
your age would make you so eligible and for purposes of such coverage you shall
be credited with two (2) additional years of age and service. You shall be
responsible for paying the normal retiree share of the applicable premiums for
retiree coverage under the group health and life insurance plans.
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(2) If you are not
entitled to retiree health or life insurance coverage under Subsection (d)(1),
then you shall be entitled to continue to participate, on the same terms
and conditions as active employee participants, in such plan or
plans for which you are not so entitled to retiree coverage for a period of two
(2) years after the Date of Termination. During such continuation period, you
shall be responsible for paying the normal employee share of the applicable
premiums for coverage under the health and life insurance plans.
(3) The Company shall
have the right to modify, amend or discontinue the Company’s group health and
life insurance plans following the Date of Termination and your continued
participation therein, and the continued participation of any other person
therein under Subsection (h) 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.
(4) If the Company is
not permitted to provide continuing coverage under the terms of the Company’s
group health and life insurance plans and related trusts, then the Company may
purchase health and/or life insurance for you for the period specified in
Subsection (d)(1) or (d)(2), as applicable, with coverage comparable to the
applicable coverage under the Company’s group health or life insurance plan, as
applicable, 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).
(5) The health benefit
continuation provided under this Subsection (d) shall satisfy the Company’s
obligations to provide, and any rights that you 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 the Employee Retirement Income Security Act of 1974, as amended,
and Section 4980B(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provisions thereto.
(e) For purposes of the
FirstEnergy Corp. Executive Deferred Compensation Plan ("Deferred Compensation
Plan"), you shall be credited with two (2) additional years of age and
service.
(f) For all purposes
under the FirstEnergy Corp. Supplemental Executive Retirement Plan ("SERP"), you
shall be credited with two (2) additional years of age and service, and your
accrued benefit, if any, shall be fully vested. If you are eligible on the Date
of Termination under the SERP and with such additional age and service credit to
commence your benefit under the SERP, your benefit under the SERP will commence
on the first of the month following the Date of Termination and your monthly
benefit from the SERP shall be calculated in accordance with the terms of the
SERP and this Subsection (f) except that (1) until you reach age 55, such SERP
benefit shall be offset only by any compensation earned by you from a subsequent
employer as provided in paragraph (j) below, (2) at age 55 and until you reach
age 62, such SERP benefit shall be offset only by the monthly amounts to which
you will be entitled at age 55 from the Company's tax-qualified pension plan,
the supplementary pension make-up benefit under the Deferred Compensation Plan
and/or the tax-qualified pension plan of any previous employers (collectively,
"Pension Income"), irrespective of whether you receive such benefits at that
time, and, (3) at age 62 and thereafter such SERP benefit shall be offset only
by Pension Income and the monthly primary Social Security Benefit to which you
will be entitled at age 62, irrespective of whether you receive such benefits at
that time.
7
(g) In addition to the
payment required by Subsection (a), the Company shall pay to you within ten
business days following the Date of Termination a special lump sum severance
benefit, payable in cash, in an amount equal to
[__________________].
(h) In the event that
because of their relationship to you, members of your family or other
individuals are covered by any plan, program, or arrangement described in
Subsection (d) above immediately prior to the Date of Termination, 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 your termination of employment
during the period in which the Company is obligated to continue coverage for
you, nothing set forth herein shall obligate the Company to continue to provide
coverage which would have ceased even if you had remained an employee of the
Company.
(i) Other Benefits
Payable: The severance
benefits described in Subsections (a), (b), (c), (d), (e), (f), (g) and (h)
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 you following your discharge or resignation (and are not
contingent on any Change in Control preceding such termination), 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.
(j) Payment
Obligations: Other than as set
forth in the Deferred Compensation Plan or the SERP, upon a Change in Control
the Company's obligations to pay the severance benefits or make any other
payments described in this Section 6 shall not be affected by any set-off,
counterclaim, recoupment, defense or other right which the Company or any of its
subsidiaries may have against you or anyone else. If you are less than age 55 at
the time of your discharge without Cause or your resignation for Good Reason,
then, commencing 24 months after the Date of Termination, you shall be required
to seek employment elsewhere and thereby mitigate the amount of SERP benefit
payable under Subsection (f)(1). You shall not be required to accept a position
other than as a senior executive of an entity comparable in size to the Company
and having duties, responsibilities and authority substantially similar in scope
and nature to your position with the Company immediately prior to the Date of
Termination. Upon obtaining such employment, you shall promptly notify the
Company of the compensation and benefits you received or will receive from such
new employer and of any changes therein.
(k) Legal Fees and
Expenses: Subject to and
contingent upon the occurrence of a Change in Control the Company agrees to pay
promptly as incurred, to the full extent permitted by law, all legal fees and
expenses which you may reasonably thereafter incur as a result of any contest,
litigation or arbitration (regardless of the outcome thereof) by the Company,
you or others of the validity or enforceability of, or liability under, any
provision of this Agreement, the Deferred Compensation Plan, or the SERP
(including any contest by you about the amount of any payment pursuant to this
Agreement, the Deferred Compensation Plan or the SERP), plus in each case
interest on any delayed payment at the rate of 150% of the Prime Rate as
published in the Wall Street Journal in the Money Rates Table on the business
day immediately preceding the conclusion of any such contest, litigation or
arbitration.
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(l) Certain
Additional Payments by the Company:
(1) Anything in this
Agreement to the contrary notwithstanding, but subject to the
next paragraph of this Subsection (6)(l)(1), in the event that
you become entitled to severance benefits under this Section 6 hereof, the
Deferred Compensation Plan, the SERP or otherwise, and it shall be determined
that any payment or distribution by the Company to you or for your benefit,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement, the Deferred Compensation Plan, the SERP or otherwise (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then you shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by you of all taxes (including any interest or penalties imposed with respect to
such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, you
retain an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payment.
If it is determined
that the Payment is subject to the Excise Tax and that the Payment is not more
than 120% of the greatest amount that can be paid to you without requiring
payment of the Excise Tax (the “Safe Harbor Amount”), then (a) no Gross-Up
Payment shall be made to you, (b) the Company shall notify you within 15
business days after the date of termination of your employment of the Safe
Harbor Amount, and (c) unless you direct the Company otherwise in writing
within 10 business days after your receipt of such notice, the Payment, in the
aggregate, shall be reduced to the Safe Harbor Amount. Notwithstanding the
foregoing provisions, if the Payment is more than 120% of the Safe Harbor
Amount, then you will receive the Gross-Up Payment.
(2) All determinations
required to be made under this Subsection (l), including whether a Gross-Up
Payment is required, the amount of such Gross-Up Payment and the amount of any
reduction in the Payments, shall be made in good faith by the Company which
shall provide detailed supporting calculations to you within 15 business days
after the date of termination of your employment, if applicable, or such earlier
time as is requested by the Company. If the Company determines that no Excise
Tax is payable by you, it shall furnish you with an opinion of counsel that you
have substantial authority not to report any Excise Tax on your federal income
tax return. Except as hereinafter provided, any determination by the Company
shall be binding upon the Company and you. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Company hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that you are
required to make a payment of any Excise Tax (other than as a result of your
direction under the preceding paragraph), the Company shall determine the amount
of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to you or for your benefit.
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(3) Notwithstanding the
provisions of Subsections 6(a) and 6(g), if the Company preliminarily determines
in good faith that the Payments are subject to reduction under this Subsection
6(l), then the payments required under Subsections 6(a) and 6(g) may be delayed
until five business days after a final determination is made under this
Subsection 6(l) as to whether the Payments will be reduced.
7. Assignability
This Agreement is
binding on and is for the benefit of the parties hereto and their respective
successors, heirs, executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may be assigned by
the Company (except to any subsidiary or affiliate) or by you.
8. Non-Competition
If, subsequent to a
Change in Control of the Company, you are discharged without Cause or resign for
Good Reason, then for a period of two years after the Date of Termination, you
shall not on your 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. For all purposes of this agreement the words "competition with
the Company" shall mean:
| (a) |
Directly
participate or engage, on the behalf of other parties, in the purchase of
products, supplies or services of the kind, nature or description of those
sold by the Company, |
| (b) |
Solicit,
divert, take away or attempt to take away any of the Company’s Customers
or the business or patronage of any such Customers of the
Company; |
| (c) |
Solicit,
entice, lure, employ or endeavor to employ any of the Company’s
employees; |
| (d) |
Divulge to
others or use for your own benefit any confidential information obtained
during the course of your employment with Company relative to sales,
services, processes, methods, machines, manufacturers, compositions,
ideas, improvements, patents, trademarks, or inventions belonging to or
relating to the affairs of Company; |
| (e) |
Divulge to
others or use to your own benefit any trade secrets belonging to the
Company obtained during the course of your employment or that you became
aware of as a consequence of your
employment. |
The term “Customer”
shall mean any person, firm, association, corporation or other entity to which
you or the Company has sold the Company’s products or services within the
twenty-four (24) month period immediately preceding the termination of your
employment with the Company or to which you or the Company is in the process of
selling its products or services, or to which you or the Company has submitted a
bid, or is in the process of submitting a bid to sell the Company’s products or
services.
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However, nothing
herein contained shall prevent you from purchasing and holding for investment
less than 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, you 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 Agreement, 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.
| 9. |
Non-Disparagement |
You 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.
10. Successor
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 Agreement 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 Agreement,
"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
Agreement 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 Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
This Agreement
shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amounts would still be
payable to you hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid to such beneficiary or beneficiaries as
you shall have designated by written notice delivered to the Company prior to
your death or, failing such written notice, to your estate.
11. Amendment;
Waiver
This Agreement may
be amended only by an instrument in writing signed by the parties hereto, and
any provision hereof may be waived only by an instrument in writing signed by
the party or parties against whom or which enforcement of such waiver is sought.
The failure of either party hereto at any time to require the performance by the
other party hereto 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 party hereto of a breach of any provision hereof 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 Agreement.
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12. Notices
All notices and
other communications hereunder shall be in writing and shall be given by hand
delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to
you:
[Executive]
[Address]
If to the
Company:
Secretary
FirstEnergy
00 Xxxxx
Xxxx Xxxxxx
Akron, Ohio
44308
or
to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
13. Validity
The invalidity or
unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect, nor shall the invalidity or
unenforceability of a portion of any provision of this Agreement affect the
validity or enforceability of the balance of such provision. If any provision of
this Agreement, 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.
14. Withholding
The Company may
withhold from any amounts payable under this Agreement such Federal, state or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.
15. Entire
Agreement
This Agreement
contains the entire understanding of the Company and you with respect to the
subject matter hereof and, upon the date this Agreement becomes effective
pursuant to Section 3, supercedes all other agreements of like or similar
nature.
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16. Applicable
Law
This Agreement
shall be governed by and construed in accordance with the substantive internal
law and not the conflict of law provisions of the State of Ohio.
If
the terms of the foregoing Agreement are acceptable to you, please sign and
return to the Company the enclosed copy of this Agreement whereupon this
Agreement shall become a valid and legally binding contract between you and the
Company.
Very truly
yours,
FIRSTENERGY CORP.
By: /s/
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X.
Xxxxxxxxx
President and Chief
Operating Officer
Accepted and Agreed
as of the date first above written:
__________________________________________
[Executive]
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