Special Severance Agreement
December 31, 2007
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Special
Severance
Agreement
Dear
Dick:
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 and
other benefits which the Company offers to pay to you in the event of your
Termination of Employment under certain circumstances (in the manner described
in Section 5 below) subsequent to a Change in Control of the Company (as defined
in Section 4 below). For purposes of this Agreement, “Termination of Employment”
shall mean a separation from service within the meaning of Section 409A of
the
Internal Revenue Code of 1986, as amended, (“Section 409A”) with the Company and
all of its 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 your 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 you after a certain
date or that the level of bona fide services you 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 36-month period (or the full period of services if
you
have been providing services for less than 36 months).
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.
3.
Term
(a)
Term
of
Agreement: The
term of this Agreement shall commence immediately upon the date hereof and
continue until December 31, 2009. 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 2008 by the
Board
at a regular meeting held between September 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 (1)
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
not be extended and shall remain the same termination date as in effect
previously.
(c)
Subsection
(b) above notwithstanding,
upon the occurrence of a Change in Control, this Agreement shall be
automatically extended for a period of twenty-four (24) full calendar months
commencing on the date of such Change in Control. At the end of such
twenty-four (24) 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.
Employment
Termination
(a) Termination
of Employment Following a Change in Control: If a Change in Control
occurs, you
shall be entitled to the benefits described in Section 6 if, at any time during
the twenty-four (24) month period following the Change in
Control:
(1) You incur an involuntary Termination of Employment for any reason other than for Cause; or
(2) You incur a voluntary Termination of Employment
for Good Reason within thirty days following an event that constitutes Good
Reason as defined below.
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(b) Definition
of Good Reason: For purposes of this
Agreement, “Good Reason” shall mean the initial occurrence, without your
consent, of one or more of the following events:
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(1)
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a
material diminution in your base
pay;
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(2)
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a
material diminution in your
authority, duties or
responsibilities;
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(3)
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a
material diminution in the
authority, duties or responsibilities of the supervisor to whom
you are
required to report, including a requirement that you report to
a corporate
officer or employee instead of reporting directly to the Board
if you
reported to the Board directly immediately before the Change in
Control;
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(4)
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a
material diminution in the
budget over which you retain
authority;
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(5)
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a
material change in the
geographic location at which you must perform services;
and
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(6)
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any
other action or inaction that
constitutes a material breach by the Company of any employment
agreement
under which you provide
services;
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provided, however, that “Good Reason” shall not be deemed to exist unless:
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(A)
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you
have provided notice to the
Company of the existence of one or more of the conditions listed
in (1)
through (6) above within 90 days after the initial occurrence of
such
condition or conditions; and
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(B)
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such
condition or conditions have
not been cured by the Company within 30 days after receipt of such
notice.
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(c) Definition of
Cause: For
purposes of this
Agreement, the term Cause shall mean that,
prior to any Termination of
Employment, you shall have committed:
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(i)
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and
been convicted of a criminal
violation involving fraud, embezzlement or theft in connection with
your
duties or in the course of your employment with the Company or any
subsidiary;
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(ii)
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intentional
wrongful damage to
property of the Company or any
subsidiary;
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(iii)
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intentional
wrongful disclosure of
secret processes or confidential information of the Company or any
subsidiary;
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(iv)
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intentional
wrongful competition
with Company as set forth in Section 8 below;
or
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(v)
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gross
negligence in the
performance of your material duties to the
Company;
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and
any such act or omission shall have
been demonstrably and materially harmful to the Company. For purposes
of this Agreement, no act or failure to act on your 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 you not in
good faith and without reasonable belief that your action or omission was in
the
best interest of the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for “Cause” hereunder unless and
until there shall have been delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three quarters of the Board then in
office at a meeting of the Board called and held for such purpose, after
reasonable notice to you and an opportunity for you, together with your counsel
(if you choose to have counsel present at such meeting), to be heard before
the
Board, finding that, in the good faith opinion of the Board, you had committed
an act constituting “Cause” as herein defined and specifying the particulars
thereof in detail. Nothing herein will limit your right or your
beneficiaries to contest the validity or propriety of any such
determination.
(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, and (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.
(e) Date
of
Termination: "Date of Termination"
shall
mean the effective date of your Termination of Employment.
(f) Normal
Retirement: If your employment
with the Company 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 the first date on which you are entitled to receive a pension benefit
that is not reduced for early payment under the FirstEnergy Corp. Master Pension
Plan or any successor pension plan.
(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 through 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.
(h) Disability
or Death: If
termination of your employment with the Company 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 your employment with the Company is terminated, and
the Company shall thereupon have no further obligation to you under this
Agreement.
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For
purposes of this Agreement,
"Disability" shall mean, 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 you except for
purposes of this provision you need not have completed ten (10) years of service
with the Company.
6. Severance
Benefits
If,
within a period of twenty-four (24)
full calendar months after a Change in Control of the Company, you incur a
Termination of Employment under circumstances described in Section 5(a) of
this
Agreement, the following shall be applicable:
(a)
The Company shall pay to you
as
soon as possible but not later than thirty (30) business days following the
Termination of Employment a lump sum severance benefit, payable in cash, in
the
amounts determined as provided below:
(1)
Your full base salary through
the
date of your Termination of Employment 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 your Termination of Employment and, in part,
as
consideration for the non-competition agreement set forth in Section 8 of this
Agreement, an amount equal to 2.99 multiplied by the sum of: (i) your annual
base salary at the rate in effect as of the date of your 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 amount in
effect for you under the FirstEnergy Corp. 2007 Incentive
Compensation Plan or any successor incentive compensation plan (“ICP”) in the
year during which your Termination of Employment occurs whether or not fully
paid.
(b) For
purposes of the ICP, 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 or any successor 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 your Termination of
Employment, the addition of three (3) 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 three (3) years
to
your age would make you so eligible and for purposes of such coverage you shall
be credited with three (3) 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.
(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 three (3) years after the date of your
Termination of Employment. 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.
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(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 your Termination of Employment 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) As
further provided in the FirstEnergy
Corp. Executive Deferred Compensation Plan ("Deferred Compensation Plan"),
you
shall be credited with three (3) additional years of age and
service. Notwithstanding anything in this Agreement or the
Deferred Compensation Plan to the contrary, the additional age and service
credits provided hereunder shall not accelerate the payout under such plans
if
such acceleration would violate the rules under Section 409A.
(f) If,
on the date of your Termination of
Employment you are a participant in the FirstEnergy Corp. Supplemental Executive
Retirement Plan ("SERP"), and as further provided in the SERP, you shall be
credited with three (3) additional years of age and service, and your accrued
benefit, if any, shall be fully vested. Notwithstanding
anything in this Agreement or the SERP to the contrary, the additional age
and
service credits provided hereunder shall not accelerate the payout under such
plans if such acceleration would violate the rules under
Section 409A.
(g) 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 your 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 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.
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(h) Other
Benefits Payable: The severance benefits
described in Subsections (a), (b), (c), (d), (e), (f), and (g) 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 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.
(i) 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.
(j) Legal
Fees
and Expenses: For a period of five
(5) years following your Termination of Employment and 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.
(k) Certain
Additional Payments by the Company:
(1) Anything
in this Agreement to the
contrary notwithstanding, 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 Payments. Such Gross-Up Payment shall be
made by the Company to you by the end of your taxable year next following the
taxable year in which such taxes are remitted by you.
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(2) All
determinations required to be made
under this Subsection (l), including whether a Gross-Up Payment is required
and
the amount of such Gross-Up Payment, shall be made in good faith by the Company
which shall provide detailed supporting calculations to you within thirty (30)
business days after the date of your Termination of 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, 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.
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 incur a Termination of Employment under
circumstances described in Section 5(a) of this Agreement, then for a period
of
twenty-four (24) months after your Termination of Employment, 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:
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(a)
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Directly
participate or engage, 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,
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(b)
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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;
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(c)
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Solicit,
entice, lure, employ or
endeavor to employ any of the Company’s
employees;
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(d)
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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;
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(e)
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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.
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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 your Termination of 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.
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 incurred
a Termination of Employment under Section 5(a)(2) of this
Agreement.
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.
10
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.
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:
Xx.
Xxxxxxx X. Xxxxx
0000
Xxx-X-Xxx Xxxx
Xxxxxxxxx,
XX 00000
If
to the
Company:
Secretary
FirstEnergy
00
Xxxxx Xxxx Xxxxxx
Xxxxx,
Xxxx 00000
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.
11
15.
Section
409A
(a) If
you are a “specified employee,” as
determined under the Company’s policy for determining specified employees on the
date of your Termination of Employment, all payments, benefits, or
reimbursements provided under this Agreement 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(f)(2)(A) of the Internal Revenue Code of 1986, as amended, 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 Section 14(a) shall commence on
your death prior to the end of the six (6) month period.
(b) Any
reimbursement of expenses or in-kind
benefits provided under this Agreement (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 Section
14(a)); provided that you first provide 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 Agreement shall either be exempt from application
of, or comply with, the requirements of Section 409A of the
Code. This agreement 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 Agreement 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 you.
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 nor their respective boards
of
directors shall be held liable for any taxes, interest, penalties, or other
monetary amounts owed by you or other taxpayers as a result of the
Agreement.
16. 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.
17. 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.
12
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:________________________________________
Xxxxxxx
X.
Xxxxxxxxx
President
and Chief Executive
Officer
|
|
|
Accepted
and Agreed as of the date
first above written
__________________________________________
Xxxxxxx
X. Xxxxx
|
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