Contract
EXHIBIT
10-48
2010-2012
Performance Share Award Agreement
This Performance
Share Award Agreement (the "Award Agreement") with the Participant is effective
as of the 1st day of January 2010 (“Grant Date”), and is not in lieu of salary
or any other compensation for services. The Performance Period for
this Award is January 1, 2010 through December 31, 2012. For the
purposes of this Award Agreement, the term "Company" means FirstEnergy Corp.,
its successors and/or its Subsidiaries, singularly or collectively.
SECTION
ONE - AWARD
As of the Grant
Date, in accordance with the FirstEnergy Corp. 2007 Incentive Plan (the “Plan”)
and the terms and conditions of this Award Agreement, the Company grants to the
Participant an award of Performance Shares. The Performance Shares
will be placed into a Performance Share account until paid out or
forfeited.
Until the
Performance Period ends pursuant to the terms and conditions described in this
Award Agreement, the Performance Share account of the Participant will be
credited with an amount per each Performance Share (the “Dividend Equivalent”)
equal to the amount per share of any cash dividends declared by the Board with a
record date on or after the Grant Date on the outstanding common stock of the
Company. Such Dividend Equivalents will be credited in the form of an
additional number of Performance Shares (which Performance Shares, from the time
of crediting, will be deemed to be in addition to and part of the base number of
Performance Shares awarded by this Award Agreement for all purposes
hereunder). The additional number of Performance Shares will be equal
to the aggregate amount of Dividend Equivalents credited on this Award on the
respective dividend payment date divided by the average of the high and low
prices per share of common stock on the respective dividend payment
date. The Performance Shares attributable to the Dividend Equivalents
will be either paid out or forfeited, as appropriate, under the same terms and
conditions under this Award Agreement that apply to the other Performance
Shares.
The value of the
Participant’s account at the end of the three-year Performance Period will be
based on the average of the high and low prices of common stock for the month of
December 2012 and may be adjusted upward or downward based upon the total
shareholder return (“TSR”) of common stock relative to an energy services
company index during the same three-year period. If the TSR rating is
at or above the 90th percentile, the payout will be 200% of the account value.
If the TSR is at the 50th percentile, the payout will be 100% of the account
value. If the TSR is at the 40th percentile, the payout will be 50% of the
account value. Payouts for a ranking above the 40th percentile and
below the 90th percentile will be interpolated. For a TSR ranking
below the 40th percentile, no payout will be made.
The payout under
this Award will be made between February 15 and March 15, 2013 if the payout is
on account of the completion of the Performance Period and satisfaction of the
TSR ranking, as specified above, or, if earlier, on the payment date as
specified in Section Two below (all payment dates are referred to as “Payment
Date”). The payout will be made in cash; however, the Participant may elect to
defer receipt of any payout under the provisions of the FirstEnergy Corp.
Executive Deferred Compensation Plan. The election to defer shall be
made in a manner as required under administrative rules established by the
Company and shall be made in a manner that complies with Section 409A of the
Internal Revenue Code (“Section 409A”).
SECTION
TWO - GENERAL TERMS
Forfeiture
The Participant
shall forfeit all or a portion of the Award and any rights hereunder to receive
the Award upon the occurrence of any of the following events before the
expiration of the Performance Period:
Event of
Participant
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Effect on
Award
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Further
Information
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Payment Form
and Time
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Termination
due to retirement (including early retirement)
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Account
balance prorated based on full months of service during Performance
Period.
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As provided
under 9.5 of the Plan.
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Single lump
sum between February 15 and March 15, 2013.
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Termination
due to Disability
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Account
balance prorated based on full months of service during Performance
Period.
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As provided
under 9.5 of the Plan.
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Single lump
sum between February 15 and March 15, 2013.
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Death
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Account
balance prorated based on full months of service during Performance
Period.
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Payout made to
beneficiary as provided under Article 15 of the Plan or by will or by the
laws of descent and distribution.
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Single lump
sum as soon as practicable after the Participant’s death but by the
earliest to occur of March 15 following the calendar year of death, the
end of the 90 day period commencing on the date of death or
March 15, 2013.
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Termination
for Cause
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Award
immediately forfeited.
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Termination
for Cause as provided under 2.7 of the Plan.
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N/A
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Termination in
which the Participant qualifies for and receives benefits under
the FirstEnergy Severance Plan, if offered
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Account
balance prorated based on full months of service during Performance
Period.
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Refer to the
FirstEnergy Severance Plan.
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Single lump
sum between February 15 and March 15, 2013.
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Other
Termination (including resignation)
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Award
immediately forfeited.
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N/A
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Transfer out
of an executive eligible position and employed by the Company on December
31, 2012
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Account
balance prorated based on full months in an executive eligible position
during Performance Period.
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If the
Participant terminates prior to December 31, 2012, the Participant may
still be entitled to a prorated account balance as described
above.
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Single lump sum between
February 15 and March 15,
2013.
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2
Prorated awards will
be calculated using the average high and low prices of common stock for the
month of December 2012 or, in the case of death, a thirty day period ending
immediately before the date of death and the most recent quarterly TSR
factor.
Notwithstanding the
foregoing, in the event the Participant is involuntarily terminated in
connection with and resulting from a Change in Control within the two-year
period following the date of the Change in Control under conditions in which the
Participant qualifies for and receives any employer severance benefit that may
be offered, including satisfaction of any requirement to execute and submit an
agreement to release the Company in full against any and all claims as required
by the arrangement or plan providing the employer severance benefit, this Award
will be fully vested and will be paid in a single lump sum as soon as
practicable but by the earliest to occur of March 15 following the year in which
such involuntary
termination occurs,
the end of the 90-day period commencing on the date of the involuntary
termination or March 15, 2013. In the event no employer severance
benefit is offered or not all of the requirements to receive an employer
severance benefit, including any requirement to execute and submit an agreement
to release the Company, are satisfied and completed by the earliest to occur of
March 15 following the year in which such involuntary termination occurs, the end of the
90-day period commencing on the date of the involuntary termination or March 15,
2013, this Award will be forfeited. For purposes of this Award, the
term "Change in Control" means a change in control that satisfies both a Change
in Control as defined in the Plan and a "change in control event" as defined in
Treasury Regulation Section 1.409A-3(i)(5) and the term “involuntary
termination” (or forms or derivations thereof) means “involuntary separation
from service” as defined in Treasury Regulation Section
1.409A-1(n). An award upon involuntary termination in connection with
and resulting from a Change in Control within the two-year period following the
date of the Change in Control is subject to such other terms as determined by
the Committee.
Withholding
Tax
3
The Company shall
have the right to deduct, withhold or require the Participant to surrender a
cash amount sufficient to satisfy all federal, state and local taxes required by
law to be withheld in connection with the payment of benefits under this
Award.
Shareholder
Rights
The Participant
shall have no rights as a shareholder of the Company, including voting rights,
with respect to the Award.
Effect
on the Employment Relationship
This grant of
Performance Shares is voluntary and made on a one-time basis and does not
constitute a commitment to make any future awards. Nothing by this
Award or in this Award Agreement guarantees employment with the Company, nor
does this Award or Award Agreement confer any special rights or privileges to
the Participant as to the terms of employment.
Administration
1.
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This Award is
governed by the laws of the State of Ohio without giving effect to the
principles of the conflicts of
laws.
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2.
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The
administration of this Award and the Plan will be performed in accordance
with Article 3 of the Plan.
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3.
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All
interpretations, determinations and decisions made by the Committee, the
Board, or any delegate of the Committee as to the provisions of the Plan
shall be final, conclusive, and binding on all persons and the Participant
agrees to be bound by such interpretations, determinations and
decisions.
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4.
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The terms of
this Award Agreement are governed at all times by the official text of the
Plan and in no way alter or modify the
Plan.
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5.
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If a term is
capitalized but not defined in this Award Agreement, it has the meaning
given to it in the Plan.
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6.
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To the extent
a conflict exists between the terms of this Award Agreement and the
provisions of the Plan, the provisions of the Plan shall
govern.
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7.
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The terms and
conditions of this Award Agreement may be modified by the
Committee:
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(a)
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in any case
permitted by the terms of the Plan or this Award
Agreement;
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(b)
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with the
written consent of the Participant;
or
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(c)
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without the
consent of the Participant, if the amendment is either not materially
adverse to the interests of the Participant or is necessary or appropriate
in the view of the Committee to conform with, or to take into account,
applicable law, including either exemption from or compliance with any
applicable tax law.
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409A
It is intended that
this Award and the compensation and benefits hereunder be exempt from Section
409A, and this Award shall be so construed and administered. In the
event that the Committee reasonably determines that any compensation or benefits
payable under this Award Agreement may be subject to taxation under Section
409A, the Committee shall have the authority to adopt, prospectively or
retroactively, such amendments to this Award Agreement or to take any other
actions it determines necessary or appropriate to (a) exempt the compensation
and benefits payable under this Award from Section 409A or (b) comply with the
requirements of Section 409A. The Committee, in its sole discretion,
shall determine to what extent, if any, this Award Agreement must be amended,
modified, or reformed. In no event, however, shall any provision of this Award
Agreement be construed to require the Company to provide any gross-up for the
tax consequences of any provisions of, or payments under, this Award and the
Company shall have no responsibility for tax consequences to Participant (or the
Participant’s beneficiary) resulting from the terms or operation of this
Award.
4
Notwithstanding any
other provision in this Award Agreement to the contrary, if the Award is deemed
to be subject to the requirements of Section 409A and not exempt from such
coverage:
1.
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A Participant
shall not be treated as having a termination of employment unless the
Participant has a “separation
from service” as defined in regulations under, and for purposes of,
Section 409A.
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2.
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If a
Participant is a “specified employee,” as determined under the Company’s
policy for determining specified employees on the date of a “separation
from service,” all payments under this Award Agreement that would
otherwise be paid or provided during the first six (6) months following
such separation from service (other than payments, benefits, or
reimbursements that are treated as separation pay under Section
1.409A-1(b)(9)(v) of the Treasury Regulations, short-term deferrals under
Section 1.409A-1(b)(4) of the Treasury Regulations or other payments
exempted under the Treasury Regulations for Section 409A) shall be
accumulated through and paid or provided (together with interest at the
applicable federal rate under Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended, in effect on the date of the separation
from service) as soon as practicable following the six (6) month
anniversary of such separation from service but not later than the end of
the taxable year in which the six (6) month anniversary occurs.
Notwithstanding the foregoing, payments delayed pursuant to this paragraph
shall commence as soon as practicable following the date of death of the
Participant prior to the end of the 6 month period but in no event later
than ninety (90) days following the date of
death.
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5
SECTION
THREE - TRANSFER OF AWARD
The Performance
Shares are not transferable during the life of the Participant. Only
the Participant shall have the right to receive payout of the Award, unless the
Participant is deceased, at which time the payout may be paid to the
Participant's beneficiary (as designated under Article 15 of the Plan), or
pursuant to the Participant’s will or the laws of descent and
distribution.
I acknowledge
receipt of this Performance Share Award and I accept and agree with the terms
and conditions stated above.
FirstEnergy
Corp.
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By
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(Signature of
Participant)
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(Date)
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