FirstEnergy Corp. Executive and Directors Incentive Compensation Plan Restricted Stock Agreement
EXHIBIT
10.6
“The sale or transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Executive and Director Incentive Compensation Plan of the FirstEnergy Corp., in the rules and administrative procedures adopted pursuant to such Plan, and in a Restricted Stock Agreement dated February 27, 2006. A copy of the Plan, such rules and procedures, and such Restricted Stock Agreement may be obtained from the Corporate Secretary of FirstEnergy Corp.”
FirstEnergy
Corp.
Executive
and Directors Incentive Compensation Plan
Award
No.:
41
Number
of Shares
Awarded:
_____
shares
Date
of Grant:
February
27,
2006
This
Restricted
Stock Agreement (“Agreement”) is entered into as of February 27, 2006 between
FirstEnergy Corp. (“FE”) and _________________ (“Recipient”).
AWARD
On
February 17, 1998, The Board of Directors (“Directors”) of FE adopted the FE
Executive and Director Incentive Compensation Plan (“Plan”), which was approved
by the common stock shareholders on April 30, 1998, and became effective May
1,
1998. As of the date of this Agreement, per the terms of the Plan, FE grants
to
the Recipient the above number of restricted shares of FE Common Stock
(“Restricted Shares”) per the terms and conditions of Article 8 of the Plan.
GENERAL
TERMS
This
Agreement is
subject to the following terms and conditions as outlined in the
Plan:
Restricted
Period
| 1. |
Restricted
Shares shall not be sold, transferred, pledged, or assigned, until
the
earliest of:
|
| a) |
April
30, 2011
at the Board’s discretion or automatically on April 30, 2013;
|
| b) |
The
date of
the Recipient’s death;
|
| c) |
The
date that
the Recipient’s employment is terminated due to Disability;
or
|
| d) |
The
date that
Recipient’s employment is terminated following a Change in Control,
provided that such termination occurs under the conditions specified
in
either Section 5(a) or 5(b) of Recipient’s Special Severance Agreement
dated March 5, 2004 and provided further that such termination was
not at
Recipient’s discretion pursuant to Section 5(c) of Recipient’s Special
Severance Agreement, dated March 5,
2004.
|
The
period from the date of this Agreement until the earliest of the above dates
is
referred to as the “Restricted Period”.
Registration
and Certificate Legend
FE
shall register a certificate(s) in the name of the Recipient for the number
of
Restricted Shares specified above. Each certificate will bear the following
legend until the time that the restrictions lapse:
“The sale or transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Executive and Director Incentive Compensation Plan of the FirstEnergy Corp., in the rules and administrative procedures adopted pursuant to such Plan, and in a Restricted Stock Agreement dated February 27, 2006. A copy of the Plan, such rules and procedures, and such Restricted Stock Agreement may be obtained from the Corporate Secretary of FirstEnergy Corp.”
1
Share
Value
Protection Rights
|
1.
|
If
Recipient’s
employment with the Company or its immediate successor as a result
of a
Change in Control is terminated under the conditions specified in
either
Section 5(a) or 5(b) of Recipient’s Special Severance Agreement dated
March 5, 2004 and is not terminated at Recipient’s discretion pursuant to
Section 5(c) of such Special Severance Agreement, Recipient shall
be
entitled to a lump sum cash payment within ten (10) days after such
termination of employment determined by subtracting (a) from (b)
and
multiplying such difference, if any, by (c)
where:
|
(a)
equals the Fair Market Value of a Share on the date of such termination of
employment;
(b)
equals the
greater of (i) or (ii), where:
(i)
is the Fair
Market Value of a Share on February 27, 2006; and
(ii)
is the Fair
Market Value of a Share on the date of the Change in Control; and
(c)
equals ______
Shares.
|
If
the Fair
Market Value of a Share determined under (a) above is equal to or
greater
than the amount determined under (b) above, no payment shall be made
under
this Paragraph 1 .
|
|
2.
|
If
Recipient’s
employment with the Company or its immediate successor continues
after a
Change in Control without termination until the date that the Restricted
Shares cease to be restricted in accordance with paragraphs a), b)
or c)
of Section 1 of the Restricted Period set forth in the Restricted
Stock
Agreement between the Company and the Recipient dated February 27,
2006,
Recipient or his beneficiary shall be entitled to a lump sum cash
payment
within ten (10) days after such date that the Restricted Shares cease
to
be restricted in accordance with such paragraphs determined by subtracting
(a) from (b) and multiplying such difference, if any, by (c)
where:
|
(a)
equals the Fair
Market Value of a Share on the date such restrictions lapse;
(b)
equals the
greater of (i) or (ii), where:
(i)
is the Fair
Market Value of a Share on February 27, 2006; and
(ii)
is the Fair
Market Value of a Share on the date of the Change in Control; and
(c)
equals ______
Shares.
If
the Fair Market Value of a Share determined under (a) above is equal to or
greater than the amount determined under (b) above, no payment shall be made
under this Paragraph 2 .
|
3.
|
An
adjustment
may be made to the above calculations as determined by the Committee,
in
its sole discretion, to prevent dilution or enlargement in a manner
as
authorized under this Restricted Stock Agreement and Section 4.3
of the
Plan in connection with any events of the type provided for in said
Section 4.3.
|
|
4.
|
Notwithstanding
anything to the contrary in this Section relating to Share Value
Protection Rights, Recipient shall be entitled to the Restricted
Shares
upon satisfaction of the other sections of this Agreement even if
there is
no cash payment made under this Section relating to Share Value Protection
Rights.
|
2
Forfeiture
The
Recipient shall forfeit all of the Restricted Stock and any right to dividends
on the Restricted Stock upon the occurrence of any the following events before
the expiration of the Period of Restriction:
| · |
Termination
of
employment with the Company or its subsidiaries for any reason, including
a termination of employment at Recipient’s discretion pursuant to Section
5 (c) of Recipient’s Special Severance Agreement dated March 5, 2004.
Notwithstanding the foregoing, no forfeiture shall occur if termination
of
employment with the Company is due to death, Disability (as defined
under
the then established rules of the Company or any of its subsidiaries,
as
the case may be) or is pursuant to either Section 5(a) or (b) of
Recipient’s Special Severance Agreement dated March 5,
2004.
|
| · |
Any
attempt to sell, transfer, pledge, or assign the Restricted Shares
in
violation of the above.
|
Upon
the occurrence
of any of the above before the expiration of the Period of Restriction, the
Restricted Stock shall be forfeited by the Recipient to the Company and the
Recipient’s interest in the Restricted Stock and dividends earned on the
Restricted Stock shall terminate immediately in accordance with the foregoing,
unless such forfeiture is waived in the sole discretion of the
Committee.
Voting
and
Dividend Rights
Subject
to the above
restrictions, the Recipient shall be entitled to all other rights of ownership,
including, but not limited to, the right to vote the Restricted Shares and
to
receive dividends. Dividends payable during the Restricted Period will be
automatically reinvested in restricted shares that are subject to the same
restrictions above.
Expiration
of Restricted Period
Should
Recipient’s
employment with FE continue after expiration of the Restricted Period, until
such time as the Recipient’s employment with FE and its subsidiaries terminates,
the Recipient will not be permitted to sell, transfer, pledge, or assign
(collectively, “Transfer”) the Restricted Shares issued under this Agreement or
any shares received as (or through the reinvestment of) dividends upon or
adjustments to those shares (collective, the “Transfer Restricted Securities”)
to the extent prohibited in this paragraph. If the Recipient is subject to
the
employee share ownership guidelines established by the Committee, then the
Recipient may not Transfer any Transfer Restricted Securities to the extent
that
the Recipient’s aggregate ownership of FE stock immediately before and after the
Transfer does not meet or exceed the ownership level that applies to the
Recipient under those share ownership guidelines. In addition, if the Recipient
is subject to the employee share ownership guidelines established by the
Committee, in no case may the Recipient Transfer any Transfer Restricted
Securities to the extent that the Transfer, when aggregated with all of
Recipient’s other Transfers, would cause the Recipient to cease to own directly
at least one-half of the Transfer Restricted Securities. Any attempt to Transfer
any Transfer Restricted Securities in violation of the foregoing will be void,
and FE shall not record such transfer on its books or treat any purported
transferee of the Transfer Restricted Securities as the owner of such shares
for
any purpose. The Committee may, however, in its sole discretion waive the
foregoing transfer restrictions in whole or in part. In addition, the Recipient
will be permitted to tender Restricted Shares to FE under Section 16.2 of the
Plan in the amount necessary to satisfy tax withholding obligations associated
with the Restricted Shares and those shares tendered to FE will not be
considered to be Transfer Restricted Securities.
3
Recipient
agrees
that FE may maintain custody of the certificate or certificates evidencing
the
Transfer Restricted Securities until the expiration of Recipient’s employment
with FE and its subsidiaries in order to enforce the restrictions provided
in
this Agreement. Upon the termination of Recipient’s employment with FE and its
subsidiaries for any reason after (or contemporaneous with) termination of
the
Restricted Period, Recipient shall be entitled to have the legend removed from
the certificate or certificates, provided that the Recipient has made the
necessary arrangements with FE to satisfy any withholding obligations.
Effect
on
the Employment Relationship
Nothing
in this
Agreement guarantees employment with FE, nor does it confer any special rights
or privileges to the Recipient as to the terms of employment.
Adjustments
In
the event of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, stock split, combination, distribution,
or other change in corporate structure of FE affecting the Common Stock, the
Committee will adjust the number and class of securities in this restricted
stock grant in a manner determined appropriate to prevent dilution or diminution
of the stock grant under this Agreement.
Administration
| 1. |
The
administration of this Agreement and the Plan will be performed in
accordance with Article 3 of the Plan. All determinations and decisions
made by the Committee, the Board, or any delegate of the Committee
as to
the provisions of the Plan shall be final, conclusive, and binding
on all
persons.
|
| 2. |
The
terms of
this Agreement are governed at all times by the official text of
the Plan
and in no way alter or modify the
Plan.
|
| 3. |
If
a term is
capitalized but not defined in this Agreement, it has the meaning
given to
it in the Plan.
|
| 4. |
To
the extent
a conflict exists between the terms of this Agreement and the provisions
of the Plan, the provisions of the Plan shall
govern.
|
| 5. |
This
Agreement
is governed by the laws of the State of Ohio without giving effect
to the
principles of the conflicts of
laws.
|
| FirstEnergy Corp. | ||
| |
|
|
| By: |
|
|
I
acknowledge receipt of this Restricted Stock Agreement and I accept and agree
with the terms and conditions stated above.
|
________________
Date:
|
(Signature of Recipient) |
|
2/27/06
4
