Exhibit 10.7
Amendment No. 1 to
FirstEnergy Corp. Deferred Compensation Plan for Outside Directors
WHEREAS, FirstEnergy Corp. (the “Company”) amended and restated the FirstEnergy
Corp. Deferred Compensation Plan for Outside Directors effective December 31,
2010 (the “Plan”); and
WHEREAS, Section 9.1 of the Plan generally provides that, prior to a Special
Circumstance (as defined in the Plan) and subject to certain conditions, the
Plan may be amended from time to time by the Board of Directors of the Company
(the “Board”); and
WHEREAS, the Board now desires to amend the Plan to make certain changes to the
definitions of “Change in Control” and “Potential Change in Control” and related
terms in the Plan;
NOW, THEREFORE, in accordance with Section 9.1 of the Plan, the Plan is amended,
effective as of January 1, 2012 except as otherwise provided below, as follows:
1. Section 1.5(h) is hereby amended by the deletion of said Section 1.5(h) in
its entirety and the substitution in lieu thereof of a new Section 1.5(h) to
read as follows:
“(h) ‘Change in Control’ means:
(x) for amounts deferred or accrued under the Plan before January 1, 2012:
(1) The acquisition by any Person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended from time to time, and any successor
thereto (the ‘Exchange Act’)and as used in Sections 13(d) and 14(d) thereof,
including a ‘group’ as defined in Section 13(d) thereof) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty
percent (50%) or more (twenty five percent (25%) if such Person proposes any
individual for election to the Board or any member of the Board is a
representative of such Person) 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 (collectively a ‘Reorganization’ for purposes of this Subsection
(h)(x)) if, following such Reorganization the conditions described in clauses
(i), (ii), and (iii) of paragraph (3) of this Subsection (h)(x) are satisfied;
or
(2) 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 as such terms are used in 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 consent by or on behalf of
a Person other than the Board; or
(3) 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 (i) more than seventy-five percent
(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 of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (ii) no Person (excluding the Company, any holding company
formed by the Company to become the parent of the Company, any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Reorganization and any Person beneficially owning, immediately prior to such
Reorganization directly or indirectly, twenty-five percent (25%) or more of,
respectively, the Outstanding Company Common Stock, or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Reorganization 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 were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such Reorganization; or

 

2

--------------------------------------------------------------------------------

 

(4) Approval by the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company. A Change in Control may occur only with respect to
the Company. A change in ownership of common stock of an Affiliate or
subsidiary, change in membership of a board of directors of an Affiliate or
subsidiary, the sale of assets of an Affiliate or subsidiary, or any other event
described in this Subsection (h)(x) that occurs only with respect to an
Affiliate or subsidiary does not constitute a Change in Control; and
(y) for amounts deferred or accrued (i.e., earned) under the Plan on or after
January 1, 2012:
(1) An acquisition by any Person, directly or indirectly, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
immediately after which such Person has beneficial ownership of twenty-five
percent (25%) or more of either: (i) the Outstanding Company Common Stock, or
(ii) the Outstanding Company Voting Securities; provided, however, that the
following acquisitions of beneficial ownership of Outstanding Company Common
Stock or Outstanding Company Voting Securities 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, unless the security being so
converted was itself acquired directly from the Company);
(ii) Any acquisition by the Company;
(iii) Any acquisition by an employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company; or
(iv) Any acquisition pursuant to a reorganization, merger, or consolidation
involving the Company or any direct or indirect wholly-owned subsidiary of the
Company, whether or not the Company is the surviving corporation in such
transaction (any of the foregoing, a ‘Reorganization’ for purposes of this
Subsection (h)(y)), if, following such Reorganization, the conditions described
in paragraph (3) below are satisfied;
(2) Individuals who, as of January 1, 2012, 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
January 1, 2012 whose election, or nomination for election by the Company’s
shareholders, is approved by a vote of at least a majority of the Directors then
comprising the Incumbent Board shall be considered as 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 successor rule) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board;

 

3

--------------------------------------------------------------------------------

 

(3) Consummation of a (A) Reorganization or (B) sale or disposition of all or
substantially all of the assets of the Company in one transaction or a series of
related transactions (determined on a consolidated basis), other than in
connection with a sale-leaseback or other arrangement resulting in the continued
utilization of such assets by the Company (such a sale or disposition, a ‘Major
Asset Disposition’), unless in each case following such Reorganization or Major
Asset Disposition (either, a ‘Major Corporate Event’) each of the following
conditions is met:
(a) The Outstanding Company Voting Securities immediately prior to such Major
Corporate Event represent (either by remaining outstanding or by converting into
or being exchanged for voting securities of the surviving corporation) at least
sixty percent (60%) of the combined voting power of the surviving corporation
(including a corporation which, as a result of such Major Corporate Event, owns
the Company or all or substantially all of the assets of the Company)
outstanding immediately after such Major Corporate Event;
(b) No Person (excluding the Company, any employee benefit plan (or related
trust) of the Company or the resulting or acquiring corporation resulting from
such Major Corporate Event, and any Person beneficially owning, immediately
prior to such Major Corporate Event, directly or indirectly, twenty-five percent
(25%) or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, immediately after consummation of such Major Corporate Event,
twenty-five percent (25%) or more of, respectively, the then-outstanding shares
of common stock of the resulting or acquiring corporation in such Major
Corporate Event, or the combined voting power of the then-outstanding voting
securities of such resulting or acquiring corporation that are entitled to vote
generally in the election of directors; and
(c) At least a majority of the members of the board of directors of the
corporation resulting from such Major Corporate Event were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such Major Corporate Event; or
(4) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.
However, in no event will a Change in Control be deemed to have occurred, with
respect to a Participant, if the Participant is part of a purchasing group which
consummates the Change in Control transaction. The Participant shall be deemed
‘part of a purchasing group’ for purposes of the preceding sentence if the
Participant is an equity participant or has agreed to become an equity
participant in the purchasing company or group (excluding passive ownership of
less than five percent (5%) of the voting securities of the purchasing company
or ownership of equity participation in the purchasing company or group which is
otherwise not deemed to be significant, as determined prior to the Change in
Control by a majority of the nonemployee continuing members of the Board of
Directors).

 

4

--------------------------------------------------------------------------------

 

2. Section 1.5(x) is hereby amended by the deletion of said Section 1.5(x) in
its entirety and the substitution in lieu thereof of a new Section 1.5(x) to
read as follows:
“(x) ‘Potential Change in Control’ means any of the following:
(1) Any Person other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company, delivers to the Company a statement
containing the information required by Schedule 13 D under the Exchange Act, or
any amendment to any such statement (or the Company becomes aware that any such
statement or amendment has been filed with the Securities and Exchange
Commission pursuant to applicable Rules under the Exchange Act), that shows that
such Person has acquired, directly or indirectly, the beneficial ownership of
(i) more than twenty percent (20%) of any class of equity security of the
Company entitled to vote as single class in the election or removal from office
of directors, or (ii) more than twenty percent (20%) of the voting power of any
group of classes of equity securities of the Company entitled to vote as a
single class in the election or removal from office of directors;
(2) The Company becomes aware that preliminary or definitive copies of a proxy
statement and information statement or other information have been filed with
the Securities and Exchange Commission pursuant to Rule 14a-6, Rule 14c-5, or
Rule 14f-1 under the Exchange Act relating to a Potential Change in Control of
the Company;
(3) Any Person delivers a Tender Offer Statement relating to Voting Securities
of the Company (or the Company becomes aware that any such statement has been
filed with the Securities and Exchange Commission pursuant to applicable Rules
under the Exchange Act);
(4) Any Person (other than the Company) publicly announces an intention to take
actions which if consummated would constitute a Change in Control;
(5) The Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control;
(6) The Board approves a proposal, which if consummated, would constitute a
Change in Control; or
(7) The Board adopts a resolution to the effect that, for purposes of this Plan,
a Potential Change in Control has occurred.

 

5

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, a Potential Change in Control shall not include
an event described in paragraphs (1) through (6) above, if a number of directors
(who were serving on the Board immediately prior to such event and who continue
to serve on the Board) equal to a majority of the members of the Board as
constituted prior to such event determines that the event shall not constitute a
Potential Change in Control and furnish written notice to the CEO of such
determination.
If a Potential Change in Control is abandoned, terminated or withdrawn for any
reason except for the occurrence of a Change in Control, it shall then cease to
be deemed that a Potential Change in Control has occurred as a result of any
event described in paragraphs (1) through (7) above, or that a Special
Circumstance has occurred by reason of such Potential Change in Control.”
IN WITNESS WHEREOF, pursuant to the delegation of authority made to an
authorized officer of FirstEnergy Corp. on February 25, 2011, by the Board of
Directors of FirstEnergy Corp., to approve the changes to the FirstEnergy Corp.
Deferred Compensation Plan for Outside Directors which are reflected in
Amendment No. 1 to FirstEnergy Corp. Deferred Compensation Plan for Outside
Directors, this Amendment No. 1 is hereby executed this 28th day of April, 2011,
effective as of the date set forth above.

            FIRSTENERGY CORP.
      By:   /s/ Anthony J. Alexander         Anthony J. Alexander,       
President and Chief Executive
Officer of FirstEnergy Corp.   

 

6