Exhibit 10.9
FIRSTENERGY CORP.
CHANGE IN CONTROL SEVERANCE PLAN
FirstEnergy Corp., an Ohio corporation (the “Company”), adopts this FirstEnergy
Corp. Change in Control Severance Plan (“the Plan”), effective as of January 1,
2011 (the “Effective Date”).
ARTICLE ONE
GENERAL PROVISIONS
1.1 Name. The Plan shall be named the FirstEnergy Corp. Change in Control
Severance Plan.
1.2 Purpose. This Plan provides certain designated employees of the Company or
any Affiliate or Subsidiary with severance benefits in the event of a
Termination of Employment following a Change in Control under conditions
specified in this Plan.
1.3 Employee Welfare Benefit Plan. This Plan is an “employee welfare benefit
plan,” as defined in Section 3(1) of ERISA and is intended only to cover
participants who are members of a “select group of management or highly
compensated employees” within the meaning of Sections 201(2), 301(a)(3),
401(a)(1) and 4021(b)(6) of ERISA. This Plan shall be construed and administered
in such a manner, and benefits shall be limited by the Administrator in his, her
or its discretion, such that, where applicable, this Plan shall not be an
“employee pension benefit plan” under Section 3(2) of ERISA. The Plan operates
on the basis of the calendar year and has been assigned plan number 555.
ARTICLE TWO
DEFINITIONS
In this document, each term shall have the meaning set forth below, unless the
context clearly indicates otherwise. Other terms may be defined within the Plan:
“Administrator” or “Administrative Committee” means the person or entity
designated to administer the Plan in Article Eight.
“Affiliate” means, as of any date, any corporation or business organization that
would be treated as a single employer with the Company under Section 414(b) or
(c) of the Code.
“Appeals Committee” means the Compensation Committee prior to a Change in
Control and, after a Change in Control, the committee designated in Section 9.4
of the Plan.

 

 

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“Base Compensation” means the annual salary (determined in a reasonable manner
by the Administrator), as applicable, of a Participant on the date of his or her
Termination of Employment. Base Compensation shall not be reduced by elective
reductions in compensation pursuant to Sections 125, 132(f), 401(k) of the Code
and similar provisions of the Code or any elective deferrals of Base
Compensation into the EDCP or any other nonqualified deferred compensation plan,
but shall be exclusive of any separation pay, bonuses, incentive pay, special
awards, fringe benefits, stock options and other stock-based compensation.
“Board” means the Board of Directors of the Company.
“Cause” means that, prior to any Termination of Employment, a Participant shall
have:

  (i)  
committed and been convicted of a criminal violation involving fraud,
embezzlement or theft in connection with his or her duties or in the course of
his or her employment with the Company, an Affiliate or any Subsidiary;

  (ii)  
committed intentional wrongful damage to property of the Company, an Affiliate
or any Subsidiary;

  (iii)  
committed intentional wrongful disclosure of secret processes or confidential
information of the Company, an Affiliate or any Subsidiary;

  (iv)  
committed intentional wrongful competition with Company, an Affiliate or any
Subsidiary as set forth in Article Seven below; or

  (v)  
committed gross negligence in the performance of his or her material duties to
the Company, an Affiliate or any Subsidiary;

and any such act or omission shall have been demonstrably and materially harmful
to the Company, an Affiliate or any Subsidiary. For purposes of this Plan, no
act or failure to act on the Participant’s 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 the Participant not in good
faith and without reasonable belief that his or her action or omission was in
the best interest of the Company. Notwithstanding the foregoing, a Participant
shall not be deemed to have been terminated for “Cause” hereunder unless and
until there shall have been delivered to the Participant a copy of a resolution
duly adopted by the affirmative vote of not less than three quarters (3/4) of
the Board then in office at a meeting of the Board called and held for such
purpose, after reasonable notice to the Participant and an opportunity for him
or her, together with his or her counsel (if he or she chooses to have counsel
present at such meeting), to be heard before the Board, finding that, in the
good faith opinion of the Board, the Participant had committed an act
constituting “Cause” as herein defined and specifying the particulars thereof in
detail. Nothing herein will limit the Participant’s (or his or her
beneficiaries’) right to contest the validity or propriety of any such
determination.

 

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“Change in Control” means

  (a)  
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 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 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”), if, following such Reorganization, the
conditions described in paragraph (c) herein are satisfied;

  (b)  
Individuals who, as of the Effective Date, 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
Effective Date 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;

 

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  (c)  
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 (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:

  (i)  
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;

  (ii)  
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

  (iii)  
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

  (d)  
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.

 

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For purposes of this “Change in Control” definition:

  (1)  
“Director” means a member of the Board.
    (2)  
“Effective Date” means January 1, 2011.

  (3)  
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor thereto.

  (4)  
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d) thereof.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and regulations and pronouncements promulgated thereunder. Whenever a reference
is made to a specific Code Section or implementing regulation, the reference
shall be deemed to include any successor or renumbered Code Section or
regulation having the same or a similar purpose.
“Company” means FirstEnergy Corp., an Ohio corporation, and any successor
corporation or business organization which succeeds to the duties and rights of
FirstEnergy Corp. under this Plan by operation of law or otherwise. FirstEnergy
Corp.’s federal taxpayer identification number is 34-1843785.
“Compensation Committee” means the Compensation Committee of the Board.
“Disability” means 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 a Participant, except that, for purposes of this
definition, the Participant need not have completed ten (10) years of service
with the Company. As of the Effective Date, a “disability” under the FirstEnergy
Corp. Master Pension Plan is defined as qualification for benefits under a
participating employer’s long-term disability plan or, if not a participant
under a participating employer’s long-term disability plan or if denied benefits
under such plan, permanently and totally disabled from any and all gainful
employment in the opinion of a participating employer physician.
“EDCP” means the FirstEnergy Corp. Executive Deferred Compensation Plan.
“Employee” means any person who is a full-time, regular employee (as determined
by the Company regardless of whether a court, agency or other governmental
authority makes a different determination) of the Company or any Affiliate or
Subsidiary. The word “Employee” shall not include any person who renders service
to the Company solely as a director, temporary employee, seasonal or leased
worker or independent contractor.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and regulations and pronouncements promulgated thereunder.
Whenever a reference is made to a specific ERISA Section or implementing
regulation, the reference shall be deemed to include any successor or renumbered
ERISA Section or regulation having the same or a similar purpose.
“Good Reason” means the initial occurrence, without the Participant’s consent,
of one or more of the following events:

  (1)  
a material diminution in the Participant’s Base Compensation;

  (2)  
a material diminution in the Participant’s authority, duties or
responsibilities;

  (3)  
a material diminution in the authority, duties or responsibilities of the
supervisor to whom the Participant is required to report, including a
requirement that the Participant report to a corporate officer or employee
instead of reporting directly to the Board if the Participant reported to the
Board directly immediately before a Change in Control;
    (4)  
a material diminution in the budget over which the Participant retains
authority;

  (5)  
a material change in the geographic location at which the Participant must
perform services and, for purposes of this paragraph (5), any reassignment which
results in your current residence to your new reporting location being at least
fifty (50) miles farther than your current residence to your previous reporting
location is considered material; and

  (6)  
any other action or inaction that constitutes a material breach by the Company
of any employment agreement under which the Participant provides services;

provided, however, that “Good Reason” shall not be deemed to exist unless:

  (A)  
the Participant has 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

  (B)  
such condition or conditions have not been cured by the Company within 30 days
after receipt of such notice.

“Parachute Payment” means the meaning given to such term in
Section 280G(b)(2)(a)(i) of the Code.
“Parachute Payment Limit” means three (3) times the base amount, as defined by
Section 280G(b)(3) of the Code.

 

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“Participant” means any Employee of the Company, Affiliate or any Subsidiary who
has been designated by the Compensation Committee as a participant in this Plan
and has been designated as eligible to receive either a Tier I Benefit or a Tier
II Benefit. As of the Effective Date, the Participants, and the benefit tiers,
are set forth on Exhibit A attached hereto.
“Potential Change in Control” means when:

  (a)  
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 13D 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:

  (1)  
more than twenty percent (20%) of any class of equity security of the Company
entitled to vote as a single class in the election or removal from office of
directors, or

  (2)  
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;

  (b)  
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;

  (c)  
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) to the Company pursuant to Rule 14d-3 under the Exchange Act;

  (d)  
Any Person (other than the Company) publicly announces an intention to take
actions which if consummated would constitute a Change in Control;

  (e)  
The Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control;

  (f)  
The Board approves a proposal which, if consummated, would constitute a Change
in Control; or

  (g)  
The Board adopts a resolution indicating that, for purposes of this Plan, a
Potential Change in Control has occurred.

 

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Notwithstanding the foregoing, a “Potential Change in Control” shall not include
an event described in (a) through (f), 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 determine 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 (a) through (g) above.
For purposes of this “Potential Change in Control” definition:

  (1)  
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor thereto.

  (2)  
“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d) thereof.

“Release and Waiver of Claims” means a written release and waiver by a
Participant, to the fullest extent allowable under applicable law and in form
reasonably acceptable to the Company, an example of which is attached hereto as
Exhibit D, of all claims, demands, suits, actions, causes of action, damages and
rights against the Company and its Affiliates whatsoever which he or she may
have had on account of his or her Termination of Employment, including, without
limitation, claims of discrimination, including on the basis of sex, race, age,
national origin, religion, or handicapped status, and any and all claims,
demands and causes of action for severance or other termination pay. Such
Release and Waiver of Claims shall not, however, apply to the obligations of the
Company arising under this Plan, any indemnification agreement between a
Participant and the Company, any retirement plans, any stock option, restricted
stock or unit, performance share or other equity award agreements, COBRA
continuation coverage or rights of indemnification a Participant may have under
the Company’s articles of incorporation or code of regulations or comparable
charter document or by statute.
“SERP” means the FirstEnergy Corp. Supplemental Executive Retirement Plan.
“Specified Employee” means any Employee who is a “specified employee,” as
defined in Section 409A of the Code on the date of his or her Termination of
Employment.
“Subsidiary” means a corporation, company or other entity (a) more than
50 percent of whose outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) are, or
(b) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than
50 percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company.

 

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“Termination of Employment” means a separation from service within the meaning
of Section 409A of the Code of the Participant from 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
the Participant’s 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 a Participant after a
certain date or that the level of bona fide services a Participant 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 the Participant has been providing services for less than
36 months).
“Tier I Benefit” means the severance benefit described in Section 6.1(a).
“Tier II Benefit” means the severance benefit described in Section 6.1(b).
ARTICLE THREE
ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. To be eligible to be a Participant in the Plan, the
Compensation Committee must designate (a) the Employee as a Participant, (b) the
participation commencement date and (c) the level of benefit to which the
Participant is entitled (either a Tier I Benefit or a Tier II Benefit).
3.2 Participation. Once the Compensation Committee designates the Employee as a
Participant, the Employee shall commence participation in the Plan as of the
date specified by the Compensation Committee.
3.3 Term.

  (a)  
Subject to Section 3.3(c), the term of this Plan shall commence immediately as
of January 1, 2011, or, if later, upon a Participant’s participation
commencement date, and continue until December 31, 2013. Once a Participant
commences participation in this Plan, this Plan shall supersede in its entirety
the terms of any prior change in control severance program or agreement
applicable to Participants of a like or similar nature. Such former agreements
will then be considered null and void as of the date on which term of the Plan
commences, as described in the preceding sentence.

 

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  (b)  
Subject to Subsection 3.3(c) below, the Plan shall be reviewed annually
commencing in 2012 by the Board at a regular meeting held between September 1
and December 31 of each year. At such annual review, the Board shall consider
whether or not to extend the term of the Plan for an additional year. Unless the
Board affirmatively votes not to extend the Plan at such annual review, the term
of the Plan 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 the Plan, the
termination date of the Plan shall not be extended and shall remain the same
termination date as in effect.

  (c)  
Sections 3.3(a) and (b) notwithstanding, upon a Potential Change in Control, the
Plan shall be automatically extended commencing on the date of such Potential
Change in Control through a period of twenty-four (24) full calendar months
following the date of the consummation of a Change in Control resulting from
such Potential Change in Control. At the end of such twenty-four (24) month
period, the Plan shall terminate; provided, however, that any unpaid, but then
due and owing, amounts as of such date will be paid in accordance with the terms
of the Plan in effect as of the date of expiration of the term. If the Potential
Change in Control is abandoned, terminated, or withdrawn, it shall then cease to
be deemed that a Potential Change in Control has occurred and, provided that the
Board has not taken affirmative action not to extend the Plan, the term of the
Plan will revert back to, and be extended per, the period described in
Sections 3.3(a) or (b) above.

ARTICLE FOUR
FUNDING AND VESTING
4.1 Source of Payments. This Plan is unfunded. The benefits are paid directly
from the Company’s general assets. A former Employee entitled to benefits under
this Plan shall be a general creditor of the Company and shall have no rights to
benefits under this Plan greater than those of such creditors.
ARTICLE FIVE
ENTITLEMENT TO BENEFITS
5.1 Entitlement to Benefits due to Involuntary Termination or Termination for
Good Reason. A Participant is entitled to severance benefits pursuant to this
Plan, as set forth in Article Six, only if a Change in Control occurs and, at
any time during the twenty-four (24) month period following the Change in
Control, the Participant incurs: (a) an involuntary Termination of Employment
for any reason other than for Cause; or (b) a voluntary Termination of
Employment for Good Reason within thirty (30) days following an event that
constitutes Good Reason.

 

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5.2 Disability; Death. If a Participant’s Termination of Employment with the
Company results from the Participant’s Disability or death, the Participant
shall not be entitled to severance benefits under this Plan, regardless of the
occurrence of a Change in Control. The Participant or his or her designated
beneficiary, in the case of death, shall receive all accrued or vested benefits
of any kind to which the Participant is, or would otherwise have been, entitled
through the date the Participant’s employment with the Company is terminated,
and the Company shall thereupon have no further obligation to the Participant
under this Plan.
5.3 Termination for Cause; Without Good Reason. If prior to or subsequent to a
Change in Control, a Participant’s employment is terminated by the Company for
Cause or by the Participant without Good Reason, the Company shall pay the
Participant’s full Base Compensation through the effective date of the
Termination of Employment at the rate in effect at the time Notice of
Termination is given, and the Participant shall also receive all accrued or
vested benefits of any kind to which he or she is, or would otherwise have been,
entitled through the effective date of the Termination of Employment, and the
Company shall thereupon have no further obligation to the Participant under this
Plan.
5.4 Notice of Termination. Any termination by the Company for Cause, or by a
Participant for Good Reason, shall be communicated by Notice of Termination to
the other party, as applicable, given in accordance with Section 12.11 hereof.
For purposes of this Plan, a “Notice of Termination” means a written notice
which (a) indicates the specific termination provision in this Plan relied upon,
and (b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for Termination of Employment under the
provision so indicated.
ARTICLE SIX
SEVERANCE BENEFITS
6.1 Severance Benefits. If a Participant becomes entitled to severance benefits
under this Plan pursuant to Section 5.1, then:

  (a)  
a Participant entitled to the Tier I Benefit shall be paid or provided the
benefits set forth on, and in accordance with, Exhibit B attached hereto; and

  (b)  
a Participant entitled to the Tier II Benefit shall be paid or provided the
benefits set forth on, and in accordance with, Exhibit C attached hereto.

Notwithstanding any other provision of Section 6.1 or this Plan, the Company
shall have no obligation to make the payments or provide the benefits set forth
on Exhibit B or Exhibit C or provide any other separation benefits hereunder
unless (i) the Participant executes and delivers to the Company a Release and
Waiver of Claims and (ii) the Participant refrains from revoking, rescinding or
otherwise repudiating such Release and Waiver of Claims for all applicable
periods during which the Participant may revoke it.

 

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6.2 Parachute Payments.
(a) If payments and benefits to or for the benefit of a Participant, whether
pursuant to this Plan or otherwise, would result in total Parachute Payments to
the Participant with a value equal to or greater than one hundred percent (100%)
of the Parachute Payment Limit, the amount payable to the Participant, shall be
reduced so that the value of all Parachute Payments to the Participant, whether
or not made pursuant to this Plan, is equal to the Parachute Payment Limit minus
One Dollar ($1.00), accomplished by first reducing any amounts payable pursuant
to this Plan, and then reducing other amounts of compensation to the extent
necessary; provided that, no such reduction shall be taken if, after reduction
for any applicable federal excise tax imposed on the Participant by Section 4999
of the Code, as well as any federal, state and local income tax imposed on the
Participant with respect to the total Parachute Payments, the total Parachute
Payments accruing to the Participant would be more than the amount of the total
Parachute Payments after (a) taking the reduction described in the first clause
of this sentence, and (b) further reducing such payments by any federal, state
and local income taxes imposed on the Participant with respect to the total
Parachute Payments. The Company agrees to undertake such reasonable efforts as
it may determine in its sole discretion to prevent any payment or benefit under
this Plan (or any portion thereof) from constituting an “excess parachute
payment,” as defined under Section 280G(b)(1) of the Code.
(b) All determinations required to be made under Subsection (a) shall be made in
good faith by the Company which shall provide detailed supporting calculations
to the Participant within thirty (30) business days after the date of the
Participant’s Termination of Employment, if applicable, or such earlier time as
is requested by the Company. Any determination by the Company shall be binding
upon the Company and the Participant.
6.3 Legal Fees and Expenses. For a period of five (5) years following a
Participant’s 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
the Participant may reasonably thereafter incur as a result of any contest,
litigation or arbitration (regardless of the outcome thereof) by the Company,
the Participant or others of the validity or enforceability of, or liability
under, any provision of this Plan, the EDCP, or the SERP in the event of a
Change in Control (including any contest by the Participant about the amount of
any payment pursuant to this Plan, the EDCP or the SERP) but excluding any
action taken by the Company or its Affiliates, including any of their successors
in interest, to enforce the restrictive covenants in Article Seven.
6.4 Payment Obligations. Other than as set forth in the EDCP 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 Article Six shall not be affected by
any set-off, counterclaim, recoupment, defense or other right which the Company
or any of its Affiliates or Subsidiaries may have against a Participant or
anyone else. Nothing in this Plan entitles a Participant to participation or
continued participation in the EDCP, the SERP or this Plan or any other plan,
program or arrangement of the Company unless participation is specifically
designated under, and in accordance with, the applicable plan, program or
arrangement.

 

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ARTICLE SEVEN
NONCOMPETITION & NONDISPARAGEMENT PROVISIONS
7.1 Non-Competition. If, subsequent to a Change in Control of the Company, a
Participant incurs a Termination of Employment under circumstances described in
Section 5.1 of the Plan, then for a period of twenty-four (24) months after such
Termination of Employment, the Participant shall not on his or her 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, an Affiliate or any
Subsidiary in a market located in any state or states in which, on the date of
the Participant’s Termination of Employment, the Company sells, has sold or
reasonably intends to sell to Customers. For all purposes of this Plan, the
words “competition with the Company, an Affiliate or any Subsidiary” shall mean:
(a) Directly participating or engaging, 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, an Affiliate or any Subsidiary;
(b) Soliciting, diverting, taking away or attempting to take away any of the
Customers with respect to their purchase or sale, or potential purchase or sale,
of the products, supplies or services of the kind, nature or description of
those sold or reasonably intended to be sold by the Company, an Affiliate or any
Subsidiary or the business or patronage of any such Customers with respect to
their purchase or sale, or potential purchase or sale, of the products, supplies
or services of the kind, nature or description of those sold or reasonably
intended to be sold by the Company, an Affiliate or any Subsidiary;;
(c) Soliciting, enticing, luring, employing or endeavoring to employ any
employees of the Company, an Affiliate or any Subsidiary;
(d) Divulging to others or using for a Participant’s own benefit any
confidential information obtained during the course of a Participant’s
employment with the Company, an Affiliate or any Subsidiary relative to sales,
services, processes, methods, machines, manufacturers, compositions, ideas,
improvements, patents, trademarks, or inventions belonging to or relating to the
affairs of the Company, an Affiliate or any Subsidiary;
(e) Divulging to others or using to a Participant’s own benefit any trade
secrets belonging to the Company, an Affiliate or any Subsidiary obtained during
the course of the Participant’s employment or that the Participant became aware
of as a consequence of his or her employment.

 

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The term “Customer” shall mean any person, firm, association, corporation or
other entity to which the Company, an Affiliate or any Subsidiary sells, has
sold or reasonably intends to sell the products, supplies or services of the
Company, an Affiliate or any Subsidiary within the twenty-four (24) month period
immediately preceding the date of the Participant’s Termination of Employment.
However, nothing herein contained shall prevent a Participant 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, a
Participant 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 Plan, 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.
7.2 Non-Disparagement. The Participants 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.
ARTICLE EIGHT
ADMINISTRATION
8.1 Appointment of Administrator. This Plan shall be administered by an
Administrative Committee consisting of three (3) or more members who are
appointed by the Chief Executive Officer of the Company. Members of the
Administrative Committee may be Participants in this Plan. However, no member of
the Administrative Committee may participate in a review of his or her own claim
under Article Nine. The Administrative Committee is the “Administrator” and
shall administer the Plan and shall have the power and the duty to take all
action and to make all decisions necessary or proper to carry out the Plan. The
determination of the Administrative Committee as to any question involving the
general administration and interpretation of the Plan shall be final,
conclusive, and binding except as otherwise provided in Article Nine. A majority
vote of the Administrative Committee members shall control any decision. Without
limiting the generality of the foregoing, the Administrative Committee shall
have the following discretionary authority, powers and duties:
(a) To require any person to furnish such information as it may request for the
purpose of the proper administration of the Plan as a condition to receiving any
benefit under the Plan;
(b) To make and enforce such rules and regulations and prescribe the use of such
forms as it deems necessary for the efficient administration of the Plan;
(c) To interpret the Plan and to resolve ambiguities, inconsistencies and
omissions;

 

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(d) To decide all questions concerning the Plan and any questions concerning the
eligibility of any employee to participate in the Plan; and
(e) To determine the amount of benefits which will be payable to any person in
accordance with the provisions of the Plan.
Upon and after the occurrence of a Change in Control, the “Administrative
Committee” shall be at least three (3) individuals selected by the individual
who, immediately prior to the Change in Control, was the Company’s Chief
Executive Officer or, if not so identified, the Company’s highest ranking
officer (the “Ex-CEO”); provided, however, the Administrative Committee, as
constituted immediately prior to a Change in Control, shall continue to act as
the Administrative Committee for this Plan until the date on which any other
individual selected by the Ex-CEO accept the responsibilities as members of the
Administrative Committee under this Plan. Upon and after a Change in Control,
the Administrative Committee shall have all discretionary authorities and powers
granted the Administrative Committee under this Plan including the discretionary
power to determine all questions arising in connection with the administration
of the Plan and the interpretation of the Plan except benefit entitlement
determinations upon appeal. Upon and after the occurrence of a Change in
Control, the Company shall: (1) pay all reasonable administrative expenses and
fees of the Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney’s fees and
expenses arising in connection with the performance of the Administrator
hereunder, except with respect to matters resulting from the gross negligence or
willful misconduct of the Administrator or its employees or agents; and
(3) supply full and timely information to the Administrator on all matters
relating to the Plan, the Participants and their Beneficiaries, the
Participants’ actual or potential severance benefits, the date and circumstances
of the Disability, death or the Termination of Employment of the Participants,
and such other pertinent information as the Administrative Committee may
reasonably require. Upon and after a Change in Control, a member of the
Administrative Committee may only be removed (and a replacement may only be
appointed) by the Ex-CEO.
8.2 Agents. In the administration of this Plan, the Administrative Committee
may, from time to time, employ agents and delegate to them such administrative
duties as it sees fit, and may from time to time consult with counsel, who may
be counsel to the Company.
8.3 Indemnity of Committees. The Company shall indemnify and hold harmless the
members of the Administrative Committee, the Appeals Committee and the
Compensation Committee against any and all claims, loss, damage, expense or
liability arising from any action or failure to act with respect to this Plan,
except in the case of intentional misconduct.

 

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ARTICLE NINE
CLAIMS PROCEDURES
9.1 Claim. Any person claiming a benefit (“Claimant”) under the Plan shall
present the request in writing to the Administrative Committee.
9.2 Initial Claim Review. In the case of a claim made by a Participant under the
Plan, the Administrative Committee will make a benefit determination within
ninety (90) days of its receipt of an application for benefits. This period may
be extended up to an additional ninety (90) days, if the Administrative
Committee provides the Claimant with a written notice of the extension within
the initial ninety (90)-day period. The extension notice will explain the reason
for the extension and the date by which the Administrative Committee expects a
decision will be made.
The Administrative Committee will notify the Claimant in writing, delivered in
person or mailed by first-class mail to the Claimant’s last known address, if
any part of a claim for benefits under the Plan has been denied. The notice of a
denial of any claim will include:
(a) the specific reason for the denial;
(b) reference to specific provisions of the Plan upon which the denial is based;
(c) a description of any internal rule, guidelines, protocol or similar
criterion relied on in making the denial (or a statement that such internal
criterion will be provided free of charge upon request);
(d) a description of any additional material or information deemed necessary by
the Administrative Committee for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and
(e) an explanation of the claims review procedure under the Plan.
If the notice described above is not furnished and if the claim has not been
granted within the time specified above for payment of the claim, the claim will
be deemed denied and will be subject to review as set forth in Section 9.3.
9.3 Review of Claim. If a claim for benefits is denied, in whole or in part, the
Claimant may request to have the claim reviewed. The Claimant will have sixty
(60) days in which to request a review of a claim. The request must be in
writing and delivered to the Compensation Committee. If no such review is
requested, the initial decision of the Administrative Committee will be
considered final and binding.

 

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The request for review must specify the reason the Claimant believes the denial
should be reversed. He or she may submit additional written comments, documents,
records, and other information relating to and in support of the claim. All
information submitted will be reviewed whether or not it was available for the
initial review. The Claimant may request reasonable access to and copies of, all
documents, records, and other information relevant to the Claimant’s claim for
benefits. A member of the Compensation Committee may not participate in the
review of his or her own claim. In addition, if the Claimant requests a review,
a member who is a subordinate of the original decision maker shall not
participate in the review of the claim.
Upon receipt of a request for review, the Compensation Committee may schedule a
hearing within thirty (30) days of its receipt of such request, subject to
availability of the Claimant and the availability of the Compensation Committee,
at a time and place convenient for all parties at which time the Claimant may
appear before the person or committee designated by the Compensation Committee
to hear appeals for a full and fair review of the Administrative Committee’s
initial decision. The Claimant may indicate in writing at the time the
Compensation Committee attempts to schedule the hearing, that he or she wishes
to waive the right to a hearing. If the Claimant does not waive his or her right
to a hearing, he or she must notify the Compensation Committee in writing, at
least fifteen (15) days in advance of the date established for such hearing, of
his or her intention to appear at the appointed time and place. The Claimant
must also specify any persons who will accompany him or her to the hearing, or
such other persons will not be admitted to the hearing. If written notice is not
timely provided, the hearing will be automatically canceled. The Claimant or the
Claimant’s duly authorized representative may review all pertinent documents
relating to the claim in preparation for the hearing and may submit issues,
documents, affidavits, arguments, and comments in writing prior to or during the
hearing.
The Compensation Committee will notify the Claimant of its decision following
its review. The Compensation Committee will render its final decision within
sixty (60) days of receipt of an appeal. If the Compensation Committee
determines that an extension of the time for processing the claim is needed, it
will notify the Claimant of the reasons for the extension and the date by which
the Compensation Committee expects a decision will be made. The extended date
may not exceed one hundred twenty (120) days after the date of the filing of the
appeal
If after the review the claim continues to be denied, the Claimant will be
provided a notice of the denial of the appeal which will contain the following
information:
(a) The specific reasons for the denial of the appeal;
(b) A reference to the specific provisions of the Plan on which the denial was
based;
(c) A statement that the Claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claim for benefits;
(d) A statement disclosing any internal rule, guidelines, protocol or similar
criterion relied on in making the denial (or a statement that such information
would be provided free of charge upon request); and
(e) A statement describing the Claimant’s right to bring a civil suit under
Federal law and a statement concerning other voluntary alternative dispute
resolutions options.

 

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9.4 Review of Claims on and after a Change in Control. Upon and after the
occurrence of a Change in Control, the Compensation Committee, as constituted
immediately prior to a Change in Control, shall continue to be the Appeals
Committee that decides appeals of any denied claims. In the event any member of
the Appeals Committee resigns or is unable to perform the duties of a member of
the Appeals Committee, successors to such members shall be selected by the
Ex-CEO. Upon and after a Change in Control, the Appeals Committee shall have all
discretionary authorities and powers granted the Compensation Committee under
this Plan to review denied claims as provided in Section 9.3. A member of the
Appeals Committee may not participate in the review of his or her own claim and
may not participate in the review a claim if he or she is a subordinate of the
original decision maker. Upon and after the occurrence of a Change in Control,
the Company shall: (1) pay all reasonable administrative expenses and fees of
the Appeals Committee; (2) indemnify the Appeals Committee against any costs,
expenses and liabilities including, without limitation, attorney’s fees and
expenses arising in connection with the performance of the Appeals Committee
hereunder, except with respect to matters resulting from the gross negligence or
willful misconduct of the Appeals Committee or its employees or agents; and
(3) supply full and timely information to the Appeals Committee on all matters
relating to the Plan, the Participants and their Beneficiaries, the
Participants’ actual or potential severance benefits, the date and circumstances
of the Disability, death or Termination of Employment of the Participants, and
such other pertinent information as the Appeals Committee may reasonably
require. Upon and after a Change in Control, a member of the Appeals Committee
may only be removed (and a replacement may only be appointed) by the Ex-CEO.
ARTICLE TEN
AMENDMENT AND TERMINATION
10.1 Procedure for Amendment or Termination. During the term of the Plan, as set
forth in Section 3.3, this Plan may be amended only by an instrument in writing
signed by the Company, provided that at least fifty-one percent (51%) of all
Participants have consented to the amendment. Any provision hereof may be waived
only by an instrument in writing signed by the Company and any affected
Participant against whom or which enforcement of such waiver is sought. The
failure of the Company or any Participant at any time to require the performance
by the other 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
the Company or a Participant of a breach of any provision of this Plan 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 Plan. Except as
provided in this Section 10.1 above, in no event may this Plan be modified,
amended or terminated by any person or entity upon a Potential Change in Control
through a period of twenty-four (24) full calendar months following the date of
the consummation of a Change in Control.
10.2 Power to Terminate. Unless earlier terminated by an amendment to the Plan
as set forth above in Section 10.1, this Plan shall automatically terminate upon
the expiration of the term of the Plan and such term is not extended as set
forth in Section 3.3. above.
10.3 Result of Termination. If the employment of a Participant terminates,
whether involuntarily or otherwise, after the effective date of the Plan
termination, he or she shall not be eligible to receive any severance benefits
under this Plan.

 

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ARTICLE ELEVEN
STATEMENT OF ERISA RIGHTS
As a Participant in the Plan, each Participant is entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (“ERISA”).
See Exhibit E attached to this Plan for a statement of such rights.
ARTICLE TWELVE
MISCELLANEOUS
12.1 No Implied Benefits. Nothing herein contained shall be construed as giving
to any Employee or any other person any legal or equitable right against the
Company or any Affiliate or Subsidiary except by reason of the express
provisions of this Plan.
12.2 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.
12.3 Successor. This Plan shall be binding upon and inure to the benefit of any
successors of the Company. 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 Plan 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 Plan, “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 Plan 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 Plan and shall
entitle a Participant severance benefits from the Company in the same amount and
on the same terms a Participant would be entitled hereunder, but only to the
extent that a Participant incurs a Termination of Employment under Section 5.1
of this Plan after a Change in Control.
This Plan shall inure to the benefit of and be enforceable by the Participant’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If a Participant should die while any
amounts would still be payable to the Participant hereunder if he or she had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid to such beneficiary or beneficiaries as the Participant shall have
designated by written notice delivered to the Company prior to his or her death
or, failing such written notice, to his or her estate.
12.4 Entire Agreement. This Plan contains the entire understanding of the
Company and the Participants with respect to the subject matter hereof and, upon
the Effective Date, supercedes all other agreements of like or similar nature.

 

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12.5 Right of Discharge Reserved. Neither the establishment of the Plan nor
anything herein contained shall be construed to confer upon any persons the
right to be continued in the employ of the Company or any Affiliate or
Subsidiary or to be employed in any particular position therewith nor shall it
in any way affect the right of the Company or any Affiliate or Subsidiary to
control its Employees and to terminate the service of any Employee at any time,
for any reason and with or without notice.
12.6 Satisfaction of Claims. Subject to the claims review procedures of
Section 9.3, any payment to any Participant, or to his or her legal
representative in accordance with the provisions of this Plan shall to the
extent thereof be in full satisfaction of all claims hereunder against the
Administrator and the Company or any Affiliate or Subsidiary.
12.7 Validity The invalidity or unenforceability of any provision or provisions
of this Plan shall not affect the validity or enforceability of any other
provision of this Plan, which shall remain in full force and effect, nor shall
the invalidity or unenforceability of a portion of any provision of this Plan
affect the validity or enforceability of the balance of such provision. If any
provision of this Plan, 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
12.8 Severability. In the event that any provision of the Plan is determined by
any judicial, quasi-judicial or administrative body to be void or unenforceable
for any reason, all other provisions of the Plan shall remain in full force and
effect as if such void or unenforceable provision had never been a part of the
Plan.
12.9 Construction. The Plan shall be construed in accordance with, and governed
by, ERISA in a manner which will assure compliance of the Plan’s operation
therewith and, to the extent applicable, the laws of the State of Ohio without
respect to conflict of law provisions thereof.
12.10 No Assignment. Except as provided in Section 12.3, the interest of a
Participant or his or her beneficiary may not be sold, transferred, assigned, or
encumbered in any manner, either voluntarily or involuntarily, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be null and void; neither shall the benefits hereunder be liable
for or subject to the debts, contracts, liabilities, engagements, or torts of
any person to whom such benefits or funds are payable, nor shall they be subject
to garnishment, attachment, or other legal or equitable process.

 

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12.11 Notices. In the event that the Administrator or any committee under the
Plan shall be required under the Plan to notify any Participant of any
occurrence or action taken under the Plan, such notice requirement shall be
satisfied by mailing to the Participant a written notice of such occurrence or
action addressed to the Participant at the last address on file with the
Company, or by delivering such written notice to the Participant at such
address. Any correspondence with the Company or Administrator shall be to:

     
 
  Administrator, CIC Severance Plan
 
  FirstEnergy Corp.
 
  76 South Main Street
 
  Akron, Ohio 44308

12.12 Titles and Headings. The titles and headings are for reference only. In
the event of a conflict between a title or heading and the content of a Section,
the content of the Section shall control.
12.13 Construction. The use of neuter, masculine and feminine pronouns shall be
deemed to include the others. The use of the singular shall be deemed to include
the plural, and vice versa. The word “including” and its variants shall be
construed as “including, without limitation,” unless the Plan expressly states
otherwise.
12.14 Section 409A of the Code.
(a) If a Participant is a Specified Employee, as determined under the Company’s
policy for determining specified employees on the date of his or her Termination
of Employment, all payments, benefits, or reimbursements provided under this
Plan 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 Code, 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 12.15(a) shall commence on
the Participant’s death prior to the end of the six (6) month period.
(b) Any reimbursement of expenses or in-kind benefits provided under this Plan
(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 12.15(a)); provided that the
Participant first provides 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.

 

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(c) It is intended that the payments and benefits provided under this Plan shall
either be exempt from application of, or comply with, the requirements of
Section 409A of the Code. This Plan 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 Plan 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 the Participant. 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 or Subsidiaries nor
their respective boards of directors shall be held liable for any taxes,
interest, penalties, or other monetary amounts owed by a Participant or other
taxpayers as a result of the Plan. If a Participant is required to execute,
submit and not revoke a release of claims against the Company in order to
receive the payment of benefits hereunder as a result of the terms of this Plan
and the period in which to execute, submit and not revoke the release begins in
a first taxable year and ends in a second taxable year, any payment to which the
Participant would be entitled hereunder will be paid in the second taxable year,
but no later than the end of the payment period specified in the Plan.
12.15 Nonduplication of Benefits. In no event will a Participant receive
benefits under both this Plan and another severance plan, severance program or
severance arrangement of the Company following a Change in Control. In the event
of a Change in Control, this Plan will provide the sole severance benefits for
any Participant subject to the conditions set forth in this Plan.
Notwithstanding the foregoing, this Section 12.15 shall not preclude any
enhanced benefits based on severance under a qualified retirement plan of the
Company, an Affiliate or any Subsidiary.
12.16 Remedies. The Participants and the Company acknowledge and agree that the
restrictive covenants contained in Article Seven are of a special nature and
that any breach, violation or evasion by a Participant of the terms of
Article Seven will result in immediate and irreparable injury and continuing
damage to the Company and its business, for which there is no adequate remedy at
law, and will cause damage to the Company in amounts difficult to ascertain.
Accordingly, the Company, its Affiliates and Subsidiaries and their successors
and assigns, shall be entitled to temporary and permanent injunctive relief and
to such further relief, including damages, as is proper under the circumstances.
If any portion of Article Seven shall be found by a court of competent
jurisdiction to be invalid or unenforceable, such court may exercise its
discretion in reforming such provisions to the end that a Participant shall be
subject to non-disclosure, non-competition, non-solicitation or
non-disparagement covenants that are reasonable under the circumstances and
enforceable by the Company. In the event that any other provision or term of
this Plant is found to be void or unenforceable to any extent for any reason, it
is the agreed upon intent of the parties hereto that all remaining provisions or
terms of the Plan shall remain in full force and effect to the maximum extent
permitted and that the Agreement shall be enforceable as if such void or
unenforceable provision or term had never been a part hereof.

 

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IN WITNESS WHEREOF, FirstEnergy Corp., by its duly authorized officer, has
executed this instrument as of this 28th day of April, 2011.

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

 

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Exhibit A
Participants
Participants as of January 1, 2011:
Tier I Benefit Participants:
Tier II Benefit Participants:
Participants as of January 1, 2012:
Tier I Benefit Participants:
Tier II Benefit Participants:

 

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Exhibit B
Tier I Benefit
If a Participant becomes entitled to severance benefits under this Plan pursuant
to Section 5.1, then a Participant entitled to the Tier I Benefit shall be paid
or provided the benefits set forth, and in accordance with, the following:
(a) The Company shall pay to the Participant as soon as possible but not later
than ninety (90) days following the Termination of Employment a lump sum
severance benefit, payable in cash, in the amounts determined as provided below:
(1) The Participant’s full Base Compensation through the date of the
Participant’s Termination of Employment at the rate in effect at the time Notice
of Termination is given.
(2) In lieu of further salary payments to the Participant for periods subsequent
to his or her Termination of Employment and, in part, as consideration for the
non-competition agreement set forth in Article Seven of the Plan, an amount
equal to 2.99 multiplied by the sum of (the “Sum”): (i) the Participant’s annual
Base Compensation at the rate in effect as of the date of the 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 Program (“STIP”)
amount in effect for the Participant under the FirstEnergy Corp. 2007 Incentive
Compensation Plan or any successor incentive compensation plan (“ICP”) in the
year during which the Termination of Employment occurs whether or not fully
paid. Subject to later valuation at the time of a Change in Control, the
consideration for the non-competition agreement set forth in Section 7.1 of the
Agreement is an amount equal to at least 1.00 times the Sum.
(b) For purposes of the STIP and notwithstanding the terms of the STIP to the
contrary, upon such Termination of Employment, and not later than ninety
(90) days following the Termination of Employment, Executive shall be entitled
to the target amount of any STIP which shall be paid in a lump sum payment.
(c) For purposes of FirstEnergy stock options issued pursuant to the FirstEnergy
Executive and Director Incentive Compensation Plan, the ICP 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 the Participant’s Termination of Employment, the addition
of three (3) years to the Participant’s age would make the Participant eligible
to qualify for retiree health or life insurance coverage under the Company’s
then-in-effect group health or life insurance plans, then the Participant 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
the Participant’s age would make the Participant so eligible and for purposes of
such coverage he or she shall be credited with three (3) additional years of age
and service. The Participant 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 the Participant is not entitled to retiree health or life insurance
coverage under Subsection (d)(1), then the Participant shall be entitled to
continue to participate, on the same terms and conditions as active employee
participants, in such plan or plans for which the Participant is not so entitled
to retiree coverage for a period of three (3) years after the date of the
Participant’s Termination of Employment. During such continuation period, the
Participant 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 any
Participant’s Termination of Employment and any Participant’s continued
participation therein, and the continued participation of any other person
therein under Subsection (g) 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 the Participant
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 the
Participant 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 ERISA and
Section 4980B(f) of the Code, or any successor provisions thereto.
(e) As further provided in the EDCP, the Participant shall be credited with
three (3) additional years of age and service. Notwithstanding anything in this
Plan or the EDCP 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 of the Code.

 

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(f) If, on the date of the Participant’s Termination of Employment the
Participant is a participant in the SERP, and as further provided in the SERP,
the Participant shall be credited with three (3) additional years of age and
service, and his or her accrued benefit, if any, shall be fully vested.
Notwithstanding anything in this Plan 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 of the Code.
(g) In the event that because of their relationship to the Participant, members
of the Participant’s family or other individuals are covered by any plan,
program, or arrangement described in Subsection (d) above immediately prior to
the date of the Participant’s 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 the Participant’s Termination of Employment
during the period in which the Company is obligated to continue coverage for the
Participant, nothing set forth herein shall obligate the Company to continue to
provide coverage which would have ceased even if the Participant had remained an
employee of the Company.
(h) 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 the Participant following his or her
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.

 

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Exhibit C
Tier II Benefit
If a Participant becomes entitled to severance benefits under this Plan pursuant
to Section 5.1, then a Participant entitled to the Tier II Benefit shall be paid
or provided the benefits set forth, and in accordance with, the following:
(a) The Company shall pay to the Participant as soon as possible but not later
than ninety (90) days following the Termination of Employment a lump sum
severance benefit, payable in cash, in the amounts determined as provided below:
(1) The Participant’s full Base Compensation through the date of the
Participant’s Termination of Employment at the rate in effect at the time Notice
of Termination is given.
(2) In lieu of further salary payments to the Participant for periods subsequent
to his or her Termination of Employment and, in part, as consideration for the
non-competition agreement set forth in Article Seven of the Plan, an amount
equal to 2.00 multiplied by the sum of (the “Sum”): (i) the Participant’s annual
Base Compensation at the rate in effect as of the date of the 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 Program (“STIP”)
amount in effect for the Participant under the FirstEnergy Corp. 2007 Incentive
Compensation Plan or any successor incentive compensation plan (“ICP”) in the
year during which the Termination of Employment occurs whether or not fully
paid. Subject to later valuation at the time of a Change in Control, the
consideration for the non-competition agreement set forth in Section 7.1 of the
Agreement is an amount equal to at least 0.50 times the Sum.
(b) For purposes of the STIP and notwithstanding the terms of the STIP to the
contrary, upon such Termination of Employment, and not later than ninety
(90) days following the Termination of Employment, Executive shall be entitled
to the target amount of any STIP which shall be paid in a lump sum payment.
(c) For purposes of FirstEnergy stock options issued pursuant to the FirstEnergy
Executive and Director Incentive Compensation Plan, the ICP 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 the Participant’s Termination of Employment, the addition
of two (2) years to the Participant’s age would make the Participant eligible to
qualify for retiree health or life insurance coverage under the Company’s
then-in-effect group health or life insurance plans, then the Participant 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 the
Participant’s age would make the Participant so eligible and for purposes of
such coverage he or she shall be credited with two (2) additional years of age
and service. The Participant 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 the Participant is not entitled to retiree health or life insurance
coverage under Subsection (d)(1), then the Participant shall be entitled to
continue to participate, on the same terms and conditions as active employee
participants, in such plan or plans for which the Participant is not so entitled
to retiree coverage for a period of two (2) years after the date of the
Participant’s Termination of Employment. During such continuation period, the
Participant 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 any
Participant’s Termination of Employment and any Participant’s continued
participation therein, and the continued participation of any other person
therein under Subsection (g) 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 the Participant
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 the
Participant 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 ERISA and
Section 4980B(f) of the Code, or any successor provisions thereto.
(e) As further provided in the EDCP, the Participant shall be credited with two
(2) additional years of age and service. Notwithstanding anything in this
Agreement or the EDCP 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 of the Code.

 

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(f) If, on the date of the Participant’s Termination of Employment the
Participant is a participant in the SERP, and as further provided in the SERP,
the Participant shall be credited with two (2) additional years of age and
service, and his or her 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 of the Code.
(g) In the event that because of their relationship to the Participant, members
of the Participant’s family or other individuals are covered by any plan,
program, or arrangement described in Subsection (d) above immediately prior to
the date of the Participant’s 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 the Participant’s Termination of Employment
during the period in which the Company is obligated to continue coverage for the
Participant, nothing set forth herein shall obligate the Company to continue to
provide coverage which would have ceased even if the Participant had remained an
employee of the Company.
(h) 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 the Participant following his or her
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.

 

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Exhibit D
Release and Waiver of Claims
(attached)

 

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Exhibit E
Statement of ERISA Rights
As a Participant in the Plan, you are entitled to certain rights and protections
under the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA
provides that all Plan participants shall be entitled to:
Receive Information About Your Plan and Benefits

  •  
Examine, without charge, at the Administrator’s office or local Human Resources
office, all documents governing the plan, and a copy of the latest annual report
filed with the Department of Labor (if it is required that such a report be
filed) and the Plan description;

  •  
Obtain copies of documents governing the operation of the Plan, and the latest
annual report (if it is required that such a report be filed) and updated
summary plan description or other Plan information upon written request to the
Administrator. The Administrator may make a reasonable charge for the copies;
and

Prudent Actions by Plan Fiduciaries

  •  
In addition to creating rights for plan participants ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit plan.
The people who operate your Plan, called “fiduciaries” of the Plan, have a duty
to do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one — the Company or any other person — may discriminate
against you in any way to prevent you from obtaining severance benefits or
exercising your rights under ERISA;

Enforce Your Rights

  •  
If your claim for a severance benefit is denied or ignored, in whole or in part,
you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.

  •  
Under ERISA, there are steps you can take to enforce your rights. For instance,
if you request a copy of Plan documents or the latest annual report from the
Plan, if any, and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Administrator. If you have a claim for benefits which is denied
or ignored, in whole or in part, you may file suit in a state or Federal court.
If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor, or you may file suit in a Federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.

Assistance with Your Questions

  •  
If you have any questions about your Plan, you should contact the Administrator.
If you have any questions about this statement or about your rights under ERISA,
or if you need assistance in obtaining documents from the Administrator, you
should contact the nearest office of the Employee Benefits Security
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W.,
Washington, D.C. 20210. You may also obtain certain publications about your
rights and responsibilities under ERISA by calling the publications hotline of
the Employee Benefits Security Administration.

 

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