FIRSTENERGY CORP.

               EXECUTIVE AND DIRECTOR INCENTIVE COMPENSATION PLAN







                                                FE Plan  effective  May 1, 1998
                                                Revised November 16, 1998
                                                Revised November 16, 1999
                                                Amendment to Plan approved by
                                                Shareholders on May 15, 2001


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                                Table of Contents
                                                                       Page

Article 1   Establishment, Purpose, and Duration
1.1   Establishment of the Plan                                          1
1.2   Purpose of the Plan                                                1
1.3   Duration of the Plan                                               1

Article 2   Definitions and Construction
2.1   Definitions
      2.1.1   Beneficial Owner                                           1
      2.1.3   Black-Scholes Value                                        1
      2.1.4   Board or Board of Directors                                1
      2.1.5   Cash Award                                                 1
      2.1.6   Cause                                                      1
      2.1.7   Change in Control                                          2
      2.1.8   Code                                                       4
      2.1.9   Committee                                                  4
      2.1.10  Company                                                    4
      2.1.11  Covered Employee                                           4
      2.1.12  Directors' Award                                           4
      2.1.13  Exchange Act                                               4
      2.1.14  Fair Market Value                                          4
      2.1.15  Incentive Stock Option or ISO                              4
      2.1.16  Key Employee                                               4
      2.1.17  Nonqualified Stock Option or NSO                           5
      2.1.18  Option                                                     5
      2.1.19  Outside Director                                           5
      2.1.20  Participant                                                5
      2.1.21  Performance Share                                          5
      2.1.22  Period of Restriction                                      5
      2.1.23  Person                                                     5
      2.1.24  Plan                                                       5
      2.1.25  Restricted Stock                                           5
      2.1.26  Subsidiary                                                 5
      2.1.27  Standard Rate                                              5
      2.1.28  Stock                                                      5
      2.1.29  Stock Appreciation Right or SAR                            5
      2.1.30  Voting Stock                                               5
2.2   Gender and Number                                                  5
2.3   Severability                                                       5


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                                Table of Contents

Article 3   Administration
3.1   The Committee                                                      5
3.2   Authority of the Committee                                         6
3.3   Selection of Participants                                          6
3.4   Decisions Binding                                                  6
3.5   Delegation of Certain Responsibilities                             6
3.6   Procedures of the Committee                                        7
3.7   Award Agreements                                                   7
3.8   Conditions on Awards                                               7
3.9   Saturdays, Sundays, and Holidays                                   7

Article 4   Stock Subject to the Plan
4.1   Number of Shares                                                   7
4.2   Lapsed Awards                                                      8
4.3   Adjustments in Authorized Shares                                   8

Article 5   Eligibility and Participation
5.1   Eligibility                                                        8
5.2   Actual Participation                                               8

Article 6   Stock Options
6.1   Grant of Options                                                   8
6.2   Option Agreement                                                   9
6.3   Option Price                                                       9
6.4   Duration of Options                                                9
6.5   Exercise of Options                                                9
6.6   Payment                                                            9
6.7   Restrictions on Stock Transferability                             10
6.8   Termination of Employment Due to Death, Disability,               10
      or Retirement
6.9   Termination of Employment for Other Reasons                       10
6.10  Nontransferability of Options                                     11


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                                Table of Contents

Article 7   Stock Appreciation Rights
7.1   Grant of Stock Appreciation Rights                                11
7.2   Exercise of SARS in Lieu of Options                               11
7.3   Exercise of SARS in Addition to Options                           11
7.4   Exercise of SARS Independent of Options                           12
7.5   Payment of SAR Amount                                             12
7.6   Form and Timing of Payment                                        12
7.7   Term of SAR                                                       12
7.8   Termination of Employment                                         12
7.9   Nontransferability of SARs                                        12

Article 8   Restricted Stock
8.1   Grant of Restricted Stock                                         12
8.2   Restricted Stock Agreement                                        12
8.3   Transferability                                                   13
8.4   Other Restrictions                                                13
8.5   Certificate Legend                                                13
8.6   Removal of Restrictions                                           13
8.7   Voting Rights                                                     13
8.8   Dividends and Other Distributions                                 13
8.9   Termination of Employment Due to Retirement                       13
8.10  Termination of Employment Due to Death or Disability              14
8.11  Termination of Employment for Other Reasons                       14

Article 9   Performance Shares
9.1   Grant of Performance Shares                                       14
9.2   Value of Performance Shares                                       14
9.3   Payment of Performance Shares                                     15
9.4   Committee Discretion to Adjust Awards                             15
9.5   Form and Timing of Payment                                        15
9.6   Termination of Employment Due to Death, Disability,               15
      or Retirement
9.7   Termination of Employment for Other Reasons                       15
9.8   Nontransferability                                                16

Article 10  Cash Awards
10.1  Grant of Cash Award                                               16
10.2  Cash Award Performance Criteria                                   16
10.3  Payout of Cash awards                                             16
10.4  Conversion of Cash Award Payout to Restricted Stock               16


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                                Table of Contents

Article 11  Directors' Awards
11.1  Grant of Director's Awards                                        17
11.2  Conversion of Retainer to Stock                                   17
11.3  Conversion of Retainer to Restricted Stock                        17
11.4  Conversion of Retainer to Stock Options                           17

Article 12  Beneficiary Designation                                     17

Article 13  Rights of Employees
13.1  Employment                                                        18
13.2  Participation                                                     18
13.3  No Implied Rights; Rights on Termination of Service               18
13.4  No Right to Company Assets                                        18

Article 14  Change in Control
14.1  Stock Based Awards                                                18
14.2  All Awards Other than Stock Based Awards                          18

Article 15  Amendment, Modification, and Termination
15.1  Amendment, Modification, and Termination                          19
15.2  Awards Previously Granted                                         19
15.3  Deferral of Payments and Distributions                            19

Article 16  Withholding and Deferral
16.1  Tax Withholding                                                   19
16.2  Stock Delivery or Withholding                                     19

Article 17  Successors                                                  20

Article 18  Requirements of Law
18.1  Requirements of Law                                               20
18.2  Governing Law                                                     20

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Scope of Revision
-----------------

Rev. 3
Clairfy that 6.8 includes early retirement.  Put 6.8 in plain English.  Increase
the number of shares  under the Plan and the limits as approved by  Shareholders
on May 15, 2001.
Add "vesting or  forfeiture"  to 8.4 to strengthen  the  substantial  forfeiture
clause as required by IRS.

Rev. 2
Change  definition  of Fair Market  Value from 20 day average to high and low on
date of grant.

Rev. 1
Reformatted from Landscape to Portrait,  made numbering  consistence  throughout
document.  Included Table of Contents and Scope of Revision  pages.  Changed the
NQSO acronym to NSO throughout.
Clarified  that the Chief  Executive  Officer  could  grant  awards  for all Key
employees,  except those defined as Covered Employees.  Incorporated the changes
to Rule 16b-3 requirements.
Clarified how dates referenced in the Agreements are to be handled when the date
falls on a Saturday,  Sunday, or Holiday.  Clarified how cashless  exercises are
handled.
Clarified that exercising portions of grants are permissible.  Added language to
18.2 regarding conflicts of law.

Rev. 0
Plan  approved by  FirstEnergy  Board of  Directors  on  February  17, 1998 Plan
approved by common  shareholders on April 30, 1998 Plan became  effective on May
1, 1998.


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                                FirstEnergy Corp.
               Executive and Director Incentive Compensation Plan

ARTICLE 1   ESTABLISHMENT, PURPOSE, AND DURATION
            ------------------------------------

1.1  ESTABLISHMENT OF THE PLAN.  FirstEnergy Corp.  (hereinafter  referred to as
     "FirstEnergy"),   established,   effective   May  1,  1998,   an  incentive
     compensation   plan  known  as  the  "Executive   and  Director   Incentive
     Compensation Plan" (hereinafter  referred to as the "Plan"),  which permits
     the grant of Incentive Stock Options,  Non-qualified  Stock Options,  Stock
     Appreciation Rights,  Restricted Stock, Performance Shares, Cash Awards and
     Directors' Awards.

1.2  PURPOSE OF THE PLAN.  The  purpose of the Plan is to promote the success of
     the Company and its  Subsidiaries by providing  incentives to Key Employees
     and  Directors  that will link their  personal  interests to the  long-term
     financial  success of the  Company and its  Subsidiaries,  and to growth in
     shareholder  value.  The Plan is  designed  to provide  flexibility  to the
     Company and its  Subsidiaries  in their ability to motivate,  attract,  and
     retain the services of Key Employees  upon whose  judgment,  interest,  and
     special  effort  the  successful  conduct  of their  operations  is largely
     dependent.  The Plan is intended to preserve  maximum  deductibility of all
     awards made under the plan within the  structure  of Section  162(m) of the
     Internal Revenue Code of 1986 as amended "the Code".

1.3  DURATION OF THE PLAN.  The Plan will  commence on May 1, 1998, as described
     in Section  1.1  herein.  The Plan shall  remain in effect,  subject to the
     right of the Board of Directors to  terminate  the Plan at any time,  until
     all Shares subject to it shall have been purchased or acquired according to
     the provisions herein.


ARTICLE 2   DEFINITIONS AND CONSTRUCTION
            ----------------------------

2.1. DEFINITIONS.  Whenever used in the Plan, the following terms shall have the
     meanings  set forth below and,  when the meaning is  intended,  the initial
     letter of the word is capitalized:

     2.1.1 "Award" means, individually or collectively,  a grant under this Plan
            of  Incentive  Stock  Options,  Nonqualified  Stock  Options,  Stock
            Appreciation  Rights,  Restricted Stock,  Performance  Shares,  Cash
            Awards or Directors' Awards.

     2.1.2 "Beneficial  Owner" shall have the  meaning  ascribed to such term in
            Rule 13d-3 of the General Rules and  Regulations  under the Exchange
            Act.

     2.1.3 "Black-Scholes  Value"  means  the  value  of  one  stock  option  as
            as calculated  by the  Black-Scholes  Valuation  Model as prescribed
            under Financial Accounting Standard 123.

     2.1.4 "Board" or "Board of  Directors"  means the Board of Directors of the
            Company.

     2.1.5 "Cash  Award"  means an  award  in the form of cash  that is a bonus
            bonus made pursuant to the terms of Article 10.

     2.1.6 "Cause"shall mean the occurrence of any one of the following:

            (i)   the  willful  and  continued   failure  by  a  Participant  to
                  substantially  perform  his/her  duties  (other  than any such
                  failure resulting from the Participant's disability),  after a
                  written demand for substantial performance is delivered to the
                  Participant that  specifically  identifies the manner in which
                  the  Company or any of its  Subsidiaries,  as the case may be,
                  believes that the Participant has not substantially  performed

                                        1

<PAGE>

                  his/her  duties,  and the Participant has failed to remedy the
                  situation  within ten (10)  business  days of  receiving  such
                  notice; or

            (ii)  the  Participant's  conviction  for  committing  a felony or a
                  crime  involving  an act of  moral  turpitude,  dishonesty  or
                  misfeasance; or

            (iii) the willful  engaging by the  Participant in gross  misconduct
                  materially and demonstrably injurious to the Company or any of
                  its Subsidiaries.  However,  no act, or failure to act, on the
                  Participant's part shall be considered  "willful" unless done,
                  or omitted to be done,  by the  Participant  not in good faith
                  and without  reasonable belief that his/her action or omission
                  was  in  the  best  interest  of  the  Company  or  any of its
                  Subsidiaries.

     2.1.7 "Change  in Control"  shall  mean:

            (i)   The acquisition by Person of beneficial  ownership (within the
                  meaning of Rule 13d-3  promulgated  under the Exchange Act) of
                  50% (25%if such Person proposes any individual for election to
                  the Board or any member of the Board is the  representative of
                  such Person) or more of either

                  (a)   the  then  outstanding  shares  of  common  stock of the
                        Company (the "Outstanding Company Common Stock") or

                  (b)   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:

                        (1)   any   acquisition   directly   from  the   Company
                              (excluding  an   acquisition   by  virtue  of  the
                              exercise of a conversion privilege),

                        (2)   any acquisition by the Company,

                        (3)   any  acquisition by any employee  benefit plan (or
                              related  trust)  sponsored  or  maintained  by the
                              Company  or  any  corporation  controlled  by  the
                              Company, or

                        (4)   any acquisition by any  corporation  pursuant to a
                              reorganization,   merger  or  consolidation,   if,
                              following   such    reorganization,    merger   or
                              consolidation, the conditions described in clauses
                              (a),  (b)  and  (c) of  subsection  (iii)  of this
                              subsection 2.1.7 are satisfied; or

            (ii)  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 (as
                  such  terms  are used in Rule  14a-11  of the  Regulation  14A
                  promulgated  under  the  Exchange  Act)  or  other  actual  or
                  threatened solicitation of proxies or consents by or on behalf
                  of a Person other than the Board; or

            (iii) Approval   by   the   shareholders   of  the   Company  of   a
                  reorganization, merger or consolidation, in each case, unless,
                  following such reorganization, merger or consolidation,

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                  (a)  more  than 75% of,  respectively,  the  then  outstanding
                       shares of common stock of the corporation  resulting from
                       such  reorganization,  merger  or  consolidation  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  or
                       consolidation  in  substantially  the same proportions as
                       their    ownership,    immediately    prior    to    such
                       reorganization,   merger   or   consolidation,   of   the
                       Outstanding  Company Common Stock and Outstanding Company
                       Voting Securities, as the case may be,

                  (b)   no Person  (excluding the Company,  an employee  benefit
                        plan  (or   related   trust)  of  the  Company  or  such
                        corporation  resulting from such reorganization,  merger
                        or  consolidation  and any Person  beneficially  owning,
                        immediately  prior  to such  reorganization,  merger  or
                        consolidation,  directly or  indirectly,  25% or more of
                        the  Outstanding  Company  Common  Stock or  Outstanding
                        Voting  Securities,  as the  case  may be)  beneficially
                        owns,   directly   or   indirectly,   25%  or  more  of,
                        respectively,  the then  outstanding  shares  of  common
                        stock   of   the   corporation   resulting   from   such
                        reorganization,  merger or consolidation or the combined
                        voting power of the then outstanding  voting  securities
                        of such  corporation  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
                        reorganization,  merger or consolidation were members of
                        the Incumbent  Board at the time of the execution of the
                        initial  agreement  providing  for such  reorganization,
                        merger  or  consolidation;   or

          (iv) Approval  by the  shareholders  of the  Company of (a) a complete
               liquidation  or  dissolution  of the  Company  or (b) the sale or
               other  disposition of all or  substantially  all of the assets of
               the Company,  other than to a corporation,  with respect to which
               following  such sale or other  disposition  (1) more than 75% of,
               respectively, the then outstanding shares of common stock of such
               corporation 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 sale or other disposition in
               substantially the same proportion as their ownership, immediately
               prior  to such  sale or  other  disposition,  of the  Outstanding
               Company Common Stock and Outstanding  Company Voting  Securities,
               as the case may be, (2) no Person  (excluding the Company and any
               employee  benefit plan (or related  trust) of the Company or such
               corporation and any Person beneficially owning, immediately prior
               to such sale or other disposition, directly or indirectly, 25% or
               more of the  Outstanding  Company  Common  Stock  or  Outstanding

                                        3


<PAGE>


               Company Voting Securities, as the case may be) beneficially owns,
               directly or indirectly,  25% or more of,  respectively,  the then
               outstanding  share of common  stock of such  corporation  and the
               combined voting power of the then outstanding  voting  securities
               of such corporation entitled to vote generally in the election of
               directors and (3) at least a majority of the members of the board
               of directors of such  corporation  were members of the  Incumbent
               Board at the time of the  execution  of the initial  agreement or
               action of the Board providing for such sale or other  disposition
               of assets of the Company.

               However,  in no event shall 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 (except
               for  (i)  passive  ownership  of  less  than  5%  of  the  voting
               securities of the purchasing  company or (ii) 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   non-employee
               continuing members of the Board).

     2.1.8 "Code" means the Internal  Revenue Code of 1986, as amended from time
            to time.

     2.1.9 "Committee" means the Compensation Committee of the Board.

     2.1.10 "Company"  means  FirstEnergy  Corp.,  an Ohio  corporation,  or any
            successor thereto as provided in Article 17 herein.

     2.1.11 "Covered  Employee"  means any Participant  designated  prior to the
            grant of Stock Options, Stock Appreciation Rights, Restricted Stock,
            Performance Shares or Cash Award by the Committee who is or may be a
            "covered  employee"  within the meaning of Section  162(m)(3) of the
            Code in the year in which such  Stock  Options,  Stock  Appreciation
            Rights,  Restricted  Stock,  Performance  Shares  or Cash  Award are
            taxable to such Participant.

     2.1.12 "Directors'  Award"  means an Award made  pursuant  to Article 11 of
            this Plan.

     2.1.13 "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
            amended from time to time.

     2.1.14 "Fair  Market  Value"  means  the  average  of the high and low sale
            prices of the common stock as reported on the composite  tape of the
            New York Stock Exchange for the date in which the  determination  of
            the fair market  value is made,  or, if there are no sales of common
            stock on that date,  then on the next  preceding date on which there
            were sales of common stock.

     2.1.15 "Incentive  Stock  Option"  or "ISO"  means an  option  to  purchase
            Stock,  granted  under  Article 6 herein,  which is designated as an
            incentive  stock option and is intended to meet the  requirements of
            Section 422 of the Code.

     2.1.16 "Key  Employee"  means  an  employee  of the  Company  or any of its
            Subsidiaries,  including an employee who is an officer or a director
            of the  Company or any of its  Subsidiaries,  who, in the opinion of
            the  Committee,  can  contribute  significantly  to the  growth  and
            profitability  of the Company and its  Subsidiaries.  "Key Employee"
            also may include any other employee, identified by the Committee, in
            special situations involving extraordinary  performance,  promotion,
            retention, or recruitment.  The granting of an Award under this Plan
            shall be deemed a determination  by the Committee that such employee
            is a Key  Employee,  but  shall  not  create a right to remain a Key
            Employee.

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<PAGE>


     2.1.17 "Nonqualified  Stock  Option" or "NSO"  means an option to  purchase
            Stock,  granted under Article 6 herein,  which is not intended to be
            an Incentive Stock Option.

     2.1.18 "Option"  means an Incentive  Stock Option or a  Nonqualified  Stock
            Option.

     2.1.19 "Outside  Director"  means any director who qualifies as an "outside
            director"  as that term is  defined in Code  Section  162(m) and the
            regulations issued thereunder.

     2.1.20 "Participant"  means a Key Employee or Director who has been granted
            an Award under the Plan.

     2.1.21 "Performance  Share"  means an Award,  designated  as a  performance
            share, granted to a Participant pursuant to Article 9 herein.

     2.1.22 "Period of  Restriction"  means the period during which the transfer
            or  sale  of  Shares  of  Restricted  Stock  by the  participant  is
            restricted.

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

     2.1.24 "Plan"  means this  Executive  and Director  Incentive  Compensation
            Plan of FirstEnergy Corp., as herein described and as hereafter from
            time to time amended.

     2.1.25 "Restricted  Stock" means an Award of Stock granted to a Participant
            pursuant to Article 8 herein.

     2.1.26 "Subsidiary"  shall mean any  corporation of which more than 50% (by
            number of  votes) of the  Voting  Stock at the time  outstanding  is
            owned, directly or indirectly, by the Company.

     2.1.27 "Standard Rate" means the electric  utility median base salary level
            for a given position as determined in the judgment of the Committee.

     2.1.28 "Stock" or "Shares"  means the common stock with a 10 cent par value
            of the Company.

     2.1.29 "Stock Appreciation Right" or "SAR" means an Award,  designated as a
            Stock  Appreciation  Right,  granted to a  Participant  pursuant  to
            Article 7 herein.

     2.1.30 "Voting  Stock"  shall  mean  securities  of any class or classes of
            stock of a corporation,  the holders of which are ordinarily, in the
            absence  of  contingencies,  entitled  to  elect a  majority  of the
            corporate directors.

2.2  GENDER AND NUMBER.  Except where  otherwise  indicated by the context,  any
     masculine  term used herein also shall  include  the  feminine,  the plural
     shall include the singular, and the singular shall include the plural.

2.3. SEVERABILITY.  In the event any provision of the Plan shall be held illegal
     or invalid for any reason,  the  illegality or invalidity  shall not affect
     the  remaining  parts of the  Plan,  and the Plan  shall be  construed  and
     enforced as if the illegal or invalid provision had not been included.


ARTICLE 3   ADMINISTRATION
            --------------

3.1  THE  COMMITTEE.  The Plan shall be  administered  by the  Committee,  which
     consists of not less than three  Directors who shall be appointed from time
     to time by, and shall serve at the  discretion  of, the Board of Directors.
     To the extent  required to comply with Rule 16b-3 under the  Exchange  Act,
     each member of the Committee shall qualify as a "Non-Employee  Director" as
     defined in Rule 16b-3 or any successor definition adopted by the Securities
     and Exchange Commission. To the extent required to comply with Code Section
     162(m), each member of the Committee shall also be an Outside Director.

                                        5


<PAGE>


3.2  AUTHORITY OF THE  COMMITTEE.  Subject to the  provisions  of the Plan,  the
     Committee  shall have full power to construe  and  interpret  the Plan;  to
     establish, amend or waive rules and regulations for its administration;  to
     accelerate  the  exercisability  of any  Award or the end of a  performance
     period  or the  termination  of any  Period  of  Restriction  or any  award
     agreement, or any other instrument relating to an Award under the Plan; and
     (subject  to the  provisions  of  Article 15 herein) to amend the terms and
     conditions of any outstanding  Option,  Stock  Appreciation  Right or other
     Award to the extent such terms and  conditions are within the discretion of
     the Committee as provided in the Plan.  Notwithstanding the foregoing,  the
     Committee shall have no authority to adjust upwards the amount payable to a
     Covered  Employee  with respect to a particular  Award,  to take any of the
     foregoing  actions,  or to take any other  action to the  extent  that such
     action or the Committee's ability to take such action would cause any Award
     under  the  Plan  to  any   Covered   Employee   to  fail  to   qualify  as
     "performance-based   compensation"  within  the  meaning  of  Code  Section
     162(m)(4) and the regulations issued thereunder. Subject to section 4.3, in
     no event  shall  the  Committee  have the  right to i)  cancel  outstanding
     Options or SARs for the purpose of replacing or regranting  such Options or
     SARs with an exercise  price that is less than the original  exercise price
     of the Option or SAR, or ii) change the Option Price of an Option or SAR to
     an exercise  price that is less than the  original  Option or SAR  exercise
     price,   without  first  obtaining  the  approval  of  shareholders.   Also
     notwithstanding  the  foregoing,  no action of the  Committee  (other  than
     pursuant  to Section 4.3 hereof or Section  9.4  hereof)  may,  without the
     consent of the person or  persons  entitled  to  exercise  any  outstanding
     Option  or Stock  Appreciation  Right or to  receive  payment  of any other
     outstanding Award, adversely affect the rights of such person or persons.

3.3  SELECTION OF PARTICIPANTS.  The Committee shall have the authority to grant
     Awards  under  the  Plan,  from  time to time,  to such Key  Employees  and
     Directors as may be selected by it. The Committee shall select Participants
     from  among  those  who they have  identified  as being  Key  Employees  or
     Directors.

3.4  DECISIONS  BINDING.  All determinations and decisions made by the Committee
     pursuant  to  the  provisions  of  the  Plan  and  all  related  orders  or
     resolutions  of the  Board of  Directors  shall be  final,  conclusive  and
     binding on all persons,  including  the Company and its  Subsidiaries,  its
     stockholders,   employees,   and   Participants   and  their   estates  and
     beneficiaries,   and  such   determinations  and  decisions  shall  not  be
     reviewable.

3.5  DELEGATION  OF CERTAIN  RESPONSIBILITIES.  The  Committee  may, in its sole
     discretion,  delegate  to  an  officer  or  officers  of  the  Company  the
     administration of the Plan under this Article 3; provided, however, that no
     such  delegation  by the  Committee  shall  be  made  with  respect  to the
     administration  of the  Plan as it  affects  Directors  of the  Company  or
     Covered  Employees and provided further that the Committee may not delegate
     its authority to correct errors,  omissions or inconsistencies in the Plan.
     The  Committee may delegate to the Chief  Executive  Officer of the Company
     its authority under this Article 3 to grant Awards to Key Employees who are
     not Covered Employees.  All authority delegated by the Committee under this
     Section 3.5 shall be exercised in  accordance  with the  provisions  of the
     Plan and any  guidelines  for the exercise of such  authority that may from
     time to time be established by the Committee.

                                        6


<PAGE>


3.6  PROCEDURES OF THE COMMITTEE.  All  determinations of the Committee shall be
     made by not less than a majority of its members  present at the meeting (in
     person or otherwise) at which a quorum is present. A majority of the entire
     Committee shall  constitute a quorum for the  transaction of business.  Any
     action  required or permitted to be taken at a meeting of the Committee may
     be taken without a meeting if a unanimous written consent, which sets forth
     the action,  is signed by each member of the  Committee  and filed with the
     minutes for  proceedings of the Committee.  Service on the Committee  shall
     constitute  service as a  director  of the  Company so that  members of the
     Committee shall be entitled to indemnification, limitation of liability and
     reimbursement  of expenses with respect to their services as members of the
     Committee  to the same extent that they are  entitled  under the  Company's
     Articles of  Incorporation  and Ohio law for their services as directors of
     the Company.

3.7  AWARD AGREEMENTS.  Stock-based  Awards under the Plan shall be evidenced by
     an award agreement,  which shall be signed by an authorized  officer of the
     Company or delegate and by the  Participant,  and shall  contain such terms
     and  conditions  as may  be  approved  by the  Committee.  Such  terms  and
     conditions need not be the same in all cases.

3.8  CONDITIONS ON AWARDS.  Notwithstanding any other provision of the Plan, the
     Board or the Committee may impose such conditions on any Award  (including,
     without  limitation,  the right of the Board or the  Committee to limit the
     time of exercise to specified periods).

     Notwithstanding  any other  provisions  of the Plan,  all Awards under this
     Plan shall be subject to the following conditions:

     (i)  Except in the case of death,  no SAR, ISO, NSO or other option granted
          pursuant  to  Article 6 shall be  exercisable  for at least six months
          after its grant; and

     (ii) Except in the case of death, no Restricted Stock or Performance  Share
          (or a Share issued in payment  thereof) shall be sold for at least six
          months after its grant.

3.9  SATURDAYS,  SUNDAYS  AND  HOLIDAYS.  When a  date  referenced  in an  award
     Agreement  falls on a  Saturday,  Sunday or other day when the  FirstEnergy
     General  Office is closed,  the date  reference will revert back to the day
     prior to such date.


ARTICLE 4   STOCK SUBJECT TO THE PLAN
            -------------------------

4.1  NUMBER OF SHARES.  Subject to adjustment as provided in Section 4.3 herein,
     the aggregate  number of Shares that may be delivered under the Plan at any
     time shall not exceed 15,000,000 Shares of common stock of the Company.  No
     more than  three-quarters  of such aggregate number of such Shares shall be
     issued as Restricted  Stock under  Article 8 of the Plan or as  Performance
     Shares under  Article 9. Stock  delivered  under the Plan may  consist,  in
     whole or in part, of authorized  and unissued  shares,  treasury  shares or
     shares purchased on the open market.  The exercise of a Stock  Appreciation
     Right,  whether paid in cash or Stock, shall be deemed to be an issuance of
     Stock under the Plan.

                                        7


<PAGE>


4.2  LAPSED AWARDS. If any Award granted under this Plan terminates, expires, or
     lapses for any  reason,  any Stock  subject to such  Award  again  shall be
     available for the grant of an Award under the Plan,  subject to Section 7.2
     herein.  If the value of any Performance  Shares issued under Article 9 are
     paid in cash after a  Performance  Period has ended,  such stock subject to
     such award  shall  again be  available  for the grant of an award under the
     Plan.

4.3  ADJUSTMENTS   IN   AUTHORIZED   SHARES.   In  the  event  of  any   merger,
     reorganization, consolidation,  recapitalization,  separation, liquidation,
     stock  dividend,  split-up,  share  combination,  or  other  change  in the
     corporate  structure of the Company  affecting the Stock,  such  adjustment
     shall be made in the  number  and  class of shares  which may be  delivered
     under  the Plan,  and in the  number  and  class of and/or  price of shares
     subject to outstanding Options, Stock Appreciation Rights, Restricted Stock
     Awards and Performance Shares, granted under the Plan, as may be determined
     to be appropriate and equitable by the Committee,  in its sole  discretion,
     to prevent dilution or enlargement of rights;  and provided that the number
     of  shares  subject  to any  Award  shall  always  be a whole  number.  Any
     adjustment of an Incentive  Stock Option under this paragraph shall be made
     in such a manner so as not to constitute a modification  within the meaning
     of Section 425(h)(3) of the Code.


ARTICLE 5   ELIGIBILITY AND PARTICIPATION
            -----------------------------

5.1  ELIGIBILITY.  Persons eligible to receive Awards under all Articles of this
     Plan  except  Article 11  include  all  employees  of the  Company  and its
     Subsidiaries who, in the opinion of the Committee,  are Key Employees.  Key
     Employees may include  employees who are members of the Board,  but may not
     include  Directors who are not  employees.  Directors who are not employees
     may receive  Awards  under this Plan  exclusively  under  Articles 6 and 8,
     subject to Article 11.

5.2  ACTUAL PARTICIPATION.  Subject to the provisions of the Plan, the Committee
     may from time to time select  those Key  Employees  to whom Awards shall be
     granted  and  determine  the nature and amount of each  Award.  No employee
     shall  have any  right to be  granted  an Award  under  this  Plan  even if
     previously granted an Award.


ARTICLE 6   STOCK OPTIONS
            -------------

6.1  GRANT OF OPTIONS.  Subject to the terms and provisions of the Plan, Options
     may be granted to  Participants  at any time and from time to time as shall
     be determined by the  Committee.  The maximum  number of Shares  subject to
     Options granted to any individual Participant in any calendar year shall be
     five hundred thousand  (500,000) Shares.  The Committee shall have the sole
     discretion,  subject to the  requirements  of the Plan,  to  determine  the
     actual number of Shares subject to Options granted to any Participant.  The
     Committee may grant any type of Option to purchase  Stock that is permitted
     by law at the time of  grant,  including,  but not  limited  to,  ISO's and
     NSO's. However, no employee may receive an Award of Incentive Stock Options
     that are first exercisable  during any calendar year to the extent that the

                                        8


<PAGE>


     aggregate Fair Market Value of the Stock(determined at the time the options
     are granted) exceeds $100,000. Nothing in this Article 6 shall be deemed to
     prevent the grant of NSO's in excess of the maximum  established by Section
     422 of the Code. Unless otherwise  expressly provided at the time of grant,
     Options  granted  under the Plan will be NSO's.  Notwithstanding  any other
     provision of the Plan, no ISO shall be granted after May 1, 2008.

6.2  OPTION  AGREEMENT.  Each  Option  grant  shall be  evidenced  by an  Option
     agreement that shall specify the type of Option granted,  the Option price,
     the  duration  of the  Option,  the  number of  Shares to which the  Option
     pertains,  and such other provisions as the Committee shall determine.  The
     Option  agreement  shall  specify  whether  the Option is intended to be an
     Incentive  Stock Option within the meaning of Section 422 of the Code, or a
     Nonqualified  Stock Option whose grant is not intended to be subject to the
     provisions of Code Section 422.

6.3  OPTION  PRICE.  The purchase  price per share of Stock covered by an Option
     shall be determined by the Committee but shall not be less than 100% of the
     Fair Market Value of such Stock on the date the Option is granted.

     An Incentive Stock Option granted to an Employee who, at the time of grant,
     owns  (within the meaning of Section  425(d) of the Code) Stock  possessing
     more than 10% of the total combined voting power of all classes of stock of
     the  Company,  shall have an  exercise  price which is at least 110% of the
     Fair Market Value of the Stock subject to the Option.

6.4  DURATION OF OPTIONS. Each Option shall expire at such time as the Committee
     shall  determine at the time of grant;  provided,  however,  that no Option
     shall be exercisable  later than the tenth (10th)  anniversary  date of its
     grant.

6.5  EXERCISE OF OPTIONS.  Subject to Section 3.8 herein,  Options granted under
     the  Plan  shall  be  exercisable  at such  times  and be  subject  to such
     restrictions  and  conditions  as the  Committee  shall  in  each  instance
     approve,  which  need  not be the same for all  Participants.  All  options
     within a single grant need not be exercised at one time.

6.6   PAYMENT. Options shall be exercised by the delivery of a written notice to
      the Company  setting  forth the number of Shares with respect to which the
      Option is to be exercised, accompanied by full payment for the Shares. The
      Option  price upon  exercise of any Option shall be payable to the Company
      in full either:

     (a) in cash or its equivalent;

     (b)  by tendering Shares of previously  acquired Stock having a Fair Market
          Value at the time of exercise equal to the total Option price,

     (c)  by foregoing compensation under rules established by the Committee,

     (d)  by delivery  by the  Participant  of  irrevocable  instructions  to an
          approved  broker to promptly  deliver to the Company the amount of the
          sale or loan proceeds to pay the exercise price, or

     (e)  such other consideration as the Committee may deem appropriate.

                                        9


<PAGE>


     The proceeds from such a payment shall be added to the general funds of the
     Company  and  shall  be used for  general  corporate  purposes.  As soon as
     practicable,  after the  Company's  receipt  of  written  notification  and
     payment, the Participant shall receive either:

     (i)  stock  certificates in an appropriate  amount based upon the number of
          Options exercised, issued in the Participant's name:

     (ii) cash in an amount  equal to the  difference  between the sale price of
          such  Shares  and the  Option  price  less  taxes  and  administrative
          expenses; or

     (iii)a combination of the foregoing.

6.7  RESTRICTIONS  ON STOCK  TRANSFERABILITY.  The  Committee  shall impose such
     restrictions on any Shares  acquired  pursuant to the exercise of an Option
     under the Plan as it may deem  advisable,  including,  without  limitation,
     restrictions   under   applicable   Federal   securities   law,  under  the
     requirements  of any stock  exchange upon which such Shares are then listed
     and under any blue sky or state securities laws applicable to such Shares.

6.8  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY,  OR RETIREMENT.  In the
     event the employment of a Participant is terminated by reason of death, any
     of  such  Participant's   outstanding   Options  shall  become  immediately
     exercisable  at any time  prior to the  expiration  date of the  Options or
     within one year after such date of  termination  of  employment,  whichever
     period is  shorter,  by such person or persons as shall have  acquired  the
     Participant's  rights under the Option  pursuant to Article 12 hereof or by
     will or by the laws of descent and distribution.

     In the event the  employment  of a  Participant  is terminated by reason of
     disability or retirement, including early retirement, (as defined under the
     then established  rules of the Company or any of its  Subsidiaries,  as the
     case may be), any of such Participant's  outstanding Options shall continue
     to vest per the vesting  schedule of the  Participant's  Option  Agreement;
     provided,   however,  that  if  the  Participant   subsequently  dies  with
     unexercised options,  the vesting and exercisaeability  will be governed by
     the first sentence of 6.8.

     Notwithstanding  the foregoing to the contrary,  the Committee  may, in its
     sole discretion, lengthen the exercise period up to the expiration date for
     an individual  participant  if it deems this is in the best interest of the
     Company.  In the  case  of  Incentive  Stock  Options,  the  favorable  tax
     treatment  prescribed  under  Section 422 of the  Internal  Revenue Code of
     l986,  as amended,  may not be available  if the Options are not  exercised
     within the Code Section 422  prescribed  time period after  termination  of
     employment for death, disability, or retirement.

6.9  TERMINATION  OF  EMPLOYMENT  FOR  OTHER  REASONS.  If the  employment  of a
     Participant  shall  terminate for any reason other than death,  disability,
     retirement (including early retirement) or for Cause, the Participant shall
     have the right to exercise such Participant's outstanding Options within 90
     days  after  the  date  of his  termination,  but in no  event  beyond  the
     expiration  of the  term of the  Options  and only to the  extent  that the
     Participant  was  entitled  to  exercise  the  Options  at the  date of his
     termination of employment. In its sole discretion, the Committee may extend
     the 90  days  to up to one  year  but,  however,  in no  event  beyond  the
     expiration date of the Option.

     If the employment of the Participant  shall terminate for Cause, all of the
     Participant's  outstanding  Options shall be immediately  forfeited back to
     the Company.

                                       10


<PAGE>


6.10 NONTRANSFERABILITY  OF  OPTIONS.  No Option  granted  under the Plan may be
     sold,   transferred,   pledged,   assigned,   or  otherwise   alienated  or
     hypothecated,  otherwise  than  by  will  or by the  laws  of  descent  and
     distribution.  Further, all Options granted to a Participant under the Plan
     shall be exercisable during his lifetime only by such Participant.


ARTICLE 7   STOCK APPRECIATION RIGHTS
            -------------------------

7.1  GRANT OF STOCK APPRECIATION RIGHTS.  Subject to the terms and conditions of
     the Plan, Stock Appreciation Rights may be granted to Participants,  at the
     discretion of the Committee,  in any of the following forms:

     (a)  in lieu of Options;

     (b)  in addition to Options;

     (c)  independent of Options; or

     (d)  in any combination of (a), (b), or (c).

     The maximum  numbers of Shares  subject to SARs  granted to any  individual
     Participant in any calendar year shall be five hundred  thousand  (500,000)
     Shares.  Subject to the immediately preceding sentence, the Committee shall
     have the sole  discretion,  subject  to the  requirements  of the Plan,  to
     determine  the  actual  number of Shares  subject  to SARs  granted  to any
     Participant.

7.2  EXERCISE OF SARS IN LIEU OF OPTIONS. SARs granted in lieu of Options may be
     exercised for all or part of the Shares  subject to the related Option upon
     the surrender of the related Options  representing the right to purchase an
     equivalent number of Shares.  The SAR may be exercised only with respect to
     the  Shares  of Stock for which  its  related  Option is then  exercisable.
     Option  Stock with respect to which the SAR shall have been  exercised  may
     not be subject again to an Award under the Plan.

     Notwithstanding  any  other  provision  of the Plan to the  contrary,  with
     respect to a SAR granted in lieu of an Incentive Stock Option:

     (i)  the SAR will  expire no later than the  expiration  of the  underlying
          Incentive Stock Option;

     (ii) the SAR amount may be forno more than one  hundred  percent  (100%) of
          the difference between the exercise price of the underlying  Incentive
          Stock  Option and the Fair  Market  Value of the Stock  subject to the
          underlying  Incentive  Stock Option at the time the SAR is  exercised;
          and

    (iii) the SAR may be exercised  only when the Fair Market Value of the Stock
          subject to the Incentive  Stock Option  exceeds the exercise  price of
          the Incentive Stock Option.

7.3  EXERCISE  OF SARS IN  ADDITION  TO  OPTIONS.  SARs  granted in  addition to
     Options  shall be deemed to be  exercised  upon the exercise of the related
     Options.  The deemed  exercise of SARs granted in addition to Options shall
     not necessitate a reduction in the number of related Options.

                                       11


<PAGE>


7.4  EXERCISE OF SARS INDEPENDENT OF OPTIONS.  Subject to Section 3.8 herein and
     Section 7.5 herein, SARs granted  independently of Options may be exercised
     upon whatever terms and conditions the Committee,  in its sole  discretion,
     imposes  upon the SARs,  including,  but not  limited  to, a  corresponding
     proportional reduction in previously granted Options.

7.5  PAYMENT OF SAR  AMOUNT.  Upon  exercise  of the SAR,  the  holder  shall be
     entitled to receive payment of an amount determined by multiplying:

     (a)  The  difference  between  the  market  price of a Share on the date of
          exercise  over the price fixed by the  Committee  at the date of grant
          (which  price  shall not be less than  100% of the  market  price of a
          Share on the date of grant) (the Exercise Price); by

     (b)  The number of Shares with respect to which the SAR is exercised.

7.6  FORM AND TIMING OF PAYMENT.  Payment to a  Participant,  upon SAR exercise,
     will be made in cash or stock, at the discretion of the Committee,  as soon
     as administratively possible after exercise.

7.7  TERM OF SAR. The term of an SAR granted under the Plan shall not exceed ten
     years.

7.8  TERMINATION OF EMPLOYMENT.  In the event the employment of a Participant is
     terminated  by reason of death,  disability,  retirement  (including  early
     retirement), or any other reason, the exercisability of any outstanding SAR
     granted in lieu of or in addition to an Option shall  terminate in the same
     manner  as its  related  Option as  specified  under  Sections  6.8 and 6.9
     herein. The  exercisability of any outstanding SARs granted  independent of
     Options also shall  terminate in the manner provided under Sections 6.8 and
     6.9 hereof.

7.9  NONTRANSFERABILITY  OF SARS.  No SAR  granted  under  the Plan may be sold,
     transferred,  pledged,  assigned,  or otherwise  alienated or hypothecated,
     other than by will or by the laws of descent and distribution. Further, all
     SARs granted to a Participant  under the Plan shall be  exercisable  during
     his lifetime only by such Participant.


ARTICLE 8   RESTRICTED STOCK
            ----------------

8.1  GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the Plan,
     the  Committee,  at any time and from  time to time,  may  grant  Shares of
     Restricted  Stock under the Plan to such  Participants and in such amounts,
     as it shall determine.  The Committee may condition the vesting or lapse of
     the Period of  Restriction  established  pursuant  to Section  8.3 upon the
     attainment of one or more of the performance goals utilized for purposes of
     Performance  Shares pursuant to Article 9 hereof. As required for valuation
     of  grants  under  the Plan,  Restricted  Stock  will be valued at its Fair
     Market  Value.  The  maximum  number  of  Shares  subject  to  issuance  as
     Restricted Stock granted to any individual Participant in any calendar year
     is two hundred fifty thousand (250,000) Shares.

8.2  RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall be evidenced
     by  a  Restricted   Stock  agreement  that  shall  specify  the  Period  of
     Restriction,  or periods, the number of Shares of Restricted Stock granted,
     and such other provisions as the Committee shall determine.

                                       12


<PAGE>


8.3  TRANSFERABILITY.  Except as  provided  in this  Article 8 or in Section 3.8
     herein,  the Shares of Restricted Stock granted  hereunder may not be sold,
     transferred,  pledged,  assigned,  or otherwise  alienated or  hypothecated
     until the  termination of the applicable  Period of Restriction or for such
     period of time as shall be  established  by the  Committee  and as shall be
     specified in the Restricted Stock agreement,  or upon earlier  satisfaction
     of other conditions  (including any performance  goals) as specified by the
     Committee  in its sole  discretion  and set forth in the  Restricted  Stock
     agreement.  All rights with respect to the  Restricted  Stock  granted to a
     Participant under the Plan shall be exercisable during his lifetime only by
     such Participant.

8.4  OTHER  RESTRICTIONS.  The Committee shall impose such other restrictions on
     any Shares of Restricted  Stock granted pursuant to the Plan as it may deem
     advisable including, without limitation, vesting or forfeiture restrictions
     under  applicable  Federal or state  securities laws, and the Committee may
     legend  certificates  representing  Restricted  Stock  to give  appropriate
     notice of such restrictions.

8.5  CERTIFICATE  LEGEND.  In  addition to any  legends  placed on  certificates
     pursuant to Section 8.4 herein,  each  certificate  representing  Shares of
     Restricted  Stock  granted  pursuant  to the Plan shall bear the  following
     legend:

          "The sale or other transfer of the shares of stock represented by this
          certificate,  whether voluntary,  involuntary, or by operation of law,
          is  subject  to  certain  restrictions  on  transfer  set forth in the
          Executive  and Director  Incentive  Compensation  Plan of  FirstEnergy
          Corp., in the rules and administrative  procedures adopted pursuant to
          such Plan, and in a Restricted  Stock  Agreement dated  __________.  A
          copy of the Plan, such rules and procedures, and such Restricted Stock
          agreement may be obtained from the Secretary of FirstEnergy Corp."

8.6  REMOVAL OF  RESTRICTIONS.  Except as  otherwise  provided in this  Article,
     Shares of  Restricted  Stock  covered by each  Restricted  Stock grant made
     under the Plan shall become freely  transferable by the  Participant  after
     the last day of the Period of  Restriction.  Once the  Shares are  released
     from the restrictions, the Participant shall be entitled to have the legend
     required by Section 8.5 removed from his Stock certificate.

8.7  VOTING  RIGHTS.  During the  Period of  Restriction,  Participants  holding
     Shares of  Restricted  Stock  granted  hereunder  may exercise  full voting
     rights with respect to those Shares.

8.8  DIVIDENDS  AND OTHER  DISTRIBUTIONS.  During  the  Period  of  Restriction,
     Participants  holding Shares of Restricted Stock granted hereunder shall be
     entitled to receive all dividends and other distributions paid with respect
     to  those  Shares  while  they  are so  held.  If  any  such  dividends  or
     distributions  are paid in Shares,  the Shares shall be subject to the same
     restrictions  on  transferability  as the Shares of  Restricted  Stock with
     respect to which they were paid.

8.9  TERMINATION OF EMPLOYMENT DUE TO RETIREMENT  (including early  retirement).
     In the event that a Participant  terminates his employment with the Company
     or any of its Subsidiaries because of retirement (as defined under the then
     established  rules of the Company or any of its  Subsidiaries,  as the case
     may be),  the  Committee  in its sole  discretion  (subject  to Section 3.8
     herein) may waive or modify the restrictions remaining on any or all Shares
     of Restricted Stock as it deems appropriate.

                                       13


<PAGE>


8.10 TERMINATION  OF  EMPLOYMENT  DUE TO DEATH  OR  DISABILITY.  In the  event a
     Participant's  employment is terminated  because of death or disability (as
     defined  under  the then  established  rules of the  Company  or any of its
     Subsidiaries,  as the case may be) during the  Period of  Restriction,  any
     remaining  Period of Restriction  applicable to the Restricted  Stock shall
     automatically  terminate and, except as otherwise  provided in Section 8.4.
     herein,   the  Shares  of  Restricted   Stock  shall  thereby  be  free  of
     restrictions and be fully transferable.

8.11 TERMINATION  OF  EMPLOYMENT  FOR  OTHER  REASONS.   In  the  event  that  a
     Participant  terminates  his  employment  with  the  Company  or any of its
     Subsidiaries for any reason other than for death, disability, or retirement
     (including early retirement), as set forth in Sections 8.9 and 8.10 herein,
     during the Period of Restriction, then any Shares of Restricted Stock still
     subject  to  restrictions  as  of  the  date  of  such  termination   shall
     automatically be forfeited and returned to the Company; provided,  however,
     that in the event of a termination  of the  employment of a Participant  by
     the Company or any of its Subsidiaries other than for Cause, the Committee,
     in its sole discretion (subject to Section 3.8 herein), may waive or modify
     the automatic forfeiture of any or all such Shares as it deems appropriate.


ARTICLE 9   PERFORMANCE SHARES
            ------------------

9.1  GRANT OF  PERFORMANCE  SHARES.  Subject to the terms and  provisions of the
     Plan,  Performance  Shares may be granted to  Participants  at any time and
     from time to time as shall be  determined  by the  Committee.  The  maximum
     number of Shares that may be issued to any  Participant  in a calendar year
     shall  not  exceed  two  hundred  fifty  thousand  (250,000),   subject  to
     adjustment as provided in Section 4.3.

9.2  VALUE OF PERFORMANCE SHARES. The Committee shall set performance goals over
     certain periods to be determined in advance by the Committee  ("Performance
     Periods").  Prior to each grant of Performance  Shares, the Committee shall
     establish an initial number of Shares for each Performance Share granted to
     each  Participant  for that  Performance  Period.  Prior  to each  grant of
     Performance Shares, the Committee also shall set the performance goals that
     will be used to determine  the extent to which the  Participant  receives a
     payment of the number of Shares for the Performance Shares awarded for such
     Performance  Period.  These  goals will be based on the  attainment  by the
     Company or its  Subsidiaries  of certain  objective  performance  measures,
     which may  include,  but are not  limited to one or more of the  following:
     total shareholder return, return on equity, return on capital, earnings per
     share,  market share,  stock price,  sales,  costs, net income,  cash flow,
     retained  earnings,  results of customer  satisfaction  surveys,  aggregate
     product price and other  product price  measures,  safety  record,  service
     reliability,   demand-side  management  (including  conservation  and  load
     management),   operating  and  maintenance  cost  management,   and  energy
     production  availability  performance measures. Such performance goals also
     may be based upon the attainment of specified  levels of performance of the
     Company  or one or more  Subsidiaries  under  one or  more of the  measures
     described  above,  relative to the performance of other  corporations.  The
     Committee may provide for the crediting of dividend  equivalents during the
     performance  period. With respect to each such performance measure utilized

                                       14


<PAGE>


     during a Performance  Period,  the Committee  shall assign  percentages  to
     various  levels of  performance  which  shall be applied to  determine  the
     extent to which the  Participant  shall  receive a payout of the  number of
     Performance  Shares  awarded.  With  respect  to  Covered  Employees,   all
     performance  goals shall be  objective  performance  goals  satisfying  the
     requirements  for  "performance-based  compensation"  within the meaning of
     Section 162(m)(4) of the Code, and shall be set by the Committee within the
     time  period   prescribed  by  Section  162(m)  of  the  Code  and  related
     regulations.

9.3  PAYMENT OF PERFORMANCE  SHARES.  After a Performance  Period has ended, the
     holder of a  Performance  Share  shall be  entitled  to  receive  the value
     thereof as  determined  by the  Committee.  The  Committee  shall make this
     determination  by first  determining  the  extent to which the  performance
     goals set pursuant to Section 9.2 have been met. It will then determine the
     applicable  percentage  (which may exceed  100%) to be applied to, and will
     apply such percentage to, the number of Performance Shares to determine the
     payout to be received by the  Participant.  In  addition,  with  respect to
     Performance Shares granted to any Covered Employee, no payout shall be made
     hereunder  except upon  written  certification  by the  Committee  that the
     applicable  performance  goal or goals have been  satisfied to a particular
     extent.  The amount  payable in cash in a calendar year to any  Participant
     with respect to any Performance  Period  pursuant to any Performance  Share
     award shall not exceed $2,000,000.

9.4  COMMITTEE  DISCRETION  TO ADJUST  AWARDS.  Subject to Section 3.2 regarding
     Awards to Covered  Employees,  the  Committee  shall have the  authority to
     modify,  amend or adjust the terms and conditions of any Performance  Share
     award,  at any time or from time to time,  including but not limited to the
     performance goals.

9.5  FORM AND TIMING OF  PAYMENT.  The payment  described  in Section 9.3 herein
     shall be made in cash, Stock, or a combination thereof as determined by the
     Committee.  Payment may be made in a lump sum or installments as prescribed
     by the  Committee.  If any payment is to be made on a deferred  basis,  the
     Committee may provide for the payment of dividend  equivalents  or interest
     during the deferral  period.  Any stock issued in payment of a  Performance
     Share  shall be subject to the  restrictions  on  transfer  in Section  3.8
     herein.

9.6  TERMINATION  OF  EMPLOYMENT  DUE  TO  DEATH,   DISABILITY,   OR  RETIREMENT
     (including  early  retirement).  In  the  case  of  death,  disability,  or
     retirement  (each  of  disability  and  retirement  as  defined  under  the
     established  rules of the Company or any of its  Subsidiaries,  as the case
     may be), the holder of a Performance Share shall receive a prorated payment
     based on the  Participant's  number of full  months of  service  during the
     Performance  Period,  further  adjusted  based  on the  achievement  of the
     performance goals, as computed by the Committee.  The Committee may require
     that a Participant  have a minimum  number of full months of service during
     the Performance Period to qualify for an Award payout.

9.7  TERMINATION  OF  EMPLOYMENT  FOR  OTHER  REASONS.   In  the  event  that  a
     Participant   terminates   employment  with  the  Company  or  any  of  its
     Subsidiaries  for any reason other than death,  disability,  or  retirement
     (including early  retirement),  all Performance  Shares shall be forfeited;
     provided,  however, that in the event of a termination of the employment of
     the  Participant by the Company or any of its  Subsidiaries  other than for
     Cause,  the  Committee  in its sole  discretion  may  waive  the  automatic
     forfeiture provisions.

                                       15


<PAGE>


9.8  NONTRANSFERABILITY.  No  Performance  Shares  granted under the Plan may be
     sold,   transferred,   pledged,   assigned,   or  otherwise   alienated  or
     hypothecated, other than by will or by the laws of descent and distribution
     until the termination of the applicable Performance Period. All rights with
     respect to Performance Shares granted to a Participant under the Plan shall
     be exercisable during his/her lifetime only by such Participant.


ARTICLE 10   CASH AWARDS
             -----------

10.1 GRANT OF CASH AWARD.  Subject to the terms of this Plan, Cash Awards may be
     made to  Participants  at any  time  and  from  time to  time as  shall  be
     determined by the Committee.  The Committee shall have complete  discretion
     in the determining the form of the Cash Awards granted to Participants

10.2 CASH AWARD PERFORMANCE CRITERIA. All Cash Awards made under this Plan shall
     be  subject to  pre-established,  objective,  business-related  Performance
     Measures.  The  performance  measures  shall  be  approved  for  use by the
     Committee  and  the  Committee  shall  certify  their  attainment  and  the
     resulting payout of Cash Awards.  Performance  Measures for Cash Awards may
     be measurable for periods of one year to five years  (allowing for prorated
     periods for new Participants).  The Performance  Measures may include,  but
     shall not be  limited  to:  operational  measures  (e.g.  attaining  merger
     milestones, customer satisfaction, service reliability, safety and tactical
     objectives), financial measures (e.g. expense control, revenue, margins and
     shareholder value added levels "SVA") and individual measures.  Performance
     Measures can be made on overlapping  cycles,  (i.e.  one-year  cycles could
     emphasize  operational  measures and three-year  cycles could emphasize SVA
     Performance  Measures.)  Each cycle of  Performance  Measures  could have a
     distinct Cash Award associated with it.

10.3 PAYOUT OF CASH AWARDS. Payouts of Cash Awards are made in relationship to a
     target  payout level  determined  prior to each cycle on a per  Participant
     basis.  Target levels under multiple  cycles will be calibrated to provide,
     in total, an annualized  level of incentives  consistent with the Company's
     compensation  philosophy as set by the  Committee.  Actual  payouts of Cash
     Awards will vary with performance results as follows:  actual payouts based
     upon operational or individual  Performance Measures will vary from 50% (if
     threshold  performance  is  attained) to 150% of the target  level;  actual
     payouts based upon Company SVA and other corporate  financial measures will
     vary from 50% (if  threshold  performance  is  attained)  up to 200% of the
     target  level.  The maximum  Cash Award  payable in a calendar  year to any
     Participant  with  respect  to any  Performance  Period  shall  not  exceed
     $2,000,000.

10.4 CONVERSION OF CASH AWARD PAYOUT TO RESTRICTED  STOCK. At the request of the
     Participant, but subject to the discretion of the Committee, any Cash Award
     payout may be converted to Restricted  Stock at a discount.  The conversion
     to Restricted  Stock will occur by multiplying the Cash Award by a premium,
     but in no event more than 120% and  dividing the product by the Fair Market
     Value of the  Restricted  Stock on the date of  conversion,  which shall be
     chosen by the  Committee  at least 10 days in  advance,  to  determine  the
     number  of  shares  of  Restricted  Stock  that  will be  provided  as full
     settlement of the Cash Award.  The shares of Restricted  Stock  provided to
     Participants in settlement of Cash Awards shall be Restricted Stock subject
     to Article 8.

                                       16


<PAGE>


ARTICLE 11   DIRECTORS' AWARDS
             -----------------

11.1 GRANT  OF  DIRECTORS'  AWARDS.  In lieu of a  portion  of  their  retainer,
     Directors'  Awards can be made in the form of Stock  Options or  Restricted
     Stock under Articles 6 and 8  respectively.  No other Awards may be made to
     Directors under the Plan.

11.2 CONVERSION  OF RETAINER TO STOCK.  At the request of a Director but subject
     to the  election of the  Committee,  a Director  may  convert any  retainer
     otherwise due to be paid by the Company in cash to an aggregate  equivalent
     value of either Stock Options, Restricted Stock or both.

11.3 CONVERSION OF RETAINER TO RESTRICTED STOCK. Retainer,  otherwise payable in
     cash may be converted to Restricted  Stock under Article 8. The  conversion
     to Restricted  Stock will occur by  multiplying  the retainer by a premium,
     but in no event more than 120% and  dividing the product by the Fair Market
     Value of the  Restricted  Stock on the date of  conversion,  which shall be
     chosen by the Committee at least 10 days in advance, into the amount of the
     retainer to determine the number of shares of Restricted Stock that will be
     provided as full settlement of the retainer.

11.4 CONVERSION OF RETAINER TO STOCK OPTIONS.  Retainer otherwise due to be paid
     in cash may be converted to Stock Options under Article 6 at the request of
     the  Participant  but subject to the  election of the  Committee.  Retainer
     shall be converted  by  multiplying  the  retainer by a premium,  but in no
     event more than 120% and  dividing  the product by the amount  equal to the
     Black-Scholes  Value of the  Stock  Option on the date of  conversion.  The
     quotient of which is the number of Stock Options that shall be awarded.


ARTICLE 12   BENEFICIARY DESIGNATION
             -----------------------

Each Participant  under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively and who may include
a trustee under a will or living trust) to whom any benefit under the Plan is to
be paid in case of his/her  death before he receives any or all of such benefit.
Each  designation  will revoke all prior  designations by the same  Participant,
shall be in a form prescribed by the Committee,  and will be effective only when
filed by the Participant in writing with the Committee  during his lifetime.  In
the  absence  of  any  such  designation  or  if  all  designated  beneficiaries
predecease the Participant, benefits remaining unpaid at the Participant's death
shall be paid to the Participant's estate.

                                       17


<PAGE>


ARTICLE 13   RIGHTS OF EMPLOYEES
             -------------------

13.1 EMPLOYMENT.  Nothing in the Plan shall  interfere  with or limit in any way
     the  right of the  Company  or any of its  Subsidiaries  to  terminate  any
     Participant's  employment at any time, nor confer upon any  Participant any
     right to continue in the employ of the Company or any of its Subsidiaries.

13.2 PARTICIPATION.  No  employee  shall  have  a  right  to  be  selected  as a
     Participant,  or,  having  been so  selected,  to be  selected  again  as a
     Participant.

13.3 NO  IMPLIED  RIGHTS;   RIGHTS  ON  TERMINATION  OF  SERVICE.   Neither  the
     establishment  of the Plan nor any amendment  thereof shall be construed as
     giving  any  Participant,  beneficiary,  or any other  person  any legal or
     equitable right unless such right shall be specifically provided for in the
     Plan or conferred by specific  action of the Committee in  accordance  with
     the terms and provisions of the Plan. Except as expressly  provided in this
     Plan,  neither the Company nor any of its Subsidiaries shall be required or
     be liable to make any payment under the Plan.

13.4 NO RIGHT TO COMPANY  ASSETS.  Neither the  Participant nor any other person
     shall acquire,  by reason of the Plan, any right in or title to any assets,
     funds or  property  of the  Company or any of its  Subsidiaries  whatsoever
     including,  without limiting the generality of the foregoing,  any specific
     funds,  assets,  or  other  property  which  the  Company  or  any  of  its
     Subsidiaries,  in its sole  discretion,  may set aside in anticipation of a
     liability  hereunder.  Any benefits which become payable hereunder shall be
     paid from the general assets of the Company or the  applicable  subsidiary.
     The Participant shall have only a contractual right to the amounts, if any,
     payable  hereunder  unsecured  by any  asset of the  Company  or any of its
     Subsidiaries.  Nothing contained in the Plan constitutes a guarantee by the
     Company or any of its  Subsidiaries  that the assets of the  Company or the
     applicable subsidiary shall be sufficient to pay any benefit to any person.


ARTICLE 14   CHANGE IN CONTROL
             -----------------

14.1 STOCK BASED AWARDS.  Notwithstanding  any other  provisions of the Plan, in
     the event of a Change in Control, all Stock based awards granted under this
     Plan shall  immediately vest 100% in each  Participant  (subject to Section
     3.8 herein), including Incentive Stock Options, Nonqualified Stock Options,
     Stock Appreciation Rights, and Restricted Stock.

14.2 ALL  AWARDS  OTHER  THAN  STOCK  BASED  AWARDS.  Notwithstanding  any other
     provisions  of the Plan,  in the event of a Change in  Control,  all Awards
     other than Stock Based Awards  granted under this Plan shall be immediately
     paid out in cash,  including  Performance  Shares. The amount of the payout
     shall be based on the higher  of:  (i) the  extent,  as  determined  by the
     Committee,  to which  performance  goals,  established  for the Performance
     Period  then in  progress  have  been  met up  through  and  including  the
     effective  date of the  Change in  Control or (ii) 100% of the value on the
     date of grant of the number of Performance Shares.

                                       18


<PAGE>


ARTICLE 15   AMENDMENT, MODIFICATION, AND TERMINATION
             ----------------------------------------

15.1 AMENDMENT,  MODIFICATION,  AND  TERMINATION.  At any time and from  time to
     time,  the Board or Committee  may  terminate,  amend,  or modify the Plan.
     However,  without  the  approval  of the  stockholders  of the  Company  if
     required  by the Code,  by the insider  trading  rules of Section 16 of the
     Exchange  Act, by any national  securities  exchange or system on which the
     Stock  is  then  listed  or  reported,  or by any  regulatory  body  having
     jurisdiction  with  respect  hereto,  no such  termination,  amendment,  or
     modification may:

     (a)  Increase  the total  amount of Stock  which may be issued  under  this
          Plan, except as provided in Section 4.3 herein; or

     (b)  Change the class of Employees eligible to participate in the Plan;

     (c)  Materially  increase the cost of the Plan or  materially  increase the
          benefits to Participants; or

     (d)  Extend the maximum period after the date of grant during which Options
          or Stock Appreciation Rights may be exercised.

15.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification of the
     Plan  other  than  pursuant  to  Section  4.3  hereof  shall in any  manner
     adversely affect any Award theretofore  granted under the Plan, without the
     written consent of the Participant.

15.3 DEFERRAL OF PAYMENTS AND DISTRIBUTIONS.  Cash Awards pursuant to Article 10
     may be eligible for deferral by any plan(s) offered by the company, subject
     to the  approval  of the  Committee  and  any  administrative  requirements
     imposed by the Committee.


ARTICLE 16   WITHHOLDING AND DEFERRAL
             ------------------------

16.1 TAX  WITHHOLDING.  The Company and any of its  Subsidiaries  shall have the
     power and the right to deduct or  withhold,  or  require a  Participant  to
     remit to the Company or any of its  Subsidiaries,  an amount  sufficient to
     satisfy Federal,  state and local taxes (including the  Participant's  FICA
     obligation)  required  by law to be  withheld  with  respect  to any grant,
     exercise, or payment made under or as a result of this Plan.

16.2 STOCK DELIVERY OR  WITHHOLDING.  With respect to withholding  required upon
     the  exercise  of Stock  Options,  or upon the  lapse  of  restrictions  on
     Restricted  Stock,  participants may elect,  subject to the approval of the
     Committee, to satisfy the withholding requirement,  in whole or in part, by
     tendering to the Company  Shares of previously  acquired Stock or by having
     the Company withhold Shares of Stock, in each such case in an amount having
     a Fair Market Value equal to the amount  required to be withheld to satisfy
     the tax withholding obligations described in Section 16.1. The value of the
     Shares to be tendered  or withheld is to be based on the Fair Market  Value
     of the Stock on the date that the  amount  of tax to be  withheld  is to be
     determined.

     All Stock  withholding  elections shall be irrevocable and made in writing,
     signed by the  Participant on forms approved by the Committee in advance of
     the day that the transaction becomes taxable.

                                       19


<PAGE>


     Stock  withholding  elections made by  Participants  who are subject to the
     short-swing  profit  restrictions  of Section 16 of the  Exchange  Act must
     comply  with the  additional  restrictions  of Section 16 and Rule 16b-3 in
     making their elections.


ARTICLE 17   SUCCESSORS
             ----------

All  obligations  of the Company under the Plan,  with respect to Awards granted
hereunder,  shall be  binding  on any  successor  to the  Company,  whether  the
existence  of such  successor  is the result of a direct or  indirect  purchase,
merger,  consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.


ARTICLE 18   REQUIREMENTS OF LAW
             -------------------

18.1 REQUIREMENTS  OF LAW.  The granting of Awards and the issuance of Shares of
     Stock under this Plan shall be subject to all applicable  laws,  rules, and
     regulations, and to such approvals by any governmental agencies or national
     securities exchanges as may be required.

18.2 GOVERNING LAW. The Plan, and all agreements  hereunder,  shall be construed
     in  accordance  with and  governed by the laws of the State of Ohio without
     giving effect to the principles of the conflicts of laws.

                                       20