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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                  SCHEDULE 14A
                                 (RULE 14A-101)
                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION
 
                  PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
                      THE SECURITIES EXCHANGE ACT OFProxy Statement Pursuant to Section 14(a) of
            the Securities Exchange Act of 1934 (Amendment No.    )
 
    Filed by the registrantRegistrant /X/
    Filed by a party other than the registrantRegistrant / /
 
    Check the appropriate box:
    / /  Preliminary proxy statement
/X/  Definitive proxy statementProxy Statement
    / /  Definitive additional materialsConfidential, for Use of the Commission Only (as permitted by Rule
         14a-6(e)(2))
    /X/  DEFINITIVE PROXY STATEMENT
    / /  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12DEFINITIVE ADDITIONAL MATERIALS
    / /  SOLICITING MATERIAL PURSUANT TO SECTION240.14A-11(C) OR
         SECTION240.14A-12
 
                                        OHIO EDISON (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                                  OHIO EDISON
                   (NAME OF PERSON(S) FILING PROXY STATEMENT)COMPANY
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                (Name of Registrant as Specified In Its Charter)
 
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    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of filing feeFiling Fee (Check the appropriate box):
 
/X/     $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).NO FEE REQUIRED.
/ /     $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14A-6(I)(1)
        AND 0-11.
        (1)    TITLE OF EACH CLASS OF SECURITIES TO WHICH TRANSACTION APPLIES:
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        (2)    AGGREGATE NUMBER OF SECURITIES TO WHICH TRANSACTION APPLIES:
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        (3).    PER UNIT PRICE OR OTHER UNDERLYING VALUE OF TRANSACTION COMPUTED
               PURSUANT TO EXCHANGE ACT RULE 0-11 (SET FORTH THE AMOUNT ON
               WHICH THE FILING FEE IS CALCULATED AND STATE HOW IT WAS DETER-
               MINED):
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        (4)    PROPOSED MAXIMUM AGGREGATE VALUE OF TRANSACTION:
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        (5)    TOTAL FEE PAID:
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/ /     Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
     (1) Title of each class of securities to which transaction applies:
     (2) Aggregate number of securities to which transaction applies:
 
     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11:
     (4) Proposed maximum aggregate value of transaction:FEE PAID PREVIOUSLY WITH PRELIMINARY MATERIALS.
/ /     Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
        RULE 0-11(A)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE
        WAS PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION
        STATEMENT NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
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            2
 
LOGO[LOGO]
 
                                   NOTICE OF
                                 ANNUAL MEETING
                                OF SHAREHOLDERS
                                      AND
                                PROXY STATEMENT
 
                         ANNUAL MEETING OF SHAREHOLDERS
                                 APRIL 25, 199624, 1997
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                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
TO THE HOLDERS OF SHARES OF COMMON STOCK OF OHIO EDISON COMPANY:
 
    The Annual Meeting of Shareholders of Ohio Edison Company will be held at
the principal office of the Company, 76 South Main Street, Akron, Ohio
44308-1890, on April 25, 1996,24, 1997, at 10 a.m., Eastern time, for the following
purposes:
 
Item No. 1 -- To elect a Board of 12 Directors;
 
     Item No. 2 -- To ratify the appointment of Arthur Andersen LLP, independent
                   public accountants, as auditors for the year of 1996;
Item No. 1  --         To elect a Board of 12 Directors;
 
Item No. 2  --         To ratify the appointment of Arthur Andersen LLP, independent public
                       accountants, as auditors for the year of 1997;
 
Item No. 3  --         To vote on a shareholder proposal; and
 
                       To take action upon any other business as may properly come before the
                       meeting.
To assure your representation at the meeting, you are urged, after reading the accompanying proxy statement, to mark, sign date and returndate your proxy card and to return it in the envelope provided. NANCY C. ASHCOM SecretarySECRETARY Akron, Ohio March 4, 199610, 1997 4 March 4, 199610, 1997 PROXY STATEMENT GENERAL INFORMATION This proxy statement and accompanying proxy card are being mailed to shareholders commencingbeginning on or about March 18, 1996,27, 1997, in connection with the solicitation of proxiesproxy cards by the Board of Directors of Ohio Edison Company (hereinafter referred to as "the Company") for use at the 19961997 Annual Meeting of Shareholders. The principal office of the Company is located at 76 South Main Street, Akron, Ohio 44308-1890. The BoardHolders of Directors fixedrecord of Company common stock at the close of business on March 7, 1996, as the record date for determination of shareholders1997, are entitled to notice of and to vote at the meeting. The Company's outstanding securities entitled to be voted atAt the meeting consistclose of business on March 7, 1997, there were 152,569,437 shares of common stock, each of which is entitledentitles its holder to one vote. The Board of Directors solicits and recommends your execution of the enclosed proxy for use at the Annual Meeting.card. You may revoke your proxy card at any time beforeprior to it is exercisedbeing used at the meeting by giving notice in writing directed to the Secretary of the Company or orally in open meeting. Shares for which a properly signed proxy card are received will be represented at the Annual Meeting and will be voted as instructed on the proxy.proxy card. Shareholders are urged to specify their choices by marking an (X) in the appropriate boxes on the proxy but ifcard. If no choices are specified, the shares represented will be voted as recommended by your Board of Directors. Shares represented by improperly marked proxiesproxy cards will be treated as abstentions for voting purposes. "Votes cast" is defined to include both for and against votes but excludes abstentions and broker non-votes. Dissenting shareholders, in connection with any item presented, do not have rights of appraisal. The representationpresence in person or by proxy of the holders of record of a majority of shares entitled to be voted shallwill constitute a quorum at the Annual Meeting. For the purpose of determining a quorum, all shares represented at the meeting are counted without regard to abstentions or broker non-votes. Votes cast include both for and against votes but exclude abstentions and broker non-votes. Shareholders have the right to exercise cumulative voting for the election of directors. In cumulative voting, a shareholder has a number of votes equal to the product of the number of directors to be elected times the number of shares owned, and may cast all of such votes for one nominee, or may distribute such votes among two or more nominees in any proportion desired. To exercise the right to vote cumulatively, the shareholder must provide specific instructions on the proxy.proxy card. Your Board of Directors proposes to solicit proxiesproxy cards from shareholders as described below. The cost of this solicitation will be borne by the Company. Proxies may be solicited, without additional compensation, by officers and employees of the Company, personally or by telephone, mail or other electronic means. The Company also has arranged for the services of Georgeson & Company Inc. to solicit proxies in a similar mannerproxy cards personally or by telephone, mail or other electronic means for a fee not to exceed $12,000 plus reimbursement of reasonable out-of-pocket expenses. Proxy cards may also be solicited in a similar manner, without additional compensation, by officers and employees of the Company. The Company may reimburse brokers, banks and other fiduciaries for postage and reasonable expenses incurred by them in forwarding proxy material to beneficial owners of stock. BOARD OF DIRECTORS The Board of Directors has the responsibility for establishing broad corporate policies and for the overall performance of the Company, although it is not involved in day-to-day operations. Members of the Board are kept informed of the Company's business by various reports and documents sent to them each month, as well as by operating and financial reportspresentations made at Board and committee meetings by Company management. The Board of Directors held 1113 meetings in 1995.1996. All of the incumbent directors attended more than 75% of the aggregate number of meetings of the Board and committees of which they are members during the period they served. The Board of Directors adopted a resolution in May 1980 stating that any person who has attained the age of 69 years would be ineligible for election as a director. As a result, Mr. Robert H. Carlson, a director of themembers. 1 5 Company since 1987, a member of the Audit and Nuclear Committees, and a director of its subsidiary, Pennsylvania Power Company, since 1983, will not be a candidate for reelection at the Annual Meeting. We are grateful for the leadership that Mr. Carlson has provided during his years of service to the Company. His wisdom, knowledge and good judgment will be missed. COMMITTEES OF THE BOARD OF DIRECTORS The committees established by the Board of Directors to assist it in the discharge of its responsibilities are described below. In addition, the Board has also formed an ad hoc Nuclear Committee which consists of three non-employee directors. This ad hoc Nuclear Committee held four joint meetings in 19951996 with the managements and directors of the companies which operate the nuclear facilities in which the Company has an ownership interest. The biographical information relating to the director nominees, which begins on page 3, includes committee memberships currently held by each nominee. AUDIT COMMITTEE This committee meets with management, financial personnel, internal auditors and the independent public accountants to consider the adequacy of the internal controls of the Company and the objectivity of financial reporting. The Audit Committee recommends to the Board the appointment of the Company's independent public accountants subject to ratification by the shareholders at the Annual Meeting. The committee also reviews the results of management's program to monitor compliance with the Company's policies on business ethics and conduct. Both the internal auditors and the independent public accountants periodically meet alone with the Audit Committee and always have unrestricted access to the committee. The Audit Committee consists of four non-employee directors and met four times in 1995.1996. COMPENSATION COMMITTEE This committee's duties and functions include: determination ofto determine an appropriate salary for the chief executive officer and recommendation thereofto recommend it to the Board of Directors; consultation and discussionto discuss salary levels for all other officers with the chief executive officer concerning establishment of salaries for all other officers;officer; and maintenance ofto maintain an orderly relationship of compensation for officers which is compatible with industry standards for companies of like character and size. The Compensation Committee consists of four non-employee directors and met fourthree times in 1995.1996. NOMINATING COMMITTEE This committee advises and makes recommendations to the Board concerning possible candidates to fill vacancies on the Board of Directors and reviews the qualifications of candidates recommended by others. The committee will consider nominees recommended by shareholders. Such recommendations with respect to any person to be considered for election as a director at the Annual Meeting of Shareholders must be submitted in writing to the committee at least six months prior to the date of the meetingAnnual Meeting of Shareholders in care of the Secretary of the Company at the address set forth on the first page of this proxy statement. Shareholder recommendations should be accompanied by a description of the proposed nominee's qualifications and other relevant biographical information, together with the written consent of the proposed nominee to be named in the proxy statement, if nominated, and to serve, if elected. The Nominating Committee consists of four directors and held two meetings during 1995.1996. FINANCE COMMITTEE This committee's primary duties are to monitor the Company's requirements for funds and financial market conditions; to approve terms of sales of Company securities when the Board of Directors does not exercise such powers; to consult with the officers of the Company on these matters; and to make recommendations to the Board. There are four directors on the Finance Committee, which met once in 1995. 2 61996. COMPENSATION OF DIRECTORS Directors who are not employees receive an annual retainer of $14,000$15,000 and 200300 shares of Ohio Edison common stock. Such directors are also paid a meeting fee of $850 for each Board and committee meeting attended,which they attend, and are reimbursed for expenses of attending. Directors may elect to defer receipt of all or a portion of their cash retainer and meeting fees to be payable in a lump sum or monthly installments after 2 they cease to be a director. Directors who are also employees receive no compensation for serving as directors. BUSINESS RELATIONSHIPS Mr. Robert M. Carter, a director, has a 20%an 18.6% equity interest in Lakefront Capital Investors, Inc., an investment management firm. During 1995,1996, Lakefront Capital Investors, Inc. provided investment management services to the Ohio Edison System Master Retirement Trust, and received a fee of $23,310.receiving $30,749 in fees. ITEMS TO BE VOTED ITEM NO. 1--NOMINEES FOR ELECTION AS DIRECTORS It is intended that shares of common stock represented by a proxy card will be voted, unless otherwise instructed on the proxy card, for the election of the 12 nominees listed below as directors of the Company to hold office until the next Annual Meeting. Under the Company's Code of Regulations, at any election for directors, the persons receiving the greatest number of votes are elected to the vacancies to be filled. The nominees for directors together with information about them are listed below. Your Board of Directors has no reason to believe that the persons named will not be available to serve after being elected. In the event that any of the original nominees would not be available to serve for any reason upon being elected, shares represented by the appointed Proxies will be voted in the discretion of such Proxies either for a lesser number of directors or for another person selected by the Board of Directors unless the inability to serve is believed to be temporary in nature. In this latter case, the shares represented by the appointed Proxies will be voted for the person named and such person, if elected, will serve when he or she is able to do so. NOMINEES FOR ELECTION AS DIRECTORS [Donald C. Blasius][PHOTO] DONALD C. BLASIUS -- Retired in 1993 as President (a position he held since 1989) of White Consolidated Industries, Inc., a manufacturer of home and commercial appliances and outdoor and industrial products. Age 66.67. He is also a Director of Wolverine Tube, Inc. Director of the Company since 1981. Committees: Finance, Nominating [H. Peter Burg][PHOTO] H. PETER BURG -- Senior Vice President, Chief Operating Officer and Chief Financial Officer of this Company since 1989.November 1996, and Senior Vice President and Chief Financial Officer from 1989-1996. Age 49.50. He is also a Director of Pennsylvania Power Company. Director of the Company since 1989. Committee: Finance 3 7 [Robert M. Carter] ROBERT M. CARTER -- Partner since 1991 in the law firm of Carter & Associates. Attorney with independent practice from 1989-1991. Age 45. He is also a Director of FirstMerit Corp. Director of the Company since 1994. Committee: Audit [Carol Cartwright] DR. CAROL A. CARTWRIGHT -- President since 1991 of Kent State University. Vice Chancellor for Academic Affairs and Professor of Human Development at the University of California at Davis from 1988-1991. Age 54. She is also a Director of Republic Engineered Steels, Inc. and M.A. Hanna Company. Director of the Company since 1992. Committee: Nominating [Willard Holland] WILLARD R. HOLLAND -- President and Chief Executive Officer of this Company and Chairman of the Board and Chief Executive Officer of its subsidiary, Pennsylvania Power Company, since 1993. President and Chief Operating Officer of this Company from 1991-1993. Senior Vice President from 1988-1991 of Detroit Edison Company, an electric utility. Age 59. He is also a Director of A. Schulman, Inc. Director of the Company since 1991. Committees: Finance, Nominating [Robert Loughhead] ROBERT L. LOUGHHEAD -- Retired in 1987 as Chairman of the Board, President and Chief Executive Officer of Weirton Steel Corporation, a manufacturer of steel products. Age 66. Director of the Company since 1980. Committees: Audit, Compensation [Russell Maier] RUSSELL W. MAIER -- Chairman of the Board and Chief Executive Officer since 1989 of Republic Engineered Steels, Inc., a specialty steel bar producer. Age 59. [PHOTO] ROBERT M. CARTER -- Partner since 1991 in the law firm of Carter & Associates. Age 46. He is also a Director of FirstMerit Corp. Director of the Company since 1994. Committee: Audit [PHOTO] DR. CAROL A. CARTWRIGHT -- President since 1991 of Kent State University. Age 55. She is also a Director of Republic Engineered Steels, Inc. and M.A. Hanna Company. Director of the Company since 1992. Committee: Nominating [PHOTO] WILLARD R. HOLLAND -- Chairman of the Board and Chief Executive Officer of this Company since November 1996, and of its subsidiary, Pennsylvania Power Company, since 1993. President and Chief Executive Officer of this Company from 1993-1996 and President and Chief Operating Officer from 1991-1993. Age 60. He is also a Director of A. Schulman, Inc. Director of the Company since 1991. Committees: Finance, Nominating [PHOTO] ROBERT L. LOUGHHEAD -- Retired in 1987 as Chairman of the Board, President and Chief Executive Officer of Weirton Steel Corporation, a manufacturer of steel products. Age 67. Director of the Company since 1980. Committees: Audit, Compensation [PHOTO] RUSSELL W. MAIER -- Chairman of the Board and Chief Executive Officer since 1989 of Republic Engineered Steels, Inc., a specialty steel bar producer. Age 60. Director of the Company since 1995. Committee: Nuclear
4 8 [Glenn Meadows] GLENN H. MEADOWS -- Retired in 1989 as President and Chief Executive Officer of McNeil Corporation, a manufacturer of industrial and automotive lubrication systems, pumps, swimming pool chemicals and equipment. Age 66. Director of the Company since 1981. Committees: Audit, Compensation, Nuclear [Paul Powers] PAUL J. POWERS -- Chairman of the Board and Chief Executive Officer since 1987 of Commercial Intertech Corp., a hydraulic components, filters and separations and metal components manufacturer. Age 61. [PHOTO] GLENN H. MEADOWS -- Retired in 1986 as President and Chief Executive Officer of McNeil Corporation, a manufacturer of industrial and automotive lubrication systems, pumps, swimming pool chemicals and equipment. Age 67. Director of the Company since 1981. Committees: Audit, Compensation, Nuclear [PHOTO] PAUL J. POWERS -- Chairman of the Board and Chief Executive Officer since 1987 of Commercial Intertech Corp., a hydraulic components, filters and separations and metal components manufacturer. Age 62. He is also a Director of Acme-Cleveland Corp., Global Marine Inc., CUNO Inc. and Twin Disc, Incorporated. Director of the Company since 1992. Committee: Compensation [PHOTO] CHARLES W. RAINGER -- Retired in 1996 as President (a position he held since 1982) of Sandusky International Inc., a manufacturer of centrifugal castings. Age 63. Director of the Company since 1987. Committees: Nominating, Nuclear [PHOTO] GEORGE M. SMART -- Chairman of the Board and President since 1993 of Phoenix Packaging Corporation, a manufacturer of easy-opening lids. President and Chief Executive Officer from 1978-1993 of Central States Can Co. and Executive Vice President from 1989-1993 of Van Dorn Company, the parent of Central States Can Co. Age 51. He is also a Director of Belden & Blake Corporation and Commercial Intertech Corp. Director of the Company since 1988. Committees: Audit, Finance [PHOTO] JESSE T. WILLIAMS, SR. -- Vice President of Human Resources Policy, Employment Practices and Systems since 1996 of The Goodyear Tire & Rubber Company, a manufacturer of tires and rubber-related products. Vice President, Human Resources Policy and Employment Practices from 1995-1996, Vice President, Compensation and Employment Practices from 1993-1995 and Vice President of Human Resources Diversity, Safety and Workers' Compensation from 1991-1993 of The Goodyear Tire & Rubber Company. Age 57. Director of the Company since 1992. Committee: Compensation [Charles Rainger] CHARLES W. RAINGER -- President and Director since 1982 of Sandusky International Inc., a manufacturer of centrifugal castings. Age 62. He is Chairman of the Board of Sandusky Limited, a subsidiary of Sandusky International Inc. Director of the Company since 1987. Committees: Nominating, Nuclear [George Smart] GEORGE M. SMART -- Chairman of the Board and President since 1993 of Phoenix Packaging Corporation, a manufacturer of easy-opening lids. President and Chief Executive Officer from 1978-1993 of Central States Can Co. and Executive Vice President from 1989-1993 of Van Dorn Company, the parent of Central States Can Co. Age 50. He is also a Director of Belden & Blake Corporation and Commercial Intertech Corp. Director of the Company since 1988. Committee: Finance [Jesse Williams] JESSE T. WILLIAMS, SR. -- Vice President, Human Resources Policy and Employment Practices since 1995 of The Goodyear Tire & Rubber Company, a manufacturer of tires and rubber-related products. Vice President, Compensation and Employment Practices from 1993-1995 and Vice President of Human Resources Diversity, Safety and Workers' Compensation from 1991-1993 of The Goodyear Tire & Rubber Company. Age 56. Director of the Company since 1992. Committee: Compensation
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM NO. 1. 5 9 ITEM NO. 2--RATIFICATION OF THE APPOINTMENT OF AUDITORS Arthur Andersen LLP, independent public accountants, appointed as auditors by the Board of Directors of the Company to examine the books and accounts of the Company for the year 1996,1997, has made the annual audit for this Company since its organization in 1930. A representative of Arthur Andersen LLP is expected to be present at the Annual Meeting. This representative will have the opportunity to make a statement and will be available to respond to appropriate questions raised at the meeting. This item requires the favorable vote of a majority of the votes cast. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM NO. 2. ITEM NO. 3--SHAREHOLDER PROPOSAL Dr. Allen Wolff, 1553 South Carpenter Road, Brunswick, Ohio 44212-3826, the beneficial owner of 10,01210,720 shares of common stock of the Company on December 31, 1995,1996, has indicated that he will again present a proposal for action at the Annual Meeting as follows: "Did"I, Allen Wolff, 1553 So. Carpenter Road, Brunswick, Ohio 44212-3826, feel that there are a number of indiscretions allowing for increased executive remuneration often in spite of decreased earnings, declining market confidence and shareholder rewards and for reaffirmations of reigning directors and management-sponsored (and often self serving) resolutions because of a triple standard in counting proxies. The space allowed me here will not adequately permit me to address these issues. Did you know that if yourever wonder how managements put up such high numbers in shares are held by a broker, they can berepresented, shares voted for you (and usuallyTHEIR proposals and AGAINST shareholder proposals? Shareholder-proposals garnering 10-45% of the vote SHOULD get some attention from the incumbent management but so often they rest on the fact that it failed. In addition to counting votes on shares they may NEVER own (SARs and stock options), they count differently (1) proxies signed but not marked are counted in favor of management's nominations), EVEN IF YOU DO NOT RECEIVE THE PROXY STATEMENT? Likewise, if you sign and return your proxy, leaving one or more items UNMARKED, it willposition (2) proxies held in street names may be voted for you in favor of management's position? Nominating only the exact number to be elected as director gives the shareholder no choice regardless of how few votes are received by any nominee. While the following examples are not specific to Ohio Edison Company, they demonstrate some unsavory shareholder situations: At one corporation some shareholders with shares held in a 401K account (apparently employees) were in effect disenfranchised because they didn't even receive their proxy statement until the date it was due for counting. Management "regretted the error", but stated that it didn't affect the outcome. Pretty smug, eh! Last year, at one corporation with 148 million shares outstanding, only 80% were represented at the annual meeting and 13 million of those were voted by brokers,slate perhaps without any inputreceipt by the real owner and 32.5 million shares werewithout any input from him and (3) unvoted proxies held in employee 401K plans may be COUNTED as voted in the same proportion as those actually voted. In these days of mergers and downsizing, sometimes employees are AFRAID to vote against management, sometimes feeling intimidated by communications from management. Management provides only one slate of director-candidates. It is "take it or leave it" and opposition can come only from well-financed renegades-sometimes with less than the best interest of the company in mind. If anything anti-management comes up at the annual meeting, they already have your proxy to vote on ANYTHING ELSE if the CEO allows a vote. Most managements will say that they use the parameters of the SEC in revealing or not voted. Why not? Perhaps these shareholders didn't understandrevealing management perks and they may use the resolutionsdate of the last merger or feltname change in revealing just how long an individual has been tenured. Managements say that they boldly tell how unmarked proxies will be voted and feel that their holding wouldn'tshareholders appreciate not being required to make any difference ina few Xs after intelligently wading through 20 or more pages of the outcome. Nevertheless, they abdicated their privilege and obligationproxy statement. Get real! Just because the SEC may allow something does not make it right. Many things are legal, but immoral. Management doesn't tell you how to get your proxy from a street name holder, nor how to appoint another proxy to represent you, nor how to vote intelligently. Atfor someone else for director (BUT I WILL). MY PROPOSAL IS TO ELIMINATE ALL DISCRETIONERY VOTING WHEN THE INDIVIDUAL (NOT THE TECHNICAL) SHAREHOLDER HAS NOT ACTUALLY VOTED BY MARKING THE CARD. For those employee-shareholders who are afraid to vote unconfidentially, but don't agree with management, at least ABSTAIN. That means your vote will not be counted FOR nor AGAINST. For the same time, another 3.8 million shares were unmarked -- giving their votesindependent, but astute shareholder, I ask you to management. How did this effect the outcome? On one questionable management compensation proposal said to have passed by 55%, actually 63% of shares WERE NOT voted in favor. Yet,vote FOR. If you don't understand, ABSTAIN. If you leave it passed, because of rules which I feel are not democratic. None of the executive compensation plans are truly OBJECTIVE with a formula made known to the shareholders and easily calculated by them. At this same corporation, my proposal was said to have received 32% of the vote (quite high for a shareholder proposal in itself), yet 77% of the outstanding shares WERE NOT voted against it. Ohio Edison's proxy resembles almost every form I have seen (that is sent directly to the shareholder), butblank, it is not easily understood by all shareholders. I have suggestions for a change. My proposal is very simple: IN FUTURE PROXIES OF THIS CORPORATION, THERE WILL BE NO DISCRETIONARY VOTING. The proxies signed will be considered represented and help to establish a quorum; the proxies counted will be on those issues actually signed by the real shareholder. Contrary to management's opinions, shareholders do not completely understand many of the proposals nor how their "votes" will be counted if signed, but unmarked. AND unmarked proxies are not votes against an issue; they are simply non-votes; therefore, those tallying the proxies need only compare the votes FOR versus the votes AGAINST or WITHHELD. I don't understand how anybody in their right mind could be against this proposal. If you agree, please vote FOR, if not, vote AGAINST." 6 10 STATEMENT OF THE BOARD OF DIRECTORS IN OPPOSITION TO THE PROPOSAL YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST DR. WOLFF'S PROPOSAL. This is the fourth consecutive year that Dr. Wolff has presented this same proposal athis proposal. Basically, Dr. Wolff is trying to get you to surrender the last two Annual Meetings, and the reasons for voting against it remain the same. The adoption of his proposal would take from you a right given to shareholdersyou by Ohio law to appoint proxies having discretionary voting power --power. We do not know why Dr. Wolff keeps submitting a rightproposal that is shared by shareholdersoverwhelmingly rejected each time it is presented. But we once again point out that adoption of other corporations. Also, thehis proposal could lead to a situation in which thea small number of shareholders attendingwho attend the Annual Meeting could decide important questions that affect our Company to the exclusion of you and other shareholders who cannot attend. Over the past several years, Dr. Wolff made essentially this same proposal to other public companies. The shareholders of such companies also overwhelmingly rejected his proposal recognizing that it is not in their best interests. For the benefit of those of you who may not be present. In addition,have only recently joined our shareholder family, we point out that the Securities and Exchange Commission prescribes the rules that must be followed by thosepublicly traded companies soliciting proxies. Dr. Wolff does not dispute that thoseThese rules are followed by Ohio Edison, he just wantsdesigned to create his own rules.help assure that the voting process is fair to all shareholders, and the Company strictly adheres to them. Even though Dr. Wolff disagrees, we continue to strongly believe that you understand the voting process and that you should continue to have all of the rights that Ohio law provides to shareholders. This is the third consecutive year that Dr. Wolff has presentedused a number of misstatements and innuendos to attempt to convince you to vote for his proposalproposal. For example, he says that stock appreciation rights and shareholders overwhelmingly defeated his proposal the last two years. In 1994, nearly 72%stock options are being voted. The truth is that stock appreciation rights and stock options are not voted since they do not carry with them any voting power. He also suggests, without support, that employees are being intimidated. We, of the votes were cast against the proposal and in 1995, the percentage of votes against the proposal substantially increased to about 78%. The time and effortcourse, deny that goes into dealing with Dr. Wolff's recurring proposal represents a cost to the Company and thus to you as a shareholder. Unfortunately, the rules of the Securities and Exchange Commission require us to includethis is occurring. Do not be misled. A vote AGAINST Dr. Wolff's proposal is truly what is in your best interest. It is a vote for as long as he continues to submit it unless he receives less than 10% of the votes cast. Even if you voted for Dr. Wolff's proposal in the past, we are asking you to treat this as a matter that has been settled by voting against the proposal to bring it to an end. Our financial resourcesshareholders' rights and your time can be spent in better ways than dealing with Dr. Wolff's proposal year after year.shareholder democracy. Adoption of Dr. Wolff's proposal requires the favorable vote of a majority of the votes cast. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM NO. 3. OTHER MATTERSBUSINESS Management does not intend to present and does not know that others will present any other items of business at the Annual Meeting any items of business other than those set forth herein.Meeting. However, if any other matters properly come before the meeting, it is intended that the appointed Proxies will vote thereon in their discretion. ANNUAL REPORTS TheThis proxy statement is accompaniedwas preceded by the mailing of the Annual Report to Shareholders for the fiscal year ended December 31, 1995,1996, which contains financial and other information about the activities of the Company. THE COMPANY WILL FURNISH TO A SHAREHOLDER, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION (FORM 10-K) UPON RECEIPT OF A WRITTEN REQUEST TO MS. NANCY C. ASHCOM, SECRETARY, OHIO EDISON COMPANY, 76 SOUTH MAIN STREET, AKRON, OHIO 44308-1890. PROPOSALS OF SECURITY HOLDERS Notice is hereby given that any shareholder proposal intended to be presented at the Annual Meeting of Shareholders in 19971998 must be received at the Company's principal office on or before November 4, 1996, in order to be included in the Company's proxy statement and proxy relating to such meeting.26, 1997. 7 11 SECURITY OWNERSHIP TABLE The following table shows shares of stock beneficially owned as of December 31, 1995,1996, by each director and nominee, the executive officers named in the Summary Executive Compensation Table, all directors and executive officers as a group and all owners of more than five percent of any class of Ohio Edison Company voting securities. It also shows the deferred common stock equivalents credited as of December 31, 1995,1996, to executive officers participating in the Executive Incentive Compensation Plan.
NUMBER OF COMMON CLASS OF SHARES BENEFICIALLY STOCK NAME OF BENEFICIAL OWNER TITLE CLASS OF STOCK OWNED(1)(2) EQUIVALENTS(3) - --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Donald C. Blasius Director, Nominee Common 2,2612,726 H. Peter Burg Director, Nominee, Sr. VP Common 9,424 11,203 Robert H. Carlson Director Common 3,78310,111 13,569 Robert M. Carter Director, Nominee Common 532865 Dr. Carol A. Cartwright Director, Nominee Common 1,0781,459 Willard R. Holland Director, Nom., Pres. & CEO Common 6,407 29,1677,502 44,741 Robert L. Loughhead Director, Nominee Common 1,9712,338 Russell W. Maier Director, Nominee Common 1001,104 Glenn H. Meadows Director, Nominee Common 2,3582,829 Paul J. Powers Director, Nominee Common 8431,208 Charles W. Rainger Director, Nominee Common 2,3192,788 George M. Smart Director, Nominee Common 1,9812,341 Jesse T. Williams, Sr. Director, Nominee Common 1,2771,673 Anthony J. Alexander Sr. VP & Gen. Counsel Common 9,009 8,40110,542 10,656 John A. Gill Vice President Common 3,092 6,712 Anthony N. Gorant Senior Vice President Common 4,333 5,036 Preferred 2003,424 8,006 Robert J. McWhorter Senior Vice President Common 3,859 8,9724,415 11,425 All Directors & Executive Officers As a Group Common 72,403 80,385 Preferred 20079,319 109,158 State Street Bank and Trust Co.(4) Common 14,587,581(9.6%14,197,485(9.3%)
(1) Beneficially owned shares include any shares with respect to which voting or investment power is attributed to a person because of joint or fiduciary ownership of the shares or relationship of the record owner, such as a spouse, even if the person does not consider himself or herself the beneficial owner. (2) The percentage of shares beneficially owned by any director or nominee, or by all directors and executive officers as a group, does not exceed one percent of the class so owned. (3) Common stock equivalents are the cumulative number of performance shares credited to each executive officer as of December 31, 1995.1996. These performance shares are the portion of the 1991, 1992, 1993, and 1994 annual incentive awards under the Executive Incentive Compensation Plan that were deferred for four years, and the 1995 and 1996 long-term incentive opportunityopportunities that waswere deferred for four years under such Plan. For a detailed explanation of the Plan, see the Board Compensation Committee Report on Executive Compensation and the footnote to the Long-Term Incentive Plan Table. Such performance shares do not have voting rights or other rights associated with ownership. (4) State Street Bank and Trust Company (225 Franklin Street, Boston, MA 02110) is Trustee under the Ohio Edison System Savings Plan which holds 11,741,03611,517,892 shares (7.7%(7.5%) of the Company's common stock, and shares voting and investment power with respect thereto with the employees participating in the Plan. The Bank also holds 2,846,5452,679,593 shares (1.9%(1.8%) of the Company's common stock as Trustee or Discretionary Advisor under various collective investment funds for employee benefit plans and other index and personal trust accounts. The Bank has sole voting power with respect to 2,368,1452,059,093 of these shares, and shares voting power with respect to 1,000 of these shares and has no voting power with respect to 619,500 of these shares; and has sole investment power with respect to 2,843,7452,677,193 of these shares and shares investment power with respect to 2,8002,400 of these shares. 8 12 SUMMARY EXECUTIVE COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM -------------------------------------------------------------------- COMPENSATION ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OTHER(2) PAYOUTS(3) COMPENSATION(4) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------- Willard R. Holland 1995 $502,365 $179,5361996 $ 1,405516,658 $ 26,469213,197 $ 38,504 President630 $ 62,099 $ 72,307 Chairman of the Company,Board and 1995 502,365 179,536 1,405 26,469 38,504 Chief Executive Officer of the 1994 461,731 92,500 889 0 44,585 ChairmanCompany and of the Board of its 1993 381,416 82,136 4,462 0 21,685 subsidiary, Pennsylvania Power Company and Chief Executive Officer of both companies H. Peter Burg 1996 $ 246,858 $ 66,756 $ 4,733 $ 44,841 $ 25,165 President, Chief Operating 1995 $231,828 $231,828 49,287 $ 3,052 $ 56,637 $ 16,433 Senior Vice PresidentOfficer and Chief Financial Officer 1994 225,042 38,809 2,014 0 21,088 1993 217,924 33,732 2,291Anthony J. Alexander 1996 $ 232,533 $ 53,500 $ 1,930 $ 30,865 $ 14,223 Executive Vice President and 1995 197,853 49,406 1,722 39,276 10,790 General Counsel 1994 192,060 27,634 2,191 0 17,83114,320 Robert J. McWhorter 1995 $214,5401996 $ 44,840219,178 $ 7,16850,690 $ 42,1128,254 $ 25,06734,136 $ 39,063 Senior Vice President 1995 214,540 44,840 7,168 42,112 25,067 1994 208,256 26,084 7,436 0 31,434 1993 201,678 25,459 7,500 0 27,435 Anthony J. Alexander 1995 $197,853 $ 49,406 $ 1,722 $ 39,276 $ 10,790 Senior Vice President 1994 192,060 27,634 2,191 0 14,320 and General Counsel 1993 186,002 23,447 1,212 0 11,957 John A. Gill 1995 $197,8531996 $ 43,039202,133 $ 1,56258,335 $ 34,1162,229 $ 10,97527,161 $ 24,655 Vice President 1995 197,853 43,039 1,562 34,116 10,975 1994 192,060 27,632 1,753 0 18,786 1993 185,941 20,540 5,655 0 15,237 Anthony N. Gorant(5) 1995 $199,608 $ 44,291 $ 6,082 $137,886 $ 135,893 Senior Vice President 1994 203,251 29,314 3,116 0 31,698 1993 195,975 24,795 7,029 0 25,175
(1) AmountsThe amounts for 1994 and 1993 reflect 50%50 percent of the annual awards under the Executive Incentive Compensation Plan. ThePlan; the remaining amounts, which were mandatorily deferred into a Common Stock Equivalent Account, were previously reported in the Long-Term Incentive Plan Table. Beginning in 1995, all annual awards are reported in this column as there is no longer a mandatory deferral. (2) Consists of reimbursement for income tax obligations on Executive Indemnity Program premium and on perquisites and other personal benefits.perquisites. (3) With the exception of Mr. Gorant noted below, theseThese amounts represent cash payouts of the portion of the 19911992 Executive Incentive Compensation Plan annual award previously deferred into a Common Stock Equivalent Account. (4) For 1995,1996, amount is comprised of (1) matching Company common stock contributions under the tax qualified Savings Plan: Holland-$6,006;6,303; Burg-$5,855;6,305; Alexander-$6,305; McWhorter-$5,852; Alexander-$5,854;6,302; Gill-$2,432; Gorant-$1,860;2,683; (2) the current dollar value of the Company's portion of the premiums paid in 19951996 for insurance policies under the Executive Supplemental Life Plan: Holland-$16,789;15,649; Burg-$2,910;2,785; Alexander-$1,571; McWhorter-$4,023; Alexander-$1,652;3,240; Gill-$678; Gorant-$0;631; (3) above market interest earned under the Executive Deferred Compensation Plan: Holland-$15,709;50,355; Burg-$5,444;13,851; Alexander-$4,928; McWhorter-$8,278; Alexander-$1,865;22,607; Gill-$6,496; Gorant-$9,976;19,972; and (4) a portion of the Executive Indemnity Program premium reportable as income: Holland-$0; Burg-$2,224; Alexander-$1,419; McWhorter-$6,914; Alexander-$1,419; Gill-$1,369; Gorant-$3,777; and (5) banked vacation paid at retirement: Gorant-$120,280. (5) Mr. Gorant retired as Senior Vice President of the Company effective November 30, 1995. His Long-Term Compensation Payout includes payment of the final value of his Common Stock Equivalent Accounts under the Executive Incentive Compensation Plan for annual awards deferred for the years 1991, 1992, 1993 and 1994.1,369. 9 13 LONG-TERM INCENTIVE PLAN TABLE--AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE BASED PLAN 19951996 TARGET EQUIVALENT PERFORMANCE OR (NUMBER OF PERFORMANCE SHARES)NON-STOCK PRICE BASED PLAN LONG-TERM NUMBER OF OTHER PERIOD -------------------------------------(NUMBER OF PERFORMANCE SHARES) INCENTIVE PERFORMANCE UNTIL MATURATION BELOW---------------------------------------------------- NAME OPPORTUNITY SHARES OR PAYOUT BELOW THRESHOLD THRESHOLD TARGET MAXIMUM - -------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- W. R. Holland-CEO $ 305,045 16,269311,146 13,462 4 years 0 8,135 16,269 24,4046,731 13,462 20,193 H. P. Burg $ 75,295 4,01676,805 3,323 4 years 0 2,008 4,016 6,0241,662 3,323 4,985 A. J. Alexander $ 65,547 2,836 4 years 0 1,418 2,836 4,254 R. J. McWhorter $ 69,678 3,71671,075 3,075 4 years 0 1,858 3,716 5,574 A. J. Alexander $ 64,258 3,427 4 years 0 1,714 3,427 5,1411,538 3,075 4,613 J. A. Gill $ 42,621 2,27343,475 1,881 4 years 0 1,137 2,273 3,410940 1,881 2,821
Each executive's 19951996 target long-term incentive opportunity was converted into performance shares equal to an equivalent number of shares of the Company's common stock based on the average price of such stock during December 1994,1995, and deferred intowill be held in a Common Stock Equivalent Account through 1998.1999. At the end of this four-year performance period, thethis Common Stock Equivalent Account attributed to the deferred award will be valued based on the average price of the Company's common stock during December 19981999 and as if any dividends that would have been paid on such stock during the performance period were reinvested on the date paid. This value may be increased or decreased as described below, based upon the total return of the Company's common stock (that is, stock price appreciation plus reinvested dividends) relative to the Edison Electric Institute's Index of 100 Investor-owned Electric Utility Companies (the "Index") during the period. If an executive retires, dies or otherwise leaves the employment of the Company prior to the end of the four-year period, the value will be further proportionally decreased based on the number of months worked during the period. However, an executive must work at least twelve months during the four-year period to be eligible for an award payout. The final value of an executive's account, if any, will be paid to the executive in cash early in early 1999.the year 2000. The final value of an executive's account may range from $0zero to 150%150 percent of the target amount. The maximum amount in the above table is equal to 150%150 percent of the target 19951996 long-term incentive opportunity and will be earned if the Company's total shareholder return is in the top 15%15 percent compared to the Index noted above.Index. An amount equal to 100%100 percent of the target 19951996 long-term incentive opportunity will be earned if the Company's total shareholder return is in the 38th percentile compared to the Index. The threshold amount is equal to 50%50 percent of the target 19951996 long-term incentive opportunity and will be earned if the Company's total shareholder return is in the 60th percentile compared to the Index. Payouts for a total shareholder return ranking between the 15th percentile and the 60th percentile will be interpolated. However, there will be no long-term award payouts if the Company's total shareholder return compared to the Index falls below the 60th percentile. CERTAIN SEVERANCE PAY AGREEMENTS In 1995, the Company entered into separate severance pay agreements with each of Messrs. Holland, Burg, Alexander and Gill providing for the payment of severance benefits in the event that the individual's employment with Ohio Edison or its subsidiaries is terminated only under specified circumstances within three years after a change in control of Ohio Edison (generally, defined as the acquisition of 50%50 percent or more of the Company's outstanding common stock or certain mergers or other business combinations). The agreements are intended to ensure that the individuals are free from personal distractions in order to put in place the best plan for shareholders when a change of control is occurring or perceived as imminent. The principal severance benefits under each agreement include payment of the following when the individual is terminated or resigns for good reason (defined, generally, as a material change, following a change inof control, inconsistent with the individual's previous job duties or compensation): (i) the individual's base salary and accrued benefits through the date of termination, including a pro-rata portion of the annual and all deferred long-term incentive awards earned; (ii) 2.99 times the sum of the individual's base salary plus the average of his annual incentive compensation awards over the past three years; (iii) Supplemental Executive Retirement Plan (SERP) benefits as follows: if the individual is less than age 55 at termination, the benefit is calculated as if he was age 55, offset by compensation earned from 10 subsequent employers until age 55, at which time it will then be offset by pension benefits and, at age 62, further offset by social security payments; if the individual is between age 10 14 55 and 62 at termination, the benefit is calculated in accordance with the SERP and will be offset by social security payments beginning at age 62; if the individual is age 62 or more at termination, the benefit is calculated in accordance with the SERP; (iv) continuation of group health and life insurance as if the individual had retired at the greater of his current age or age 55 and the greater of his current years of service or actual years of service at age 55; and (v) payment of legal fees and expenses as well as any excise taxes resulting from the agreement. The severance pay agreements have initial three-year terms and are automatically renewed each year for an additional year unless expressly discontinued by the Board. After a change in control, if the individual resigns, he is prohibited for two years from working for or with competing entities. Under the Merger Agreement in regard to the proposed merger of Ohio Edison and Centerior Energy Corporation, officers (excluding assistant officers and officers over the age of 62) of Ohio Edison may, if an adequate position is not available following the merger or their employment is terminated, elect to obtain severance compensation equal to 2.99 times the executive's three-year average annual salary and bonus, plus health care benefits for three years. Furthermore, any officer of Ohio Edison who has entered into one of the severance agreements described above may elect to cancel that severance agreement and accept the same benefits offered to other terminated officers under the Merger Agreement. EXECUTIVE RETIREMENT PLAN The Ohio Edison System Supplemental Executive Retirement Plan is limited to eligible senior executives as approved by the Compensation Committee of the Board of Directors. At normal retirement, eligible senior executives (which include all of the officers listed above) who have five or more years of service with the Company are provided a retirement benefit equal to the greater of 65 percent of their highest annual salary, or 55 percent of the average of their highest three consecutive years of salary plus annual incentive awards paid after January 1, 1996 and paid prior to retirement, reduced by the executive's pensions under tax-qualified pension plans of the Company or other employers, any supplementary pension under the Company's Executive Deferred Compensation Plan, and social security benefits. Subject to exceptions that might be made in specific cases, senior executives retiring prior to age 65, or with less than five years of service, or both, may receive a similar but reduced benefit. This Plan also provides for disability and surviving spouse benefits. As of the end of 1995,1996, the estimated annual retirement benefits of the executive officers listed above at age 65 from such sources were: W. R. Holland-$326,540;335,828; H. P. Burg-$150,689;160,458; A. J. Alexander-$151,146; R. J. McWhorter-$139,448; A. J. Alexander-$128,591;142,466; and J. A. Gill-$128,591. Mr. A. N. Gorant retired on November 30, 1995, and his annual retirement benefit from all of the above sources is $138,980.131,386. BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee of the Board of Directors (the "Committee") is committed to maintaining a compensation program that rewards executives based on performance and is sufficient to attract and retain talented executives critical to the long-term success of the Company. The Committee recognizes that the Company operates in an increasingly competitive environment and is also committed to maintaining an incentive compensation program that rewards performance not only with respect to the achievement of annual objectives, but also with respect to the long-term return of the Company's common stock as compared to other companies in the electric utility industry. In the performance of its work, the Committee regularly reviews compensation data to position the target total pay opportunity for Company executives (consisting of salary, annual incentive awards, and long-term incentive awards) to the median reported by the Edison Electric Institute and other surveys for executives at publicly-held utility companies with revenue levels comparable to Ohio Edison Company. The Committee also has periodically used external, independent compensation consultants to provide it assistance in its work. As was discussed in last year's Committee report, the Committee directed the Company in late 1994 to retain an external compensation consultant to conduct a competitive compensation analysis and review the design of its executive compensation and benefit programs. As a result of this study, no changes were made to the Company's executive base salary program. However, the competitive analysis concluded that the target total pay opportunity provided by the Company was below the median of that provided by the comparable utilities noted above primarily due to limited long- term incentive opportunities. The study recommended making incentive compensation a larger part of an executive's total pay opportunity, restructuring the Company's Executive Incentive Compensation Plan (the "Incentive Plan") into separate annual and long-term incentive programs, and strengthening the linkage between an executive's total pay opportunity to long-term increases in shareholder value relative to other electric utilities. Thus, effective January 1, 1995, the Committee approved some important changes to the Incentive Plan which was first implemented in 1985 and last amended in 1991. The details of these and other changes are contained later in this report. 11 15 The base salary range for an executive is market-based and is related to an evaluation of the responsibilities for his/herthe position. It is constructed around a standard rate. An individual executive's actual salary is based upon the standard rate for his/herthe position and an annual assessment of the executive's job 11 performance. However, the maximum base salary of each named executive officer in the Summary Executive Compensation Table (the "Table") is limited to the standard rate of his/herthe executive's pay range. Any additional compensation is provided by the Incentive Plan, described below. This further increases the portion of the named executive's total pay opportunity that is at risk. The Salary column in the Table lists the 19951996 base salary of the named executive officers, including salary deferred into the Company's Executive Deferred Compensation Plan (the "Deferral Plan") and/or the Company's Savings Plan. Under the Executive Incentive Compensation Plan (the "Incentive Plan"), a target total incentive opportunity is established for an executive at the beginning of each year which is then allocated into a target annual incentive opportunity and a target long-term incentive opportunity. As the level of an executive's responsibility increases in the Company, both the portion of his/herthe executive's total pay opportunity that is put at risk and the portion that is tied to the long-term return of the Company's common stock increase.increases. For Mr. Holland in 1995, 50%1996, 50 percent of his total pay opportunity was put at risk in the form of incentive compensation. This amounted to a target total incentive opportunity of $508,408,$518,576 of which 40%40 percent or $203,363$207,430 was allocated into a target annual incentive opportunity, and 60%60 percent or $305,045$311,146 was allocated into a target long-term incentive opportunity. At the beginning of each year, the Committee reviews and approves a list of measurable corporate financial and strategic goals to be used to establish annual objectives for executives participating in the Incentive Plan. Each executive has a portion of his/herthe executive's annual incentive award based on the achievement of certain specific corporate financial goals of direct benefit to the shareholder. As an executive's responsibility in the Company increases, this portion tied to these corporate financial goals increases. Additional objectives established for any executive may be other financial or strategic goals from the list that the executive directly affects or may be other specific objectives that are expected to directly contribute to the achievement of all goals. An executive's annual incentive award may range from $0 to 150%150 percent of his/herthe executive's target annual incentive opportunity based on the level of achievement of the objectives established for him/her.established. However, unless the Board otherwise determines based upon the specific circumstances involved, no annual incentive awards will be paid unless a minimum threshold earnings per share is attained, common stock dividends paid by the Company during the plan year are at least equal to the previous year-end annualized rate and the rate freeze as contained in the Company's Rate Reduction and Economic Development program remains in effect. The Committee approved five 19951996 corporate financial and strategic objectives for Mr. Holland. These objectives related to the achievement of confidential target levels regarding earnings per share, operationalshareholder cash flow, cost reductions and revenue enhancements identified by the Company's Performance Initiative Programs, customer service satisfaction, revenue enhancements from new business, and generating plant capacity.operating effectiveness. These objectives provided 40%, 20%, 20%, 10%40, 40, 10, 5 and 10%,5 percent, respectively, of Mr. Holland's target annual incentive opportunity. Based on the level of 19951996 achievement of each of these objectives, Mr. Holland received an annual incentive award of $179,536.$213,197. The annual incentive award paid to each of the named executive officers in accordance with the Incentive Plan is listed in the bonus column of the Table. The awards include amounts deferred into the Deferral Plan. To link a portion of each executive's total pay opportunity to the long-term performance of the Company's common stock, each year an executive's target long-term incentive opportunity will beis converted into equivalent performance shares and deferredheld in a Common Stock Equivalent Account (the "Account") for four years. Each executive's 19951996 target long-term incentive opportunity will be deferredheld in a 19951996 Account through 1998.1999. This 19951996 Account will be valued in early 19992000 based on the total return of the Company's common stock and the total return of the stock compared to other investor-owned utilities during this four-year period. The final value, if any, will be paid to the executive in cash. For a detailed explanation of this long-term incentive program, see the footnote to the Long-Term Incentive Plan Table. The target long-term incentive opportunity and the corresponding number of equivalent performance shares allocated to each named executive officer are also listed in the Long-Term Incentive Plan Table. In accordance with the Incentive Plan in effect prior to 1995,in 1992, each named executive was required to defer 50%50 percent of his 19911992 annual incentive award into a 19911992 Account for four years.years from 1993 through 1996. The terms and conditions of this long-term deferral were reported in the proxy statementProxy Statement for that year. In early 1996,1997, each named executive's 12 16 19911992 Account was valued based on an average annualannualized 6.74 percent total 12 return of 10.9% for the Company's common stock during this period, a second3rd quintile total return ranking relative to the Edison Electric Institute's Index of 100 Investor-Owned Electric Companies and a second2nd quintile ranking of the Company's price change to residential customers relative to a peer group of twenty electric utilities selected from this Index. The long-term incentive award paid to each of the named executive officers in accordance with the prior Incentive Plan is listed in the Long-Term Compensation Payouts column of the Table. Due to the increasing emphasis of incentive compensation as part of an executive's total pay opportunity, the Committee approved a study recommendation to include annual incentive awards paid after January 1, 1996, in the calculation of the Supplemental Executive Retirement Plan benefit for eligible senior executives. For a detailed explanation of this Plan, see the Executive Retirement Plan section of this proxy statement. Lastly, the Company has not yet developed a policy with respect to qualifying certain performance based compensation paid to its named executive officers under the Incentive Plan for corporate deductibility under Section 162(m) of the Internal Revenue Code. The total compensation paid to each of these officers that was subject to 19951996 federal income tax was significantly below the $1,000,000 deductibility cap specified in Section 162(m). If and when it is anticipated that such compensation paid to any of these named executive officers will reach this limit the Company will establish such a policy. Compensation Committee: Robert L. Loughhead, Chairman Glenn H. Meadows Paul J. Powers Jesse T. Williams, Sr. 13 17 SHAREHOLDER RETURN: PERFORMANCE COMPARISON GRAPHS The following graphs illustrate the total annual return earned from an investment in Ohio Edison Common Stock,common stock, compared with those earned in the Edison Electric Institute's Index of 100 Investor-Owned Electric Utility Companies (the "EEI 100 Index") and the Standard & Poor's 500 Index of widely held common stocks (the "S&P 500 Index"). The top graph shows the total annual returns by year. The second graph depicts the cumulative value of a $100 investment on December 31, 1990.1991. Total return represents stock price changes plus the reinvestment of dividends in the stock. GRAPH 1 TOTAL ANNUAL RETURNS OHIO EDISON, EEI 100 INDEX AND S&P 500 INDEX EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Measurement Period Ohio EdisonOHIO EDISON EEI 100 In- S&P 500 In- (Fiscal Year Covered) Co. dex dex 1991 29.30 28.87 30.47 1992 20.93 7.6220.95 7.59 7.62 1993 4.58 11.124.59 11.14 10.08 1994 -11.92 -11.57 1.32 1995 35.9 31.0 37.635.86 31.02 37.60 1996 3.72 1.20 22.87
GRAPH 2 TOTAL RETURN CUMULATIVE VALUES OHIO EDISON, EEI 100 INDEX AND S&P 500 INDEX EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Measurement Period Ohio EdisonOHIO EDISON EEI 100 In- S&P 500 In- (Fiscal Year Covered) Co. dex dex 19901991 100.00 100.00 100.00 1991 129.30 128.87 130.47 1992 156.37 138.69 140.40120.95 107.59 107.62 1993 163.54 154.11 154.55126.50 119.58 118.47 1994 144.04 136.28 156.60111.42 105.74 120.03 1995 195.72 178.55 215.44151.38 138.54 165.16 1996 157.01 140.20 202.94
(LOGO)IJKPrinted on Recycled Paper 14 [LOGO] 18 [OHIO EDISON LOGO] 76 South Main St. THE ENERGY MAKERS Akron, Ohio 44308 ________________________________________________________________________ Nancy C. Ashcom Secretary[LETTERHEAD] March 13, 199624, 1997 Dear Shareholder: You are cordially invited to join us at this year's Annual Meeting of Shareholders to be held at 10 a.m. on Thursday, April 25,24, at our General Office in Akron, Ohio. During the meeting, we will review the Company's performance in 1995,1996, including those efforts that are enabling us to reduce costs, improve operations and enhance our fiancialfinancial position. We will also be discussing our plans for the future as well as answering any questions you may have concerning our operations or business strategies. The enclosed proxy material provides you with more information about the business items that will be voted on at the meeting. In addition to the election of the Board of Directors and the ratification of auditors, you will be voting on a shareholder proposal that would restrict shareholders' rights. YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE SHAREHOLDER PROPOSAL. Please take a few minutes now to review this material and then mark your vote on the proxy card below. After you sign and date your proxy card, please return it in the enclosed postage-paid envelope. Your participation and support are important to us as we formulate our plans for the future. If you plan on attending the Annual Meeting, please refer to the map on the back of this letter for directions to the General Office. We hope you can join us on April 25.us. Sincerely, /s/ Nancy C. Ashcom TEAR HERE ______________________________________________________________________________ Indicate your vote by an (X) in the appropriate boxes. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS NO. 1 & 2 ITEM NO. 1 Election of DirectorsDirectors: FOR WITHHOLD / / / / FOR all nominees listed below (except WITHHOLD authority to vote below (exceptfor as printed forto the contrary below) all nominees listed below to the contrary below) D.C. Blasius,Blaslus, H.P. Burg, R.M. Carter, C.A. Cartwright, W.R. Holland, R.L.R.I. Loughhead, R.W. Maier, G.H. Meadows, P.J. Powers, C.W. Rainger, G.M. Smart, J.T. Williams, Sr. INSTRUCTION: To withhold authority to vote for any individual nominee, print the nominee's name on the following line. --------------------------------------------------- X__________________________- ---------------------------------------- ITEM NO. 2 Ratification of appointment of auditors. FOR AGAINST ABSTAIN / / / / / / YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM NO. 3 X__________________________ ITEM NO. 3 Shareholder Proposal SIGN HERE AS NAME(S) APPEAR FOR AGAINST ABSTAIN ABOVE. If signing for a / / / / / / X - ---------------------------------------- X - ---------------------------------------- Sign here as name(s) appear above. If signing for a corporation or partnership or as agent, attorney or fiduciary, indicate the capacity in which you are signing. ___________________________ Date 19 [MAP 1][MAP] OHIO EDISON [MAP 2] 76 SOUTH MAIN STREETST. AKRON, OHIO 44308-1890 GENERAL OFFICE LOCATION (CORNER OF MAIN ST. AND MILL ST.) Public parking is available in two parking decks which have entrances from W. Mill St. One of these parking decks is attached to the Ohio Edison Building and the other is directly across the street. [OHIO EDISON LOGO][LOGO] THIS PROXY CARD IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS AT THE PRINCIPAL OFFICE OF THE COMPANY, 76 SOUTH MAIN STREET, AKRON, OHIO, ON THURSDAY, APRIL 25, 1996,24, 1997, AT 10:0010 A.M., EASTERN TIME. P The undersigned hereby appoints Nancy C. Ashcom and Theodore F. Struck, II as Proxies with the power to appoint their substitute, and R hereby authorizes them to represent and to vote, as designated below, all the shares of common stock of Ohio Edison Company which the O undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held on April 25, 1996,24, 1997, or any X adjournment thereof, and in their discretion the Proxies are authorized to vote upon such other business as may properly come Y before the meeting. Please sign and mail promptly THIS PROXY WILL BE VOTED AS INDICATED. IF to assure your representation at NO Please sign and mail promptly DIRECTIONS ARE INDICATED, THE SHARES to assure your representationthe meeting. REPRESENTED BY THIS PROXY WILL BE VOTED FOR at the meeting. ITEMS 1 AND 2, AND AGAINST ITEM 3. Continued and to be signed and dated on the other side.CONTINUED AND TO BE SIGNED AND DATED ON THE OTHER SIDE. 20 [OHIO EDISON LOGO] THE ENERGY MAKERS [LOGO] OHIO EDISON SYSTEM SAVINGS PLAN VOTING DIRECTION FORM ANNUAL MEETING OF SHAREHOLDERS OF OHIO EDISON COMPANY AT THE PRINCIPAL OFFICE OF THE COMPANY, 76 SOUTH MAIN STREET, AKRON, OHIO, ON THURSDAY, APRIL 25, 1996,24, 1997, AT 10:00 A.M., EASTERN TIME YOUR ALLOCATED SHARES: TO: STATE STREET BANK & TRUST COMPANY, TRUSTEE OF THE OHIO EDISON SYSTEM SAVINGS PLAN As a participant in the Ohio Edison System Savings Plan, I hereby direct State Street Bank & Trust Company, Trustee, to vote, in accordance with my directions below, the shares of Ohio Edison common stock which are allocated to my account and also my proportionate number of shares which have not been allocated to participants or for which no direction forms are recieved,received, at the 19961997 Annual Meeting of Shareholders to be held on April 25, 1996,24, 1997, or any adjournment thereof, and in its discretion it is authorized to vote upon such other business as may properly come before the meeting. If no directions are indicated below, the shares represented by this signed direction form are directed to be votedIF NO DIRECTIONS ARE INDICATED BELOW, THE SHARES REPRESENTED BY THIS SIGNED DIRECTION FORM ARE DIRECTED TO BE VOTED FOR ItemsITEMS 1 andAND 2, and votedAND VOTED AGAINST ItemITEM 3.
ALLOCATED SHARES |X|(Number indicated above.) /X/ Indicate your direction by marking the appropriate boxes. (Number indicated above.)-------------------------------------------------------------- YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS NO. 1 & 2. ITEM NO.-------------------------------------------------------------- Item No. 1. Election of Directors: ITEM NO.Directors Item No. 2. Ratification of appointment of auditors. FOR WITHHOLD FOR AGAINST ABSTAIN FOR / / / / WITHHOLD / / / / / / all nominees listed authority to vote below (except as for all nominees ------------------------------------------------------------- printed to the listed below YOUR BOARD OROF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM NO. 33. contrary below) ITEM NO. 3. Shareholder Proposal. FOR AGAINST ABSTAIN------------------------------------------------------------- D.C. Blasius, H.P. Burg, R.M. Carter, C.A. Cartwright, / / / / / /Item No. 3. Shareholder Proposal. W.R. Holland, R.L. Loughhead, R.W. Maier, G.H. Meadows, FOR AGAINST ABSTAIN P.J. Powers, C.W. Rainger, G.M. Smart, J.T. Williams, Sr. INSTRUCTION: To withhold authority to vote for any / / / / / / individual nominee, print that nominee's name on the following line. ------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- UNALLOCATED SHARES (Proportion to be determined.) -------------------------------------------------------------- YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS NO. 1 & 2. ITEM NO.-------------------------------------------------------------- Item No. 1. Election of Directors ITEM NO.Item No. 2. Ratification of appointment of auditors. FOR WITHHOLD FOR AGAINST ABSTAIN FOR / / / / WITHHOLD / / / / / / all nominees listed authority to vote below (except as for all nominees ------------------------------------------------------------- printed to the listed below YOUR BOARD OROF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM NO. 33. contrary below) ITEM NO. 3. Shareholder Proposal. FOR AGAINST ABSTAIN------------------------------------------------------------- D.C. Blasius, H.P. Burg, R.M. Carter, C.A. Cartwright, / / / / / /Item No. 3. Shareholder Proposal. W.R. Holland, R.L. Loughhead, R.W. Maier, G.H. Meadows, FOR AGAINST ABSTAIN P.J. Powers, C.W. Rainger, G.M. Smart, J.T. Williams, Sr. INSTRUCTION: To withhold authority to vote for any / / / / / / individual nominee, print that nominee's name on the following line. ------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- ------------------------------------------------- Date , 1996 --------------------------------------------------- ----------------------1997 SIGNATURE. Sign as name appears above. To assure your representation at the meeting, please sign and mail promptly in the enclosed postage-paid envelope to State Street Bank & Trust Company, Box 1997 G.P.O., New York, N.Y. 10117-0024SIGN AS NAME APPEARS ABOVE. ---------------
21 [OHIO EDISON LOGO] 76 South Main St. The Energy Makers Akron, Ohio 44308 216-384-5504 ________________________________________________________________________________ Nancy C. Ashcom Secretary[LETTERHEAD] March 13, 199624, 1997 Dear Fellow Employee:Savings Plan Participant: As a participant in the Ohio EdisonCompany's System Savings Plan, you are entitled to vote on business items that will be presented at the Company'sour Annual Meeting of Shareholders on Thursday, April 25.24. One of the three business items of business towe will be votedvoting on deals withconcerns a shareholder's proposal that would restrict the rights of all shareholders. YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THIS PROPOSAL, WHICH IS ITEM NO. 3 ON YOUR VOTING DIRECTION FORM. This proposal, which is being presented for the third consecutive year, is contrary to our interests as shareholders, has been soundly defeated the interestslast three years. Turning to the other items of the Company and its shareholders.business, YOUR BOARD OF DIRECTORS ALSO RECOMMENDS THAT YOU VOTE FOR ITEM NO. 1,NO.1, THE ELECTION OF DIRECTORS, AND FOR ITEM NO. 2, THE RATIFICATION OF THE APPOINTMENT OF AUDITORS. Please review the enclosed proxy material and complete, sign and return the voting direction form in the envelope provided. On the form, please indicate your vote for both the shares allocated to your Savings Plan account and your proportion of the unallocated shares. If you have any questions, concerning this voting procedure, please refer to your Employee Benefits Handbook or call Investor Services at 1-800-736-3402. Your vote on these business items is very important to us, and we appreciateus. Thank you for your continued support. Sincerely, /s/ Nancy C. Ashcom