Board of Director
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Non-Qualifying Stock Option (NSO) Agreement
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for Elected and Bonus Stock Options
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Option No.: 10
Number of Elected Options: 4,246 NSO's
Number of Bonus Options: 850 NSO's
Total Options Granted: 5,096 NSO's
Exercise Price: $ 31.69 per share
This Option Agreement ("Agreement") is entered into as of the 1st day of
January, 2001, between FirstEnergy Corp. ("FE"), and ______________
("Optionee") and is in lieu of the Board of Directors retainer fee.
SECTION ONE - AWARD
The Board of Directors ("Directors") of FE adopted the FE Executive and
Director Incentive Compensation Plan ("Plan") on February 17, 1998. The
Plan was subsequently approved by the common stock shareholders on April
30, 1998, and became effective May 1, 1998. According to the terms of the
Plan, the Optionee shall receive, as of the above date, the number of
Options ("Options") to purchase shares of FE Common Stock ("Shares"), at
the above price, based upon the Optionee's elections indicated on the
Election Form signed by the Optionee on November 20, 2000.
All grants are considered NSO's, not subject to the provisions of section
422 of the Code.
SECTION TWO - GENERAL TERMS
This Agreement is subject to the following terms and conditions as
outlined in the Plan:
Options Accrued
All Options granted are earned in 2001 in 10% increments for each month
served not to exceed 100%. A full month's credit will be given for time
served after the first of the month.
All Bonus options become fully vested after the director has served four
(4) years from the date of this grant, subject to the same restrictions as
the grant.
Exercise of Options
These Options will become exerciseable as of January 1, 2005, which is
four (4) years after the grant unless it becomes exerciseable prior to
that date due to termination from the Board.
Expiration
These Options expire on December 31, 2011 at 2:00 PM, Akron Time, unless
the Options expire earlier due to termination from the Board (or 2:00 PM
on the last business day prior to such date, if the date falls on a
Saturday, Sunday, or other day when the FirstEnergy General Office is
closed).
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Termination from the Board
Event of Optionee Vesting When Options Expire Further Information
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Retirement Vesting continues per Options expire on As defined by the Board
vesting schedule January 1, 2011 on November 7, 1997
Disability Vesting continues per Options expire on As defined under
vesting schedule January 1, 2011 Internal Revenue Code
Section 22(3)(3)
Death, including death 100% vesting on date All options expire Shares exercisable by
after disability, of death the earlier of one the beneficiary (per
retirement, or resigna- year after date of Article 12 of the
tion before January 1, death or expiration Plan, or by will or
2005 of the grant by the laws of descent
and distribution)
Death after January 1, Vesting stops upon date All unvested options are
2005 for any reason you leave Board immediately forfeited
other than disability, back to the Company.
retirement, or For Cause All vested options expire
the earlier of one year
after you leave the Board
or 90 days after death, if
such death occurs prior to
one year after termination,
or the expiration of the
grant
Termination For Cause Vesting stops upon date All vested and unvested Termination for Cause
you leave Board options are immediately is defined in section
forfeited back to the 2.1.6 of the Plan
Company
Other Termination, Vesting stops upon date All unvested options
including resignation you leave Board are immediately
before January 1, 2005 forfeited back to the
Company. All vested
options expire the earlier
of 90 days after you leave
the Board or expiration of
the grant
Other Termination, Vesting stops upon date All unvested options
including resignation you leave Board are immediately forfeited
after January 1, 2005 back to the Company. All
vested options expire the
earlier of one year after
you leave the Board or
expiration of the grant
Change in Control
In the event of a Change in Control (as defined in Section 2.1.7 of the
Plan), all options under this Agreement become immediately exerciseable as
of the date of the Change in Control.
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Effect on the Board Relationship
Nothing in this Agreement guarantees Board membership with FE, nor does it
confer any special rights or privileges to the Optionee.
Adjustments
In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, stock split,
combination, distribution, or other change in corporate structure of FE
affecting the Common Stock, the Compensation Committee ("Committee") of
the Board of Directors of FE will adjust the number and class of
securities in this option in a manner determined appropriate to prevent
dilution or diminution of the Option under this Agreement.
Forfeiture
1. All Options not earned in 2001 are immediately forfeited back to the
Company upon termination from the Board.
2. All Bonus Options granted are forfeited back to the Company upon
termination from the Board for any reason other than retirement,
death,
or disability prior to January 1, 2005.
Administration
1. This Agreement is governed by the laws of the State of Ohio without
giving effect to the principles of the conflicts of laws.
2. The terms and conditions of this Option may be modified by the
Committee:
a) in any case permitted by the terms of the Plan or this Option,
b) with the written consent of the Optionee, or
c) without the consent of the Optionee if the amendment is either not
adverse to the interests of the Optionee or is required by law.
3. The administration of this Agreement and the Plan will be performed in
accordance with Article 3 of the Plan. All determinations and
decisions made by the Committee, the Board, or any delegate of the
Committee as to the provisions of the Plan shall be final, conclusive,
and binding on all persons.
4. The terms of this Agreement are governed at all times by the official
text of the Plan and in no way alter or modify the Plan.
5. If a term is capitalized but not defined in this Agreement, it has the
meaning given to it in the Plan.
6. To the extent a conflict exists between the terms of this Agreement
and
the provisions of the Plan, the provisions of the Plan shall govern.
SECTION THREE - METHODS OF EXERCISING THE OPTION
Notification to Exercise
To exercise an option, the Optionee must submit to the Administrator of
the Plan the information below either on a form provided by FE, a broker
form, or on a blank sheet of paper:
1. Number of shares being purchased,
2. The grant price,
3. The form of payment,
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4. A statement of intention to exercise,
5. The signature of the Optionee, (or legal representative in the case of
death or disability), and
6. Any representations or disclosures required by any applicable
securities law.
Method of Payment
Payment for the transaction and associated brokerage fees may be made
through the following methods:
1. Cash Exercise -- Delivering cash equal to the cost of the exercise.
2. Stock Swap Exercise -- Surrendering certificates of FE stock
previously
acquired having a Fair Market Value at the time of the exercise equal
to the amount of the exercise, along with a small amount of cash, not
to exceed the price of one (1) share of stock.
3. Cashless Exercise - Using the net proceeds from the immediate sale of
stock to pay for the exercise of the Option, as directed in the
written
notification to exercise the option.
4. A combination of any of the above based upon Plan administrative
rules.
Withholding Tax
Though taxes are the responsibility of the Optionee, FE shall have the
right to deduct, withhold, or require the Optionee to surrender an amount
sufficient to satisfy federal (including FICA and Medicare), state, and/or
local taxes required by law to be withheld for any exercise.
SECTION FOUR - TRANSFER OF OPTION
The Option is not transferable during the life of the Optionee. Only the
Optionee shall have the right to exercise an option, unless deceased, at
which time the option may be exercised by Optionee's beneficiary (as
described in Article 12 of the Plan or by will or by the laws of descent
and distribution).
FirstEnergy Corp.
By ---------------------------
Corporate Secretary
I acknowledge receipt of this NSO Agreement and I accept and
agree with the terms and conditions stated above.
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(Signature of Optionee) (Date)
(This is XXX's Ynd grant under the Stock Option Program.)
Director's Stock Option Agreement
01/11/01
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