8-KLeadership Changes

FIRSTENERGY CORP 8-K Report, Executive Changes (Mar 20, 2012)

Filed March 20, 2012For Securities:FE

Summary

This 8-K filing details an updated Employment Agreement for FirstEnergy Corp.'s President and CEO, Anthony J. Alexander, effective March 20, 2012. The agreement extends his tenure through April 30, 2016, and outlines his continued role, compensation structure, and provisions for potential succession planning. The agreement aims to ensure leadership continuity while providing Mr. Alexander with incentives and clarity on his executive responsibilities and compensation through the specified period. Key aspects include Mr. Alexander's base salary and eligibility for short-term and long-term incentive programs, aligning with the company's compensation philosophy. Furthermore, a significant restricted stock award has been granted to enhance retention and align his interests with shareholders. The agreement also clarifies termination conditions and associated payouts, including acceleration of restricted stock vesting in certain circumstances, and includes customary non-competition and non-disparagement clauses.

Key Highlights

  • 1FirstEnergy Corp. has entered into a new Employment Agreement with President and CEO Anthony J. Alexander, effective March 20, 2012.
  • 2The agreement extends Mr. Alexander's employment through April 30, 2016.
  • 3Mr. Alexander's 2012 base salary is set at $1,340,000, with eligibility for short-term and long-term incentive programs.
  • 4A restricted stock award of 200,000 common shares has been granted, with 25% vesting on December 31, 2013, 25% on December 31, 2014, and the remaining 50% on December 31, 2015, contingent on continued employment.
  • 5The restricted stock award vests in full under specific termination conditions, including voluntary termination due to reduced compensation, termination by the Board without 'Cause', or death/disability.
  • 6The agreement allows for succession planning, where another executive may be appointed President/CEO, with Mr. Alexander potentially transitioning to an Executive Chairman or Chairman of the Board role.
  • 7Mr. Alexander's previously granted restricted stock (98,271 shares from Feb 2006) has been fully vested as of the Effective Date.

Frequently Asked Questions

The primary purpose is to secure the continued service of Mr. Alexander as President and CEO through April 30, 2016, and to outline his compensation, incentives, and responsibilities, including provisions for succession planning.

His compensation includes an annual base salary of $1,340,000 for 2012, eligibility for the Company's Short-Term and Long-Term Incentive Programs, and a restricted stock award of 200,000 shares with a phased vesting schedule.

The restricted stock award would vest in full if the agreement is terminated voluntarily by Mr. Alexander due to a reduction in his total compensation opportunity (under specific conditions), if the Board terminates the agreement without 'Cause', or in the event of his death or 'Disability'.

Yes, Mr. Alexander has agreed to subject any incentive-based compensation to claw-back provisions as required by federal securities laws. He is also subject to customary non-competition obligations during the Employment Period and for 24 months thereafter, as well as a non-disparagement obligation.