As filed with the Securities and Exchange Commission on January 24, 2003.
Registration No. 333-102074
Securities And Exchange Commission
Washington, D.C. 20549
Pre-Effective
Amendment No. 1
to
Form S-3
Registration Statement
Under
The Securities Act Of 1933
FirstEnergy Corp.
(Exact name of registrant as specified in its charter)
Ohio 34-1843785
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
76 South Main Street, Akron, Ohio 44308-1890
(800) 646-0400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Nancy C. Ashcom
Corporate Secretary
FirstEnergy Corp.
76 South Main Street
Akron, Ohio 44308-1890
(330) 384-5504
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copies to:
Lucas F. Torres, Esq.
Pillsbury Winthrop LLP
One Battery Park Plaza
New York, NY 10004-1490
(212) 858-1000
Fax: (212) 858-1500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
2
SUBJECT TO COMPLETION DATED JANUARY 24, 2003
PROSPECTUS
FIRSTENERGY CORP.
STOCK INVESTMENT PLAN
6,000,000 SHARES
COMMON STOCK
The FirstEnergy Corp. Stock Investment Plan provides a way for shareholders and
employees of FirstEnergy Corp. and its subsidiaries, as well as others, to
purchase shares of FirstEnergy's common stock. (See Question 4.) Holders of
preferred stock of our subsidiaries are also eligible to participate in the
Plan. Participants in the Plan may:
- Reinvest all or a portion of cash dividends paid on stock of
FirstEnergy or its subsidiaries that is registered in their names, as
well as any common stock credited to their Plan accounts, to purchase
shares of FirstEnergy common stock.
- Make an initial investment in FirstEnergy common stock with a cash
payment of at least $250 or, if already a shareholder or employee of
FirstEnergy or its subsidiaries, make an investment in FirstEnergy
common stock with optional cash investments at any time of at least $25
per payment. After non-shareholders or non-employees make the initial
investment, such persons can also make additional optional cash
investments of at least $25. Cash investments are limited to a maximum
of $100,000 per calendar year.
- Receive certificates for whole shares of common stock credited to
their Plan accounts upon request.
- Deposit certificates representing FirstEnergy common stock into the
Plan for safekeeping.
- Sell shares of common stock credited to their Plan accounts through
the Plan.
Cash dividends and cash investments under the Plan will be used to purchase
shares of FirstEnergy common stock which, at our option, either will be
purchased on behalf of Plan participants in the open market by Morgan Stanley &
Co. Incorporated, who we refer to as the Independent Agent, or will be newly
issued shares. (See Questions 2 and 13.) The price of shares purchased in the
open market under the Plan will be the weighted average price paid by the
Independent Agent for the shares over the purchase period. (See Question 13.)
The price of newly issued shares acquired under the Plan will be the average of
the high and low prices of FirstEnergy common stock as reported in The Wall
Street Journal's report of New York Stock Exchange Composite Transactions for
the investment date. In both cases, the purchase price will include a
transaction fee of up to $0.09 per share to cover our administrative costs and,
if shares are purchased in the open market, the fees of the Independent Agent
for its services in executing those purchases. We will receive all of the
proceeds resulting from the purchase of newly issued shares under the Plan. We
do not receive any part of the proceeds resulting from the purchase of shares in
the open market under the Plan other than the indicated portion of the
transaction fees. Our estimated annual administrative cost to operate the Plan
is $200,000. Some or all of this cost may be recovered through the transaction
fees.
Fees payable by a Plan participant will be added to the purchase price for
shares purchased, and deducted from the selling price for shares sold, under the
Plan. (See Questions 15 and 22.)
--------------------
To the extent required by applicable law in certain jurisdictions, including
Arizona, Florida, Idaho, Maine, New Jersey and North Dakota, shares of common
stock offered under the Plan to persons who are not already holders of
FirstEnergy common stock will be offered only through a registered broker/dealer
in those jurisdictions.
--------------------
This Prospectus describes the provisions of the Plan and should be retained by
participants for future reference. Shares of FirstEnergy common stock are traded
on the New York Stock Exchange under the symbol "FE."
Before you invest, you should carefully read this Prospectus and the information
referred to under the heading "Where You Can Find More Information." Also,
because investing in our common stock involves risks, you should consider the
information presented under "Risk Factors" beginning on page 1.
--------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined that this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------------
The date of this Prospectus is ______________.
3
TABLE OF CONTENTS
Page
----
RISK FACTORS.........................................................1
FORWARD-LOOKING INFORMATION..........................................7
FIRSTENERGY CORP.....................................................7
DESCRIPTION OF THE PLAN..............................................8
Purpose.........................................................8
Administration..................................................8
Participation...................................................9
Dividend Reinvestment..........................................10
Cash Investments...............................................10
Investment Dates...............................................11
Purchases......................................................11
Safekeeping Option For Common Stock Certificates...............12
Sales, Certificate Withdrawals And Closing Plan Accounts.......13
Statements To Participants.....................................14
Tax Consequences...............................................14
Other Information..............................................14
USE OF PROCEEDS.....................................................15
DESCRIPTION OF COMMON STOCK.........................................15
LEGAL MATTERS.......................................................18
EXPERTS.............................................................18
WHERE YOU CAN FIND MORE INFORMATION.................................18
i
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION NOT
CONTAINED, OR INCORPORATED BY REFERENCE, IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY FIRSTENERGY. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF FIRSTENERGY SINCE THE DATE OF THIS PROSPECTUS.
UNLESS THE CONTEXT REQUIRES OTHERWISE, REFERENCES TO "WE," "US," "OUR" AND
"FIRSTENERGY" REFER SPECIFICALLY TO FIRSTENERGY CORP. AND ITS SUBSIDIARIES.
RISK FACTORS
Before investing in our common stock, you should carefully consider the risks
described below, as well as the other information contained in this Prospectus
or incorporated by reference herein from our other filings with the Securities
and Exchange Commission, which we refer you to for more detailed information on
our business, industry, and financial and corporate structure. These are risks
we consider to be material to your decision whether to invest in our common
stock. There may be risks that you view in a different way than we do, and we
may omit a risk that we consider immaterial, but you consider important. If any
of the following risks occur, our business, financial condition or results of
operations could be materially harmed. In that case, the value or trading price
of our common stock could decline, and you could lose part or all of your
investment.
RISKS RELATED TO OUR BUSINESS
CHANGES IN COMMODITY PRICES COULD DECREASE REVENUES FROM POWER WE SELL AND
INCREASE THE COST OF POWER WE BUY.
While much of our generation serves customers under rates set by regulatory
bodies, we also purchase and sell electricity in the competitive markets.
Increases in fuel costs can affect our profit margins in both our competitive
and non-competitive markets. Changes in power prices may impact our financial
results and financial position by decreasing the amount we receive from the sale
of power or increasing the amount we pay to purchase power. Power prices may
fluctuate substantially over relatively short periods of time for a variety of
reasons and we could be particularly vulnerable if power prices rise while any
of our generating units are out of service as a result of an unscheduled outage.
Although we use derivatives to hedge electricity and natural gas purchase prices
over periods of up to three years, we could experience losses on those hedges
when the underlying commodities are delivered. These losses would affect our net
income at the time of delivery.
OUR FACILITIES MAY NOT OPERATE AS PLANNED, WHICH MAY INCREASE OUR EXPENSES OR
DECREASE OUR REVENUES AND, THUS, HAVE AN ADVERSE EFFECT ON OUR FINANCIAL
PERFORMANCE.
Operation of power plants involves many risks, including the breakdown or
failure of equipment or processes, accidents, labor disputes, fuel interruption
and performance below expected levels. In addition, weather-related incidents
and other natural disasters can disrupt generation, transmission and
distribution delivery systems. Operation of our power plants below expected
capacity levels could result in lost revenues or increased expenses, including
higher maintenance costs and, if we are unable to perform our contractual
obligations, penalties or damages may result.
WE MAY NOT BE ABLE TO OBTAIN ADEQUATE FUEL SUPPLIES, WHICH COULD ADVERSELY
AFFECT OUR ABILITY TO OPERATE OUR FACILITIES.
We purchase fuel from many suppliers. Disruption in the delivery of fuel,
including disruptions as a result of weather, labor relations or environmental
regulations affecting our fuel suppliers, could adversely affect our ability to
operate our facilities, and thus, our results of operations.
RISKS RELATED TO OUR INDUSTRY
1
WE ARE SUBJECT TO COMPLEX AND CHANGING GOVERNMENT REGULATIONS THAT MAY REQUIRE
INCREASED EXPENSE AND/OR CHANGES IN BUSINESS STRATEGY THAT COULD HAVE A NEGATIVE
IMPACT ON THE RESULTS OF OPERATIONS OF FIRSTENERGY AND OUR SUBSIDIARIES.
We are subject to comprehensive regulation by various federal, state and local
regulatory agencies that significantly influences our operating environment. We
are required to have numerous permits, approvals and certificates from the
agencies that regulate our business. We believe the necessary permits, approvals
and certificates have been obtained for our existing operations and that our
business is conducted in accordance with applicable laws; however, we are unable
to predict the impact on our operating results from the future regulatory
activities of any of these agencies. Changes in or reinterpretations of existing
laws or regulations or the imposition of new laws or regulations may require us
to incur additional expenses or change the way we run our businesses, and
therefore have an adverse impact on our results of operations.
As a registered public utility holding company, we are subject to regulation by
the SEC under the Public Utility Holding Company Act of 1935. The SEC has
determined that our electric facilities constitute a single integrated public
utility system under the standards of the Holding Company Act. The Holding
Company Act regulates us with respect to accounting, the issuance of securities,
the acquisition and sale of utility assets, securities or any other interest in
any business, and entering into, and performance of, service, sales and
construction contracts among our subsidiaries, and certain other matters. The
Holding Company Act also limits the extent to which we may engage in non-utility
businesses or acquire additional utility businesses. Each of our operating
utility subsidiaries' retail rates, conditions of service, issuance of
securities and other matters are subject to regulation in the state in which it
operates - in Ohio by the Public Utilities Commission of Ohio, in New Jersey by
the New Jersey Board of Public Utilities and in Pennsylvania by the Pennsylvania
Public Utility Commission. With respect to their wholesale and interstate
electric operations and rates, those subsidiaries are subject to regulation,
including regulation of their accounting policies and practices, by the Federal
Energy Regulatory Commission. Under Ohio law, municipalities may regulate rates,
subject to appeal to the Public Utilities Commission of Ohio if not acceptable
to the utility. In addition, our subsidiary American Transmission Systems
Incorporated, is subject to regulation by the Federal Energy Regulatory
Commission with respect to its rates and operation of interstate transmission.
Decisions by any of these regulatory bodies could affect us adversely for the
reasons described above.
RESTRUCTURING AND DEREGULATION IN THE ELECTRIC UTILITY INDUSTRY MAY RESULT IN
INCREASED COMPETITION AND UNRECOVERABLE COSTS THAT COULD ADVERSELY AFFECT OUR
AND OUR UTILITY SUBSIDIARIES' BUSINESS AND RESULTS OF OPERATIONS.
As a result of the actions taken by state legislative bodies over the last few
years, major changes in the electric utility business are occurring in parts of
the United States, including Ohio, New Jersey and Pennsylvania, where our
utility subsidiaries operate. These changes have resulted in fundamental
alterations in the way integrated utilities and holding company systems, like
ours, conduct their business.
Increased competition resulting from restructuring efforts could have a
significant, adverse financial impact on us and our utility subsidiaries and
consequently on our results of operations. Increased competition could result in
increased pressure to lower prices, including the price of electricity. Retail
competition and the unbundling of regulated electric service could have a
significant, adverse financial impact on us and our subsidiaries due to
potential impairment of assets, a loss of retail customers, lower profit margins
or increased costs of capital. We cannot predict the extent and timing of entry
by additional competitors into the electric markets.
In Ohio, New Jersey and Pennsylvania, laws applicable to electric industry
restructuring and the respective state regulatory plans of our operating
electric utility subsidiaries in those states include provisions:
- establishing provider-of-last-resort, or PLR, obligations for
customers who have not selected other suppliers in those subsidiaries'
service areas,
- allowing customers to select other generation suppliers, and
- deregulating those subsidiaries' electric generation businesses.
Under their respective PLR obligations our regulated utility
subsidiaries are required to provide electric service to customers who have not
selected other suppliers at capped rates, which may be below current market
rates and may not have any relationship to our cost of supplying this power. To
satisfy PLR obligations in their
2
respective service areas during applicable transition periods, our regulated
utility subsidiaries source power either from electricity supplied through our
competitive energy services subsidiary, FirstEnergy Solutions Corp., or from
grandfathered wholesale and non-utility generator contracts. FirstEnergy
Solutions in turn obtains power from generation assets owned or leased by
FirstEnergy Generation Corp., or through open market purchases. Because PLR
rates are capped, we bear the risks associated with increases in the costs of
procuring such power, whether those increases are experienced directly by us
through fuel price increases, increased costs of environmental compliance or
generating unit outages, or reflected in the market prices we must pay for
purchased power. In addition, increases in these costs can no longer be
recovered from customers as was permitted prior to state restructuring. If these
costs were to increase significantly and prove unrecoverable, our profit margins
may significantly decrease and adversely affect our results of operations and
business.
Our PLR customers may choose to purchase power from alternative unaffiliated
suppliers. Should they choose to switch from us, our revenues from power sales
would decrease. On the other hand, customers originally choosing alternative
unaffiliated suppliers may switch back to us, which may increase demand above
our available generation or contractual capacity and force us to purchase
additional power on the open market at potentially unfavorable prices. Switching
by customers as permitted by the state laws referred to above, therefore, could
have an adverse effect on our results of operations and financial position.
Conversely, to the extent power we sell to meet our PLR obligations could have
been sold to third parties at more favorable wholesale prices, we will have
incurred potentially significant lost opportunity costs.
In addition, our Ohio transition plan stipulation also granted preferred access
over our Ohio utility subsidiaries to unaffiliated marketers, brokers and
aggregators to 1,120 MW of our generation capacity through 2005 at established
prices for sales to suppliers serving the retail customers of our Ohio utility
subsidiaries. To the extent any of that capacity is used by unaffiliated
parties, we may incur potentially significant lost opportunity costs if we could
have sold such capacity at more favorable wholesale prices or used it in
satisfaction of PLR obligations in preference to higher priced purchased power
obtained for that purpose.
THE DIFFERENT REGIONAL POWER MARKETS IN WHICH WE COMPETE OR WILL COMPETE IN THE
FUTURE HAVE CHANGING TRANSMISSION REGULATORY STRUCTURES, WHICH COULD AFFECT OUR
PERFORMANCE IN THESE REGIONS.
Our results are likely to be affected by differences in the market and
transmission regulatory structures in various regional power markets. Problems
or delays that may arise in the formation and operation of new regional
transmission organizations, or RTOs, may restrict our ability to sell power
produced by our generating capacity to certain markets if there is insufficient
transmission capacity otherwise available. The rules governing the various
regional power markets may also change from time to time, which could affect our
costs or revenues. Because it remains unclear which companies will be
participating in the various regional power markets, or how RTOs will develop or
what regions they will cover, we are unable to assess fully the impact that
transmission requirements may have on our business.
Management is unable to predict the outcome of these transmission regulatory
actions and proceedings or their impact on the timing and operation of RTOs, our
transmission operations or future results of operations and cash flows.
WE ARE EXPOSED TO RISKS OF NUCLEAR GENERATION, WHICH INVOLVE ISSUES AND
UNCERTAINTIES RELATING TO HEALTH AND SAFETY, THE ADEQUACY OF INSURANCE COVERAGE
AND NUCLEAR PLANT DECOMMISSIONING.
We currently have interests in four nuclear generating units operated by our
subsidiary, FirstEnergy Nuclear Operating Company: Beaver Valley Power Station
Units 1 and 2; Davis-Besse Nuclear Power Station; and Perry Nuclear Power Plant
Unit 1. We are, therefore, subject to the risks of nuclear generation, which
include the following:
- the potential harmful effects on the environment and human health
resulting from the operation of nuclear facilities and the storage,
handling and disposal of radioactive materials;
- limitations on the amounts and types of insurance commercially
available to cover losses that might arise in connection with our
nuclear operations or those of others in the United States;
- uncertainties with respect to contingencies and assessment amounts if
insurance coverage is inadequate; and
3
- uncertainties with respect to the technological and financial aspects
of decommissioning nuclear plants at the end of their licensed
operation.
The Nuclear Regulatory Commission, or NRC, has broad authority under federal law
to impose licensing and safety-related requirements for the operation of nuclear
generation facilities. In the event of non-compliance, the NRC has the authority
to impose fines or shut down a unit, or both, depending upon its assessment of
the severity of the situation, until compliance is achieved. Revised safety
requirements promulgated by the NRC could necessitate substantial capital
expenditures at nuclear plants, including ours.
On April 30, 2002, the NRC initiated a formal inspection process at the
Davis-Besse nuclear plant. This action was taken in response to corrosion we
found in the reactor vessel head near the nozzle penetration hole during a
refueling outage in the first quarter of 2002. The purpose of the formal
inspection process is to establish criteria for NRC oversight of the licensee's
performance and to provide a record of the major regulatory and licensee actions
taken, and technical issues resolved, leading to the NRC's approval of restart
of the plant. As a result, the plant continues to remain offline. We expect to
complete refurbishment and installation of the replacement reactor head as well
as any other work related to restart of the plant early in 2003. The NRC must
authorize restart of the plant following its formal inspection process before
the unit can be returned to service. More details of the repair costs incurred
through 2002 are contained in our quarterly reports on Form 10-Q, as well as our
current reports on Form 8-K filed with the SEC (see "Where You Can Find More
Information").
Any of our plants could experience a serious nuclear incident at any time. If
such an incident did occur, it could cause us to incur significant repair and
replacement power expenses, which could adversely affect our results of
operations or financial condition. In addition, a major incident at any nuclear
facility anywhere in the world could cause the NRC to limit or prohibit the
operation or licensing of any domestic nuclear unit. Any such action could
require us to purchase replacement power on the open market. Depending on
prevailing market prices for replacement power, our financial condition, cash
flows and results of operations could be materially adversely affected if this
were to occur.
In addition, under the public liability insurance provided pursuant to the Price
Anderson Act, we could be required to pay additional amounts in the event that
losses in excess of private insurance occur as a result of a nuclear incident at
any U.S. nuclear unit. As members of Nuclear Electric Insurance Limited, or
NEIL, our subsidiaries owning or leasing interests in a nuclear facility are
also subject to assessments under the insurance policies that cover replacement
power costs in the event of an extended outage at any NEIL member company's
nuclear facility if losses exceed the accumulated funds available to the
insurer.
OUR OPERATING RESULTS ARE AFFECTED BY WEATHER CONDITIONS AND MAY FLUCTUATE ON A
SEASONAL AND QUARTERLY BASIS.
Weather conditions directly influence the demand for electric power. In our
service territories, demand for power peaks during the hot summer months, with
market prices also typically peaking at that time. As a result, our overall
operating results may fluctuate on a seasonal and quarterly basis. In addition,
we have historically sold less power, and consequently earned less revenue, when
weather conditions are milder. Severe weather, such as tornadoes, hurricanes,
storms and droughts, may cause outages and property damage which may require us
to incur additional expenses. The effect of the failure of our facilities to
operate as planned, as described above, would be particularly burdensome during
a peak demand period.
CHANGES IN TECHNOLOGY MAY SIGNIFICANTLY AFFECT OUR BUSINESS BY MAKING OUR POWER
PLANTS LESS COMPETITIVE.
A key element of our business model is that generating power at central power
plants achieves economies of scale and produces power at relatively low cost.
There are other technologies that produce power, most notably fuel cells,
microturbines, windmills and photovoltaic (solar) cells. It is possible that
advances in technology could reduce the cost of alternative methods of producing
power to a level that is competitive with that of most central power station
electric production. If this were to happen and if these technologies achieved
economies of scale, the value of our power plants could be reduced and, unless
we also developed these technologies, our market share could be eroded. Changes
in technology could also alter the channels through which retail electric
customers buy power, thereby potentially decreasing demand for our product and
harming our financial results.
OUR COSTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS ARE SIGNIFICANT, AND THE COST OF
COMPLIANCE WITH FUTURE ENVIRONMENTAL LAWS COULD HARM OUR CASH FLOW AND
PROFITABILITY.
4
Our operations are subject to extensive federal, state and local environmental
statutes, rules and regulations relating to air quality, water quality, waste
management, natural resources and health and safety. Compliance with these legal
requirements requires us to commit significant capital toward environmental
monitoring, installation of pollution control equipment, emission fees and
permits at all of our facilities. These expenditures have been significant in
the past and we expect that they will increase in the future. If the costs of
compliance with existing environmental regulations were to increase, it could
harm our industry, our business and our results of operations and financial
position. Moreover, environmental laws are constantly subject to change, which
may materially increase our costs of compliance or accelerate the timing of
these capital expenditures, especially if emission and/or discharge limits are
tightened, more extensive permitting requirements are imposed, additional
substances become regulated and the number and types of our operating assets
subject to such regulation increase.
Our compliance strategy, although reasonably based on the information available
to us today, may not successfully address the relevant standards and
interpretations of the future.
GOVERNMENTAL AUTHORITIES MAY ASSESS PENALTIES ON US FOR FAILURES TO COMPLY WITH
ENVIRONMENTAL LAWS AND REGULATIONS.
If we fail to comply with environmental laws and regulations, even if caused by
factors beyond our control, that failure may result in the assessment of civil
or criminal penalties and fines against us. Recent lawsuits by the U.S.
Environmental Protection Agency and various states filed against us highlight
the environmental risks faced by generating facilities, in general, and
coal-fired generating facilities, in particular.
In 1999 and 2000, the EPA issued Notices of Violation or a Compliance Order to
nine utilities covering 44 power plants, including our W. H. Sammis Plant. In
addition, the U.S. Department of Justice filed eight civil complaints against
various investor-owned utilities, which included a complaint against Ohio Edison
Company and Pennsylvania Power Company in the U.S. District Court for the
Southern District of Ohio. The Notices of Violation and complaint allege
violations of the Clean Air Act based on operation and maintenance of the Sammis
Plant dating back to 1984. The complaint requests permanent injunctive relief to
require the installation of "best available control technology" and civil
penalties of up to $27,500 per day of violation. Although unable to predict the
outcome of these proceedings, we believe the Sammis Plant is in full compliance
with the Clean Air Act and the Notices of Violation and complaint are without
merit. Nevertheless, penalties could be imposed if the Sammis Plant continues to
operate without correcting the alleged violations and a court determines that
the allegations are valid. The Sammis Plant continues to operate while these
proceedings are pending.
If these actions are resolved against us, substantial modifications of our
existing coal-fired power plants may be required. In addition, we could be
required to invest significantly in additional emission control equipment,
accelerate the timing of capital expenditures, pay penalties and/or halt
operations - costs which in most cases will not be recoverable through rates as
they once might have been. Moreover, our results of operations and financial
position could be reduced due to the consequent reallocation of management
resources and the expense of ongoing litigation.
RISKS RELATED TO OUR FINANCIAL AND CORPORATE STRUCTURE
OUR BUSINESS IS DEPENDENT ON OUR ABILITY TO SUCCESSFULLY ACCESS CAPITAL MARKETS.
OUR INABILITY TO ACCESS CAPITAL MAY LIMIT OUR ABILITY TO EXECUTE OUR BUSINESS
PLAN OR PURSUE IMPROVEMENTS.
We rely on access to both short-term money markets and longer-term capital
markets as a source of liquidity for capital requirements not satisfied by the
cash flow from our operations. If we are not able to access capital at
competitive rates, our ability to execute our strategy will be adversely
affected. Certain market disruptions or a downgrade of our credit rating may
increase our cost of borrowing or adversely affect our ability to access one or
more financial markets. Such disruptions could include:
- further economic downturns;
- the bankruptcy of an unrelated energy company;
- capital market conditions generally;
- market prices for electricity and gas;
5
- terrorist attacks or threatened attacks on our facilities; or
- the overall health of the utility industry.
Restrictions on our ability to access financial markets may affect our ability
to execute our business plan as scheduled. An inability to access capital may
limit our ability to pursue improvements or acquisitions that we may otherwise
rely on for future growth.
INCREASES IN OUR DEBT-TO-EQUITY RATIO, COMMONLY REFERRED TO AS LEVERAGE, COULD
ADVERSELY AFFECT OUR COMPETITIVE POSITION, BUSINESS PLANNING AND FLEXIBILITY,
FINANCIAL CONDITION, ABILITY TO SERVICE OUR DEBT OBLIGATIONS AND TO PAY
DIVIDENDS ON OUR COMMON STOCK, AND ABILITY TO ACCESS CAPITAL ON FAVORABLE TERMS.
Our cash requirements arise primarily from the capital-intensive nature of our
electric utilities. In addition to operating cash flows, we rely heavily on our
short-term credit facilities and long-term debt. Our credit lines impose various
limitations that could impact our liquidity and result in a significant adverse
impact on our business strategy and our ongoing financing needs. Changes in
economic conditions could result in higher interest rates, which would increase
our interest expense on our floating rate debt and reduce funds available to us
for our current plans. Additionally, an increase in our leverage could adversely
affect us by:
- increasing the cost of future debt financing;
- prohibiting the payment of dividends on our common stock or adversely
impacting our ability to pay such dividends at the current rate;
- making it more difficult for us to satisfy our existing financial
obligations;
- limiting our ability to obtain additional financing, if needed, for
working capital, acquisitions, debt service requirements or other
purposes;
- increasing our vulnerability to adverse economic and industry
conditions;
- requiring us to dedicate a substantial portion of our cash flow from
operations to payments on our debt, which would reduce funds available
to us for operations, future business opportunities or other purposes;
and
- limiting our flexibility in planning for, or reacting to, changes in
our business and the industry in which we compete.
A DOWNGRADE IN OUR CREDIT RATING COULD NEGATIVELY AFFECT OUR ABILITY TO ACCESS
CAPITAL.
Standard & Poor's and Moody's Investors Service rate our senior, unsecured debt
at BBB- and Baa2, respectively. These ratings indicate the agency's assessment
of our ability to pay interest, distributions and principal on these securities.
If Moody's or Standard & Poor's were to downgrade our long-term rating,
particularly below investment grade, our borrowing costs would increase which
would diminish our financial results. In addition, we would likely be required
to pay a higher interest rate in future financings, and our potential pool of
investors and funding sources could decrease. We may also be forced to issue
additional equity, which would have a dilutive effect on our equity holders and
our earnings-per-share results.
Various energy supply contracts contain credit enhancement provisions in the
form of cash collateral or letters of credit in the event of a reduction in
credit rating below investment grade. Requirements of these provisions vary and
typically require more than one rating reduction to fall below investment grade
by Standard & Poor's or Moody's to trigger additional collateralization by us.
As of September 30, 2002, rating-contingent collateralization totaled $23.3
million. We monitor these collateralization provisions and update our total
exposure monthly.
OUR CASH FLOW, ABILITY TO PAY DIVIDENDS AND ABILITY TO MEET DEBT OBLIGATIONS
LARGELY DEPEND ON THE PERFORMANCE OF OUR SUBSIDIARIES AND AFFILIATES
We are a holding company and conduct our operations primarily through
subsidiaries. Substantially all of our consolidated assets are held by such
subsidiaries. Accordingly, our cash flow, our ability to pay dividends on our
6
common stock and our ability to meet our obligations to creditors are largely
dependent upon the earnings of these subsidiaries and the distribution or other
payment of such earnings to us in the form of dividends. The subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due on any debt or equity securities that we issue or to make any funds
available for such payment.
Because we are a holding company, our unsecured obligations will be effectively
subordinated to all existing and future liabilities of our subsidiaries.
Therefore, our rights and the rights of our shareholders and creditors to
participate in the assets of any subsidiary in the event that such a subsidiary
is liquidated or reorganized, will be subject to the prior claims of the
subsidiary's creditors. To the extent that we may ourselves be a creditor with
recognized claims against any such subsidiary, our claims would still be
effectively subordinated to any security interest in, or mortgages or other
liens on, the assets of the subsidiary and would be subordinated to any
indebtedness or other liabilities of the subsidiary senior to that held by us.
Although certain agreements to which we and our subsidiaries are parties limit
the ability to incur additional indebtedness, we and our subsidiaries retain the
ability to incur substantial additional indebtedness and other liabilities.
FORWARD-LOOKING INFORMATION
This Prospectus includes forward-looking statements based on information
currently available to management. Such statements are subject to certain risks
and uncertainties. These statements typically contain, but are not limited to,
the terms "anticipate", "potential", "expect", "believe", "estimate" and similar
words. Actual results may differ materially due to the speed and nature of
increased competition and deregulation in the electric utility industry,
economic or weather conditions affecting future sales and margins, changes in
markets for energy services, changing energy and commodity market prices,
legislative and regulatory changes (including revised environmental
requirements), the availability and cost of capital, ability to accomplish or
realize anticipated benefits from strategic initiatives and other similar
factors.
FIRSTENERGY CORP.
FirstEnergy Corp. was organized under the laws of the State of Ohio in 1996. On
November 7, 2001, we merged with GPU, Inc. and we were the surviving company. As
a result of the merger, we became and continue to be subject to regulation by
the SEC under the Holding Company Act. Our principal business is the holding,
directly or indirectly, of all of the outstanding common stock of our principal
electric utility operating subsidiaries, Ohio Edison Company, The Cleveland
Electric Illuminating Company, Pennsylvania Power Company, The Toledo Edison
Company, Jersey Central Power & Light Company, Metropolitan Edison Company and
Pennsylvania Electric Company. Our other principal operating subsidiaries
include American Transmission Systems, Incorporated; FirstEnergy Solutions
Corp.; FirstEnergy Facilities Services Group, LLC; MYR Group, Inc.; MARBEL
Energy Corporation; FirstEnergy Nuclear Operating Company; GPU Capital, Inc.;
and GPU Power, Inc. American Transmission Systems owns and operates transmission
facilities located within the service areas of Ohio Edison, Cleveland Electric,
Toledo Edison and Penn Power. FirstEnergy Solutions provides energy-related
products and services and, through its FirstEnergy Generation Corp. subsidiary,
operates our non-nuclear generation business. FirstEnergy Nuclear Operating
operates the electric utility subsidiaries' nuclear generating facilities.
FirstEnergy Facilities Services Group is the parent company of several heating,
ventilating, air conditioning and energy management companies, and MYR is a
utility infrastructure construction service company. MARBEL is a fully
integrated natural gas company. GPU Capital, Inc. owns and operates electric
distribution systems in foreign countries and GPU Power, Inc. owns and operates
generation facilities in foreign countries.
Our consolidated revenues are primarily derived from electric service provided
by our electric utility subsidiaries. The combined service areas of our electric
utility operating subsidiaries encompass approximately 37,200 square miles in
Ohio, Pennsylvania and New Jersey. The areas they serve have a combined
population of approximately 11.0 million.
As of September 30, 2002, Ohio Edison, Cleveland Electric, Penn Power and Toledo
Edison had 12,980 megawatts (MW) of generation capacity to meet customer needs.
Pursuant to our corporate separation plan implemented under Ohio utility
restructuring legislation, we transferred operational control of the non-nuclear
generation assets of those operating subsidiaries to FirstEnergy Generation as
of January 1, 2001. We expect that the transfer of ownership of those assets to
FirstEnergy Generation will be completed by December 31, 2005, the end of the
legislation's market development period.
As a result of restructuring legislation in Pennsylvania and New Jersey, GPU had
divested essentially all of its generation assets prior to the time we agreed to
merge with GPU in August 2000. However, Pennsylvania and
7
New Jersey restructuring orders require Jersey Power, Pennsylvania Electric and
Metropolitan Edison, operating subsidiaries of ours that were formerly owned by
GPU, to act as providers of last resort by supplying electricity to customers
who do not choose an alternate supplier. Jersey Power's obligation in New Jersey
is removed for the period through July 2003 as a result of a regulatory approved
auction. Pennsylvania Electric's and Metropolitan Edison's obligations in
Pennsylvania extend through 2010. Effective September 1, 2002, Metropolitan
Edison and Pennsylvania Electric assigned their provider of last resort (PLR)
responsibility to an affiliate company, FirstEnergy Solutions, through a
wholesale power sale. The PLR sale runs through the end of 2002 and will be
automatically extended for each successive calendar year unless any party elects
to cancel the agreement by November 1 of the preceding year. Under the terms of
the wholesale agreement, FirstEnergy Solutions assumes the supply obligation and
the energy supply profit and loss risk for the portion of power supply
requirements not self-supplied by Metropolitan Edison and Pennsylvania Electric
under their non-utility generation (NUG) contracts and other existing power
contracts with nonaffiliated third party suppliers. This arrangement reduces
Metropolitan Edison's and Pennsylvania Electric's exposure to high wholesale
power prices by providing power below the shopping credit for their uncommitted
PLR energy costs during the term of the agreement to FirstEnergy Solutions.
Metropolitan Edison and Pennsylvania Electric will continue to defer those cost
differences between NUG contract rates and the rates reflected in their capped
generation rates.
Our principal executive office is located at 76 South Main Street, Akron, Ohio
44308-1890; telephone: (330) 646-0400.
DESCRIPTION OF THE PLAN
The following questions and answers describe the terms and conditions of the
Plan. We suggest that you keep this Prospectus for future reference.
PURPOSE
1. Q. What is the purpose of the Plan?
A. The purpose of the Plan is to provide shareholders and employees
of FirstEnergy and its subsidiaries, as well as others, a way to
purchase shares of FirstEnergy common stock. Purchases can be made
by investing cash and/or reinvesting cash dividends.
ADMINISTRATION
2. Q. Who administers the Plan?
A. We administer the Plan. This includes keeping the Plan records and
serving as custodian for shares held in the Plan. If we elect to
meet the purchase requirements of participants through purchases
of shares of common stock in the open market, funds for investment
will be deposited promptly into an escrow account for the benefit
of Plan participants. An Independent Agent appointed by us will
then act on behalf of participants in buying shares. The
Independent Agent, or such other registered securities broker
designated by us, will sell Plan shares on behalf of participants.
The Independent Agent is not an affiliate of FirstEnergy or our
subsidiaries. No affiliate of ours will exercise any direct or
indirect control or influence over (a) the times when, or the
prices at which, the Independent Agent purchases shares for the
Plan, (b) the amount of the securities to be purchased, (c) the
manner in which the securities are to be purchased, or (d) the
selection of a broker or dealer (other than the Independent Agent
itself) through which the purchase may be executed. We will not
change more than once, in any three-month period, the source of
the shares to fund the plan, the basis for determining the amount
of our contributions to the Plan or the basis for determining the
frequency of our allocations to the Plan, or any formula specified
in the Plan that determines the amount or timing of securities to
be purchased by the Independent Agent.
We reserve the right to interpret and regulate the Plan as deemed
necessary or desirable. Neither FirstEnergy nor our Independent
Agent will be liable for any act done in good faith or for any
omission to act in good faith, including, without limitation, any
claim of liability arising out of failure to close a participant's
account upon the participant's death prior to receipt of written
notice of such death, or with respect to the prices at which
shares of common stock are purchased or sold for the participant's
account and the times when such purchases and sales are made, or
with respect to any loss or
8
fluctuation in the market value after the purchase or sale of such
shares. However, we shall not be relieved from any liability
imposed under any federal, state or other applicable securities
law that cannot be waived.
3. Q. Who should I contact with questions concerning the Plan or
FirstEnergy?
A. You may call our Investor Services toll-free at (800) 736-3402 or
visit our Web site at www.firstenergycorp.com. You may also write
to us at the following address:
FIRSTENERGY CORP.
INVESTOR SERVICES
76 SOUTH MAIN STREET
AKRON, OH 44308-1890
PARTICIPATION
4. Q. Who is eligible to participate in the Plan?
A. All registered shareholders and employees of FirstEnergy and its
subsidiaries, including holders of preferred stock of
subsidiaries, are eligible to participate. In addition, any person
or entity who is not a registered shareholder or employee is
eligible to participate provided that in the case of citizens or
residents of a country other than the United States, its
territories and possessions, their participation would not violate
local laws applicable to FirstEnergy, the Plan or the participant.
5. Q. How do I enroll in the Plan or change my method of participation?
A. SHAREHOLDERS - Current registered shareholders can enroll by
completing and signing a Plan Enrollment Form.
EMPLOYEES - Employees can enroll by completing and signing a Plan
Enrollment Form/Payroll Deduction Authorization Form. If voluntary
payroll deductions are not desired, this form must be accompanied
by a cash payment.
OTHER PERSONS OR ENTITIES - If you are not a registered
shareholder or employee, you can enroll by making an initial cash
investment of at least $250 and completing and signing a Plan
Enrollment Form. The Plan Enrollment Form provides information
necessary to open an account, such as the stock registration
desired, address and taxpayer identification number.
You may change your method of participation at any time by
completing and signing another Plan Enrollment Form. In the case
of an employee who is using payroll deductions to invest in the
Plan, the amount of the deduction can be changed or canceled by
completing and signing another Plan Enrollment Form/Payroll
Deduction Authorization Form.
6. Q. What dividend payment options are provided under the Plan?
A. The Plan provides complete flexibility in regard to how dividends
are paid. You are asked to provide payment instructions by
completing both Parts (A) and (B) of the Dividend Reinvestment and
Payment Instructions Section of the Plan Enrollment Form. Part (A)
contains payment instructions for shares that are held by you in
certificate form. Part (B) contains payment instructions for
shares that are held by us in an account for you. Dividend payment
options are as follows:
REINVEST DIVIDENDS ON ALL SHARES - All dividends are reinvested to
purchase shares of FirstEnergy common stock.
PAY CASH DIVIDENDS ON ALL SHARES - All dividends are paid in cash.
PAY CASH DIVIDENDS ON PORTION OF SHARES - You may elect to have a
portion of dividends paid in cash and reinvest the remaining
dividends to purchase shares of FirstEnergy common stock by
selecting the number of shares, the percent, or the dollar amount
of dividends to be paid in cash.
9
If you elect to receive all or a portion of your dividends in
cash, your cash dividends may be deposited directly into your
checking, savings or credit union account at any financial
institution that accepts electronic direct deposits. Receiving
your payments by direct deposit ensures that the funds will be
deposited into your bank account on the payment date. If you are
interested in direct deposit of dividends, you should complete the
appropriate section on the Plan Enrollment Form or call Investor
Services for a Direct Deposit Authorization Form.
7. Q. When must my Plan Enrollment Form be received by FirstEnergy?
A. For dividends to be reinvested, your Plan Enrollment Form must be
received by FirstEnergy on or before the record date for the
dividend payment; otherwise, reinvestment of dividends will start
with the next succeeding dividend payment. The dividend record and
payment dates for preferred stock dividends vary and can be
obtained by contacting Investors Services. The dividend record and
payment dates for common stock dividends, which must be declared
by the Board of Directors, are expected to be as follows:
Record dates - Fifth business day of February, May, August,
November
Payment dates - March 1, June 1, September 1, December 1
For initial cash investments, a properly completed Plan Enrollment
Form and the initial cash payment must be received by FirstEnergy
prior to a cash Investment Date, which are the 1st and 15th day of
each month. Otherwise, the investment will be made on the next
succeeding cash Investment Date. See Question 11 for additional
information.
DIVIDEND REINVESTMENT
8. Q. What is meant by dividend reinvestment?
A. If you elect to reinvest all or a portion of your dividends, we
will take those dividends and purchase shares of FirstEnergy
common stock for you. The amount reinvested will be reduced by (1)
any amount that is required to be withheld under any applicable
tax or other statutes and (2) applicable transaction fees. See the
"Purchases" section for more detailed information.
CASH INVESTMENTS
9. Q. Who is eligible to make cash investments?
A. All persons and entities that are eligible to participate in the
Plan are eligible to make cash investments. See Question 4 for
Plan eligibility requirements.
10. Q. What are the minimum and maximum cash investments?
A. If you are not a registered shareholder or employee of FirstEnergy
or its subsidiaries, the initial cash investment must be at least
$250.
If you are a registered shareholder or employee of FirstEnergy or
its subsidiaries, the minimum cash investment is $25 per payment;
however, for employees who elect to use payroll deduction to make
cash investments, the minimum deduction is $10.
The maximum amount of cash investments is $100,000 per calendar
year.
11. Q. How do I make a cash investment?
A. If you are not a current Plan participant, you must enclose a
check with your Plan Enrollment Form.
If you are a current Plan participant, you can make a cash
investment by sending a check or by signing up for automatic
electronic investments as discussed below. When sending a check,
you should attach a cash investment form, which is attached to
your Plan statements. You may also send a check without
10
a cash investment form; however, your stock registration or tax
identification number should be included on your check for account
identification purposes, along with a cover letter requesting that
the check be used to purchase common stock of FirstEnergy. If you
are sending a cash payment to open a new account, you must send a
letter of instruction providing the name, address and tax
identification number (include an IRS Form W-9) for the new
account.
All checks should be made payable to "FirstEnergy Corp." and sent
to FirstEnergy Investor Services at 76 South Main Street, Akron,
OH 44308-1890. For the protection of participants, we discourage
sending cash or endorsed second-party checks. Cash investments
received from foreign shareholders must be in United States
dollars.
You may authorize monthly automatic electronic cash investments by
completing the appropriate section on the Enrollment Form or by
completing an Automatic Electronic Investment Authorization Form
available from Investor Services. This enables you to make regular
investments, if you choose, without the inconvenience of writing
and mailing checks. If you authorize automatic electronic cash
investments, funds will be withdrawn from your bank or credit
union account around the 25th day of each month and will be
invested on the next Investment Date following the withdrawal.
Your bank, savings association or credit union must be a member of
the National Automated Clearinghouse Association. You may change
the amount automatically withdrawn or the financial institution at
any time by completing a new Automatic Electronic Investment
Authorization Form, and you may stop automatic electronic cash
investments by notifying Investor Services in writing.
Cash investments, pending purchase of common stock through the
Plan, will be credited to your Plan account and held in a bank
account separate from funds of FirstEnergy. No interest will be
paid to you on cash held for investment.
You may request the return of a cash investment upon written
request received by FirstEnergy not later than 48 hours prior to
the applicable Investment Date.
INVESTMENT DATES
12. Q. When are the Investment Dates for Plan purchases?
A. Investment Dates for reinvested dividends are the dividend payment
dates. Payment dates for common stock dividends are expected to be
March 1, June 1, September 1 and December 1. Payment dates for
preferred stock dividends can be obtained by contacting Investor
Services. Investment Dates for cash investments are the 1st and
15th day of each month. A cash investment must be received by
FirstEnergy by the business day before the Investment Date in
order to be invested on such Investment Date. Otherwise, the cash
investment will be held by FirstEnergy and invested on the next
Investment Date.
In order to receive dividends on shares of common stock purchased
with a cash investment, the shares must be purchased on an
Investment Date prior to the dividend record date. Record dates
for common stock dividends are expected to be the fifth business
day of February, May, August and November.
PURCHASES
13. Q. What is the price of shares purchased under the Plan?
A Reinvested dividends and cash investments will be used to purchase
shares of FirstEnergy common stock which, at the option of
FirstEnergy, will be either purchased on behalf of Plan
participants in the open market by an Independent Agent appointed
by FirstEnergy or newly issued shares. When shares are purchased
in the open market, the purchase price per share will be the
weighted average price of the aggregated shares purchased by the
Independent Agent during the purchase period plus a transaction
fee which is not expected to exceed $.09 per share. The purchase
period may begin three business days before the Investment Date,
if the Independent Agent so elects, and should be completed no
more than ten days after the Investment Date, although it could be
longer. The length of the purchase period is affected by the
amount of funds to be invested, the availability of shares in the
open market, and market conditions. Purchases of shares pursuant
to cash payments will be
11
completed no later than 30 days after receipt of cash payments.
The Independent Agent will combine the funds of all participants
for the purpose of executing purchase transactions.
When shares to be purchased are satisfied by newly issued shares,
the price will be the average of the high and low prices of
FirstEnergy's common stock, as reported in The Wall Street
Journal's report of New York Stock Exchange Composite
Transactions, for the Investment Date (or the next preceding day
on which FirstEnergy common stock is traded on the New York Stock
Exchange, if it is not traded on the Investment Date), plus a
transaction fee which is not expected to exceed $.09 per share.
The determination of the source of shares of common stock to be
used for purchases under the Plan will be solely based on
FirstEnergy's need to increase equity capital. If FirstEnergy does
not need to raise funds externally or if the need for funds is
satisfied using sources other than the issuance of new shares
through the Plan, shares of common stock purchased for
participants under the Plan will be purchased in the open market.
As of the date of this Prospectus, shares of common stock
purchased for participants under the Plan are being purchased in
the open market. We will not change more than once in any
three-month period the source of the purchase of the shares.
If shares cannot be purchased with respect to an Investment Date
due to the inability to purchase shares during the purchase
period, or if such purchase is deemed to be otherwise inadvisable
by FirstEnergy or the Independent Agent, the dividends and cash
investments which otherwise would have been invested will be paid
or returned, as the case may be, by the Company issuing checks to
the affected participants without interest.
14. Q. How many shares of common stock will be purchased?
A. The number of shares (including any fraction of a share) of common
stock purchased for you will be determined by dividing the total
amount of the cash dividend and/or cash investment to be invested
for you on the Investment Date by the purchase price. All shares
purchased under the Plan are held by FirstEnergy and credited to
your Plan account until such time as you request the withdrawal of
shares from your Plan account. Because only the Independent Agent
may direct the time or price at which shares are purchased, we
cannot exercise directly or indirectly, control or influence over
the number of shares to be purchased.
15. Q. Do I incur any fees for shares purchased under the Plan?
A. Yes. There is a transaction fee for each share purchased to cover
brokerage commissions and administrative costs of the Plan. This
transaction fee is not expected to exceed $.09 per share. Although
not anticipated, Plan participants will receive advance written
notice if there is a need to charge a transaction fee of greater
than $.09 per share due to increased administrative costs or
broker commissions.
SAFEKEEPING OPTION FOR COMMON STOCK CERTIFICATES
16. Q. What is the purpose and advantages of the safekeeping option?
A. The purpose of the Plan's safekeeping option is to enable you to
deposit any FirstEnergy common stock certificates into the Plan
for safekeeping. The certificates are canceled and the shares are
credited to your Plan account. The shares are shown on dividend
checks and/or Plan account statements and otherwise treated in the
same manner as shares purchased through the Plan. FirstEnergy does
not offer safekeeping for preferred stock certificates.
Benefits of the Plan's safekeeping option include: you do not have
to worry or bear the cost of protecting stock certificates or
replacing certificates due to loss, theft or destruction; you can
request that a certificate for whole shares be issued at no cost
to you at any time; and because shares held in safekeeping are
treated in the same manner as shares purchased through the Plan,
you may conveniently sell them through the Plan.
17. Q. How do I use the safekeeping option?
12
A. At the time of Plan enrollment, you may take advantage of the
safekeeping option by sending your certificate(s), unsigned, to
FirstEnergy Investor Services with a Plan Enrollment Form. Or, at
any time after enrollment, you may send your certificate(s),
unsigned, with a signed letter of instruction requesting that
FirstEnergy hold the shares in safekeeping and stating whether the
dividends for shares being sent are to be reinvested or paid in
cash. Registered mail is suggested when mailing certificates.
SALES, CERTIFICATE WITHDRAWALS AND CLOSING PLAN ACCOUNTS
18. Q. How do I receive a certificate for or sell a portion of my
Plan shares?
A. To receive a certificate for or to sell a portion of the shares
credited to your Plan account, you must notify us of the number of
whole shares to be issued in certificate form or to be sold.
19. Q. How do I close my Plan account?
A. To close a Plan account, you must notify us and provide
instructions as to whether a certificate is to be issued, the
shares are to be sold, or both. If both, the number of whole
shares for which a certificate is to be issued must be specified
so that the remainder of the shares can be sold. When requested to
issue a certificate only, or if no instructions are provided, we
will issue a certificate for all whole shares credited to the
account and a check for the value of any fraction of a share. The
check for the fraction will be based on the closing sale price of
FirstEnergy common stock, as reported in The Wall Street Journal's
report of New York Stock Exchange Composite Transactions, for the
trading day immediately preceding the day we process the request.
20. Q. How long does it take to withdraw certificates or close my Plan
account?
A. It normally takes less than three business days from the time we
receive a request for an account to be closed or a certificate to
be issued. However, if we receive your request to close your Plan
account between a dividend record date and the date that the
additional shares purchased with your reinvested dividend are
credited to your account, your request may not be processed until
the additional shares are credited to your Plan account
(approximately two weeks after the dividend payment date). The
additional shares purchased will be added to your account, and all
shares will be issued or sold as soon as possible thereafter,
depending on your instructions. Upon request, however, we can
issue a certificate for or sell all whole shares currently in your
Plan account, and then close your account by issuing another
certificate for or selling the additional shares purchased after
the shares are credited to your Plan account.
The Plan does not provide for the automatic issuance of
certificates after a purchase, and certificates for fractions of
shares will not be issued under any circumstances. Certificates
representing Plan shares will be issued in the name in which your
account is registered. If you desire to transfer Plan shares to
another registration, you should contact us for transfer
instructions.
21. Q. How often are shares sold and at what price?
A. Participants' requests to sell Plan shares will be aggregated and
sold at least once a week. (See Question 20 for information on
requests to sell all shares and close a Plan account after a
dividend record date). We will place a market order with the
Independent Agent or broker designated by us, who will sell the
shares as soon as practicable. Neither FirstEnergy nor any
participant will have any authority or power to direct the time or
price at which shares may be sold.
The price of the shares sold will be the weighted average price of
the aggregated shares sold by the Independent Agent or designated
broker less a transaction fee which is not expected to exceed $.09
per share. A check for sale of the shares, less the transaction
fee, will generally be mailed to the participant three business
days after the shares are sold.
22. Q. Will I incur any fees for shares sold under the Plan?
A. Yes. There is a transaction fee for each share sold to cover
brokerage commissions and administrative costs of the Plan. This
transaction fee is not expected to exceed $.09 per share.
13
STATEMENTS TO PARTICIPANTS
23. Q. Will I receive Plan account statements?
A. If you reinvest some or all of your dividends, you will receive a
Plan statement about three weeks after each dividend payment date.
You will also receive a Plan statement about two weeks after any
Investment Date that you invest cash.
If you receive a dividend check for some or all of your dividends,
you will receive account information on the stub attached to the
check.
In addition to periodic account statements, a Plan account history
report is available at any time upon request to FirstEnergy. This
report is a summary of all Plan purchases and withdrawals and
provides a concise and thorough record for you.
TAX CONSEQUENCES
24. Q. What are the tax consequences of participation in the Plan?
A. You will have the same federal income tax obligations with respect
to your dividends as shareholders who are not Plan participants.
This means that dividends reinvested under the Plan are taxable as
ordinary income even though you did not actually receive them in
cash.
The selling of shares, including any fractional share, may give
rise to a capital gain or loss for federal income tax purposes.
Any such gain or loss will be determined by the difference between
your net proceeds from the sale and your tax basis in the shares
sold.
The original tax basis of shares acquired through the Plan is
equal to their purchase price per share, including brokerage
commission and other fees. See Question 13 for information
regarding the purchase price of shares acquired through the Plan.
Any capital gain or loss will be long-term or short-term according
to your holding period and current tax laws. The holding period
for the shares acquired under the Plan commences the day after the
applicable Investment Date.
The above tax information is only a general discussion of certain
tax aspects of an investment in the Plan. You should consult your
personal tax adviser as to all of the tax consequences of
participating in the Plan, including the application of current
and proposed federal, state, local, foreign and other tax laws.
OTHER INFORMATION
25. Q. What happens if we issue a stock dividend or declare a stock
split?
A. Any shares of common stock distributed by us as a stock dividend
on shares credited to your Plan account, or as a split of these
shares, will be credited to your Plan account. Stock dividends or
split shares distributed on any shares held by you in certificate
form will be mailed directly to you in the same manner as to
shareholders who are not participating in the Plan.
26. Q. If FirstEnergy has a rights offering, how will the rights on Plan
shares be handled?
A. Rights on shares held by you in certificate form and on any
shares, both whole and fractional, credited to your Plan account
will be mailed directly to you in the same manner as to
shareholders not participating in the Plan.
27. Q. How will shares I hold in the Plan be voted at meetings of
shareholders?
A. You will receive a proxy card which will enable you to vote both
shares credited to your Plan account and shares held by you in
certificate form.
14
28. Q. Can shares credited to my Plan account be pledged?
A. No. Shares credited to your Plan account may not be pledged. If
you wish to pledge such shares you must request the issuance of a
stock certificate for such shares.
29. Q. Who bears the risk of market price fluctuations affecting the
value of Plan shares?
A. Each individual participant in the Plan bears the risk of market
price changes affecting the value of the stock. We cannot assure
you of a profit or protect you against a loss on any shares you
hold, purchase or sell under the Plan.
30. Q. Can FirstEnergy terminate my participation in the Plan?
A. Yes. After mailing written notice to you, we may terminate your
participation in the Plan for any reason, including if your
ownership interest is less than one full share. If your
participation has been terminated, you will receive (1) a
certificate for any or all of the whole shares of common stock
credited to your account, (2) any uninvested dividend or cash
investment credited to your account and (3) a check for the cash
value of any fraction of a share of common stock credited to your
account. Such fraction of a share will be valued at the average of
the high and low prices of FirstEnergy common stock as reported in
The Wall Street Journal's report of New York Stock Exchange
Composite Transactions for the trading day preceding the date of
termination.
31. Q. May the Plan be changed, suspended or discontinued?
A. We reserve the right, for any reason, to modify, suspend or
terminate any provision of the Plan, or the Plan as a whole, at
any time. All participants will receive notice of any such
modification, suspension or termination. Typically, will be
provided prior to the effectiveness of the applicable
modification, suspension or termination. However, notices of
suspension or termination caused by the inability to purchase or
inadvisability of purchasing shares may be given after the fact.
If the Plan is suspended, we may similarly, for any reason,
reinstate the Plan at any time. Again, notice will be given to
participants of the reinstatement and such notice may be given
before or after the fact.
Upon any termination of the Plan by us, you will receive (1) a
certificate for all of the whole shares of common stock credited
to your account, (2) any uninvested dividend or cash investment
credited to your account and (3) a check for the cash value for
any fraction of a share of common stock credited to your account.
Such fraction of a share will be valued at the average of the high
and low prices of FirstEnergy common stock as reported in The Wall
Street Journal's report of New York Stock Exchange Composite
Transactions for the trading day preceding the date of
termination.
IF YOU HAVE QUESTIONS CONCERNING THE PLAN OR FIRSTENERGY, PLEASE CALL INVESTOR
SERVICES AT 1-800-736-3402.
USE OF PROCEEDS
The proceeds from the sale to the Plan of any newly issued stock will be used to
meet working capital and capital expenditure requirements and for other
corporate purposes.
DESCRIPTION OF COMMON STOCK
Certain provisions of FirstEnergy's Amended Articles of Incorporation and
Amended Code of Regulations are summarized or referred to below. The summaries
are merely an outline, do not purport to be complete, do not relate to or give
effect to the provisions of statutory or common law, and are qualified in their
entirety by express reference to such Amended Articles of Incorporation and
Amended Code of Regulations.
FirstEnergy is authorized by its Amended Articles of Incorporation to issue
375,000,000 shares of common stock, par value $.10 per share, of which
297,636,276 shares were issued and outstanding as of December 20, 2002.
15
FirstEnergy is also authorized by its Amended Articles of Incorporation to issue
5,000,000 shares of preferred stock, par value $100 per share, of which none are
currently issued and outstanding. The common stock currently outstanding is, and
the common stock offered pursuant to this Prospectus will be, fully paid and
non-assessable.
DIVIDEND RIGHTS
Subject only to the prior rights and preferences of any issued and outstanding
shares of FirstEnergy's preferred stock, the holders of the common stock shall
be entitled to receive dividends when, as and if declared by the Board of
Directors of FirstEnergy out of funds of FirstEnergy legally available therefor.
There can be no assurance that funds will be legally available to pay dividends
at any given time or that, if funds are available, the Board of Directors will
declare a dividend.
LIQUIDATION RIGHTS
In the event of any dissolution or liquidation of FirstEnergy, the holders of
common stock shall be entitled to receive, pro rata, after the prior rights of
the holders of any issued and outstanding shares of FirstEnergy's preferred
stock have been satisfied, all of the assets of FirstEnergy that remain
available for distribution after payment in full of all liabilities of
FirstEnergy.
VOTING RIGHTS
The holders of FirstEnergy common stock are entitled to one vote on each matter
submitted for their vote at any meeting of the shareholders of FirstEnergy for
each share of FirstEnergy common stock held as of the record date for such
meeting. Under FirstEnergy's Amended Articles of Incorporation, the voting
rights, if any, of FirstEnergy preferred stock may differ from the voting rights
of FirstEnergy common stock. The holders of common stock are not entitled to
cumulate their votes for the election of directors. FirstEnergy's Amended
Articles of Incorporation provide that the Board of Directors be divided into
three classes with the term of office of the respective classes to expire in
successive years.
In order to amend or repeal, or adopt any provision inconsistent with, the
provisions of FirstEnergy's Amended Articles of Incorporation dealing with (a)
the right of the Board of Directors to establish the terms of unissued shares or
to authorize the acquisition by FirstEnergy of its outstanding shares; (b) the
absence of cumulative voting and preemptive rights; or (c) the requirement that
at least 80% of the voting power of FirstEnergy's outstanding shares must
approve the foregoing, at least 80% of the voting power of FirstEnergy's
outstanding shares must approve. In addition, the approval of at least 80% of
the voting power of FirstEnergy's outstanding shares must be obtained to amend
or repeal the provisions of FirstEnergy's Amended Code of Regulations dealing
with (a) the time and place of shareholders' meetings, the manner in which
special meetings of shareholders are called or the way business is conducted at
such meetings; (b) the number, election and terms of directors, the manner of
filling vacancies on the Board of Directors, the removal of directors or the
manner in which directors are nominated; or (c) the indemnification of officers
or directors. Amendment of the provision of the Amended Code of Regulations that
requires the approval of 80% of the voting power of FirstEnergy's outstanding
shares in the instances enumerated above requires the same level of approval.
Adoption of amendments to FirstEnergy's Amended Articles of Incorporation (other
than those requiring 80% approval as specified above), adoption of a plan of
merger, consolidation or reorganization, authorization of a sale or other
disposition of all or substantially all of the assets of FirstEnergy not made in
the usual and regular course of its business or adoption of a resolution of
dissolution, and any other matter which would otherwise require a two-thirds
approving vote, require the approval of two-thirds of the voting power of
FirstEnergy's outstanding shares, unless FirstEnergy's Board of Directors
provides otherwise, in which case, these matters will require the approval of a
majority of the voting power of FirstEnergy's outstanding shares and the
approval of a majority of the voting power of any shares entitled to vote as a
class.
SHAREHOLDER RIGHTS AGREEMENTS
On November 18, 1997, FirstEnergy authorized assignment of one share purchase
right for each outstanding share of FirstEnergy common stock. Each right
entitles the registered holder to purchase one share of FirstEnergy common stock
at a purchase price of $70 per share, when the rights become exercisable.
The following description of the rights is qualified in its entirety by
reference to the terms of the rights agreement between FirstEnergy and The Bank
of New York, as rights agent.
The rights are not exercisable until the earlier of:
16
- ten days following a public announcement that a person or group,
including any affiliates or associates of such person or group,
has acquired or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of FirstEnergy
common stock (an "Acquiring Person"); or
- ten days following the commencement or announcement of an
intention to make a tender offer or exchange offer which would
result in any person or group (and related persons) having
beneficial ownership of 25% or more of the outstanding shares of
FirstEnergy common stock.
The rights will expire on November 28, 2007, unless that date is extended or the
rights are earlier redeemed by FirstEnergy and exchanged for shares of
FirstEnergy common stock, as described below.
In the event that (i) FirstEnergy merges with or is involved in a business
combination transaction with an Acquiring Person, (ii) 50% or more of
FirstEnergy's consolidated assets or earning power are sold to an Acquiring
Person, (iii) an Acquiring Person acquires 25% or more of the outstanding shares
of FirstEnergy common stock or (iv) an Acquiring Person engages in one or more
self-dealing transactions with FirstEnergy, each holder of a right, other than
rights beneficially owned by an Acquiring Person, which become void, will have
the right to receive upon exercise that number of shares of FirstEnergy common
stock or stock of the acquiring company, as the case may be, having an average
market value during a specified time period of two times the purchase price
provided for in the right.
At any time after a person or group acquires beneficial ownership of 15% or more
of the outstanding shares of FirstEnergy common stock and prior to the
acquisition by such person or group of 50% or more of the then outstanding
shares of FirstEnergy common stock, FirstEnergy may exchange all or part of the
then outstanding rights (other than rights owned by such person or group which
have become void) for shares of FirstEnergy common stock.
At any time prior to the tenth day following the acquisition by a person or
group of beneficial ownership of 15% or more of the outstanding shares of
FirstEnergy common stock, FirstEnergy may redeem the rights in whole, but not in
part, at a price of $.001 per right.
The rights may have anti-takeover effects. The rights will cause substantial
dilution to a person or group that attempts to acquire FirstEnergy unless the
rights are redeemed by FirstEnergy's Board of Directors. However, it can be
expected that the rights would not interfere with any merger or other business
combination approved by the Board of Directors.
NO PREEMPTIVE OR CONVERSION RIGHTS
Holders of FirstEnergy common stock have no preemptive or conversion rights and
are not subject to further calls or assessments by FirstEnergy. There are no
redemption or sinking fund provisions applicable to the common stock.
LISTING
Shares of FirstEnergy common stock are traded on the New York Stock Exchange
under the symbol "FE."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the common stock of FirstEnergy is
FirstEnergy Securities Transfer Company, a wholly owned subsidiary of
FirstEnergy.
DIVIDEND INFORMATION
Cash dividends declared and paid, per share of our common stock, for each
quarter of 2002, 2001 and 2000 were $0.375. Dividends on our common stock are
paid as declared by our board of directors and are typically paid on the first
day of March, June, September and December. Future dividends will depend on our
future earnings and the ability of our regulated subsidiaries to pay cash
dividends to us which are subject to certain regulatory limitations and also
subject to charter and indenture limitations for some of those subsidiaries'
that may, in general, restrict the amount of retained earnings available for
these dividends. These provisions, however, do not currently materially restrict
payment of these dividends.
17
LEGAL MATTERS
The legality of the common stock offered by this Prospectus has been passed upon
for FirstEnergy by Gary D. Benz, Esq., Associate General Counsel of FirstEnergy.
As of December 16, 2002, Mr. Benz owned 2,405 shares of FirstEnergy common
stock.
EXPERTS
Our former independent public accountants, Arthur Andersen LLP have not
consented to the incorporation by reference of their report in this Prospectus
on our consolidated financial statements for the year ended December 31, 2001,
and we have dispensed with the requirement to file their consent in reliance
upon Rule 437a under the Securities Act of 1933. Because Arthur Andersen LLP
have not consented to the incorporation by reference of their report in this
Prospectus, you will not be able to recover against Arthur Andersen LLP under
Section 11 of the Securities Act of 1933 for any untrue statements of a material
fact contained in the financial statements audited by Arthur Andersen LLP or any
omissions to state a material fact required to be stated therein.
With respect to our unaudited interim consolidated financial information for the
quarters ended March 31, 2002, June 30, 2002 and September 30, 2002,
incorporated by reference in this Prospectus, PricewaterhouseCoopers LLP,
independent public accountants, have applied limited procedures in accordance
with professional standards for reviews of that information. However, their
separate reports dated May 15, 2002, August 8, 2002, and November 13, 2002,
incorporated by reference in this Prospectus, state that they did not audit and
they do not express opinions on that unaudited interim consolidated financial
information. Accordingly, the degree of reliance on their reports on that
information should be restricted in light of the limited nature of the review
procedures applied. PricewaterhouseCoopers LLP is not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim consolidated financial information because these reports are
not "reports" or "parts" of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of that Act.
WHERE YOU CAN FIND MORE INFORMATION
We are required by the Securities Exchange Act of 1934 to file annual, quarterly
and special reports and other information with the SEC. These reports and other
information can be inspected and copied at the SEC's public reference room at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. You may also read and copy these SEC filings by visiting the
SEC's Web site at http://www.sec.gov or our Web site at
http://www.firstenergycorp.com. Information contained on our Website does not
constitute part of this Prospectus.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 with respect to the securities offered by this
Prospectus. This Prospectus does not contain all of the information included in
the registration statement. For further information, you should refer to the
registration statement.
The SEC allows us to incorporate by reference in this Prospectus the information
we file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this Prospectus. The information included in this
Prospectus is not complete, and should be read together with the information
incorporated by reference. We incorporate by reference in this Prospectus the
documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, until
the termination of this offering; information we file in the future with the SEC
will automatically update and supersede this information:
- FirstEnergy's Annual Report on Form 10-K for the year ended
December 31, 2001;
18
- FirstEnergy's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2002, June 30, 2002 and September 30, 2002; and
- FirstEnergy's Current Reports on Form 8-K filed April 18, 2002 (as
amended on May 7 and May 9, 2002), May 9, 2002, May 24, 2002,
August 1, 2002, August 9, 2002, August 12, 2002, August 23, 2002,
September 11, 2002, September 24, 2002, October 7, 2002, October
31, 2002, December 2, 2002, December 3, 2002, December 20, 2002,
January 17, 2003, and January 21, 2003 respectively.
You may also request additional copies of these reports or copies of our other
SEC filings at no cost by writing or telephoning us at the following address:
FirstEnergy Corp.
76 South Main Street
Akron, Ohio 44308-1890
Attention: Corporate Secretary
(800) 736-3402
19
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration fee $18,000
Costs of printing and engraving* 15,000
Legal fees and expenses* 45,000
Accounting fees and expenses* 15,000
Miscellaneous expenses* 7,000
Total $100,000
------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated gives a
corporation incorporated under the laws of Ohio power to indemnify any person
who is or has been a director, officer or employee of that corporation, or of
another corporation at the request of that corporation, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any threatened, pending or completed action, suit or
proceeding, criminal or civil, to which he is or may be made a party because of
being or having been such director, officer or employee, provided that in
connection therewith, such person is determined to have acted in good faith in
what he reasonably believed to be in or not opposed to the best interest of the
corporation of which he is a director, officer or employee, and without
reasonable cause, in the case of a criminal matter, to believe that his conduct
was unlawful. The determination as to the conditions precedent to the permitted
indemnification of such person is made by the directors of the indemnifying
corporation acting at a meeting at which, for the purpose, any director who is a
party to or threatened with any such action, suit or proceeding may not be
counted in determining the existence of a quorum and may not vote. If, because
of the foregoing limitations, the directors are unable to act in this regard,
such determination may be made by the majority vote of the corporation's voting
shareholders (or without a meeting upon two-thirds written consent of such
shareholders), by judicial proceeding or by written opinion of independent legal
counsel other than an attorney, or a firm having associated with it an attorney
who has been retained by or who has performed services for the corporation or
any person to be indemnified during the five years preceding the date of
determination.
Regulation 31 of the Registrant's Amended Code of Regulations provides as
follows:
"The Corporation shall indemnify, to the full extent then permitted by
law, any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that he or she is or was a member of the Board of
Directors or an officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, trustee,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The Corporation shall pay, to the
full extent then required by law, expenses, including attorney's fees,
incurred by a member of the Board of Directors in defending any such
action, suit or proceeding as they are incurred, in advance of the
final disposition thereof, and may pay, in the same manner and to the
full extent then permitted by law, such expenses incurred by any other
person. The indemnification and payment of expenses provided hereby
shall not be exclusive of, and shall be in addition to, any other
rights granted to those seeking indemnification under any law, the
Amended Articles of Incorporation, any agreement, vote of shareholders
or disinterested members of the Board of Directors, or otherwise, both
as to action in official capacities and as to action in another
capacity while he or she is a member of the Board of Directors, or an
officer, employee or agent of the Corporation, and shall continue as to
a person who has ceased to be a member of the Board of Directors,
trustee, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person."
1
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated provides
that the indemnification thereby permitted shall not be exclusive of any other
rights that directors, officers or employees may have, including rights under
insurance purchased by the corporation.
Regulation 32 of the Registrant's Amended Code of Regulations provides as
follows:
"The Corporation may, to the full extent then permitted by law and
authorized by the Board of Directors, purchase and maintain insurance
or furnish similar protection, including but not limited to trust
funds, letters of credit or self-insurance, on behalf of or for any
persons described in Regulation 31 against any liability asserted
against and incurred by any such person in any such capacity, or
arising out of his status as such, whether or not the Corporation would
have the power to indemnify such person against such liability.
Insurance may be purchased from or maintained with a person in which
the Corporation has a financial interest."
The Registrant maintains and pays the premium on contracts insuring the
Registrant (with certain exclusions) against any liability to directors and
officers they may incur under the above indemnity provisions and insuring each
director and officer of the Registrant (with certain exclusions) against
liability and expense, including legal fees, which he or she may incur by reason
of his or her relationship to the Registrant, even if the Registrant does not
have the obligation or right to indemnify him or her against such liability or
expense.
ITEM 16. EXHIBITS
The following exhibits are incorporated by reference into this registration
statement or are filed herewith and made a part hereof:
Exhibit No. Description
----------- -----------
4(a)* Amended Articles of Incorporation of FirstEnergy Corp.
(Registration No. 333-21011, Exhibit (3)-1).
4(b)* FirstEnergy Corp. Amended Code of Regulations
(Registration No. 333-21011, Exhibit (3)-2).
4(c)* Form of Common Stock Certificate (incorporated by
reference from Registration No. 333-40063, Exhibit 4(c)).
4(d)* Rights Agreement, dated as of November 18, 1997,
between FirstEnergy Corp. and The Bank of New York
and form of Right Certificate (incorporated by
reference from current Report on Form 8-K, dated
November 18, 1997, Exhibit 4.1).
5** Opinion of Gary D. Benz, Esq., Associate General
Counsel of FirstEnergy Corp., as to the securities
being registered.
15** Letter of PricewaterhouseCoopers LLP re unaudited
interim financial information.
23** Consent of Gary D. Benz, Esq. (contained in Exhibit 5).
24.1** Power of Attorney
-----------------------
* Incorporated by reference.
** Previously filed.
2
ITEM 17 UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Akron, State of Ohio, on the 24th day of January,
2003.
FIRSTENERGY CORP.
(Registrant)
H. Peter Burg*
---------------------------------
H. Peter Burg
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
H. Peter Burg* Chairman of the Board and Chief January 24, 2003
------------------ Executive Officer (Principal
H. Peter Burg Executive Officer)
Richard H. Marsh* Senior Vice President and Chief January 24, 2003
---------------------- Financial Officer (Principal
Richard H. Marsh Financial Officer)
Harvey L. Wagner* Vice President, Controller and January 24, 2003
--------------------- Chief Accounting Officer
Harvey L. Wagner (Principal Accounting Officer)
Anthony J. Alexander* President, Chief Operating Officer January 24, 2003
------------------------- and Director
Anthony J. Alexander
Carol A. Cartwright* Director January 24, 2003
------------------------
Carol A. Cartwright
William F. Conway* Director January 24, 2003
----------------------
William F. Conway
Robert B. Heisler, Jr.* Director January 24, 2003
---------------------------
Robert B. Heisler, Jr.
Robert L. Loughhead* Director January 24, 2003
------------------------
Robert L. Loughhead
Russell W. Maier* Director January 24, 2003
---------------------
Russell W. Maier
John M. Pietruski* Director January 24, 2003
----------------------
John M. Pietruski
Robert N. Pokelwaldt* Director January 24, 2003
-------------------------
Robert N. Pokelwaldt
Paul J. Powers* Director January 24, 2003
-------------------
Paul J. Powers
4
Catherine A. Rein* Director January 24, 2003
---------------------
Catherine A. Rein
Robert C. Savage* Director January 24, 2003
---------------------
Robert C. Savage
George M. Smart* Director January 24, 2003
--------------------
George M. Smart
Carlisle A. H. Trost* Director January 24, 2003
-------------------------
Carlisle A. H. Trost
Jesse T. Williams, Sr.* Director January 24, 2003
---------------------------
Jesse T. Williams, Sr.
Patricia K. Woolf* Director January 24, 2003
----------------------
Patricia K. Woolf
*By: /s/ Lucas F. Torres January 24, 2003
-------------------------------
Attorney-in-fact
5
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
4(a)* Amended Articles of Incorporation of FirstEnergy Corp.
(Registration No. 333-21011, Exhibit (3)-1).
4(b)* FirstEnergy Corp. Amended Code of Regulations
(Registration No. 333-21011, Exhibit (3)-2).
4(c)* Form of Common Stock Certificate (incorporated by
reference from Registration No. 333-40063, Exhibit
4(c)).
4(d)* Rights Agreement, dated as of November 18, 1997,
between FirstEnergy Corp. and The Bank of New York
and form of Right Certificate (incorporated by
reference from current Report on Form 8-K, dated
November 18, 1997, Exhibit 4.1).
5** Opinion of Gary D. Benz, Esq., Associate General
Counsel of FirstEnergy Corp., as to the securities
being registered.
15** Letter of PricewaterhouseCoopers LLP re unaudited
interim financial information.
23** Consent of Gary D. Benz, Esq. (contained in Exhibit 5).
24.1** Power of Attorney
-----------------------
* Incorporated by reference.
** Previously filed.
6