Blog: FIRSTENERGY CORP : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Interim President and Chief Executive Officer

On September 15, 2022, FirstEnergy Corp. (“FirstEnergy” or the “Company”)
announced that the Board of Directors (the “Board”) of the Company has appointed
Mr. John W. Somerhalder II to serve as Interim President and Chief Executive
Officer of the Company, effective as of September 16, 2022. In connection with
his appointment as Interim President and Chief Executive Officer, Mr.
Somerhalder will continue to serve as Chair of the Board. The Board will conduct
a search of external candidates to identify a permanent President and Chief
Executive Officer of the Company. Mr. Somerhalder’s appointment follows the
decision by Steven E. Strah on September 15, 2022 to retire as the President and
Chief Executive Officer of the Company, effective as of September 16, 2022, as
further described below.

Mr. Somerhalder, age 66, has served as Chair of the Board since May 2022, and
previously served as Vice Chair and Executive Director of the Company from March
2021 to May 2022. Prior to joining the Company, Mr. Somerhalder served as
interim president and chief executive officer of CenterPoint Energy, Inc., an
electric and natural gas utility serving several U.S. markets, from February
2020 to July 2020, and served as a member of the CenterPoint Energy board of
directors from 2016 through July 2020. Mr. Somerhalder also served as interim
president and chief executive officer of Colonial Pipeline Company, a U.S.
refined products pipeline company, from February 2017 to October 2017. Prior to
that, Mr. Somerhalder served as president and chief executive officer of AGL
Resources Inc., an energy services holding company in the southeastern United
States, from March 2006 through his retirement in December 2015, and served as
chairman of the company’s board from November 2007 until December 2015. Prior to
joining AGL Resources, Mr. Somerhalder served in a number of roles with El Paso
Corporation, a publicly traded natural gas and related energy products provider,
where he spent almost 30 years, starting his career as an engineer and
progressing through leadership roles before being named president of El Paso
Pipeline Group and executive vice president of El Paso Corporation. Mr.
Somerhalder also previously held directorships with Gulfport Energy Corp.,
Crestwood Equity Partners LP, Enable Midstream Partners, LP, and SunCoke Energy
Partners GP LLC.

In connection with Mr. Somerhalder’s appointment as Interim President and Chief
Executive Officer of the Company, at the recommendation of the Compensation
Committee, the Board approved the following compensation package for Mr.
Somerhalder for his interim executive service:

•base salary at an annual rate of $1,250,000 per year; and
•annual participation in the Company’s short-term incentive program, with a
target value equal to 125% of Mr. Somerhalder’s annual base salary rate and a
maximum value equal to 200% of the target award, on performance terms
substantially similar to those in effect for other senior executive officers of
the Company (with such award prorated for partial interim executive service
during the year).

The Board also expects to provide Mr. Somerhalder with the right to receive
payments in Company common stock for his interim executive service (“Share
Payments”), which Share Payments would be based on $600,000 for each month of
his interim executive service (prorated for partial months of service),
determined based on the Company’s average of the high and low closing stock
price during each such month or partial month of service. In January of each
year, Mr. Somerhalder would receive Share Payments for the months during the
prior year in which he provided interim executive service. The Share Payments
are expected to be fully vested, but subject to (net of taxes) a one-year
holding period following his interim executive service.

Mr. Somerhalder is also expected to be eligible to participate in the Company’s
executive relocation program, executive deferred compensation plan, 401(k) plan,
vacation and paid time off program, and standard health and welfare benefits,
but is not expected to vest in the Company’s Cash Balance Pension Plan and will
not be subject to the Company’s share ownership guidelines. Mr. Somerhalder’s
compensation will be subject to applicable tax withholding. While Mr.
Somerhalder serves in his interim role he will not be entitled to receive
director compensation.

Retirement of President and Chief Executive Officer; Director Resignation

On September 15, 2022, Mr. Strah decided to retire, as the President and Chief
Executive Officer of the Company, effective as of September 16, 2022. Mr. Strah
also resigned from the Board on September 15, 2022, effective as of September
16, 2022, and the size of the Board was reduced from twelve to eleven directors.

Mr. Strah will receive no severance payments or severance benefits. However, as
is the case generally for executive officers who retire from the Company, Mr.
Strah is eligible to receive certain retirement benefits, generally described in
the Company’s most recent definitive proxy statement filed with the Securities
and Exchange Commission. These other retirement benefits generally include
vested amounts and payments under the FirstEnergy Corp. Master Pension Plan and
the FirstEnergy Corp. Amended and Restated Executive Deferred Compensation Plan,
a prorated award for 2022 under the Company’s Short-Term Incentive Program,
certain prorated performance-based award payouts (based on actual performance)
under the Company’s Long-Term Incentive Program, and the value of Mr. Strah’s
unused banked and frozen vacation at the time of his retirement.

——————————————————————————–

Item 7.01 Regulation FD Disclosure.

Press Release Regarding Management Changes and Executive Review Process

On September 15, 2022, the Company issued a press release regarding recently
announced management changes and the completion of the Board’s review of the
current executive team previously announced in connection with the settlement of
derivative litigation. A copy of the press release is attached as Exhibit 99.1
hereto and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.              Description
99.1                       FirstEnergy Corp. Press Release, dated September     15    , 2022
104                      Cover Page Interactive Data File (the cover page XBRL tags are embedded
                         within the Inline XBRL document)


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Forward-Looking Statements: This Form 8-K includes forward-looking statements
based on information currently available to management. Such statements are
subject to certain risks and uncertainties and readers are cautioned not to
place undue reliance on these forward-looking statements. These statements
include declarations regarding management’s intents, beliefs and current
expectations. These statements typically contain, but are not limited to, the
terms “anticipate,” “potential,” “expect,” “forecast,” “target,” “will,”
“intend,” “believe,” “project,” “estimate,” “plan” and similar words.
Forward-looking statements involve estimates, assumptions, known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements, which may include the following: the potential liabilities,
increased costs and unanticipated developments resulting from government
investigations and agreements, including those associated with compliance with
or failure to comply with the Deferred Prosecution Agreement entered into on
July 21, 2021 with the U.S. Attorney’s Office for the Southern District of Ohio;
the risks and uncertainties associated with government investigations and audits
regarding Ohio House Bill 6, as passed by Ohio’s 133rd General Assembly (“HB 6”)
and related matters, including potential adverse impacts on federal or state
regulatory matters, including, but not limited to, matters relating to rates;
the risks and uncertainties associated with litigation, arbitration, mediation,
and similar proceedings, particularly regarding HB 6 related matters, including
risks associated with obtaining court approval of the settlement agreement in
the derivative shareholder lawsuits and risks associated with securities
litigation; changes in national and regional economic conditions, including
recession and inflationary pressure, affecting us and/or our customers and those
vendors with which we do business; weather conditions, such as temperature
variations and severe weather conditions, or other natural disasters affecting
future operating results and associated regulatory actions or outcomes in
response to such conditions; legislative and regulatory developments, including,
but not limited to, matters related to rates, compliance and enforcement
activity, cybersecurity, and climate change; the ability to accomplish or
realize anticipated benefits from our FE Forward initiative and our other
strategic and financial goals, including, but not limited to, overcoming current
uncertainties and challenges associated with the ongoing government
investigations, executing our transmission and distribution investment plans,
greenhouse gas reduction goals, controlling costs, improving our credit metrics,
growing earnings, and strengthening our balance sheet; changing market
conditions affecting the measurement of certain liabilities and the value of
assets held in our pension trusts may negatively impact our results of
operations and related guidance, and may also cause us to make contributions to
our pension sooner or in amounts that are larger than currently anticipated; the
risks associated with cyber-attacks and other disruptions to our, or our
vendors’, information technology system, which may compromise our operations,
and data security breaches of sensitive data, intellectual property and
proprietary or personally identifiable information; mitigating exposure for
remedial activities associated with retired and formerly owned electric
generation assets; the ability to access the public securities and other capital
and credit markets in accordance with our financial plans, the cost of such
capital and overall condition of the capital and credit markets affecting us,
including the increasing number of financial institutions evaluating the impact
of climate change on their investment decisions; the extent and duration of the
COVID-19 pandemic and the related impacts to our business, operations and
financial condition resulting from the outbreak of COVID-19 including, but not
limited to, disruption of businesses in our territories, supply chain
disruptions, additional costs, workforce impacts and governmental and regulatory
responses to the pandemic, such as the moratoriums on utility disconnections and
workforce vaccination mandates imposed at varying points throughout the
pandemic; actions that may be taken by credit rating agencies that could
negatively affect either our access to or terms of financing or our financial
condition and liquidity; changes in assumptions regarding factors such as
economic conditions within our territories, the reliability of our transmission
and distribution system, or the availability of capital or other resources
supporting identified transmission and distribution investment opportunities;
changes in customers’ demand for power, including, but not limited to, economic
conditions, the impact of climate change, or energy efficiency and peak demand
reduction mandates; the potential of non-compliance with debt covenants in our
credit facilities; the ability to comply with applicable reliability standards
and energy efficiency and peak demand reduction mandates; changes to
environmental laws and regulations, including, but not limited to, those related
to climate change; labor disruptions by our unionized workforce; changes to
significant accounting policies; any changes in tax laws or regulations, or
adverse tax audit results or rulings; and the risks and other factors discussed
from time to time in our Securities and Exchange Commission (“SEC”) filings.
Dividends declared from time to time on FirstEnergy Corp.’s common stock during
any period may in the aggregate vary from prior periods due to circumstances
considered by FirstEnergy Corp.’s Board of Directors at the time of the actual
declarations. A security rating is not a recommendation to buy or hold
securities and is subject to revision or withdrawal at any time by the assigning
rating agency. Each rating should be evaluated independently of any other
rating.

These forward-looking statements are also qualified by, and should be read
together with, the risk factors included in FirstEnergy Corp.’s filings with the
SEC, including, but not limited to, the most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q, and any subsequent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. The foregoing review of factors also
should not be construed as exhaustive. New factors emerge from time to time, and
it is not possible for management to predict all such factors, nor assess the
impact of any such factor on FirstEnergy Corp.’s business or the extent to which
any factor, or combination of factors, may cause results to differ materially
from those contained in any forward-looking statements. FirstEnergy Corp.
expressly disclaims any obligation to update or revise, except as required by
law, any forward-looking statements contained herein or in the information
incorporated by reference as a result of new information, future events or
otherwise.

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© Edgar Online, source Glimpses

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