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Item 9A. Controls and Procedures

2024-02-13 compared with 2023-02-13 · 93 added, 40 removed, 197 unchanged (40% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

FirstEnergy has established disclosure controls and procedures to ensure that information is accumulated and communicated to management, including the interim chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure, and ensure that information required to be disclosed in the reports FirstEnergy files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

The management of FirstEnergy, with the participation of the interim chief executive officer and chief financial officer, have evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2022.

Based on that evaluation, the interim chief executive officer and chief financial officer of FirstEnergy have concluded that its disclosure controls and procedures were effective as of December 31, 2022.

FirstEnergy, through the oversight of its Disclosure Committee, has established disclosure controls and procedures to ensure that information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure, and ensure that information required to be disclosed in the reports FirstEnergy files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

The management of FirstEnergy, with the participation of the chief executive officer and chief financial officer, has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2023.

Based on that evaluation, the chief executive officer and chief financial officer of FirstEnergy have concluded that its disclosure controls and procedures were effective as of December 31, 2023.

Management’s Report on Internal Control over Financial Reporting

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OTHER INFORMATION

On February 9, 2023, the FE Board approved a new service-based restricted shares award in the amount of $2 million for Mr.

Jon Taylor that will be granted on March 1, 2023.

The number of shares subject to the award will be determined as of March 1, 2023, based on the FE’s average high and low stock price as of that date.

The shares will generally vest over a four-year period from March 1, 2023, with 25% of the award vesting after two years, another 25% vesting after a third year, and the remaining amount of the award vesting after the fourth year, generally subject to Mr.

Taylor’s continued employment with the FirstEnergy.

The award will have other terms and conditions based on FE’s 2020 Incentive Compensation Plan and will be consistent with the form of Restricted Stock Agreement attached to this Annual Report on Form 10-K as Exhibit 10-53.

Trading Arrangements

During the quarter ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of FE adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408 of Regulation S-K).

Director Resignation

On February 7, 2024, Sean Klimczak notified the FE Board of his intention to resign as a director of FE, effective the earlier of (i) the appointment of his replacement, or (ii) February 29, 2024.

Klimczak’s resignation was not the result of any dispute or disagreement with FE or the FE Board on any matter relating to the operations, policies or practices of FirstEnergy.

BIP Securities II-B L.P.

intends to designate a substitute director acceptable to the FE Board to be appointed to the FE Board.

Pursuant to that certain Common Stock Purchase Agreement with BIP Securities II-B L.P., an affiliate of Blackstone Infrastructure Partners L.P., dated as of November 6, 2021, so long as BIP Securities II-B L.P.

beneficially owns at least 75% of the shares of FE common stock acquired by it pursuant to the Common Stock Purchase Agreement, BIP Securities II-B L.P.

will have the right to nominate one natural person for election to the FE Board.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Total 4,111,762 $ — 10,060,406

(1) This number includes 1,427,058 shares subject to outstanding awards of stock based RSUs granted under the ICP 2015 and ICP 2020 if paid at target for the three outstanding cycles, as well as 1,427,058 additional shares assuming maximum performance metrics are achieved for the 2020-2022, 2021-2023, and 2022-2024 cycles of stock based RSUs, and 443,826 shares related to the DCPD that will be paid in stock.

(1) This number includes 1,918,675 shares subject to outstanding awards of stock based Restricted Stock Units granted under the ICP 2020 if paid at target for the three outstanding cycles, as well as 1,918,675 additional shares assuming maximum performance metrics are achieved for the 2021-2023, 2022-2024, and 2023-2025 cycles of stock based Restricted Stock Units, and 274,412 shares related to the DCPD that will be paid in stock.

(2) There are no outstanding options, therefore, no consideration is required from participants for the exercise or vesting of any outstanding equity compensation awards.

(3) Represents shares available for issuance, assuming maximum performance metrics are achieved (or approximately 4,844,747 under ICP 2015 and 8,494,381 under ICP 2020, available assuming performance at target) for the 2020-2022, 2021-2023, and 2022-2024 cycles of stock-based RSUs, with respect to future awards under the ICP 2020 and future accruals of dividends on awards outstanding under ICP 2015 or ICP 2020.

Additional shares may become available under the ICP 2015 or ICP 2020 due to cancellations, forfeitures, cash settlements or other similar circumstances with respect to outstanding awards.

(3) Represents shares available for issuance, assuming maximum performance metrics are achieved (or approximately 4,841,463 under ICP 2015 and 7,137,618 under ICP 2020, available assuming performance at target) for the 2021-2023, 2022-2024, and 2023-2025 cycles of stock-based Restricted Stock Units, with respect to future awards under the ICP 2020 and future accruals of dividends on awards outstanding under ICP 2020.

Additional shares may become available under the ICP 2020 due to cancellations, forfeitures, cash settlements or other similar circumstances with respect to outstanding awards.

(4) All equity compensation plans have been approved by security holders.

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The information required by Item 13 is incorporated herein by reference to FirstEnergy’s 2024 Proxy Statement to be filed with the SEC pursuant to Regulation 14A under the Exchange Act.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

A summary of the audit and all other fees for services rendered by PricewaterhouseCoopers LLP are as follows:

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Audit-Related Fees (2)

Tax-Related Fees (3)

All Other Fees (4)

Total Fees $ 10,307 $ 8,653

(1) Professional services rendered for the audits of FirstEnergy's annual financial statements and reviews of unaudited financial statements included in FirstEnergy's Quarterly Reports on Form 10-Q and for services in connection with statutory and regulatory filings or engagements, including comfort letters, agreed upon procedures and consents for financings and filings made with the SEC.

(2) Audit-related fees in 2022 and 2021 were related to services rendered for EESG reporting assessments.

(3) Tax-related fees in 2022 were primarily related to the performance of tax services in conjunction with the FET P&SA I.

(1) Professional services rendered for the audits of FirstEnergy's and certain of its subsidiary annual financial statements and reviews of unaudited financial statements included in FirstEnergy's Quarterly Reports on Form 10-Q filings made with the SEC, and for services in connection with statutory and regulatory filings or engagements, including comfort letters, agreed upon procedures and consents for financings.

2023 audit fees also include newly required regulatory audits for certain subsidiaries and additional audit services to support the planned registration of certain subsidiaries with the SEC during 2024.

(2) Audit-related fees in 2022 were related to services rendered for EESG reporting assessments.

(3) Tax fees in 2023 and 2022 were primarily related to the performance of tax services related to the sale of interest in FET.

(4) All other fees in 2023 primarily reflect certain costs related to the ongoing SEC investigation.

All other fees in 2022 primarily reflect certain costs incurred as a result of system implementation quality assurance services, the ongoing SEC investigation and software subscription fees.

All other fees in 2021 primarily reflect the ongoing SEC investigation, software subscription fees and accounting research license costs.

Additional information required by this item is incorporated herein by reference to FirstEnergy’s 2024 Proxy Statement to be filed with the SEC pursuant to Regulation 14A under the Exchange Act.

EXHIBITS, FINANCIAL STATEMENT SCHEDULE

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this report on Form 10-K:

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3.2 Third Amended and Restated Code of Regulations of FirstEnergy Corp., effective May 17, 2022 (incorporated by reference to FE’s Form 8-K on May 23, 2022, Exhibit 3.1, File No.

3.3 Amendment to the Third Amended and Restated Code of Regulations (incorporated by reference to FE’s Form 10-Q filed August 1, 2023, Exhibit 3 .

4.1 Indenture, dated November 15, 2001, between FirstEnergy Corp.

and The Bank of New York Mellon, as Trustee (incorporated by reference to FE’s Form S-3 filed September 21, 2001, Exhibit 4(a), File No.

4.2 Indenture, dated as of May 4, 2023, between FirstEnergy Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 4, 2023, Exhibit 4.1, File No.

4.3 Officer’s Certificate relating to FirstEnergy Corp.'s 2.85% Notes, Series A, due 2022, 3.90% Notes, Series B, due 2027 and 4.85% Notes, Series C, due 2047 (incorporated by reference to FE’s Form 8-K filed June 21, 2017, Exhibit 4.1, File No.

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4.13 Description of Securities Registered under Section 12(b) of the Securities Exchange Act of 1934 (incorporated by reference to FE's Form 10-K filed February 10, 2020, Exhibit 4-10, File No.

4.14 Form of 4.00% Convertible Senior Notes due 2026 (included hereto in Exhibit 4.2

10.1 Credit Agreement, dated as of October 18, 2021, by and among FirstEnergy Corp., FirstEnergy Transmission, LLC, the banks and other financial institutions party thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to FE’s Form 8-K filed October 18, 2021, Exhibit 10.1, File No.

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10.6 Credit Agreement, dated as of October 18, 2021, by and among Monongahela Power Company, The Potomac Edison Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd, as administrative agent (incorporated by reference to FirstEnergy’s Form 8-K filed October 18, 2021, Exhibit 10.6, File No.

10.7 Amendment No.

1 and Consent and Limited Waiver to Credit Agreement, dated as of April 27, 2023, by and among FirstEnergy Corp., FirstEnergy Transmission, LLC, the banks and other financial institutions party thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.1, File No.

10.8 Amendment No.

1 and Consent and Limited Waiver to Credit Agreement, dated as of April 27, 2023, by and among The Cleveland Electric Illuminating Company, Ohio Edison Company, The Toledo Edison Company, the banks and other financial institutions party thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.2, File No.

10.9 Amendment No.

1 and Consent and Limited Waiver to Credit Agreement, dated as of April 27, 2023, by and among Metropolitan Edison Company, Pennsylvania Power Company, Pennsylvania Electric Company, West Penn Power Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd., as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.3, File No.

10.10 Amendment No.

1 and Consent and Limited Waiver to Credit Agreement, dated as of April 27, 2023, by and among American Transmission Systems, Incorporated, Mid-Atlantic Interstate Transmission, LLC, Trans-Allegheny Interstate Line Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and PNC Bank, National Association, as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.4, File No.

10.11 Amendment No.

1 to Credit Agreement, dated as of April 27, 2023, by and among Jersey Central Power & Light Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd., as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.5, File No.

10.12 Amendment No.

1 to Credit Agreement, dated as of April 27, 2023, by and among Monongahela Power Company, The Potomac Edison Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd, as administrative agent.

(incorporated by reference to FirstEnergy’s Form 8-K filed May 1, 2023, Exhibit 10.6, File No.

10.13 Amendment No.

2 and Consent and Limited Waiver to Credit Agreement, dated as of October 20, 2023, by and among FirstEnergy Corp., the banks and other financial institutions party thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.1, File No.

10.14 Amendment No.

2 and Consent and Limited Waiver to Credit Agreement, dated as of October 20, 2023, by and among The Cleveland Electric Illuminating Company, Ohio Edison Company, The Toledo Edison Company, the banks and other financial institutions party thereto, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.2, File No.

10.15 Amendment No.

2 and Consent and Limited Waiver to Credit Agreement, dated as of October 20, 2023, by and among Metropolitan Edison Company, Pennsylvania Power Company, Pennsylvania Electric Company, West Penn Power Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd., as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.3, File No.

10.16 Amendment No.

2 and Consent and Limited Waiver to Credit Agreement, dated as of October 20, 2023, by and among American Transmission Systems, Incorporated, Mid-Atlantic Interstate Transmission, LLC, Trans-Allegheny Interstate Line Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and PNC Bank, National Association, as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.4, File No.

10.17 Amendment No.

2 to Credit Agreement, dated as of October 20, 2023, by and among Jersey Central Power & Light Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd., as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.5, File No.

10.18 Amendment No.

2 to Credit Agreement, dated as of October 20, 2023, by and among Monongahela Power Company, The Potomac Edison Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and Mizuho Bank, Ltd, as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.6, File No.

10.19 Credit Agreement, dated as of October 20, 2023, by and among Keystone Appalachian Transmission Company, the banks and other financial institutions party thereto on the date hereof, as lenders, and PNC Bank, National Association, as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.7, File No.

10.20 Credit Agreement, dated as of October 20, 2023, by and among FirstEnergy Transmission, LLC, the banks and other financial institutions party thereto on the date hereof, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent.

(incorporated by reference to FE’s Form 10-Q filed October 26, 2023, Exhibit 10.8, File No.

10.21 Consent Decree dated March 18, 2005 (incorporated by reference to FE’s Form 8-K filed March 18, 2005, Exhibit 10-1, File No.

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and Brookfield Super-Core Infrastructure Partners (ER) SCSp, as guarantors.

(incorporated by reference to FE’s Form 10 -K filed Febru ary 16 , 202 2 , Exhibit 10 -10 , File No.

10-11 (B) Amended and Restated Limited Liability Company Operating Agreement of FirstEnergy Transmission, LLC (incorporated by reference to FE’s Form 8-K filed May 31, 2022, Exhibit 10.1, File No.

(incorporated by reference to FE’s Form 10-K filed February 16, 2022, Exhibit 10-10, File No.

10.25 Purchase and Sale Agreement, dated as of February 2, 2023, among the FirstEnergy Corp., and FirstEnergy Transmission, LLC, and North American Transmission Company II L.P., and North American Transmission FINCO L.P., Brookfield Super-Core Infrastructure Partners L.P., Brookfield Super-Core Infrastructure Partners (NUS) L.P.

and Brookfield Super-Core Infrastructure Partners (ER) SCSp, as guarantors.

(incorporated by reference to FE’s Form 10-Q filed April 27, 2023, Exhibit 10.1, File No.

10.26 Amended and Restated Limited Liability Company Operating Agreement of FirstEnergy Transmission, LLC (incorporated by reference to FE’s Form 8-K filed May 31, 2022, Exhibit 10.1, File No.

10.27 Common Stock Purchase Agreement, dated as of November 6, 2021, among the FirstEnergy Corp.

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(incorporated by reference to FE’s Form S-3 filed on December 13, 2021, Exhibit 4(d), File No.

10-13 Director Appointment and Nomination Agreement, dated March 16, 2021, by and among the Icahn Group and FirstEnergy (incorporated by reference to FE's Form 8-K filed March 16, 2021, Exhibit 10.1, File No.

10.28 (B) FirstEnergy Corp.

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10.67 (B) Form of Restricted Stock Award Agreement (incorporated by reference to FE’s Form 10-Q filed July 22, 2021, Exhibit 10.3, File No.

10-54 (B) Voluntary Retirement Agreement with Gary D.

Benz (incorporated by reference to FE’s Form 10-Q filed July 22, 2021, Exhibit 10.4, File No.

10.68 (B) Restricted Stock Award Agreement to John W.

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10.70 (B) Form of 2022-2024 Stock-Based Performance-Adjusted Restricted Stock Unit Award Agreement (incorporated by reference to FE’s Form 10-Q filed April 21, 2022, Exhibit 10.2, File No.

10.71 (B) Form of 2023-2025 Cash-Based Performance-Adjusted Restricted Stock Unit Award Agreement (incorporated by reference to FE’s Form 10-Q filed August 1, 2023, Exhibit 10.7, File No.

10.72 (B) Form of 2023-2025 Stock-Based Performance-Adjusted Restricted Stock Unit Award Agreement (incorporated by reference to FE’s Form 10-Q filed August 1, 2023, Exhibit 10.

10.71 (B) Stock-Based Performance-Adjusted Restricted Stock Unit Award Agreement to John W.

Somerhalder II (incorporated by reference to FE’s Form 10-Q filed July 26, 2022, Exhibit 10.2, File No.

10-59 (A)(B) 2022 Interim Chief Executive Officer Restricted Stock Units Award Agreement to John W.

10.72 (B) Offer letter, dated March 26, 2023, between FirstEnergy Corp.

Tierney (incorporated by reference to FE’s Form 10-Q filed April 27, 2023, Exhibit 10.2, File No.

10.72 (B) 2022 Interim Chief Executive Officer Restricted Stock Units Award Agreement to John W.

Somerhalder II.

10-60 (A)(B) 2023 Interim Chief Executive Officer Restricted Stock Units Award Agreement to John W.

(incorporated by reference to FE’s Form 10-K filed February 13, 2023, Exhibit 10.59, File No.

10.73 (B) 2023 Interim Chief Executive Officer Restricted Stock Units Award Agreement to John W.

Somerhalder II.

(incorporated by reference to FE’s Form 10-K filed February 13, 2023, Exhibit 10.60, File No.

14 Code of Business Conduct and Ethics (incorporated by reference to FE’s Form 10-Q filed July 22, 2021, Exhibit 14.1, File No.

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23 (A) Consent of Independent Registered Public Accounting Firm.

31-1 (A) Certification of interim chief executive officer, pursuant to Rule 13a-14(a).

31.1 (A) Certification of chief executive officer, pursuant to Rule 13a-14(a).

31.2 (A) Certification of chief financial officer, pursuant to Rule 13a-14(a).

32 (A) Certification of interim chief executive officer and chief financial officer, pursuant to 18 U.S.C.

32 (A) Certification of chief executive officer and chief financial officer, pursuant to 18 U.S.C.

97 (A) Policy r elating to r ecovery of e rroneously a warded c ompensation

101 The following materials from the Annual Report on Form 10-K for FirstEnergy Corp.

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FIRSTENERGY CORP.

Somerhalder II

Interim President and Chief Executive Officer and Chair of the FE Board

President and Chief Executive Officer

February 13, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

FIRSTENERGY CORP.

President and Chief Executive Officer

(Principal Executive Officer)

Somerhalder II

Interim President and Chief Executive Officer and Chair of the FE Board

(Principal Executive Officer)

Non-Executive Chair

/s/ Lisa Winston Hicks

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/s/ Steven J.

Demetriou /s/ Andrew Teno

Demetriou Andrew Teno

Director Director

/s/ Paul Kaleta /s/ Leslie M.

Paul Kaleta Leslie M.

Demetriou /s/ Leslie M.

Demetriou Leslie M.

Director Director

Klimczak /s/ Melvin D.

Klimczak Melvin D.

/s/ Paul Kaleta /s/ Melvin D.

Paul Kaleta Melvin D.

Director Director

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures