SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 12, 2003
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
----------- ----------------------------------- ------------------
333-21011 FIRSTENERGY CORP. 34-1843785
(An Ohio Corporation)
76 South Main Street
Akron, Ohio 44308
(800) 736-3402
Item 5. Other Events
This current report on Form 8-K files an exhibit to the Registration
Statement on Form S-3 (No. 333-103865) filed by FirstEnergy Corp. (Company) with
the Securities and Exchange Commission (SEC) under the Securities Act of 1933,
as amended (Securities Act), on March 17, 2003, as amended by Pre-Effective
Amendment No. 1 thereto, filed with the SEC under the Securities Act on August
27, 2003.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No. Description
1(a) Underwriting Agreement, dated September 12, 2003, between the
Company and Citigroup Global Markets Inc. and Morgan Stanley
& Co. Incorporated, as representatives of the several
underwriters named therein, relating to the offer and sale of up
to 32,200,000 shares of the Company's common stock, par value
$0.10 per share.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
September 24, 2003
FIRSTENERGY CORP.
Registrant
/s/ Harvey L. Wagner
--------------------------------------------
Harvey L. Wagner
Vice President, Controller
and Chief Accounting Officer
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Exhibit 1(a)
EXECUTION COPY
FIRSTENERGY CORP.
----------
28,000,000 SHARES COMMON STOCK, PAR VALUE $.10 PER SHARE
UNDERWRITING AGREEMENT
September 12, 2003
September 12, 2003
Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated
and the other Underwriters listed on Annex A hereto
c/o
Citigroup Global Capital Inc.
388 Greenwich Street
New York, New York 10013
and
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
I. FirstEnergy Corp., an Ohio corporation (hereinafter called the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Citigroup Global Capital Inc. ("Citigroup"), Morgan Stanley &
Co. Incorporated ("Morgan Stanley"), and each of the other underwriters named on
Annex A hereto (collectively, the "Underwriters", which term, when the context
permits, shall also include any underwriters substituted as hereinafter provided
in Section X), for whom Citigroup and Morgan Stanley are acting as
representatives (in such capacity, the "Representatives"), and the Underwriters,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agree to purchase, severally and
not jointly, from the Company the number of shares of the Company's common
stock, par value $.10 per share, identified in Annex B hereto, set forth on
Annex A hereto opposite their names (in an aggregate number of shares of
28,000,000), together with associated share purchase rights, at a purchase price
(the "Purchase Price") identified in Annex B hereto (the "Firm Shares"). The
Company also proposes, subject to the same terms and conditions referenced
above, to issue and sell to the Underwriters not more than an additional
4,200,000 shares of its common stock, par value $.10 per share, together with
associated share purchase rights (the "Additional Shares"), if and to the extent
you, as Representatives, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of the Company's common stock,
par value $.10 per share, granted to the Underwriters in Section III hereof. The
Firm Shares and the Additional Shares are hereafter collectively referred to as
the "Shares." The shares of common stock, par value $.10 per share, of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus
(Registration No. 333-103865), for the registration of $2,000,000,000 aggregate
par value and/or principal amount of its debt securities, common stock, share
purchase contracts and/or share purchase units, and will file with the
Commission a final prospectus supplement specifically relating to the terms of
the Shares pursuant to Rule 424(b) under the Securities Act of 1933 (the
"Securities Act"). Such registration statement has become effective. The Company
qualifies for use of Form S-3 for the registration of the Shares, and the Shares
are registered under the Securities Act. The prospectus forming a part of such
registration statement, at the time such registration statement (or the most
recent amendment thereto filed prior to the time of effectiveness of this
Agreement) became effective, including all documents incorporated by reference
therein at that time pursuant to Item 12 of Form S-3, is hereinafter referred to
as the "Basic Prospectus." In the event that (i) the Basic Prospectus shall have
been amended, revised or supplemented prior to the time of effectiveness of this
Agreement, including without limitation by any preliminary prospectus supplement
relating to the Shares, or (ii) the Company shall have filed documents pursuant
to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") after the time such registration statement (or the most recent amendment
thereto filed prior to the time of effectiveness of this Agreement) became
effective and prior to the time of effectiveness of this Agreement, which are
incorporated or deemed to be incorporated by reference in the Basic Prospectus
pursuant to Item 12 of Form S-3, the term "Basic Prospectus" as used herein
reflecting such incorporation by reference. Such registration statement in the
form in which it became effective and as it may have been amended by all
amendments thereto as of the time of effectiveness of this Agreement (including,
for these purposes, as an amendment any document incorporated or deemed to be
incorporated by reference in the Basic Prospectus (the "Incorporated
Documents")), and the Basic Prospectus as it shall be supplemented to reflect
the terms of the offering and sale of the Shares by a prospectus supplement (the
"Prospectus Supplement") to be filed with the Commission pursuant to Rule 424(b)
under the Securities Act, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively.
II.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective Shares as soon after this underwriting
agreement (the "Agreement") is entered into as in your judgment is advisable.
The Company is further advised by you that the Shares are to be offered to the
public at the public offering price set forth in Annex B hereto. Annex B also
sets forth the maximum concession and reallowance per Share.
III.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have the
right to purchase, severally and not jointly, up to 4,200,000 Additional Shares
at the Purchase Price. The Representatives may exercise this right on behalf of
the Underwriters in whole or from time to time in part by giving written notice
of each election to exercise the option not later than 30 days after the date of
this Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be a least one business day after the
written notice is given and may not be earlier than the closing date for the
Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section IV hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, that Additional Shares are to be purchased
(an "Option Closing Date"), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Additional Shares to be purchased on such
Option Closing Date as the number of Firm Shares set forth in Annex B hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
IV.
Payment for the Firm Shares shall be made to the Company or its order
by wire transfer or by certified or official bank check or checks in immediately
available funds at the office of Pillsbury Winthrop LLP, One Battery Park Plaza,
New York, N.Y., at 10:00 A.M., New York City time, upon delivery of such Firm
Shares for the respective accounts of the Underwriters, on September 17, 2003,
or at such other time on the same or such other date, not later than September
24, 2003, as we shall mutually agree. The time and date of such payment and
delivery are herein referred to as the Closing Date.
Payment for any Additional Shares shall be made to the Company or its
order by wire transfer or by certified or official bank check or checks in
immediately available funds at the office of Pillsbury Winthrop LLP, One Battery
Park Plaza, New York, N.Y., at 10:00 A.M., New York City time, upon delivery of
such Additional Shares for the respective accounts of the Underwriters, on the
date specified in the corresponding notice described in Section III or at such
other time on the same or on such other date, in any event not later than
October 24, 2003, as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date."
The Firm Shares and Additional Shares shall be registered in such
names and in such denominations as you shall request in writing not later than
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two full business days prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the Underwriters, with any transfer taxes,
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the purchase price therefor. Delivery of Firm Shares
and Additional Shares shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
V.
The Company represents and warrants to you that as of the date hereof:
(a) (i) the Basic Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto or filed pursuant to Rule 424(b) under the Securities Act
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder (the "Securities Act Regulations"), and the Incorporated
Documents complied when originally filed in all material respects with
the requirements of the Securities Act or the Exchange Act pursuant to
which they were filed and the applicable rules and regulations of the
Commission thereunder, (ii) the Registration Statement and the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein, will comply (at the time
of such amendment, supplement or modification and, if amended,
supplemented or modified prior to the Closing Date, on the Closing
Date) in all material respects with the Securities Act and the
Securities Act Regulations, (iii) the Registration Statement, when it
became effective, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iv) the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein, will not contain (at the
time of such amendment, supplement or modification and, if amended,
supplemented or modified prior to the Closing Date, on the Closing
Date) any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; except that these representations and warranties do not
apply to statements in or omissions from the Registration Statement or
the Prospectus, in each case as amended, supplemented or modified, or
the Basic Prospectus, based upon information furnished to the Company
in writing by you or by any Underwriter expressly for use therein.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio, has the corporate power and authority to own, lease or
operate its property and to conduct its business as described in the
Basic Prospectus and the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(c) Each Significant Subsidiary (as defined below) of the
Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, and has corporate power and authority to own, lease or
operate its property and to conduct its business as presently being
conducted; and is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
"Significant Subsidiary" shall have include American Transmission
Systems, Incorporated, The Cleveland Electric Illuminating Company,
FirstEnergy Generation Corp., FirstEnergy Nuclear Company, FirstEnergy
Solutions Corp., Jersey Central Power & Light Company, Metropolitan
Edison Company, Ohio Edison Company, Pennsylvania Electric Company,
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Pennsylvania Power Company, The Toledo Edison Company, First Energy
Nuclear Operating Company.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(f) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(g) The Shares have been duly authorized, and when issued
and delivered against payment therefor as provided herein, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
incorporation or code of regulations of the Company or any Significant
Subsidiary of the Company or any agreement or other instrument binding
upon the Company or any Significant Subsidiary of the Company or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Significant Subsidiary of
the Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states and under both the Securities Act and
the Public Utility Holding Company Act of 1935 (the "Holding Company
Act") from the Commission (whose approval for the performance by the
Company of its obligations under this Agreement has been obtained).
(i) Since the respective dates as of which information is
given in the Prospectus, there has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in the earnings, business, condition (financial or otherwise)
or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(j) There are no legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries is a
party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(k) Each preliminary prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424(b) under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the Securities Act Regulations.
(l) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, required to
register as an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment
Company Act of 1940.
(m) The accountants who certified the financial statements
included or incorporated by reference in the Prospectus were at the
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time of such certifications independent certified accountants with
respect to the Company within the meaning of the Securities Act and
the Securities Act Regulations (hereinafter, the "Independent
Accountants").
(n) The Company maintains (x) systems of internal controls
and processes sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences; and (y) disclosure controls and procedures
(as defined in Rule 13a-14(c) under the Exchange Act).
(o) Except as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), the Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) Except as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
VI.
The several obligations of the Underwriters hereunder are
subject to the following conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, no order of the Commission
directed to the adequacy or accuracy of any document incorporated by
reference therein shall be in effect, and no proceedings for either
purpose shall be pending before or threatened by the Commission; (ii)
subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act (a "Rating"); (iii)
subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
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thereto subsequent to the date of this Agreement), that, in the
judgment of the Representatives, is material and adverse and which, in
either case, makes it, in the judgment of the Representatives,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus;
(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in paragraphs (a)(i)
and (a)(ii) above and that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) You shall have received, on and as of the Closing Date,
the favorable opinion of Gary D. Benz, Esq., Associate General Counsel
for the Company, or of such other member or members of the bar of the
State of Ohio who may be designated for that purpose by the Company
and who shall not be unsatisfactory to your counsel, to the effect
that:
(i) the Company has been duly incorporated and is
validly existing under the laws of the State of Ohio, and
has corporate authority to carry on its business as
described in the Prospectus, to own, lease and operate the
properties used and useful in said business and to issue the
Shares;
(ii) each Significant Subsidiary of the Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate
authority to conduct its business as presently being
conducted as described in the Prospectus and to own, lease
and operate its property useful in said business;
(iii) the statements made in Item 15 of the
Registration Statement, insofar as such statements
constitute summaries of the legal matters or documents
referred to therein, are accurate in all material respects;
(iv) the authorized Common Stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(v) the shares of Common Stock outstanding prior
to the issuance of the Shares have been duly authorized and
are validly issued, fully paid and non-assessable;
(vi) all of the issued shares of capital stock of
each Significant Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free
and clear of all liens, encumbrances, equities or claims;
(vii) the Shares have been duly authorized and,
when issued and delivered in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights arising under
the Ohio General Corporation Law or under the Company's
amended articles of incorporation or amended code of
regulation or by contractual arrangement;
(viii) all legally required proceedings under
Ohio, New Jersey and Pennsylvania law in connection with the
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authorization, issuance and sale and the validity of the
Shares by the Company in accordance with this Agreement have
been taken and all legally required orders, consents or
other authorizations or approvals of any Ohio, New Jersey
and Pennsylvania public boards or bodies in connection
therewith (other than in connection with or in compliance
with the provisions of the securities or Blue Sky laws of
any jurisdiction, as to which such counsel need not express
an opinion) have been obtained;
(ix) this Agreement has been duly authorized,
executed and delivered by the Company;
(x) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of the laws
of the State of Ohio, New Jersey or Pennsylvania or the
amended articles of incorporation or amended code of
regulations of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to
the Company and its subsidiaries, taken as a whole, or, to
the best of such counsel's knowledge, any judgement, order
or decree of any Ohio, New Jersey or Pennsylvania
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any Ohio,
New Jersey or Pennsylvania governmental body or agency is
required for the performance by the Company of its
obligations under this Agreement except such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer or issuance of the
Shares;
(xi) to the best knowledge of such counsel, no
order directed to the adequacy of any document incorporated
by reference in the Prospectus has been issued by the
Commission, and no challenge by the Commission has been made
to the adequacy of any such document;
(xii) the descriptions in the Registration
Statement and Prospectus of franchises, regulations,
statutes, legal and governmental proceedings and contracts
and other documents insofar as such descriptions constitute
(a) matters of law or legal conclusions (or summaries
thereof) involving the laws of the State of Ohio, New Jersey
or Pennsylvania or (b) summaries of legal proceedings to
which the Company is a party, are accurate in all material
respects, and such counsel does not know of any legal or
governmental proceedings required to be described in the
Registration Statement or the Prospectus which are not so
described (or the descriptions of which are not incorporated
by reference therein) as required, other than proceedings
that such counsel believes are not likely to have a material
adverse effect on the Company and its subsidiaries taken as
a whole, or on the power or ability of the Company to
perform its obligations under this Agreement or to
consummate the transactions contemplated by the Prospectus,
nor of any contracts or documents of a character required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement
which are not so described (or the descriptions of which are
not incorporated by reference therein) or filed as required;
and
(xiii) except as set forth in the Prospectus
(exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), the Company and
each of its subsidiaries has obtained all necessary
consents, authorizations, approvals, orders, licenses,
certificates and permits of and from, and has made all
declarations and filings with, all foreign, federal, state,
local and other governmental authorities, all
self-regulatory organizations and all courts and other
tribunals, required to own, lease, license and operate and
use its properties and assets and to conduct its business in
the manner described in the Prospectus, except to the extent
that the failure to obtain, declare or file would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole.
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In rendering such opinion, such counsel may rely as to all
matters of New York law upon the opinion referred to in paragraph (d)
below and as to all matters of New Jersey law upon the opinion of
counsel acceptable to the Representatives. In addition, such counsel
shall state that nothing has come to the attention of such counsel
which would lead such counsel to believe that the Registration
Statement or any post-effective amendment thereto (except for the
financial statements, including the notes thereto and any related
schedules, and other financial and statistical data included therein,
as to which such counsel need express no opinion), at the time such
Registration Statement or any such post-effective amendment thereto
became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein (except for the financial
statements, including the notes thereto and any related schedules, and
other financial and statistical data therein, as to which such counsel
need express no opinion), as of its date and on the Closing Date
included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) You shall have received, on and as of the Closing Date,
the favorable opinion of Pillsbury Winthrop LLP, New York counsel for
the Company, to the effect that:
(i) the statements made in the Prospectus under
the caption "Description of Common Stock", insofar as such
statements constitute summaries of the legal matters or
documents referred to therein, are accurate in all material
respects;
(ii) the authorized Common Stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iii) the Shares have been duly authorized and,
when issued and delivered in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights arising under
the Ohio General Corporation Law or under the Company's
amended articles of incorporation or amended code of
regulation;
(iv) all legally required proceedings under the
laws of the State of New York or the United States of
America in connection with the authorization, issuance and
sale of the Shares by the Company in accordance with this
Agreement have been taken and all legally required orders,
consents or other authorizations or approvals of the
Commission and of any other New York or federal public
boards or bodies in connection therewith (other than in
connection with or in compliance with the provisions of the
securities or Blue Sky laws of any jurisdiction, as to which
such counsel need not express an opinion) have been
obtained;
(v) this Agreement has been duly authorized,
executed and delivered by the Company;
(vi) to such counsel's knowledge, the execution
and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement will not
contravene any provision of the laws of the State of New
York or federal law or the amended articles of incorporation
or amended code of regulations of the Company or any
agreement listed on Schedule I hereto that is material to
the Company or any of its subsidiaries, taken as a whole, or
any judgement, order or decree of any New York or federal
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any New
York or federal governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement except such as may be required by the securities
or Blue Sky laws of New York in connection with the offer or
8
issuance of the Shares and under both the Securities Act and
the Holding Company Act from the Commission (whose approval
for the performance by the Company of its obligations under
this Agreement has been obtained);
(vii) the Registration Statement, the Prospectus
and any supplements or amendments thereto (except for the
financial statements, including the notes thereto and any
related schedules, and other financial and statistical data
included or incorporated by reference therein, as to which
such counsel need not express an opinion), as of their
respective effective or issue dates, complied as to form in
all material respects with the requirements of the
Securities Act and the applicable rules and regulations of
the Commission thereunder;
(viii) each document of the Company incorporated
by reference in the Prospectus, as such document was
originally filed by the Company pursuant to the Securities
Act or the Exchange Act (except for the financial
statements, including the notes thereto and any related
schedules, and other financial and statistical data included
or incorporated by reference therein, as to which such
counsel need not express an opinion), complied as to form
when so filed in all material respects with the requirements
of the Securities Act or the Exchange Act pursuant to which
it was filed and the applicable rules and regulations of the
Commission thereunder;
(ix) to the best knowledge of such counsel, no
order directed to the adequacy of any document of the
Company incorporated by reference in the Prospectus has been
issued by the Commission, and no challenge by the Commission
has been made to the adequacy of any such document; and
(x) the Company is not, and after giving effect to
the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus will not
be, required to register as an "investment company" or an
entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as
amended.
In rendering such opinion, such counsel may rely as to all
matters of Ohio and Pennsylvania law upon the opinion referred to in
paragraph (c) above and as to all matters of New Jersey law upon the
opinions of counsel acceptable to the Representatives. In addition,
such counsel shall state that nothing has come to the attention of
such counsel which would lead such counsel to believe that the
Registration Statement or any post-effective amendment thereto (except
for the financial statements, including the notes thereto and any
related schedules, and other financial and statistical data therein,
as to which such counsel need express no opinion), at the time such
Registration Statement or any such post-effective amendment thereto
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein (except for the financial
statements, including the notes thereto and any related schedules, and
other financial and statistical data therein, as to which such counsel
need express no opinion), as of its date and on the Closing Date
included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(e) You shall have received, on and as of the Closing Date,
the favorable opinion of Thelen Reid & Priest LLP, counsel for the
Underwriters, with respect to the matters described in paragraphs
(d)(i), (d)(iii) and (d)(v) above. In rendering such opinion, such
counsel shall state that nothing has come to the attention of such
counsel which would lead such counsel to believe that the Registration
9
Statement or any post-effective amendment thereto (except for the
financial statements, including the notes thereto and any related
schedules, or other financial data therein, as to which such counsel
need express no opinion), at the time such Registration Statement or
any such post-effective amendment thereto becomes effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented or modified by the filing of a document incorporated by
reference therein (except for the financial statements, including the
notes thereto and any related schedules, and other financial data
therein, as to which such counsel need express no opinion), as of its
date and on the Closing Date included or includes any untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the
Representatives, from the Independent Accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between the Representatives and certain
shareholders, officers and directors of the Company relating to sales
and certain other dispositions of shares of Common Stock or certain
other securities, delivered to the Representatives on or before the
date hereof, shall be in full force and effect on the Closing Date.
VII.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish without charge to the Representatives ten
conformed copies of the Registration Statement, including all exhibits
filed with the Registration Statement and the documents incorporated
by reference therein (other than exhibits which are incorporated by
reference therein) and to each other Underwriter a signed copy of the
Registration Statement without exhibits and, during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and
any documents incorporated by reference therein at or after the date
thereof and any amendments and supplements thereto as you may
reasonably request. The terms "supplement" and "amendments" or "amend"
as used in this Agreement shall include all documents filed by the
Company with the Commission subsequent to the date of the Prospectus
pursuant to the Exchange Act which are deemed to be incorporated by
reference in the Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus or filing with the Commission any document
pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the
period referred to in paragraph (c) below, to furnish to the
Representatives a copy of each such proposed amendment, supplement or
document for your review prior to filing and not to file any such
proposed amendment, supplement or document to which you reasonably
object, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period as the Underwriters are required
by law to deliver a Prospectus in connection with sales of the Shares
by an Underwriter or dealer after the first date of the public
offering of the Shares, any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of your counsel
or counsel to the Company, to amend the Registration Statement or to
amend or supplement the Prospectus or modify the information
10
incorporated by reference therein in order that the Prospectus will
not include any untrue statements of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus or modify such information to
comply with the Securities Act and the Securities Act Regulations,
forthwith to prepare and file with the Commission and to furnish
(subject to the conditions in paragraph (b) above), at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters, and to any other
dealers upon request, such amendments or supplements to the Prospectus
or modifications to the documents incorporated by reference therein,
so that the statements in the Prospectus as so amended, supplemented
or modified will not, in the light of the circumstances existing at
the time such Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus will comply with the Securities Act and the
Securities Act Regulations. Unless such event relates solely to the
activities of the Underwriters (in which case the Underwriters shall
assume the expense of preparing any such amendment or supplement), the
expenses of complying with this paragraph (c) shall be borne by the
Company until the expiration of nine months from the time of
effectiveness of this Agreement, and such expenses shall be borne by
the Underwriters thereafter.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdiction as you
shall reasonably request.
(e) To make available generally to the Company's security
holders and to the Representatives as soon as practicable an earning
statement covering a twelve month period beginning after the date of
this Agreement which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the Securities Act
Regulations.
(f) Without the prior written consent of the Representatives
on behalf of the Underwriters, during the period ending 90 days after
the date of the Prospectus, not to (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Shares to be sold hereunder, (B) the issuance by the
Company of shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof
of which the Underwriters have been advised in writing, or (C) the
issuance by the Company of shares of Common Stock pursuant to the
terms of the FirstEnergy Corp. Stock Investment Plan, the FirstEnergy
Corp. Executive and Director Incentive Compensation Plan, the
Centerior Energy Corporation Equity Compensation Plan, the GPU, Inc.
Stock Option and Restricted Stock Plan for MYR Group Inc. Employees,
the GPU, Inc. 1990 Stock Plan for Employees of GPU, Inc. and
Subsidiaries, the MYR Group Inc. 1999 Stock Option and Restricted
Stock Plan, the MYR Group Inc. 1995 Stock Option and Restricted Stock
Plan, the MYR Group Inc. 1992 Stock Option and Restricted Stock Plan,
the MYR Group Inc. 1990 Stock Option and Restricted Stock Plan, the
FirstEnergy Corp. Deferred Compensation Plan for Outside Directors,
the FirstEnergy Corp. Executive Deferred Compensation Plan, the
FirstEnergy Savings Plan, the GPU Companies Employee Savings Plan for
Nonbargaining Employees, the GPU Companies Employee Savings Plan for
Employees Represented by IBEW System Council U-3, the GPU Companies
Employee Savings Plan for Employees Represented by IBEW Local 459 and
UWUA Local 180, the GPU Companies Employee Savings Plan for Employees
Represented by IBEW Local 177, and FirstEnergy's Facilities Services
Group Business Unit President Incentive Plan.
(g) Reserved.
(h) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
11
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Basic Prospectus, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related
to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost
of printing or producing any Blue Sky or Legal Investment memorandum
in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification
of the Shares for offer and sale under state securities laws as
provided in Section VII(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the
offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the New York Stock Exchange, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, (ix) the document production charges
and expenses associated with printing this Agreement and (x) all other
costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in
this Section. It is understood, however, that except as provided in
this Section, Section VIII, and the third paragraph of Section X
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
(i) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(j) Not to, directly or indirectly, use any of the proceeds
from the sale of the Shares, or lend, contribute or otherwise make
available any such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities
of any person or entity in violation of any program administered by
the Office of Foreign Assets Control of the United States Department
of the Treasury, including without limitation those implemented by
regulations codified in Subtitle B, Chapter V, of Title 31, Code of
Federal Regulations.
VIII.
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or the Basic Prospectus
(including documents incorporated by reference therein), or caused by any
12
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
provided further, that with respect to any untrue statement or omission of
material fact made in any preliminary prospectus, the indemnity agreement
contained in this paragraph of Section VIII shall not inure to the benefit of
any Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the Shares concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (i) the Company had previously furnished
copies of the Prospectus to the Representatives, (ii) delivery of the Prospectus
was required by the Securities Act to be made to such person, (iii) the untrue
statement or omission of a material fact contained in the preliminary prospectus
was corrected in the Prospectus and (iv) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Shares to
such person, a copy of the Prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus, any amendments or supplements thereto, or the Basic Prospectus.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such action (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interest between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by the Representatives, in the case of parties
indemnified pursuant to the second preceding paragraph, and by the Company, in
the case of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 60
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
13
If the indemnification provided for in this Section VIII is
unavailable to an indemnified party under the first or second paragraphs hereof
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits conferred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregrate public offering
price of the Shares set forth in the table on the cover of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' obligations to contribute pursuant to this Section VIII are
several in the proportions which the respective number of Shares set forth
opposite their names in Annex A bear to the total number of Shares so set forth
in Annex A, or in such other proportions as may be determined pursuant to
Section IX, and not joint.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section VIII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section VIII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amounts of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section VIII are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section
VIII and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter to any person controlling any Underwriter or any affiliate of
any Underwriter or by or on behalf of the Company, any of its directors,
officers or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
IX.
The Underwriters may terminate this Agreement by notice given by the
Representatives to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
14
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
X.
This Agreement shall become effective when it has been executed by the
Company and the Representatives.
If any one or more of the Underwriters shall fail or refuse to
purchase the Shares which it or they have agreed to purchase hereunder, and the
total number of Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the total number
of Shares, the other Underwriters shall be obligated severally in the
proportions which the number of Shares set forth opposite their names in Annex A
bear to the total number of Shares so set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase; provided that in no event
shall the number of Shares which any Underwriter has agreed to purchase pursuant
to Section I be increased pursuant to this Section X by an amount in excess of
one-ninth of such number of Shares without the consent of such Underwriter. If
any Underwriter or Underwriters shall fail or refuse to purchase Shares and the
total number of Shares with respect to which such default occurs is more than
one-tenth of the total number of the Shares and arrangements satisfactory to you
and the Company for the purchase of such Shares are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or of the Company except as provided in
Section VIII. In any such case which does not result in such termination, either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days in each case, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by them in connection with this Agreement or the offering
contemplated hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15
This Agreement may be executed in counterparts each of which shall be
deemed to constitute an original and all of which shall be deemed to be one and
the same instrument binding on all of the parties hereto.
Very truly yours,
FIRSTENERGY CORP.
By: /s/ Thomas C. Navin
-------------------------------
Name and Title: Thomas C. Navin, Treasurer
--------------------------
16
Accepted: September 12, 2003
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Henry A. Clark III
-----------------------------------------
Name: Henry A. Clark III
Title: Managing Director
MORGAN STANLEY & CO.
INCORPORATED
By: /s/ David Schwarzbach
-----------------------------------------
Name: David Schwarzbach
Title: Vice President
Acting severally on behalf of themselves
and as Representatives on behalf of the
several Underwriters named herein and
on Annex A hereto.
17
Annex A
to Underwriting
Agreement
LIST OF UNDERWRITERS
Number of Firm Shares to
Name be Purchased
---- ---------
Citigroup Global Markets Inc. ....................... 7,560,000
Morgan Stanley & Co. Incorporated.................... 7,560,000
Barclays Capital Inc................................. 2,296,000
J.P. Morgan Securities Inc........................... 2,296,000
Wachovia Securities, LLC............................. 2,296,000
BNY Capital Markets, Inc............................. 1,078,000
Credit Suisse First Boston LLC ...................... 1,078,000
Lehman Brothers Inc. ................................ 1,078,000
UBS Securities LLC .................................. 1,078,000
McDonald Investments Inc., A Keycorp Company ........ 280,000
National City Investments, Inc. ..................... 280,000
PNC Capital Markets Inc. ............................ 280,000
SBK-Brooks Investments Corp. ........................ 280,000
Scotia Capital (USA) Inc. ........................... 280,000
The Williams Capital Group, L.P. .................... 280,000
-------------
Total.................................... 28,000,000
Annex B
to Underwriting
Agreement
Underwriting Agreement dated September 12, 2003
Registration Statement No.:
..........333-103865
Representatives:
..........Citigroup Global Markets Inc.
..........Morgan Stanley & Co. Incorporated
..........
Maximum
Concession/
Number of Purchase Price to Share to
Title Shares Price Public Dealers
----- --------- ----------- ----------- ---------
Common Stock, Par Value 28,000,000 $812,700,000 $840,000,000 $0.590
$.10 Per Share
September 12, 2003
Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated
and the other Underwriters listed on Annex A to the
Underwriting Agreement described below
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Citigroup Global Markets, Inc.
("Citigroup") and Morgan Stanley & Co. Incorporated ("Morgan Stanley"), as
--------- ---------------
representatives (the "Representatives") of the several Underwriters, including
---------------
Citigroup and Morgan Stanley (the "Underwriters"), propose to enter into an
------------
Underwriting Agreement (the "Underwriting Agreement") with FirstEnergy Corp., an
----------------------
Ohio corporation (the "Company"), providing for the public offering (the "Public
------- ------
Offering") by the several Underwriters of 28,000,000 shares (the "Shares") of
-------- ------
common stock, par value $.10 per share, of the Company (the "Common Stock").
------------
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of the
Representatives, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the final prospectus relating to the Public
Offering (the "Prospectus"), (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any Shares to the
Underwriters pursuant to the Underwriting Agreement or (b) transactions relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering.
In addition, the undersigned agrees that, without the prior written
consent of the Representatives, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the undersigned's share of Common Stock except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
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(Name)
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(Address)