AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 20, 2002.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRSTENERGY CORP.
(Exact name of registrant as specified in its charter)
OHIO 34-1843785
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
76 SOUTH MAIN STREET, AKRON, OHIO 44308-1890
(800) 646-0400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
NANCY C. ASHCOM
CORPORATE SECRETARY
FIRSTENERGY CORP.
76 SOUTH MAIN STREET
AKRON, OHIO 44308-1890
(330) 384-5504
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
WITH COPIES TO:
LUCAS F. TORRES, ESQ.
PILLSBURY WINTHROP LLP
ONE BATTERY PARK PLAZA
NEW YORK, NY 10004-1490
(212) 858-1000
FAX: (212) 858-1500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
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Common Stock, $.10 par value(3)...... 6,000,000 shares $31.99 $191,940,000 $17,664
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(1) Pursuant to Rule 416 the amount of shares to be registered includes such
additional number of shares as are required to prevent dilution resulting
from stock splits, stock dividends or similar transactions affecting the
common stock of the Registrant.
(2) Estimated in accordance with Rule 457(c) under the Securities Act of 1933
solely for the purpose of calculating the registration fee and, based upon
the average of the high and low prices of the common stock of the Registrant
on the New York Stock Exchange Composite Tape on December 13, 2002.
(3) Includes rights to purchase shares of common stock under the Registrant's
Rights Agreement that, prior to the occurrence of certain events, will not
be exercisable or evidenced separately from the shares of common stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED DECEMBER 20, 2002
PROSPECTUS
FIRSTENERGY CORP.
STOCK INVESTMENT PLAN
6,000,000 SHARES
COMMON STOCK
(PAR VALUE $.10 PER SHARE)
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The FirstEnergy Corp. Stock Investment Plan provides a way for shareholders
and employees of FirstEnergy Corp. and its subsidiaries, as well as others, to
purchase shares of FirstEnergy's common stock. Participants in the Plan may:
- Reinvest all or a portion of cash dividends paid on stock of FirstEnergy
or its subsidiaries that is registered in their names, as well as any
common stock credited to their Plan accounts, to purchase shares of
FirstEnergy common stock.
- Make an initial investment in FirstEnergy common stock with a cash payment
of at least $250 or, if already a shareholder or employee of FirstEnergy
or its subsidiaries, make an investment in FirstEnergy common stock with
optional cash investments at any time of at least $25 per payment. Cash
investments are limited to a maximum of $100,000 per calendar year.
- Receive certificates for whole shares of common stock credited to their
Plan accounts upon request.
- Deposit certificates representing FirstEnergy common stock into the Plan
for safekeeping.
- Sell shares of common stock credited to their Plan accounts through the
Plan.
Cash dividends and cash investments under the Plan will be used to purchase
shares of FirstEnergy common stock which, at our option, either will be
purchased on behalf of Plan participants in the open market by an Independent
Agent appointed by us or will be newly issued shares. The price of shares
purchased in the open market under the Plan will be the weighted average price
paid by the Independent Agent for the shares over the purchase period. The price
of newly issued shares acquired under the Plan will be the average of the high
and low prices of FirstEnergy common stock as reported in The Wall Street
Journal's report of New York Stock Exchange Composite Transactions for the
investment date. In both cases, the purchase price will include a transaction
fee which is not expected to exceed $.09 per share. We will receive all of the
proceeds resulting from the purchase of newly issued shares under the Plan. We
do not receive any part of the proceeds resulting from the purchase of shares in
the open market under the Plan other than a portion of the related transaction
fees designed to cover administrative costs. Our estimated annual cost to
operate the Plan is $200,000. Some or all of these costs may be recovered
through the transaction fees.
Fees payable by a Plan participant will be added to the purchase price for
shares purchased, and deducted from the selling price for shares sold, under the
Plan. (See Questions 15 and 22.)
To the extent required by applicable law in certain jurisdictions, including
Arizona, Florida, Idaho, Maine, New Jersey and North Dakota, shares of common
stock offered under the Plan to persons who are not already holders of
FirstEnergy common stock will be offered only through a registered broker/dealer
in those jurisdictions.
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This Prospectus describes the provisions of the Plan and should be retained
by participants for future reference. Shares of FirstEnergy common stock are
traded on the New York Stock Exchange under the symbol "FE."
Before you invest, you should carefully read this Prospectus and the
information referred to under the heading "Where You Can Find More Information."
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined that this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------
The date of this Prospectus is .
TABLE OF CONTENTS
PAGE
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FIRSTENERGY CORP. .......................................... 1
DESCRIPTION OF THE PLAN..................................... 3
Purpose................................................ 3
Administration......................................... 3
Participation.......................................... 4
Dividend Reinvestment.................................. 5
Cash Investments....................................... 5
Investment Dates....................................... 6
Purchases.............................................. 7
Safekeeping Option For Common Stock Certificates....... 8
Sales, Certificate Withdrawals And Closing Plan
Accounts.............................................. 8
Statements To Participants............................. 9
Tax Consequences....................................... 10
Other Information...................................... 10
RISK FACTORS................................................ 12
USE OF PROCEEDS............................................. 22
DESCRIPTION OF COMMON STOCK................................. 22
LEGAL MATTERS............................................... 23
EXPERTS..................................................... 23
WHERE YOU CAN FIND MORE INFORMATION......................... 23
i
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
NOT CONTAINED, OR INCORPORATED BY REFERENCE, IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY FIRSTENERGY. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF FIRSTENERGY SINCE THE DATE OF THIS PROSPECTUS.
FIRSTENERGY CORP.
FirstEnergy Corp. ("FirstEnergy", "we", "our" or "us") was organized under
the laws of the State of Ohio in 1996. On November 7, 2001, we merged with GPU,
Inc. ("GPU") and we were the surviving company. Our principal business is the
holding, directly or indirectly, of all of the outstanding common stock of our
principal electric utility operating subsidiaries, Ohio Edison Company ("Ohio
Edison"), The Cleveland Electric Illuminating Company ("Cleveland Electric"),
Pennsylvania Power Company ("Penn Power"), The Toledo Edison Company ("Toledo
Edison"), Jersey Central Power & Light Company ("JCP&L"), Metropolitan Edison
Company ("Met-Ed") and Pennsylvania Electric Company ("Penelec"). Our other
principal operating subsidiaries include American Transmission Systems,
Incorporated ("ATSI"); FirstEnergy Solutions Corp. ("FES"); FirstEnergy
Facilities Services Group, LLC ("FEFSG"); MYR Group, Inc. ("MYR"); MARBEL Energy
Corporation ("MARBEL"); FirstEnergy Nuclear Operating Company ("FENOC"); GPU
Capital, Inc.; and GPU Power, Inc. ATSI owns and operates transmission
facilities located within the service areas of Ohio Edison, Cleveland Electric,
Toledo Edison and Penn Power. FES provides energy-related products and services
and, through its FirstEnergy Generation Corp. ("FirstEnergy Generation")
subsidiary, operates our non-nuclear generation business. FENOC operates the
electric utility subsidiaries' nuclear generating facilities. FEFSG is the
parent company of several heating, ventilating, air conditioning and energy
management companies, and MYR is a utility infrastructure construction service
company. MARBEL is a fully integrated natural gas company. GPU Capital, Inc.
owns and operates electric distribution systems in foreign countries and GPU
Power, Inc. owns and operates generation facilities in foreign countries.
Our consolidated revenues are primarily derived from electric service
provided by our electric utility subsidiaries. The combined service areas of our
electric utility operating subsidiaries encompass approximately 37,200 square
miles in Ohio, Pennsylvania and New Jersey. The areas they serve have a combined
population of approximately 11.0 million.
As of September 30, 2002, Ohio Edison, Cleveland Electric, Penn Power and
Toledo Edison had 12,980 megawatts (MW) of generation capacity to meet customer
needs. Pursuant to our corporate separation plan implemented under Ohio utility
restructuring legislation, we transferred operational control of the non-nuclear
generation assets of those operating subsidiaries to FirstEnergy Generation as
of January 1, 2001. We expect that the transfer of ownership of those assets to
FirstEnergy Generation will be completed by December 31, 2005, the end of the
legislation's market development period.
As a result of restructuring legislation in Pennsylvania and New Jersey,
GPU had divested essentially all of its generation assets prior to the time we
agreed to merge with GPU in August 2000. However,
1
Pennsylvania and New Jersey restructuring orders require JCP&L, Penelec and
Met-Ed, operating subsidiaries of ours that were formerly owned by GPU, to act
as providers of last resort by supplying electricity to customers who do not
choose an alternate supplier. JCP&L's obligation in New Jersey is removed for
the period through July 2003 as a result of a regulatory approved auction.
Penelec's and Met-Ed's obligations in Pennsylvania extend through 2010.
Effective September 1, 2002, Met-Ed and Penelec assigned their provider of last
resort (PLR) responsibility to an affiliate company, FES, through a wholesale
power sale. The PLR sale runs through the end of 2002 and will be automatically
extended for each successive calendar year unless any party elects to cancel the
agreement by November 1 of the preceding year. Under the terms of the wholesale
agreement, FES assumes the supply obligation and the energy supply profit and
loss risk for the portion of power supply requirements not self-supplied by
Met-Ed and Penelec under their non-utility generation (NUG) contracts and other
existing power contracts with nonaffiliated third party suppliers. This
arrangement reduces Met-Ed's and Penelec's exposure to high wholesale power
prices by providing power below the shopping credit for their uncommitted PLR
energy costs during the term of the agreement to FES. Met-Ed and Penelec will
continue to defer those cost differences between NUG contract rates and the
rates reflected in their capped generation rates.
Our principal executive office is located at 76 South Main Street, Akron,
Ohio 44308-1890; telephone: (330) 646-0400.
2
DESCRIPTION OF THE PLAN
The following questions and answers describe the terms and conditions of
the Plan. We suggest that you keep this Prospectus for future reference.
PURPOSE
1. Q. What is the purpose of the Plan?
A. The purpose of the Plan is to provide shareholders and employees of
FirstEnergy and its subsidiaries, as well as others, a way to purchase
shares of FirstEnergy common stock. Purchases can be made by investing
cash and/or reinvesting cash dividends.
ADMINISTRATION
2. Q. Who administers the Plan?
A. We administer the Plan. This includes keeping the Plan records and
serving as custodian for shares held in the Plan. If we elect to meet the
purchase requirements of participants through purchases of shares of
common stock in the open market, funds for investment will be deposited
promptly into an escrow account for the benefit of Plan participants. An
Independent Agent appointed by us will then act on behalf of participants
in buying shares. The Independent Agent, or such other registered
securities broker designated by us, will sell Plan shares on behalf of
participants.
We reserve the right to interpret and regulate the Plan as deemed
necessary or desirable. Neither FirstEnergy nor our Independent Agent
will be liable for any act done in good faith or for any omission to act
in good faith, including, without limitation, any claim of liability
arising out of failure to close a participant's account upon the
participant's death prior to receipt of written notice of such death, or
with respect to the prices at which shares of common stock are purchased
or sold for the participant's account and the times when such purchases
and sales are made, or with respect to any loss or fluctuation in the
market value after the purchase or sale of such shares. However, we shall
not be relieved from any liability imposed under any federal, state or
other applicable securities law that cannot be waived.
3. Q. Who should I contact with questions concerning the Plan or FirstEnergy?
A. You may call our Investor Services toll-free at (800) 736-3402 or visit
our Web site at www.firstenergycorp.com. You may also write to us at the
following address:
FIRSTENERGY CORP.
INVESTOR SERVICES
76 SOUTH MAIN STREET
AKRON, OH 44308-1890
3
PARTICIPATION
4. Q. Who is eligible to participate in the Plan?
A. All registered shareholders and employees of FirstEnergy and its
subsidiaries are eligible to participate. In addition, any person or
entity who is not a registered shareholder or employee is eligible to
participate provided that in the case of citizens or residents of a
country other than the United States, its territories and possessions,
their participation would not violate local laws applicable to
FirstEnergy, the Plan or the participant.
5. Q. How do I enroll in the Plan or change my method of participation?
A. SHAREHOLDERS -- Current registered shareholders can enroll by completing
and signing a Plan Enrollment Form.
EMPLOYEES -- Employees can enroll by completing and signing a Plan
Enrollment Form/Payroll Deduction Authorization Form. If voluntary
payroll deductions are not desired, this form must be accompanied by a
cash payment.
OTHER PERSONS OR ENTITIES -- If you are not a registered shareholder or
employee, you can enroll by making an initial cash investment of at least
$250 and completing and signing a Plan Enrollment Form. The Plan
Enrollment Form provides information necessary to open an account, such
as the stock registration desired, address and taxpayer identification
number.
You may change your method of participation at any time by completing and
signing another Plan Enrollment Form. In the case of an employee who is
using payroll deductions to invest in the Plan, the amount of the
deduction can be changed or canceled by completing and signing another
Plan Enrollment Form/Payroll Deduction Authorization Form.
6. Q. What dividend payment options are provided under the Plan?
A. The Plan provides complete flexibility in regard to how dividends are
paid. You are asked to provide payment instructions by completing both
Parts (A) and (B) of the Dividend Reinvestment and Payment Instructions
Section of the Plan Enrollment Form. Part (A) contains payment
instructions for shares that are held by you in certificate form. Part
(B) contains payment instructions for shares that are held by us in an
account for you. Dividend payment options are as follows:
REINVEST DIVIDENDS ON ALL SHARES -- All dividends are reinvested to
purchase shares of FirstEnergy common stock.
PAY CASH DIVIDENDS ON ALL SHARES -- All dividends are paid in cash.
PAY CASH DIVIDENDS ON PORTION OF SHARES -- You may elect to have a
portion of dividends paid in cash and reinvest the remaining dividends to
purchase shares of FirstEnergy common stock by selecting the number of
shares, the percent, or the dollar amount of dividends to be paid in
cash.
If you elect to receive all or a portion of your dividends in cash, your
cash dividends may be deposited directly into your checking, savings or
credit union account at any financial institution
4
that accepts electronic direct deposits. Receiving your payments by
direct deposit ensures that the funds will be deposited into your bank
account on the payment date. If you are interested in direct deposit of
dividends, you should complete the appropriate section on the Plan
Enrollment Form or call Investor Services for a Direct Deposit
Authorization Form.
7. Q. When must my Plan Enrollment Form be received by FirstEnergy?
A. For dividends to be reinvested, your Plan Enrollment Form must be
received by FirstEnergy on or before the record date for the dividend
payment; otherwise, reinvestment of dividends will start with the next
succeeding dividend payment. The dividend record and payment dates for
preferred stock dividends vary and can be obtained by contacting
FirstEnergy. The dividend record and payment dates for common stock
dividends, which must be declared by the Board of Directors, are expected
to be as follows:
RECORD DATES -- Fifth business day of February, May, August, November
PAYMENT DATES -- March 1, June 1, September 1, December 1
For initial cash investments, a properly completed Plan Enrollment Form
and the initial cash payment must be received by FirstEnergy prior to a
cash Investment Date, which are the 1st and 15th day of each month.
Otherwise, the investment will be made on the next succeeding cash
Investment Date.
DIVIDEND REINVESTMENT
8. Q. What is meant by dividend reinvestment?
A. If you elect to reinvest all or a portion of your dividends, we will take
those dividends and purchase shares of FirstEnergy common stock for you.
The amount reinvested will be reduced by (1) any amount that is required
to be withheld under any applicable tax or other statutes and (2)
applicable transaction fees. See the "Purchases" section for more
detailed information.
CASH INVESTMENTS
9. Q. Who is eligible to make cash investments?
A. All persons and entities that are eligible to participate in the Plan are
eligible to make cash investments. See Question 4 for Plan eligibility
requirements.
10. Q. What are the minimum and maximum cash investments?
A. If you are not a registered shareholder or employee of FirstEnergy or its
subsidiaries, the initial cash investment must be at least $250.
If you are a registered shareholder or employee of FirstEnergy or its
subsidiaries, the minimum cash investment is $25 per payment; however,
for employees who elect to use payroll deduction to make cash
investments, the minimum deduction is $10.
The maximum amount of cash investments is $100,000 per calendar year.
5
11. Q. How do I make a cash investment?
A. If you are not a current Plan participant, you must enclose a check with
your Plan Enrollment Form.
If you are a current Plan participant, you can make a cash investment by
sending a check or by signing up for automatic electronic investments as
discussed below. When sending a check, you should attach a cash
investment form, which is attached to your Plan statements. You may also
send a check without a cash investment form; however, your stock
registration or tax identification number should be included on your
check for account identification purposes, along with a cover letter
requesting that the check be used to purchase common stock of
FirstEnergy. If you are sending a cash payment to open a new account, you
must send a letter of instruction providing the name, address and tax
identification number (include an IRS Form W-9) for the new account.
All checks should be made payable to "FirstEnergy Corp." and sent to
FirstEnergy Investor Services at 76 South Main Street, Akron, OH
44308-1890. For the protection of participants, we discourage sending
cash or endorsed second-party checks. Cash investments received from
foreign shareholders must be in United States dollars.
You may authorize monthly automatic electronic cash investments by
completing the appropriate section on the Enrollment Form or by
completing an Automatic Electronic Investment Authorization Form
available from Investor Services. This enables you to make regular
investments, if you choose, without the inconvenience of writing and
mailing checks. If you authorize automatic electronic cash investments,
funds will be withdrawn from your bank or credit union account around the
25th day of each month and will be invested on the next Investment Date
following the withdrawal. Your bank, savings association or credit union
must be a member of the National Automated Clearinghouse Association. You
may change the amount automatically withdrawn or the financial
institution at any time by completing a new Automatic Electronic
Investment Authorization Form, and you may stop automatic electronic cash
investments by notifying Investor Services in writing.
Cash investments, pending purchase of common stock through the Plan, will
be credited to your Plan account and held in a bank account separate from
funds of FirstEnergy. No interest will be paid to you on cash held for
investment.
You may request the return of a cash investment upon written request
received by FirstEnergy not later than 48 hours prior to the applicable
Investment Date.
INVESTMENT DATES
12. Q. When are the Investment Dates for Plan purchases?
A. Investment Dates for reinvested dividends are the dividend payment dates.
Payment dates for common stock dividends are expected to be March 1, June
1, September 1 and December 1. Payment dates for preferred stock can be
obtained by contacting Investor Services. Investment Dates for cash
investments are the 1st and 15th day of each month. A cash investment
must be received by FirstEnergy by the business day before the Investment
Date in order to be invested on such Investment Date. Otherwise, the cash
investment will be held by FirstEnergy and invested on the next
Investment Date.
6
In order to receive dividends on shares of common stock purchased with a
cash investment, the shares must be purchased on an Investment Date prior
to the dividend record date. Record dates for common stock dividends are
expected to be the fifth business day of February, May, August and
November.
PURCHASES
13. Q. What is the price of shares purchased under the Plan?
A. Reinvested dividends and cash investments will be used to purchase shares
of FirstEnergy common stock which, at the option of FirstEnergy, will be
either purchased on behalf of Plan participants in the open market by an
Independent Agent appointed by FirstEnergy or newly issued shares. When
shares are purchased in the open market, the purchase price per share
will be the weighted average price of the aggregated shares purchased by
the Independent Agent during the purchase period plus a transaction fee
which is not expected to exceed $.09 per share. The purchase period may
begin before the Investment Date and should be completed no more than ten
days after the Investment Date, although it could be longer. The length
of the purchase period is affected by the amount of funds to be invested,
the availability of shares in the open market, and market conditions. In
regard to purchases made by the Independent Agent, neither FirstEnergy
nor any participant will have any authority or power to direct the time
or price at which shares may be purchased; the markets on which the
shares are to be purchased (including any securities exchange, the
over-the-counter market or negotiated transactions); or the selection of
the broker or dealer (other than the Independent Agent) through whom
purchases may be made. The Independent Agent will combine the funds of
all participants for the purpose of executing purchase transactions.
When shares to be purchased are satisfied by newly issued shares, the
price will be the average of the high and low prices of FirstEnergy's
common stock, as reported in The Wall Street Journal's report of New York
Stock Exchange Composite Transactions, for the Investment Date (or the
next preceding day on which FirstEnergy common stock is traded on the New
York Stock Exchange, if it is not traded on the Investment Date), plus a
transaction fee which is not expected to exceed $.09 per share.
The primary consideration in determining the source of shares of common
stock to be used for purchases under the Plan is expected to be
FirstEnergy's need to increase equity capital. If FirstEnergy does not
need to raise funds externally or if the need for funds is satisfied
using sources other than the issuance of new shares through the Plan,
shares of common stock purchased for participants under the Plan will be
purchased in the open market. As of the date of this Prospectus, shares
of common stock purchased for participants under the Plan are being
purchased in the open market.
If shares cannot be purchased with respect to an Investment Date, or if
such purchase is deemed to be otherwise inadvisable by FirstEnergy or the
Independent Agent, the dividends and cash investments which otherwise
would have been invested will be paid or returned, as the case may be, to
the participants without interest.
7
14. Q. How many shares of common stock will be purchased?
A. The number of shares (including any fraction of a share) of common stock
purchased for you will be determined by dividing the total amount of the
cash dividend and/or cash investment to be invested for you on the
Investment Date by the purchase price. All shares purchased under the
Plan are held by FirstEnergy and credited to your Plan account until such
time as you request the withdrawal of shares from your Plan account.
15. Q. Do I incur any fees for shares purchased under the Plan?
A. Yes. There is a transaction fee for each share purchased to cover
brokerage commissions and administrative costs of the Plan. This
transaction fee is not expected to exceed $.09 per share.
SAFEKEEPING OPTION FOR COMMON STOCK CERTIFICATES
16. Q. What is the purpose and advantages of the safekeeping option?
A. The purpose of the Plan's safekeeping option is to enable you to deposit
any FirstEnergy common stock certificates into the Plan for safekeeping.
The certificates are canceled and the shares are credited to your Plan
account. The shares are shown on dividend checks and/or Plan account
statements and otherwise treated in the same manner as shares purchased
through the Plan. FirstEnergy does not offer safekeeping for preferred
stock certificates.
Benefits of the Plan's safekeeping option include: you do not have to
worry or bear the cost of protecting stock certificates or replacing
certificates due to loss, theft or destruction; you can request that a
certificate for whole shares be issued at no cost to you at any time; and
because shares held in safekeeping are treated in the same manner as
shares purchased through the Plan, you may conveniently sell them through
the Plan.
17. Q. How do I use the safekeeping option?
A. At the time of Plan enrollment, you may take advantage of the safekeeping
option by sending your certificate(s), unsigned, to FirstEnergy Investor
Services with a Plan Enrollment Form. Or, at any time after enrollment,
you may send your certificate(s), unsigned, with a signed letter of
instruction requesting that FirstEnergy hold the shares in safekeeping
and stating whether the dividends for shares being sent are to be
reinvested or paid in cash. Registered mail is suggested when mailing
certificates.
SALES, CERTIFICATE WITHDRAWALS AND CLOSING PLAN ACCOUNTS
18. Q. How do I receive a certificate for or sell a portion of my Plan shares?
A. To receive a certificate for or to sell a portion of the shares credited
to your Plan account, you must notify us of the number of whole shares to
be issued in certificate form or to be sold.
19. Q. How do I close my Plan account?
A. To close a Plan account, you must notify us and provide instructions as
to whether a certificate is to be issued, the shares are to be sold, or
both. If both, the number of whole shares for which a certificate is to
be issued must be specified so that the remainder of the shares can be
sold. When
8
requested to issue a certificate only, or if no instructions are
provided, we will issue a certificate for all whole shares credited to
the account and a check for the value of any fraction of a share. The
check for the fraction will be based on the closing sale price of
FirstEnergy common stock, as reported in The Wall Street Journal's report
of New York Stock Exchange Composite Transactions, for the trading day
immediately preceding the day we process the request.
20. Q. How long does it take to withdraw certificates or close my Plan account?
A. It normally takes less than three business days from the time we receive
a request for an account to be closed or a certificate to be issued.
However, if we receive your request to close your Plan account between a
dividend record date and the date that the additional shares purchased
with your reinvested dividend are credited to your account, your request
may not be processed until the additional shares are credited to your
Plan account (approximately two weeks after the dividend payment date).
The additional shares purchased will be added to your account, and all
shares will be issued or sold as soon as possible thereafter, depending
on your instructions. Upon request, however, we can issue a certificate
for or sell all whole shares currently in your Plan account, and then
close your account by issuing another certificate for or selling the
additional shares purchased after the shares are credited to your Plan
account.
The Plan does not provide for the automatic issuance of certificates
after a purchase, and certificates for fractions of shares will not be
issued under any circumstances. Certificates representing Plan shares
will be issued in the name in which your account is registered. If you
desire to transfer Plan shares to another registration, you should
contact us for transfer instructions.
21. Q. How often are shares sold and at what price?
A. Participants' requests to sell Plan shares will be aggregated and sold at
least once a week. (See Question 20 for information on requests to sell
all shares and close a Plan account after a dividend record date). We
will place a market order with the Independent Agent or broker designated
by us, who will sell the shares as soon as practicable. Neither
FirstEnergy nor any participant will have any authority or power to
direct the time or price at which shares may be sold.
The price of the shares sold will be the weighted average price of the
aggregated shares sold by the Independent Agent or designated broker less
a transaction fee which is not expected to exceed $.09 per share. A check
for sale of the shares, less the transaction fee, will generally be
mailed to the participant three business days after the shares are sold.
22. Q. Will I incur any fees for shares sold under the Plan?
A. Yes. There is a transaction fee for each share sold to cover brokerage
commissions and administrative costs of the Plan. This transaction fee is
not expected to exceed $.09 per share.
STATEMENTS TO PARTICIPANTS
23. Q. Will I receive Plan account statements?
A. If you reinvest some or all of your dividends, you will receive a Plan
statement about three weeks after each dividend payment date. You will
also receive a Plan statement about two weeks after any Investment Date
that you invest cash.
9
If you receive a dividend check for some or all of your dividends, you
will receive account information on the stub attached to the check.
In addition to periodic account statements, a Plan account history report
is available at any time upon request to FirstEnergy. This report is a
summary of all Plan purchases and withdrawals and provides a concise and
thorough record for you.
TAX CONSEQUENCES
24. Q. What are the tax consequences of participation in the Plan?
A. You will have the same federal income tax obligations with respect to
your dividends as shareholders who are not Plan participants. This means
that dividends reinvested under the Plan are taxable as ordinary income
even though you did not actually receive them in cash.
The selling of shares, including any fractional share, may give rise to a
capital gain or loss for federal income tax purposes. Any such gain or
loss will be determined by the difference between your net proceeds from
the sale and your tax basis in the shares sold.
The original tax basis of shares acquired through the Plan is equal to
their purchase price per share, including brokerage commission and other
fees. See Question 13 for information regarding the purchase price of
shares acquired through the Plan.
Any capital gain or loss will be long-term or short-term according to
your holding period and current tax laws. The holding period for the
shares acquired under the Plan commences the day after the applicable
Investment Date.
The above tax information is only a general discussion of certain tax
aspects of an investment in the Plan. You should consult your personal
tax adviser as to all of the tax consequences of participating in the
Plan, including the application of current and proposed federal, state,
local, foreign and other tax laws.
OTHER INFORMATION
25. Q. What happens if we issue a stock dividend or declare a stock split?
A. Any shares of common stock distributed by us as a stock dividend on
shares credited to your Plan account, or as a split of these shares, will
be credited to your Plan account. Stock dividends or split shares
distributed on any shares held by you in certificate form will be mailed
directly to you in the same manner as to shareholders who are not
participating in the Plan.
26. Q. If FirstEnergy has a rights offering, how will the rights on Plan shares
be handled?
A. Rights on shares held by you in certificate form and on any shares, both
whole and fractional, credited to your Plan account will be mailed
directly to you in the same manner as to shareholders not participating
in the Plan.
10
27. Q. How will shares I hold in the Plan be voted at meetings of shareholders?
A. You will receive a proxy card which will enable you to vote both shares
credited to your Plan account and shares held by you in certificate form.
28. Q. Can shares credited to my Plan account be pledged?
A. No. Shares credited to your Plan account may not be pledged. If you wish
to pledge such shares you must request the issuance of a stock
certificate for such shares.
29. Q. Who bears the risk of market price fluctuations affecting the value of
Plan shares?
A. Each individual participant in the Plan bears the risk of market price
changes affecting the value of the stock. We cannot assure you of a
profit or protect you against a loss on any shares you hold, purchase or
sell under the Plan.
30. Q. Can FirstEnergy terminate my participation in the Plan?
A. Yes. After mailing written notice to you, we may terminate your
participation in the Plan for any reason, including if your ownership
interest is less than one full share. If your participation has been
terminated, you will receive (1) a certificate for any or all of the
whole shares of common stock credited to your account, (2) any uninvested
dividend or cash investment credited to your account and (3) a check for
the cash value of any fraction of a share of common stock credited to
your account. Such fraction of a share will be valued at the average of
the high and low prices of FirstEnergy common stock as reported in The
Wall Street Journal's report of New York Stock Exchange Composite
Transactions for the trading day preceding the date of termination.
31. Q. May the Plan be changed, suspended or discontinued?
A. We reserve the right, for any reason, to modify, suspend or terminate any
provision of the Plan, or the Plan as a whole, at any time. All
participants will receive notice of any such modification, suspension or
termination. Typically, notice of a modification will be provided prior
to the effectiveness of the modification and notice of suspension or
termination will be given after the fact, but this may not always be the
case. If the Plan is suspended, we may similarly, for any reason,
reinstate the Plan at any time. Again, notice will be given to
participants of the reinstatement and such notice may be given before or
after the fact.
Upon any termination of the Plan by us, you will receive (1) a
certificate for all of the whole shares of common stock credited to your
account, (2) any uninvested dividend or cash investment credited to your
account and (3) a check for the cash value for any fraction of a share of
common stock credited to your account. Such fraction of a share will be
valued at the average of the high and low prices of FirstEnergy common
stock as reported in The Wall Street Journal's report of New York Stock
Exchange Composite Transactions for the trading day preceding the date of
termination.
IF YOU HAVE QUESTIONS CONCERNING THE PLAN OR FIRSTENERGY, PLEASE CALL INVESTOR
SERVICES AT 1-800-736-3402.
11
RISK FACTORS
Before investing in our common stock, you should carefully consider the
risks described below, as well as the other information contained in this
Prospectus or incorporated by reference herein from our other filings with the
Securities and Exchange Commission ("SEC"), which we refer you to for more
detailed information on our business, industry, and financial and corporate
structure. These are risks we consider to be material to your decision whether
to invest in our common stock. There may be risks that you view in a different
way than we do, and we may omit a risk that we consider immaterial, but you
consider important. If any of the following risks occur, our business, financial
condition or results of operations could be materially harmed. In that case, the
value or trading price of our common stock could decline, and you could lose
part or all of your investment.
RISKS RELATED TO OUR BUSINESS
CHANGES IN COMMODITY PRICES COULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
While much of our generation serves customers under rates set by regulatory
bodies, we also purchase and sell electricity in the competitive markets.
Increases in fuel costs can affect our profit margins in both our competitive
and non-competitive markets. Changes in power prices may impact our financial
results and financial position by decreasing the amount we receive from the sale
of power or increasing the amount we pay to purchase power. Power prices may
fluctuate substantially over relatively short periods of time for a variety of
reasons and we could be particularly vulnerable if power prices rise while any
of our generating units are out of service as a result of an unscheduled outage.
Although we use derivatives to hedge electricity and natural gas purchase
prices over periods of up to three years, we could experience losses on those
hedges when the underlying commodities are delivered. These losses would affect
our net income at the time of delivery.
OUR FACILITIES MAY NOT OPERATE AS PLANNED, WHICH MAY INCREASE OUR EXPENSES OR
DECREASE OUR REVENUES AND, THUS, HAVE AN ADVERSE EFFECT ON OUR FINANCIAL
PERFORMANCE.
Operation of power plants involves many risks, including the breakdown or
failure of equipment or processes, accidents, labor disputes, fuel interruption
and performance below expected levels. In addition, weather-related incidents
and other natural disasters can disrupt generation, transmission and
distribution delivery systems. Operation of our power plants below expected
capacity levels could result in lost revenues or increased expenses, including
higher maintenance costs and, if we are unable to perform our contractual
obligations, penalties or damages may result.
WE MAY NOT BE ABLE TO OBTAIN ADEQUATE FUEL SUPPLIES, WHICH COULD ADVERSELY
AFFECT OUR ABILITY TO OPERATE OUR FACILITIES.
We purchase fuel from many suppliers. Disruption in the delivery of fuel,
including disruptions as a result of weather, labor relations or environmental
regulations affecting our fuel suppliers, could adversely affect our ability to
operate our facilities, and thus, our results of operations.
12
RISKS RELATED TO OUR INDUSTRY
WE ARE SUBJECT TO COMPLEX GOVERNMENT REGULATIONS THAT MAY HAVE A NEGATIVE
IMPACT ON THE BUSINESSES AND RESULTS OF OPERATIONS OF FIRSTENERGY AND OUR
SUBSIDIARIES.
We are subject to comprehensive regulation by various federal, state and
local regulatory agencies that significantly influences our operating
environment. We are required to have numerous permits, approvals and
certificates from the agencies that regulate our business. We believe the
necessary permits, approvals and certificates have been obtained for our
existing operations and that our business is conducted in accordance with
applicable laws; however, we are unable to predict the impact on our operating
results from the future regulatory activities of any of these agencies. Changes
in or reinterpretations of existing laws or regulations or the imposition of new
laws or regulations may require us to incur additional expenses and could have
an adverse impact on our results of operations.
As a registered public utility holding company, we are subject to
regulation by the SEC under the Public Utility Holding Company Act of 1935 (the
"1935 Act"). The SEC has determined that our electric facilities constitute a
single integrated public utility system under the standards of the 1935 Act. The
1935 Act regulates us with respect to accounting, the issuance of securities,
the acquisition and sale of utility assets, securities or any other interest in
any business, and entering into, and performance of, service, sales and
construction contracts among our subsidiaries, and certain other matters. The
1935 Act also limits the extent to which we may engage in non-utility businesses
or acquire additional utility businesses. Each of our operating utility
subsidiaries' retail rates, conditions of service, issuance of securities and
other matters are subject to regulation in the state in which it operates - in
Ohio by the Public Utilities Commission of Ohio ("PUCO"), in New Jersey by the
New Jersey Board of Public Utilities ("NJBPU") and in Pennsylvania by the
Pennsylvania Public Utility Commission ("PPUC"). With respect to their wholesale
and interstate electric operations and rates, those subsidiaries are subject to
regulation, including regulation of their accounting policies and practices, by
the Federal Energy Regulatory Commission ("FERC"). Under Ohio law,
municipalities may regulate rates, subject to appeal to the PUCO if not
acceptable to the utility. In addition, ATSI is subject to regulation by the
FERC with respect to its rates and operation of interstate transmission.
Decisions by any of these regulatory bodies could affect us adversely.
RESTRUCTURING AND DEREGULATION IN THE ELECTRIC UTILITY INDUSTRY MAY RESULT IN
INCREASED COMPETITION AND UNRECOVERABLE COSTS THAT COULD ADVERSELY AFFECT OUR
AND OUR UTILITY SUBSIDIARIES' BUSINESS AND RESULTS OF OPERATIONS.
As a result of the actions taken by state legislative bodies over the last
few years, major changes in the electric utility business are occurring in parts
of the United States, including Ohio, New Jersey and Pennsylvania, where our
utility subsidiaries operate. These changes have resulted in fundamental
alterations in the way integrated utilities and holding company systems, like
ours, conduct their business.
Increased competition resulting from restructuring efforts could have a
significant, adverse financial impact on us and our utility subsidiaries and
consequently on our results of operations. Increased competition could result in
increased pressure to lower prices, including the price of electricity. Retail
competition and the unbundling of regulated electric service could have a
significant, adverse financial impact on us and our subsidiaries due to
potential impairment of assets, a loss of retail customers, lower
13
profit margins or increased costs of capital. We cannot predict the extent and
timing of entry by additional competitors into the electric markets.
In Ohio, New Jersey and Pennsylvania, laws applicable to electric industry
restructuring and the respective state regulatory plans of our operating
electric utility subsidiaries in those states include provisions:
- establishing PLR obligations for customers who have not selected other
suppliers in those subsidiaries' service areas,
- allowing customers to select other generation suppliers, and
- deregulating those subsidiaries' electric generation businesses.
Under their respective PLR obligations our regulated utility subsidiaries
are required to provide electric service to customers who have not selected
other suppliers at capped rates, which may be below current market rates and may
not have any relationship to our cost of supplying this power. To satisfy PLR
obligations in their respective service areas during applicable transition
periods, our regulated utility subsidiaries source power either from electricity
supplied through our competitive energy services subsidiary, FES, or from
grandfathered wholesale and non-utility generator contracts. FES in turn obtains
power from generation assets owned or leased by FirstEnergy Generation, or
through open market purchases. Because PLR rates are capped, we bear the risks
associated with increases in the costs of procuring such power, whether those
increases are experienced directly by us through fuel price increases, increased
costs of environmental compliance or generating unit outages, or reflected in
the market prices we must pay for purchased power. In addition, increases in
these costs can no longer be recovered from customers as was permitted prior to
state restructuring. If these costs were to increase significantly and prove
unrecoverable, our results of operations and business could be adversely
affected.
Our PLR customers may choose to purchase power from alternative
unaffiliated suppliers. Should they choose to switch from us, our revenues from
power sales would decrease. On the other hand, customers originally choosing
alternative unaffiliated suppliers may switch back to us, which may increase
demand above our available generation or contractual capacity and force us to
purchase additional power on the open market at potentially unfavorable prices.
Switching by customers as permitted by the state laws referred to above,
therefore, could have an adverse effect on our results of operations and
financial position. Conversely, to the extent power we sell to meet our PLR
obligations could have been sold to third parties at more favorable wholesale
prices, we will have incurred potentially significant lost opportunity costs.
In addition, our Ohio transition plan stipulation also granted preferred
access over our Ohio utility subsidiaries to unaffiliated marketers, brokers and
aggregators to 1,120 MW of our generation capacity through 2005 at established
prices for sales to suppliers serving the retail customers of our Ohio utility
subsidiaries. To the extent any of that capacity is used by unaffiliated
parties, we may incur potentially significant lost opportunity costs if we could
have sold such capacity at more favorable wholesale prices or used it in
satisfaction of PLR obligations in preference to higher priced purchased power
obtained for that purpose.
14
THE DIFFERENT REGIONAL POWER MARKETS IN WHICH WE COMPETE OR WILL COMPETE IN THE
FUTURE HAVE CHANGING TRANSMISSION REGULATORY STRUCTURES, WHICH COULD AFFECT OUR
PERFORMANCE IN THESE REGIONS.
Our results are likely to be affected by differences in the market and
transmission regulatory structures in various regional power markets. Problems
or delays that may arise in the formation and operation of new regional
transmission organizations, or "RTOs", may restrict our ability to sell power
produced by our generating capacity to certain markets if there is insufficient
transmission capacity otherwise available. The rules governing the various
regional power markets may also change from time to time, which could affect our
costs or revenues. Because it remains unclear which companies will be
participating in the various regional power markets, or how RTOs will develop or
what regions they will cover, we are unable to assess fully the impact that
transmission requirements may have on our business.
Management is unable to predict the outcome of these transmission
regulatory actions and proceedings or their impact on the timing and operation
of RTOs, our transmission operations or future results of operations and cash
flows.
WE ARE EXPOSED TO RISKS OF NUCLEAR GENERATION.
We currently have interests in four nuclear generating units operated by
our subsidiary, FENOC: Beaver Valley Power Station Units 1 and 2; Davis-Besse
Nuclear Power Station; and Perry Nuclear Power Plant Unit 1. We are, therefore,
subject to the risks of nuclear generation, which include the following:
- the potential harmful effects on the environment and human health
resulting from the operation of nuclear facilities and the storage,
handling and disposal of radioactive materials;
- limitations on the amounts and types of insurance commercially available
to cover losses that might arise in connection with our nuclear
operations or those of others in the United States;
- uncertainties with respect to contingencies and assessment amounts if
insurance coverage is inadequate; and
- uncertainties with respect to the technological and financial aspects of
decommissioning nuclear plants at the end of their licensed operation.
The Nuclear Regulatory Commission ("NRC") has broad authority under federal
law to impose licensing and safety-related requirements for the operation of
nuclear generation facilities. In the event of non-compliance, the NRC has the
authority to impose fines or shut down a unit, or both, depending upon its
assessment of the severity of the situation, until compliance is achieved.
Revised safety requirements promulgated by the NRC could necessitate substantial
capital expenditures at nuclear plants, including ours.
On April 30, 2002, the NRC initiated a formal inspection process at the
Davis-Besse nuclear plant. This action was taken in response to corrosion we
found in the reactor vessel head near the nozzle penetration hole during a
refueling outage in the first quarter of 2002. The purpose of the formal
inspection process is to establish criteria for NRC oversight of the licensee's
performance and to provide a record of the major regulatory and licensee actions
taken, and technical issues resolved, leading to the NRC's approval of restart
of the plant. As a result, the plant continues to remain offline. We expect to
complete
15
refurbishment and installation of the replacement reactor head as well as any
other work related to restart of the plant early in 2003. The NRC must authorize
restart of the plant following its formal inspection process before the unit can
be returned to service. More details of the repair costs incurred through 2002
are contained in our quarterly reports on Form 10-Q, as well as our current
reports on Form 8-K filed with the SEC (see "Where You Can Find More
Information").
Any of our plants could experience a serious nuclear incident at any time.
If such an incident did occur, it could cause us to incur significant repair and
replacement power expenses, which could adversely affect our results of
operations or financial condition. In addition, a major incident at any nuclear
facility anywhere in the world could cause the NRC to limit or prohibit the
operation or licensing of any domestic nuclear unit. Any such action could
require us to purchase replacement power on the open market. Depending on
prevailing market prices for replacement power, our financial condition, cash
flows and results of operations could be materially adversely affected if this
were to occur.
In addition, under the public liability insurance provided pursuant to the
Price Anderson Act, we could be required to pay additional amounts in the event
that losses in excess of private insurance occur as a result of a nuclear
incident at any U.S. nuclear unit. As members of Nuclear Electric Insurance
Limited (NEIL), our subsidiaries owning or leasing interests in a nuclear
facility are also subject to assessments under the insurance policies that cover
replacement power costs in the event of an extended outage at any NEIL member
company's nuclear facility if losses exceed the accumulated funds available to
the insurer.
OUR OPERATING RESULTS ARE AFFECTED BY WEATHER CONDITIONS AND MAY FLUCTUATE ON A
SEASONAL AND QUARTERLY BASIS.
Weather conditions directly influence the demand for electric power. In our
service territories, demand for power peaks during the hot summer months, with
market prices also typically peaking at that time. As a result, our overall
operating results may fluctuate on a seasonal and quarterly basis. In addition,
we have historically sold less power, and consequently earned less revenue, when
weather conditions are milder. Severe weather, such as tornadoes, hurricanes,
storms and droughts, may cause outages and property damage which may require us
to incur additional expenses. The effect of the failure of our facilities to
operate as planned, as described above, would be particularly burdensome during
a peak demand period.
CHANGES IN TECHNOLOGY MAY SIGNIFICANTLY AFFECT OUR BUSINESS BY MAKING OUR POWER
PLANTS LESS COMPETITIVE.
A key element of our business model is that generating power at central
power plants achieves economies of scale and produces power at relatively low
cost. There are other technologies that produce power, most notably fuel cells,
microturbines, windmills and photovoltaic (solar) cells. It is possible that
advances in technology could reduce the cost of alternative methods of producing
power to a level that is competitive with that of most central power station
electric production. If this were to happen and if these technologies achieved
economies of scale, the value of our power plants could be reduced and, unless
we also developed these technologies, our market share could be eroded. Changes
in technology could also alter the channels through which retail electric
customers buy power, thereby potentially harming our financial results.
16
OUR COSTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS ARE SIGNIFICANT, AND THE COST
OF COMPLIANCE WITH FUTURE ENVIRONMENTAL LAWS COULD HARM OUR CASH FLOW AND
PROFITABILITY.
Our operations are subject to extensive federal, state and local
environmental statutes, rules and regulations relating to air quality, water
quality, waste management, natural resources and health and safety. Compliance
with these legal requirements requires us to commit significant capital toward
environmental monitoring, installation of pollution control equipment, emission
fees and permits at all of our facilities. These expenditures have been
significant in the past and we expect that they will increase in the future.
Costs of compliance with environmental regulations could harm our industry, our
business and our results of operations and financial position, especially if
emission and/or discharge limits are tightened, more extensive permitting
requirements are imposed, additional substances become regulated and the number
and types of assets we operate increase.
Moreover, environmental laws are subject to change, which may materially
increase our costs of compliance or accelerate the timing of these capital
expenditures. Our compliance strategy, although reasonably based on the
information available to us today, may not successfully address the relevant
standards and interpretations of the future.
GOVERNMENTAL AUTHORITIES MAY ASSESS PENALTIES ON US FOR FAILURES TO COMPLY WITH
ENVIRONMENTAL LAWS AND REGULATIONS.
If we fail to comply with environmental laws and regulations, even if
caused by factors beyond our control, that failure may result in the assessment
of civil or criminal penalties and fines against us. Recent lawsuits by the U.S.
Environmental Protection Agency (the "EPA") and various states filed against us
highlight the environmental risks faced by generating facilities, in general,
and coal-fired generating facilities, in particular.
In 1999 and 2000, the EPA issued Notices of Violation ("NOV") or a
Compliance Order to nine utilities covering 44 power plants, including our W. H.
Sammis Plant. In addition, the U.S. Department of Justice filed eight civil
complaints against various investor-owned utilities, which included a complaint
against Ohio Edison and Penn Power in the U.S. District Court for the Southern
District of Ohio. The NOV and complaint allege violations of the Clean Air Act
based on operation and maintenance of the Sammis Plant dating back to 1984. The
complaint requests permanent injunctive relief to require the installation of
"best available control technology" and civil penalties of up to $27,500 per day
of violation. Although unable to predict the outcome of these proceedings, we
believe the Sammis Plant is in full compliance with the Clean Air Act and the
NOV and complaint are without merit. Nevertheless, penalties could be imposed if
the Sammis Plant continues to operate without correcting the alleged violations
and a court determines that the allegations are valid. The Sammis Plant
continues to operate while these proceedings are pending.
If these actions are resolved against us, substantial modifications of our
existing coal-fired power plants may be required. In addition, we could be
required to invest significantly in additional emission control equipment,
accelerate the timing of capital expenditures, pay penalties and/or halt
operations -- costs which in most cases will not be recoverable through rates as
they once might have been. Moreover, our results of operations and financial
position could be reduced due to the consequent reallocation of management
resources and the expense of ongoing litigation.
17
RISKS RELATED TO OUR FINANCIAL AND CORPORATE STRUCTURE
OUR BUSINESS IS DEPENDENT ON OUR ABILITY TO SUCCESSFULLY ACCESS CAPITAL
MARKETS. OUR INABILITY TO ACCESS CAPITAL MAY LIMIT OUR ABILITY TO EXECUTE OUR
BUSINESS PLAN OR PURSUE IMPROVEMENTS.
We rely on access to both short-term money markets and longer-term capital
markets as a source of liquidity for capital requirements not satisfied by the
cash flow from our operations. If we are not able to access capital at
competitive rates, our ability to execute our strategy will be adversely
affected. Certain market disruptions or a downgrade of our credit rating may
increase our cost of borrowing or adversely affect our ability to access one or
more financial markets. Such disruptions could include:
- further economic downturns;
- the bankruptcy of an unrelated energy company;
- capital market conditions generally;
- market prices for electricity and gas;
- terrorist attacks or threatened attacks on our facilities; or
- the overall health of the utility industry.
Restrictions on our ability to access financial markets may affect our
ability to execute our business plan as scheduled. An inability to access
capital may limit our ability to pursue improvements or acquisitions that we may
otherwise rely on for future growth.
INCREASES IN OUR DEBT-TO-EQUITY RATIO, COMMONLY REFERRED TO AS LEVERAGE, COULD
ADVERSELY AFFECT OUR COMPETITIVE POSITION, BUSINESS PLANNING AND FLEXIBILITY,
FINANCIAL CONDITION, ABILITY TO SERVICE OUR DEBT OBLIGATIONS AND TO PAY
DIVIDENDS ON OUR COMMON STOCK, AND ABILITY TO ACCESS CAPITAL ON FAVORABLE
TERMS.
Our cash requirements arise primarily from the capital-intensive nature of
our electric utilities. In addition to operating cash flows, we rely heavily on
our short-term credit facilities and long-term debt. Our credit lines impose
various limitations that could impact our liquidity and result in a significant
adverse impact on our business strategy and our ongoing financing needs. Changes
in economic conditions could result in higher interest rates, which would
increase our interest expense on our floating rate debt and reduce funds
available to us for our current plans. Additionally, an increase in our leverage
could adversely affect us by:
- increasing the cost of future debt financing;
- prohibiting the payment of dividends on our common stock or adversely
impacting our ability to pay such dividends at the current rate;
- making it more difficult for us to satisfy our existing financial
obligations;
- limiting our ability to obtain additional financing, if needed, for
working capital, acquisitions, debt service requirements or other
purposes;
18
- increasing our vulnerability to adverse economic and industry conditions;
- requiring us to dedicate a substantial portion of our cash flow from
operations to payments on our debt, which would reduce funds available to
us for operations, future business opportunities or other purposes; and
- limiting our flexibility in planning for, or reacting to, changes in our
business and the industry in which we compete.
A DOWNGRADE IN OUR CREDIT RATING COULD NEGATIVELY AFFECT OUR ABILITY TO ACCESS
CAPITAL.
Standard & Poor's and Moody's Investors Service rate our senior, unsecured
debt at BBB- and Baa2, respectively. These ratings indicate the agency's
assessment of our ability to pay interest, distributions and principal on these
securities. If Moody's or Standard & Poor's were to downgrade our long-term
rating, particularly below investment grade, our borrowing costs would increase
which would diminish our financial results. In addition, we would likely be
required to pay a higher interest rate in future financings, and our potential
pool of investors and funding sources could decrease. We may also be forced to
issue additional equity, which would have a dilutive effect on our equity
holders and our earnings-per-share results.
Various energy supply contracts contain credit enhancement provisions in
the form of cash collateral or letters of credit in the event of a reduction in
credit rating below investment grade. Requirements of these provisions vary and
typically require more than one rating reduction to fall below investment grade
by Standard & Poor's or Moody's to trigger additional collateralization by us.
As of September 30, 2002, rating-contingent collateralization totaled $23.3
million. We monitor these collateralization provisions and update our total
exposure monthly.
OUR CASH FLOW, ABILITY TO PAY DIVIDENDS AND ABILITY TO MEET DEBT OBLIGATIONS
LARGELY DEPEND ON THE PERFORMANCE OF OUR SUBSIDIARIES AND AFFILIATES.
We are a holding company and conduct our operations primarily through
subsidiaries. Substantially all of our consolidated assets are held by such
subsidiaries. Accordingly, our cash flow, our ability to pay dividends on our
common stock and our ability to meet our obligations to creditors are largely
dependent upon the earnings of these subsidiaries and the distribution or other
payment of such earnings to us in the form of dividends. The subsidiaries are
separate and distinct legal entities and have no obligation to pay any amounts
due on any debt or equity securities that we issue or to make any funds
available for such payment.
Because we are a holding company, our unsecured obligations will be
effectively subordinated to all existing and future liabilities of our
subsidiaries. Therefore, our rights and the rights of our shareholders and
creditors to participate in the assets of any subsidiary in the event that such
a subsidiary is liquidated or reorganized, will be subject to the prior claims
of the subsidiary's creditors. To the extent that we may ourselves be a creditor
with recognized claims against any such subsidiary, our claims would still be
effectively subordinated to any security interest in, or mortgages or other
liens on, the assets of the subsidiary and would be subordinated to any
indebtedness or other liabilities of the subsidiary senior to that held by us.
Although certain agreements to which we and our subsidiaries are parties limit
the ability to
19
incur additional indebtedness, we and our subsidiaries retain the ability to
incur substantial additional indebtedness and other liabilities.
USE OF PROCEEDS
The proceeds from the sale to the Plan of any newly issued stock will be
used to meet working capital and capital expenditure requirements and for other
corporate purposes.
DESCRIPTION OF COMMON STOCK
Certain provisions of FirstEnergy's Amended Articles of Incorporation and
Amended Code of Regulations are summarized or referred to below. The summaries
are merely an outline, do not purport to be complete, do not relate to or give
effect to the provisions of statutory or common law, and are qualified in their
entirety by express reference to such Amended Articles of Incorporation and
Amended Code of Regulations.
FirstEnergy is authorized by its Amended Articles of Incorporation to issue
375,000,000 shares of common stock, par value $.10 per share, of which
297,636,276 shares were issued and outstanding as of December 20, 2002.
FirstEnergy is also authorized by its Amended Articles of Incorporation to issue
5,000,000 shares of preferred stock, par value $100 per share, of which none are
currently issued and outstanding. The common stock currently outstanding is, and
the common stock offered pursuant to this Prospectus will be, fully paid and
non-assessable.
DIVIDEND RIGHTS
Subject only to the prior rights and preferences of any issued and
outstanding shares of FirstEnergy's preferred stock, the holders of the common
stock shall be entitled to receive dividends when, as and if declared by the
Board of Directors of FirstEnergy out of funds of FirstEnergy legally available
therefor. There can be no assurance that funds will be legally available to pay
dividends at any given time or that, if funds are available, the Board of
Directors will declare a dividend.
LIQUIDATION RIGHTS
In the event of any dissolution or liquidation of FirstEnergy, the holders
of common stock shall be entitled to receive, pro rata, after the prior rights
of the holders of any issued and outstanding shares of FirstEnergy's preferred
stock have been satisfied, all of the assets of FirstEnergy that remain
available for distribution after payment in full of all liabilities of
FirstEnergy.
VOTING RIGHTS
The holders of FirstEnergy common stock are entitled to one vote on each
matter submitted for their vote at any meeting of the shareholders of
FirstEnergy for each share of FirstEnergy common stock held as of the record
date for such meeting. Under FirstEnergy's Amended Articles of Incorporation,
the voting rights, if any, of FirstEnergy preferred stock may differ from the
voting rights of FirstEnergy common stock. The holders of common stock are not
entitled to cumulate their votes for the election of directors.
20
FirstEnergy's Amended Articles of Incorporation provide that the Board of
Directors be divided into three classes with the term of office of the
respective classes to expire in successive years.
In order to amend or repeal, or adopt any provision inconsistent with, the
provisions of FirstEnergy's Amended Articles of Incorporation dealing with (a)
the right of the Board of Directors to establish the terms of unissued shares or
to authorize the acquisition by FirstEnergy of its outstanding shares; (b) the
absence of cumulative voting and preemptive rights; or (c) the requirement that
at least 80% of the voting power of FirstEnergy's outstanding shares must
approve the foregoing, at least 80% of the voting power of FirstEnergy's
outstanding shares must approve. In addition, the approval of at least 80% of
the voting power of FirstEnergy's outstanding shares must be obtained to amend
or repeal the provisions of FirstEnergy's Amended Code of Regulations dealing
with (a) the time and place of shareholders' meetings, the manner in which
special meetings of shareholders are called or the way business is conducted at
such meetings; (b) the number, election and terms of directors, the manner of
filling vacancies on the Board of Directors, the removal of directors or the
manner in which directors are nominated; or (c) the indemnification of officers
or directors. Amendment of the provision of the Amended Code of Regulations that
requires the approval of 80% of the voting power of FirstEnergy's outstanding
shares in the instances enumerated above requires the same level of approval.
Adoption of amendments to FirstEnergy's Amended Articles of Incorporation
(other than those requiring 80% approval as specified above), adoption of a plan
of merger, consolidation or reorganization, authorization of a sale or other
disposition of all or substantially all of the assets of FirstEnergy not made in
the usual and regular course of its business or adoption of a resolution of
dissolution, and any other matter which would otherwise require a two-thirds
approving vote, require the approval of two-thirds of the voting power of
FirstEnergy's outstanding shares, unless FirstEnergy's Board of Directors
provides otherwise, in which case, these matters will require the approval of a
majority of the voting power of FirstEnergy's outstanding shares and the
approval of a majority of the voting power of any shares entitled to vote as a
class.
SHAREHOLDER RIGHTS AGREEMENTS
On November 18, 1997, FirstEnergy authorized assignment of one share
purchase right for each outstanding share of FirstEnergy common stock. Each
right entitles the registered holder to purchase one share of FirstEnergy common
stock at a purchase price of $70 per share, when the rights become exercisable.
The following description of the rights is qualified in its entirety by
reference to the terms of the rights agreement between FirstEnergy and The Bank
of New York, as rights agent.
The rights are not exercisable until the earlier of:
- ten days following a public announcement that a person or group,
including any affiliates or associates of such person or group, has
acquired or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of FirstEnergy common stock (an "Acquiring
Person"); or
21
- ten days following the commencement or announcement of an intention to
make a tender offer or exchange offer which would result in any person or
group (and related persons) having beneficial ownership of 25% or more of
the outstanding shares of FirstEnergy common stock.
The rights will expire on November 28, 2007, unless that date is extended
or the rights are earlier redeemed by FirstEnergy and exchanged for shares of
FirstEnergy common stock, as described below.
In the event that (i) FirstEnergy merges with or is involved in a business
combination transaction with an Acquiring Person, (ii) 50% or more of
FirstEnergy's consolidated assets or earning power are sold to an Acquiring
Person, (iii) an Acquiring Person acquires 25% or more of the outstanding shares
of FirstEnergy common stock or (iv) an Acquiring Person engages in one or more
self-dealing transactions with FirstEnergy, each holder of a right, other than
rights beneficially owned by an Acquiring Person, which become void, will have
the right to receive upon exercise that number of shares of FirstEnergy common
stock or stock of the acquiring company, as the case may be, having an average
market value during a specified time period of two times the purchase price
provided for in the right.
At any time after a person or group acquires beneficial ownership of 15% or
more of the outstanding shares of FirstEnergy common stock and prior to the
acquisition by such person or group of 50% or more of the then outstanding
shares of FirstEnergy common stock, FirstEnergy may exchange all or part of the
then outstanding rights (other than rights owned by such person or group which
have become void) for shares of FirstEnergy common stock.
At any time prior to the tenth day following the acquisition by a person or
group of beneficial ownership of 15% or more of the outstanding shares of
FirstEnergy common stock, FirstEnergy may redeem the rights in whole, but not in
part, at a price of $.001 per right.
The rights may have anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire FirstEnergy
unless the rights are redeemed by FirstEnergy's Board of Directors. However, it
can be expected that the rights would not interfere with any merger or other
business combination approved by the Board of Directors.
NO PREEMPTIVE OR CONVERSION RIGHTS
Holders of FirstEnergy common stock have no preemptive or conversion rights
and are not subject to further calls or assessments by FirstEnergy. There are no
redemption or sinking fund provisions applicable to the common stock.
LISTING
Shares of FirstEnergy common stock are traded on the New York Stock
Exchange under the symbol "FE."
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the common stock of FirstEnergy is
FirstEnergy Securities Transfer Company, a wholly owned subsidiary of
FirstEnergy.
22
LEGAL MATTERS
The legality of the common stock offered by this Prospectus has been passed
upon for FirstEnergy by Gary D. Benz, Esq., Associate General Counsel of
FirstEnergy. As of December 16, 2002, Mr. Benz owned 2,405 shares of FirstEnergy
common stock.
EXPERTS
Our former independent public accountants, Arthur Andersen LLP have not
consented to the incorporation by reference of their report in this Prospectus
on our consolidated financial statements for the year ended December 31, 2001,
and we have dispensed with the requirement to file their consent in reliance
upon Rule 437a under the Securities Act of 1933. Because Arthur Andersen LLP
have not consented to the incorporation by reference of their report in this
Prospectus, you will not be able to recover against Arthur Andersen LLP under
Section 11 of the Securities Act of 1933 for any untrue statements of a material
fact contained in the financial statements audited by Arthur Andersen LLP or any
omissions to state a material fact required to be stated therein.
With respect to our unaudited interim consolidated financial information
for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002,
incorporated by reference in this Prospectus, PricewaterhouseCoopers LLP,
independent public accountants, have applied limited procedures in accordance
with professional standards for reviews of that information. However, their
separate reports dated May 15, 2002, August 8, 2002, and November 13, 2002,
incorporated by reference in this Prospectus, state that they did not audit and
they do not express opinions on that unaudited interim consolidated financial
information. Accordingly, the degree of reliance on their reports on that
information should be restricted in light of the limited nature of the review
procedures applied. PricewaterhouseCoopers LLP is not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim consolidated financial information because these reports are
not "reports" or "parts" of the registration statement prepared or certified by
PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of that Act.
WHERE YOU CAN FIND MORE INFORMATION
We are required by the Securities Exchange Act of 1934 to file annual,
quarterly and special reports and other information with the SEC. These reports
and other information can be inspected and copied at the SEC's public reference
room at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. You may also read and copy these SEC filings by visiting
the SEC's Web site at http://www.sec.gov or our Web site at
http://www.firstenergycorp.com. Information contained on our Web site does not
constitute part of this Prospectus.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 with respect to the securities offered by this
Prospectus. This Prospectus does not contain all of the information included in
the registration statement. For further information, you should refer to the
registration statement.
23
The SEC allows us to incorporate by reference in this Prospectus the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this Prospectus. The
information included in this Prospectus is not complete, and should be read
together with the information incorporated by reference. We incorporate by
reference in this Prospectus the documents listed below and any future filings
we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, until we sell all of the securities described in this
Prospectus; information we file in the future with the SEC will automatically
update and supersede this information:
- FirstEnergy's Annual Report on Form 10-K for the year ended December 31,
2001;
- FirstEnergy's Quarterly Reports on Form 10-Q for the quarters ended March
31, 2002, June 30, 2002 and September 30, 2002; and
- FirstEnergy's Current Reports on Form 8-K filed April 18, 2002 (as
amended on May 8 and May 9, 2002), May 9, 2002, May 24, 2002, August 1,
2002, August 9, 2002, August 12, 2002, August 23, 2002, September 11,
2002, September 24, 2002, October 7, 2002, October 31, 2002, December 2,
2002, December 3, 2002, and December 20, 2002, respectively.
You may also request additional copies of these reports or copies of our
other SEC filings at no cost by writing or telephoning us at the following
address:
FirstEnergy Corp.
76 South Main Street
Akron, Ohio 44308-1890
Attention: Corporate Secretary
(800) 736-3402
24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration fee............................................ $ 18,000
Costs of printing and engraving*............................ 15,000
Legal fees and expenses*.................................... 45,000
Accounting fees and expenses*............................... 15,000
Miscellaneous expenses*..................................... 7,000
Total.................................................. $100,000
---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated gives
a corporation incorporated under the laws of Ohio power to indemnify any person
who is or has been a director, officer or employee of that corporation, or of
another corporation at the request of that corporation, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any threatened, pending or completed action, suit or
proceeding, criminal or civil, to which he is or may be made a party because of
being or having been such director, officer or employee, provided that in
connection therewith, such person is determined to have acted in good faith in
what he reasonably believed to be in or not opposed to the best interest of the
corporation of which he is a director, officer or employee, and without
reasonable cause, in the case of a criminal matter, to believe that his conduct
was unlawful. The determination as to the conditions precedent to the permitted
indemnification of such person is made by the directors of the indemnifying
corporation acting at a meeting at which, for the purpose, any director who is a
party to or threatened with any such action, suit or proceeding may not be
counted in determining the existence of a quorum and may not vote. If, because
of the foregoing limitations, the directors are unable to act in this regard,
such determination may be made by the majority vote of the corporation's voting
shareholders (or without a meeting upon two-thirds written consent of such
shareholders), by judicial proceeding or by written opinion of independent legal
counsel other than an attorney, or a firm having associated with it an attorney
who has been retained by or who has performed services for the corporation or
any person to be indemnified during the five years preceding the date of
determination.
Regulation 31 of the Registrant's Amended Code of Regulations provides as
follows:
"The Corporation shall indemnify, to the full extent then permitted by law,
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
she is or was a member of the Board of Directors or an officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
Corporation shall pay, to
II-1
the full extent then required by law, expenses, including attorney's fees,
incurred by a member of the Board of Directors in defending any such
action, suit or proceeding as they are incurred, in advance of the final
disposition thereof, and may pay, in the same manner and to the full extent
then permitted by law, such expenses incurred by any other person. The
indemnification and payment of expenses provided hereby shall not be
exclusive of, and shall be in addition to, any other rights granted to
those seeking indemnification under any law, the Amended Articles of
Incorporation, any agreement, vote of shareholders or disinterested members
of the Board of Directors, or otherwise, both as to action in official
capacities and as to action in another capacity while he or she is a member
of the Board of Directors, or an officer, employee or agent of the
Corporation, and shall continue as to a person who has ceased to be a
member of the Board of Directors, trustee, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of
such a person."
Section 1701.13(E) of Title 17 of Page's Ohio Revised Code Annotated
provides that the indemnification thereby permitted shall not be exclusive of
any other rights that directors, officers or employees may have, including
rights under insurance purchased by the corporation.
Regulation 32 of the Registrant's Amended Code of Regulations provides as
follows:
"The Corporation may, to the full extent then permitted by law and
authorized by the Board of Directors, purchase and maintain insurance or
furnish similar protection, including but not limited to trust funds,
letters of credit or self-insurance, on behalf of or for any persons
described in Regulation 31 against any liability asserted against and
incurred by any such person in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify such person against such liability. Insurance may be purchased
from or maintained with a person in which the Corporation has a financial
interest."
The Registrant maintains and pays the premium on contracts insuring the
Registrant (with certain exclusions) against any liability to directors and
officers they may incur under the above indemnity provisions and insuring each
director and officer of the Registrant (with certain exclusions) against
liability and expense, including legal fees, which he or she may incur by reason
of his or her relationship to the Registrant, even if the Registrant does not
have the obligation or right to indemnify him or her against such liability or
expense.
II-2
ITEM 16. EXHIBITS
The following exhibits are incorporated by reference into this registration
statement or are filed herewith and made a part hereof:
EXHIBIT NO. DESCRIPTION
----------- -----------
4(a) Amended Articles of Incorporation of FirstEnergy Corp.
(incorporated by reference from Registration No. 333-21011,
Exhibit (3)-1).
4(b) FirstEnergy Corp. Amended Code of Regulations (incorporated
by reference from Registration No. 333-21011, Exhibit
(3)-2).
4(c) Form of Common Stock Certificate (incorporated by reference
from Registration No. 333-40063, Exhibit 4(c)).
4(d) Rights Agreement, dated as of November 18, 1997, between
FirstEnergy Corp. and The Bank of New York and form of Right
Certificate (incorporated by reference from Current Report
on Form 8-K, dated November 18, 1997, Exhibit 4.1).
5 Opinion of Gary D. Benz, Esq., Associate General Counsel of
FirstEnergy Corp., as to the securities being registered.
15 Letter of PricewaterhouseCoopers LLP re unaudited interim
financial information.
23 Consent of Gary D. Benz, Esq. (contained in Exhibit 5).
24.1 Power of Attorney (See Signature Page).
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers of sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
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PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
Each of the undersigned directors and officers of FirstEnergy Corp., the
Registrant, individually as such director and/or officer, hereby makes,
constitutes and appoints H. P. Burg, N. C. Ashcom, J. H. Byington and L. F.
Torres, and each of them severally, as his true and lawful attorney-in-fact and
agent to execute in his name, place and stead, in any and all capacities, and to
file with the Securities and Exchange Commission, this registration statement
and any and all amendments, including post-effective amendments, to this
registration statement pursuant to the above undertaking, which amendment may
make such other changes in the registration statement as the Registrant deems
appropriate.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Akron, State of Ohio, on the 20th day of December,
2002.
FIRSTENERGY CORP.
(Registrant)
/s/ H. PETER BURG
---------------------------------------
H. Peter Burg
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ H. PETER BURG Chairman of the Board and December 20, 2002
------------------------------------------------ Chief Executive Officer
H. Peter Burg (Principal Executive
Officer)
/s/ RICHARD H. MARSH Senior Vice President and December 20, 2002
------------------------------------------------ Chief Financial Officer
Richard H. Marsh (Principal Financial
Officer)
/s/ HARVEY L. WAGNER Vice President, Controller December 20, 2002
------------------------------------------------ and Chief Accounting
Harvey L. Wagner Officer (Principal
Accounting Officer)
/s/ ANTHONY J. ALEXANDER President, Chief Operating December 20, 2002
------------------------------------------------ Officer and Director
Anthony J. Alexander
/s/ CAROL A. CARTWRIGHT Director December 20, 2002
------------------------------------------------
Carol A. Cartwright
/s/ WILLIAM F. CONWAY Director December 20, 2002
------------------------------------------------
William F. Conway
II-5
/s/ ROBERT B. HEISLER, JR. Director December 20, 2002
------------------------------------------------
Robert B. Heisler, Jr.
/s/ ROBERT L. LOUGHHEAD Director December 20, 2002
------------------------------------------------
Robert L. Loughhead
/s/ RUSSELL W. MAIER Director December 20, 2002
------------------------------------------------
Russell W. Maier
/s/ JOHN M. PIETRUSKI Director December 20, 2002
------------------------------------------------
John M. Pietruski
/s/ ROBERT N. POKELWALDT Director December 20, 2002
------------------------------------------------
Robert N. Pokelwaldt
/s/ PAUL J. POWERS Director December 20, 2002
------------------------------------------------
Paul J. Powers
/s/ CATHERINE A. REIN Director December 20, 2002
------------------------------------------------
Catherine A. Rein
/s/ ROBERT C. SAVAGE Director December 20, 2002
------------------------------------------------
Robert C. Savage
/s/ GEORGE M. SMART Director December 20, 2002
------------------------------------------------
George M. Smart
/s/ CARLISLE A. H. TROST Director December 20, 2002
------------------------------------------------
Carlisle A. H. Trost
/s/ JESSE T. WILLIAMS, SR. Director December 20, 2002
------------------------------------------------
Jesse T. Williams, Sr.
/s/ PATRICIA K. WOOLF Director December 20, 2002
------------------------------------------------
Patricia K. Woolf
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
4(a) Amended Articles of Incorporation of FirstEnergy Corp.
(Registration No. 333-21011, Exhibit (3)-1).
4(b) FirstEnergy Corp. Amended Code of Regulations (Registration
No. 333-21011, Exhibit (3)-2).
4(c) Form of Common Stock Certificate (incorporated by reference
from Registration No. 333-40063, Exhibit 4(c)).
4(d) Rights Agreement, dated as of November 18, 1997, between
FirstEnergy Corp. and The Bank of New York and form of Right
Certificate (incorporated by reference from current Report
on Form 8-K, dated November 18, 1997, Exhibit 4.1).
5 Opinion of Gary D. Benz, Esq., Associate General Counsel of
FirstEnergy Corp., as to the securities being registered.
15 Letter of PricewaterhouseCoopers LLP re unaudited interim
financial information.
23 Consent of Gary D. Benz, Esq. (contained in Exhibit 5).
24.1 Power of Attorney (See Signature Page).