2.2.0.25falsefalse00204 - Disclosure - Stock Based Compensation Planstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<!-- Begin Block Tagged Note 4 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>4. STOCK-BASED COMPENSATION PLANS</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">FirstEnergy has four stock-based compensation programs — LTIP, EDCP, ESOP and DCPD.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><b>(A) LTIP</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">FirstEnergy’s LTIP includes four stock-based compensation programs — restricted stock, restricted
stock units, stock options and performance shares.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Under FirstEnergy’s LTIP, total awards cannot exceed 29.1 million shares of common stock or their
equivalent. Only stock options, restricted stock and restricted stock units have currently been
designated to pay out in common stock, with vesting periods ranging from two months to ten years.
Performance share awards are currently designated to be paid in cash rather than common stock and
therefore do not count against the limit on stock-based awards. As of December 31, 2010, 7.2
million shares were available for future awards.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">FirstEnergy records the actual tax benefit realized from tax deductions when awards are exercised
or distributed. Realized tax benefits during the years ended December 31, 2010, 2009 and 2008 were
$11 million, $9 million and $43 million, respectively. The excess of the deductible amount over the
recognized compensation cost is recorded in stockholders’ equity and reported as an other financing
activity on the Consolidated Statements of Cash Flows.
</div>
<!-- Folio -->
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</div>
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<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><b>Restricted Stock and Restricted Stock Units</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Eligible employees receive awards of FirstEnergy common stock or stock units subject to
restrictions. Those restrictions lapse over a defined period of time or based on performance.
Dividends are received on the restricted stock and are reinvested in additional shares. Restricted
common stock grants under the LTIP were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted common shares granted
</div></td>
<td> </td>
<td> </td>
<td align="right">71,752</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73,255</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">82,607</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average market price
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">38.43</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.68</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">68.98</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average vesting period (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">4.74</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.42</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.03</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Dividends restricted
</div></td>
<td> </td>
<td colspan="2" align="right">Yes</td>
<td> </td>
<td> </td>
<td colspan="2" align="right">Yes</td>
<td> </td>
<td> </td>
<td colspan="2" align="right">Yes</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Vesting activity for restricted common stock during 2010 was as follows (forfeitures were not
material):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Number</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Grant-Date</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Restricted Stock</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested as of January 1, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">648,293</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">50.39</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested as of December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">475,914</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">51.26</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted in 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">71,752</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38.43</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested in 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">292,152</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38.75</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">FirstEnergy grants two types of restricted stock unit awards: discretionary-based and
performance-based. With the discretionary-based, FirstEnergy grants the right to receive, at the
end of the period of restriction, a number of shares of common stock equal to the number of
restricted stock units set forth in each agreement. With the performance-based, FirstEnergy grants
the right to receive, at the end of the period of restriction, a number of shares of common stock
equal to the number of restricted stock units set forth in the agreement subject to adjustment
based on FirstEnergy’s stock performance.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted common shares units granted
</div></td>
<td> </td>
<td> </td>
<td align="right">511,418</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">533,399</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,683</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average vesting period (years)
</div></td>
<td> </td>
<td> </td>
<td align="right">3.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.14</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Vesting activity for restricted stock units during 2010 was as follows (forfeitures were not
material):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Number</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Grant-Date</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Restricted Stock Units</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested as of January 1, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">1,489,187</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">54.81</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested as of December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">1,402,108</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48.40</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted in 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">511,418</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37.13</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested in 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">579,736</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38.83</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Compensation expense recognized in 2010, 2009 and 2008 for restricted stock and restricted
stock units, net of amounts capitalized, was approximately $22 million, $25 million and $29
million, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><i>Stock Options</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Stock options were granted to eligible employees allowing them to purchase a specified number of
common shares at a fixed grant price over a defined period of time. Stock option activities under
FirstEnergy stock option programs during 2010 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Number</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>of</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Grant-Date</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Stock Option Activities</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, January 1, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">3,074,626</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">34.69</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">(3,074,626 options exercisable)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options granted
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Options exercised
</div></td>
<td> </td>
<td> </td>
<td align="right">180,460</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26.86</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Options forfeited
</div></td>
<td> </td>
<td> </td>
<td align="right">5,100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21.61</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, December 31, 2010
</div></td>
<td> </td>
<td> </td>
<td align="right">2,889,066</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35.18</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">(2,889,066 options exercisable)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Options outstanding and range of exercise price as of December 31, 2010 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Options Outstanding and Exercisable</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Range of</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Exercise Prices</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Contractual Life</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">$29.50-29.71
</div></td>
<td> </td>
<td> </td>
<td align="right">894,054</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29.66</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.77</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">$34.45-39.46
</div></td>
<td> </td>
<td> </td>
<td align="right">1,995,012</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37.66</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.67</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">2,889,066</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35.18</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.39</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">FirstEnergy reduced its use of stock options beginning in 2005 and increased its use of
performance-based, restricted stock units. As a result, all unvested stock options vested in 2008.
No compensation expense was recognized for stock options during 2010 and 2009, and compensation
expense in 2008 was not material. Cash received from the exercise of stock options in 2010, 2009
and 2008 was $6 million, $7 million and $74 million, respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><i>Performance Shares</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Performance shares are share equivalents and do not have voting rights. The shares track the
performance of FirstEnergy’s common stock over a three-year vesting period. During that time,
dividend equivalents are converted into additional shares. The final account value may be adjusted
based on the ranking of FirstEnergy stock performance to a composite of peer companies.
Compensation expense (income) recognized for performance shares during 2010, 2009 and 2008, net of
amounts capitalized, totaled approximately ($4) million, $3 million and $8 million, respectively.
During 2010, no cash was paid to settle performance shares due to certain criteria not being met
for the previous three-year vesting period. Cash used to settle performance shares in 2009 and 2008
was $15 million and $14 million, respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><b>(B) ESOP</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">An ESOP Trust funded most of the matching contribution for FirstEnergy’s 401(k) savings plan
through December 31, 2007. All employees eligible for participation in the 401(k) savings plan are
covered by the ESOP.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">In 2008 and 2009, shares of FirstEnergy common stock were purchased on the market and contributed
to participants’ accounts. Total ESOP-related compensation expenses in 2010, 2009 and 2008, net of
amounts capitalized and dividends on common stock were $30 million, $36 million and $40 million,
respectively.
</div>
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</div>
<!-- PAGEBREAK -->
<div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; ">
<div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%"><b>(C) EDCP</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Under the EDCP, covered employees can direct a portion of their compensation, including annual
incentive awards and/or long-term incentive awards, into an unfunded FirstEnergy stock account to
receive vested stock units or into an
unfunded retirement cash account. Through December 31, 2010, covered employees received an
additional 20% premium in the form of stock units based on the amount allocated to the FirstEnergy
stock account. During 2010, the EDCP was amended to cease the 20% stock premium with respect to
annual and long-term incentive awards earned during any calendar years that commence on or after
January 1, 2011. Dividends are calculated quarterly on stock units outstanding and are paid in the
form of additional stock units. Upon withdrawal, stock units are converted to FirstEnergy shares.
Payout typically occurs three years from the date of deferral; however, an election can be made in
the year prior to payout to further defer shares into a retirement stock account that will pay out
in cash upon retirement (see Note 3). Interest is calculated on the cash allocated to the cash
account and the total balance will pay out in cash upon retirement. Compensation expense (income)
recognized on EDCP stock units, net of amounts capitalized, in 2010, 2009 and 2008 was ($3)
million, ($0.2) million and ($13) million, respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><b>(D) DCPD</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Under the DCPD, directors can elect to allocate all or a portion of their cash retainers, meeting
fees and chair fees to deferred stock or deferred cash accounts. Funds deferred into the stock
account through December 31, 2010, receive a 20% match to the funds allocated. The 20% match and
any appreciation on it are forfeited if the director leaves the Board within three years from the
date of deferral for any reason other than retirement, disability, death, upon a change in control
or when a director is ineligible to stand for re-election. Compensation expense is recognized for
the 20% match over the three-year vesting period. Directors may also elect to defer their equity
retainers into the deferred stock account; however, they do not receive a 20% match on that
deferral. During 2010, the DCPD was amended to cease the 20% match feature with respect to
director’s fees earned for service performed during any calendar years that commence on or after
January 1, 2011. DCPD expenses recognized in 2010, 2009 and 2008 was $4 million, $3 million and $3
million, respectively. The net liability recognized for DCPD of approximately $5 million as of
December 31, 2010, 2009 and 2008 is included in the caption “Retirement benefits” on the
Consolidated Balance Sheets.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 10pt">Of the 1.7 million stock units authorized under the EDCP and DCPD, 1,239,415 stock units were
available for future awards as of December 31, 2010.
</div>
</div>
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<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14
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