FE 8-K
Firstenergy Corp (FE)
8-K
2024-08-13
For: 2024-08-12
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12, 2024
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure
On August 13, 2024, FirstEnergy Corp. (the “Company”) issued a press release with respect to an agreement (the “Agreement”) entered into between the Company and the Office of the Ohio Attorney General (“OAG”) and the Office of the Summit County Prosecutor (the “Summit County Prosecutor”), which is more fully described below. A copy of this press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information set forth in and incorporated by reference into this Item 7.01 of this Current Report on Form 8-K is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. The furnishing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.
Item 8.01 Other Events
As previously disclosed, the Company has been cooperating with the Ohio Organized Crime Investigations Commission (the “OOCIC”) regarding the OOCIC’s ongoing investigation surrounding Ohio House Bill 6 as passed by Ohio's 133rd General Assembly (“HB 6”). In February 2024, in connection with such investigation, an indictment by a grand jury of Summit County, Ohio was unsealed against the now-deceased, former chairman of the PUCO and two former senior officers of the Company, Charles E. Jones and Michael J. Dowling, charging each of them with several felony counts, including bribery, telecommunications fraud, money laundering and aggravated theft. Also, as previously disclosed, in September and October of 2020, the OAG and certain other parties filed complaints against several parties, including the Company, in State of Ohio ex rel. Dave Yost, Ohio Attorney General v. FirstEnergy Corp., et al. and City of Cincinnati and City of Columbus v. FirstEnergy Corp. (the “OAG Civil Matter”) alleging, among other things, civil violations of the Ohio Corrupt Activity Act and related claims in connection with the passage of HB 6.
On August 12, 2024 (the “Effective Date”), the Company entered into the Agreement with the OAG and the Summit County Prosecutor, which fully resolves, in each case with respect to the Company, both the OOCIC investigation and the OAG Civil Matter. The Agreement is furnished as Exhibit 99.2 hereto and incorporated herein by reference.
Within five business days of the Effective Date, the Company will pay a settlement amount of $19.5 million to the OAG, to be used for purposes the OAG deems appropriate. In anticipation of finalizing the Agreement, and as previously disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the Securities and Exchange Commission on July 30, 2024, the Company previously recorded a loss contingency equal to $19.5 million in the second quarter of 2024.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | |||||||
Forward-Looking Statements: This Form 8-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the Deferred Prosecution Agreement entered into July 21, 2021 with the U.S. Attorney’s Office for the Southern District of Ohio; the risks and uncertainties associated with government investigations and audits regarding HB 6 and related matters, including potential adverse impacts on federal or state regulatory matters, including, but not limited to, matters relating to rates; the risks and uncertainties associated with litigation, arbitration, mediation and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining dismissal of the derivative shareholder lawsuits; changes in national and regional economic conditions, including recession, volatile interest rates, inflationary pressure, supply chain disruptions, higher fuel costs, and workforce impacts, affecting us and/or our customers and those vendors with which we do business; variations in weather, such as mild seasonal weather variations and severe weather conditions (including events caused, or exacerbated, by climate change, such as wildfires, hurricanes, flooding, droughts, high wind events and extreme heat events) and other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to such conditions; legislative and regulatory developments, including, but not limited to, matters related to rates, energy regulatory policies, compliance and enforcement activity, cyber security, and climate change; the risks associated with physical attacks, such as acts of war, terrorism, sabotage or other acts of violence, and cyber-attacks and other disruptions to our, or our vendors’, information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information; the ability to meet our goals relating to employee, environmental, social and corporate governance opportunities, improvements, and efficiencies, including our greenhouse gas (“GHG”) reduction goals; the ability to accomplish or realize anticipated benefits through establishing a culture of continuous improvement and our other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing Energize365, our transmission and distribution investment plan, executing on our rate filing strategy, controlling costs, improving credit metrics, maintaining investment grade ratings, and growing earnings; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts may negatively impact our forecasted growth rate, results of operations, and may also cause us to make contributions to our pension sooner or in amounts that are larger than currently anticipated; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets, including those sites impacted by the recently promulgated legacy coal combustion residual rules; changes to environmental laws and regulations, including, but not limited to, rules recently finalized by the Environmental Protection Agency and the SEC related to climate change; changes in customers’ demand for power, including, but not limited to, economic conditions, the impact of climate change, emerging technology, particularly with respect to electrification, energy storage and distributed sources of generation; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; future actions taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, generation resource planning, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; the potential of non-compliance with debt covenants in our credit facilities; the ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; human capital management challenges, including among other things, attracting and retaining appropriately trained and qualified employees and labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, including, but not limited to, the Inflation Reduction Act of 2022, or adverse tax audit results or rulings; and the risks and other factors discussed from time to time in our SEC filings. Dividends declared from time to time on FirstEnergy Corp.’s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.’s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. These forward-looking statements are also qualified by, and should be read together with, the risk factors included in FirstEnergy Corp.’s Form 10-K, Form 10-Q and in FirstEnergy's other filings with the SEC. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.’s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy Corp. expressly disclaims any obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
August 13, 2024
| FIRSTENERGY CORP. | |||||
| Registrant | |||||
| By: | /s/ Jason J. Lisowski | ||||
Jason J. Lisowski Vice President, Controller and Chief Accounting Officer | |||||
Exhibit 99.1
| FirstEnergy Corp. | For Release: August 13, 2024 | |||||||
| 76 South Main Street | ||||||||
| Akron, Ohio 44308 | ||||||||
| www.firstenergycorp.com | ||||||||
| News Media Contact: | Investor Relations Contact: | |||||||
| Jennifer Young | Gina Caskey | |||||||
| (330) 761-4362 | (330) 761-4185 | |||||||
| [email protected] | [email protected] | |||||||
FirstEnergy Resolves Proceedings with Office of the Ohio Attorney General and Office of the Summit County Prosecutor
AKRON, Ohio – FirstEnergy Corp. (NYSE: FE) today announced that it has reach an agreement, effective Aug. 12, 2024, with the Office of the Ohio Attorney General and the Office of the Summit County Prosecutor to resolve all outstanding proceedings between the parties.
“We are pleased to have reached a resolution with the Ohio Attorney General’s Office and the Office of the Summit County Prosecutor, which recognizes the substantial actions FirstEnergy has taken to establish a highly effective compliance program and instill a culture of ethics and integrity at every level of the organization,” said Brian X. Tierney, President and Chief Executive Officer. “FirstEnergy, led by a new Board of Directors and executive team, is a stronger organization today, energized by our commitments to our stakeholders and well positioned for the future. As we move forward, our focus is investing in our regulated electric companies to improve the customer experience and to meet their energy needs today and into the future.”
FirstEnergy is dedicated to integrity, safety, reliability and operational excellence. Its electric distribution companies form one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York. The company’s transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy online at www.firstenergycorp.com and on X @FirstEnergyCorp.
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Forward-Looking Statements: This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms “anticipate,” “potential,” “expect,” "forecast," "target," "will," "intend," “believe,” "project," “estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the Deferred Prosecution Agreement entered into July 21, 2021 with the U.S. Attorney’s Office for the Southern District of Ohio; the risks and uncertainties associated with government investigations and audits regarding HB 6 and related matters, including potential adverse impacts on federal or state regulatory matters, including, but not limited to, matters relating to rates; the risks and uncertainties associated with litigation, arbitration, mediation and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining dismissal of the derivative shareholder lawsuits; changes in national and regional economic conditions, including recession, volatile interest rates, inflationary pressure, supply chain disruptions, higher fuel costs, and workforce impacts, affecting us and/or our customers and those vendors with which we do business; variations in weather, such as mild seasonal weather variations and severe weather conditions (including events caused, or exacerbated, by climate change, such as wildfires, hurricanes, flooding, droughts, high wind events and extreme heat events) and other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to such conditions; legislative and regulatory developments, including, but not limited to, matters related to rates, energy regulatory policies, compliance and enforcement activity, cyber security, and climate change; the risks associated with physical attacks, such as acts of war, terrorism, sabotage or other acts of violence, and cyber-attacks and other disruptions to our, or our vendors’, information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information; the ability to meet our goals relating to employee, environmental, social and corporate governance opportunities, improvements, and efficiencies, including our greenhouse gas (“GHG”) reduction goals; the ability to accomplish or realize anticipated benefits through establishing a culture of continuous improvement and our other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing Energize365, our transmission and distribution investment plan, executing on our rate filing strategy, controlling costs, improving credit metrics, maintaining investment grade ratings, and growing earnings; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts may negatively impact our forecasted growth rate, results of operations, and may also cause us to make contributions to our pension sooner or in amounts that are larger than currently anticipated; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets, including those sites impacted by the recently promulgated legacy coal combustion residual rules; changes to environmental laws and regulations, including, but not limited to, rules recently finalized by the Environmental Protection Agency and the Securities and Exchange Commission (“SEC”) related to climate change; changes in customers’ demand for power, including, but not limited to, economic conditions, the impact of climate change, emerging technology, particularly with respect to electrification, energy storage and distributed sources of generation; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; future actions taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, generation resource planning, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; the potential of non-compliance with debt covenants in our credit facilities; the ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; human capital management challenges, including among other things, attracting and retaining appropriately trained and qualified employees and labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, including, but not limited to, the Inflation Reduction Act of 2022, or adverse tax audit results or rulings; and the risks and other factors discussed from time to time in our SEC filings. Dividends declared from time to time on FirstEnergy Corp.’s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.’s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. These forward-looking statements are also qualified by, and
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should be read together with, the risk factors included in FirstEnergy Corp.’s Form 10-K, Form 10-Q and in FirstEnergy's other filings with the SEC. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.’s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy Corp. expressly disclaims any obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.
(081324)
Exhibit 99.2
AGREEMENT
This agreement (the “Agreement”) entered into between the Office of the Ohio Attorney General and the Office of the Summit County Prosecutor (jointly, the “State of Ohio”), and FirstEnergy Corp.1 (“FirstEnergy” or the “Company”) (together with the State of Ohio, the “Parties”) on the grounds, and for the reasons, stated herein.
Recitals
1.The State of Ohio has conducted a thorough investigation of the facts and circumstances relating to certain payments made by former executives of FirstEnergy to entities controlled by former Ohio Speaker of the House, Larry Householder, and to former Chairman of the Public Utilities Commission of Ohio, Samuel Randazzo. Based on that investigation, and in consideration of the substantial cooperation provided by FirstEnergy, FirstEnergy’s timely remediation and ongoing investments in its compliance program, and the commitments made by FirstEnergy set forth in this Agreement, the State of Ohio has determined that it will not criminally prosecute the Company in connection with any of the conduct set forth in the Statement of Facts appended to FirstEnergy’s Deferred Prosecution Agreement (the “DPA”) with the United States Attorney’s Office for the Southern District of Ohio, U.S. v. FirstEnergy Corp., No. 1:21-cr-00086-TSB (S.D. Ohio) (hereafter, the “Statement of Facts”).
2.At the request of FirstEnergy, which seeks to resolve all matters involving the State of Ohio, and in consideration of the terms and obligations set forth in this Agreement, the Office of the Ohio Attorney General will voluntarily dismiss with prejudice all claims against FirstEnergy in the litigation captioned, State of Ohio Ex Rel Dave Yost v. FirstEnergy Corp. et al., No. 20-cv-6281 (Ohio Court of Common Pleas, Franklin County) (the “Lawsuit”). Nothing in this Agreement shall affect the outstanding claims against the remaining defendants named in the Lawsuit.
3.In consideration of these obligations and promises by the State of Ohio, FirstEnergy agrees to the terms and obligations specified below.
4.The Parties are entering this Agreement based in part on:
a)FirstEnergy’s full cooperation with the State of Ohio throughout the State of Ohio’s investigation, including by (i) producing documents and information that furthered the State of Ohio’s investigation, and (ii) making current employees available for interviews in person and otherwise.
b)FirstEnergy’s provision of information reflecting timely and significant remedial changes to, and ongoing investments in, its ethics and compliance programs. Such
1 For purposes of this Agreement and the avoidance of any doubt, FirstEnergy Corp. includes FirstEnergy Corp.; FirstEnergy Service Company; FirstEnergy Political Action Committee; FirstEnergy PAC FSL; Cleveland Electric Illuminating Company; Toledo Edison; and Ohio Edison. It does not include FirstEnergy Solutions Corp., Energy Harbor Corp. or any of the other of the named parties in the Lawsuit.
changes include, among others: (1) creating an Office of Ethics and Compliance and appointing a Chief Ethics and Compliance Officer to the Executive Council; (2) staffing the Office of Ethics and Compliance with dedicated trained professionals responsible for overseeing the compliance program, investigating all reported allegations of potential misconduct, and identifying opportunities for improvement in the program; (3) integrating compliance formally as a core company value and creating resources for executives and managers to effectively promote FirstEnergy’s commitment to ethics and compliance; (4) enhancing the scope and nature of compliance-related information regularly reported to the Audit Committee and Board of Directors; (5) creating and enhancing policies and procedures designed to prevent violations of U.S. and Ohio laws and regulations, including by ensuring that such policies and procedures are visible, accessible, and clear in their presentation; (6) implementing and employing technological solutions to bolster monitoring and oversight of employee and third party activity, including with automatic verification procedures for processing payments; (7) publicizing and training employees on using FirstEnergy’s Employee Help Line and other concern reporting channels; (8) creating Company-wide campaigns to support a “speak up” culture that encourages employees and business collaborators to report any concerns about potential violations of FirstEnergy’s policies and procedures and/or U.S. and Ohio laws and regulations; (9) training and educating FirstEnergy managers and employees on compliance with FirstEnergy’s policies and procedures, including with respect to external expenditures and third party engagements; (10) engaging external trained compliance advisors to review and approve third party consulting contracts to verify the purpose of the engagement and compliance with U.S. and Ohio laws and regulations; (11) enhancing formal disciplinary procedures to ensure consistent and fair treatment of employees; (12) implementing procedures for risk-based diligence of third party relationships prior to onboarding and periodically throughout such relationships; and (13) developing schedules for periodic certifications by consultants and lobbyists that they are in compliance with applicable laws, regulations and ethical rules, and FirstEnergy’s policies.
c)FirstEnergy’s commitment to continued cooperation with regard to any investigation or prosecution by the State of Ohio related to the conduct set forth in the Statement of Facts.
5.This Agreement is not intended to, and does not, encompass any current investigation, litigation, or prosecution by the State of Ohio or any other Ohio local or state prosecutorial agency of any of the former employees or executives of FirstEnergy whose conduct is described in the Statement of Facts.
Terms and Obligations
I.FirstEnergy’s Monetary Obligations
6.Within five business days after signing this Agreement, FirstEnergy will pay a settlement amount of $19.5 million to the Office of the Ohio Attorney General to be used for purposes the Office of the Ohio Attorney General deems proper, which may include, without limitation, a charitable law fund established under O.R.C. § 109.32 to be distributed to a non-energy charitable organization to be determined by the Office of the Ohio Attorney General, and the reimbursement of the time and expenses of the Summit County Prosecutor, the Delaware
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County Prosecutor’s Office, and the Ohio Organized Crime Investigations Commission in conducting their investigation. In addition, as set forth in Section III below, FirstEnergy shall set aside $500,000 to fund remediation commitments, for a total amount of $20 million (the “Settlement Amount”).
II.FirstEnergy’s Cooperation Commitments
7.FirstEnergy’s cooperation obligations under this Agreement shall have a term of two years from the date on which the Agreement is executed, or until any current investigation, litigation, or prosecution by the State of Ohio related to the conduct set forth in the Statement of Facts has concluded, whichever is later (the “Cooperation Term”). Nothing in this Agreement shall be construed to limit the ability of the State of Ohio to enforce the obligations that FirstEnergy has under this Agreement.
8.During the Cooperation Term, FirstEnergy shall cooperate with the State of Ohio in any and all matters relating to the conduct described in the Statement of Facts currently under investigation, litigation, or prosecution by the State of Ohio. FirstEnergy’s cooperation, as described in this Agreement, shall be subject to applicable laws and regulations, including any ongoing obligations to other federal or state law enforcement or regulatory entities. In connection with its obligations under this Agreement, FirstEnergy shall not be required to waive any valid claims of attorney-client privilege, attorney work product doctrine, or any other applicable privilege; however, the State of Ohio retains the ability to challenge FirstEnergy’s claims of attorney-client privilege, attorney work product doctrine, and any other applicable privilege, as appropriate. FirstEnergy agrees that its cooperation shall include, but not be limited to, the following:
a)Completely, truthfully and in a timely manner disclose all factual information not protected by any applicable privilege or work product protection with respect to its activities, those of its subsidiaries and affiliates, and those of its present and former directors, officers, employees, agents, and consultants, related to the conduct described in the Statement of Facts. This obligation of complete and truthful disclosure includes, but is not limited to, the obligation of FirstEnergy to promptly provide to the State of Ohio, upon request, any and all non-privileged documents, records, information, or other tangible evidence, in the possession, custody, or control of FirstEnergy or its subsidiaries related to the conduct described in the Statement of Facts;
b)Upon request by the State of Ohio, provide a privilege log for those documents, records, information, or other tangible evidence requested but withheld under a claim of any applicable privilege or work product protection;
c)Upon request by the State of Ohio, designate knowledgeable current employees, agents, or attorneys to provide to the State of Ohio the information and materials described above on behalf of FirstEnergy; and
d)Upon learning of any evidence or substantiated allegation of a violation of Ohio law related to the conduct described in the Statement of Facts, report such evidence or substantiated allegation to the State of Ohio.
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III.FirstEnergy’s Remediation Commitments
9.In consultation with the State of Ohio, FirstEnergy shall retain the services of an independent consultant (the “Independent Consultant”) qualified in the areas of ethics and compliance to review and confirm the efficacy of FirstEnergy’s programmatic changes and remediation efforts.
10.FirstEnergy shall set aside $500,000 to fund the compensation and expenses of the Independent Consultant.
11.The Independent Consultant shall have a full nine months from the date of the Independent Consultant’s engagement to conduct its assessment and may determine to extend the engagement up to, but no longer than, three months.
12.Following engagement of the Independent Consultant, to facilitate its review, FirstEnergy shall provide the Independent Consultant: (1) a presentation describing its remediation efforts; (2) documents and information supporting its remediation efforts; (3) access to FirstEnergy’s compliance reports and supporting documentation; and (4) access to the Chief Ethics and Compliance Officer, to whom the Independent Consultant may direct questions and reasonable requests for additional information.
13.At the conclusion of the Independent Consultant’s engagement, the Independent Consultant shall prepare a report for FirstEnergy reflecting the Independent Consultant’s findings. The Independent Consultant shall provide the report directly to FirstEnergy’s Chief Executive Officer. The Chief Executive Officer, Chief Ethics and Compliance Officer, and Chief Legal Officer shall then meet with the Independent Consultant to discuss the report and any recommendations made therein.
14.A copy of the Independent Consultant’s report shall be shared with FirstEnergy’s Board of Directors and, if requested, be made available for inspection by a representative of the Office of the Ohio Attorney General and the Office of the Summit County Prosecutor.
15.After meeting and conferring, in the event FirstEnergy and the Independent Consultant disagree on the implementation of any outstanding recommendations, FirstEnergy shall set forth in writing why the proposed recommendations are not appropriate or unduly burdensome, which shall be shared with FirstEnergy’s Board of Directors.
16.FirstEnergy Corp. will ensure that all contributions made to entities incorporated under 26 U.S.C. § 501(c)(4) (“501(c)(4)” entities) and all payments to entities operating for the benefit of a public official either directly or indirectly (collectively, “Corporate Political Contributions”), are reviewed and approved by a compliance officer trained to ensure such payments comport with Company policy and U.S. and Ohio law. The compliance officer shall
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have access to FirstEnergy’s Board of Directors as necessary and appropriate to report the amount, beneficiary, and purpose of all such contributions and payments.
17.In a manner consistent with its current policies and procedures as established following the DPA, and for so long as such policies and procedures remain in effect, FirstEnergy shall continue to publicly disclose all Corporate Political Contributions.
IV.The State of Ohio’s Commitments
18.In consideration of FirstEnergy’s promises and obligations set forth in this Agreement:
a)The State of Ohio shall not seek any criminal charges or refer for prosecution any investigation as to FirstEnergy or its subsidiaries relating to the conduct described in the Statement of Facts.
b)Within five business days of FirstEnergy satisfying its obligation to pay the Settlement Amount, the Office of the Ohio Attorney General shall dismiss all claims against FirstEnergy with prejudice in the Lawsuit and forego pursuit of any and all civil claims against FirstEnergy arising out of the conduct set forth in the Statement of Facts, which shall be deemed to have been waived and released.
V.Miscellaneous
19.This Agreement constitutes the entire agreement and understanding of the Parties with respect to the subject matter contained herein. Except as set forth herein, there are no promises, understandings, or agreements between the State of Ohio and FirstEnergy or FirstEnergy’s counsel. No additional agreement, understanding, or condition may be entered into unless in a writing signed by duly authorized representatives of the State of Ohio and FirstEnergy. This Agreement may be modified only in a writing signed by duly authorized representatives of the State of Ohio and FirstEnergy.
20.This Agreement is covered by the laws of Ohio. The Parties agree that exclusive jurisdiction and venue for any dispute arising under the Agreement is in the Court of Common Pleas of Summit County.
21.In the event that any provision of this Agreement is deemed to be invalid or unenforceable, the remaining provisions will remain intact or enforceable as stated, provided that doing so provides the same or similar consideration to the Parties.
22.It is further understood that FirstEnergy and the State of Ohio may disclose the existence of this Agreement to the public in a jointly agreed press release or statement mutually approved by the Parties prior to dissemination. To the extent that FirstEnergy is required by applicable law to disclose the existence of this Agreement, FirstEnergy will provide the State of Ohio with reasonable advance notice of the content of such disclosure to the extent practicable.
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23.This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same agreement. Fax or electronically submitted signatures are acceptable, binding signatures for purposes of this Agreement.
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AGREED AND CONSENTED TO:
/s/ Jonathan D. Blanton Date: August 12, 2024
Jonathan D. Blanton
First Assistant Attorney General
Office of the Ohio Attorney General
/s/ Carol Hamilton O’Brien Date: August 9, 2024
Carol Hamilton O’Brien
Deputy Attorney General for Law Enforcement
Office of the Ohio Attorney General
/s/ Elliot Kolkovich Date: August 9, 2024
Elliot Kolkovich
Summit County Prosecutor
/s/ Brian X. Tierney Date: August 12, 2024
Brian X. Tierney
President and Chief Executive Officer
FirstEnergy Corp.
REVIEWED AND APPROVED:
By: /s/ Robert J. Giuffra, Jr. Date: August 12, 2024
Robert J. Giuffra, Jr.
Sharon L. Nelles
Kamil R. Shields
Sullivan & Cromwell LLP
Attorneys for FirstEnergy Corp.
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