EX-10.42 NON-QUALIFYING

EXHIBIT 10.42

FirstEnergy Corp.
Executive and Directors Incentive Compensation Plan
Non-Qualifying Stock Option (NSO) Agreement

This Option Agreement (“Agreement”) is entered into as of the 20th day of August, 2004, between FirstEnergy Corp., and Richard R. Grigg (“Optionee”) and is not in lieu of salary or any other compensation for services. For the purposes of this plan, the term “Company” or “FE” means FirstEnergy Corp. or its subsidiaries, singularly or collectively.

SECTION ONE — AWARD

On February 17, 1998, the Board of Directors (“Board”) of FE adopted the FE Executive and Director Incentive Compensation Plan (“Plan”), which was approved and amended by the common stock shareholders. As of the date of this Agreement, per the terms of the Plan, FE grants to the Optionee an option (“Option”) to purchase the above number of shares of FE Common Stock (“Shares”) at the option price reflected above.

All Grants are considered NSOs, not subject to the provisions of section 422 of the Internal Revenue Code.

SECTION TWO — GENERAL TERMS

This Agreement is subject to the following terms and conditions, many of which are described in greater detail in the Plan. Please consult the Plan document for further information.

Vesting Provisions

These Options will vest in 25% increments starting one year from the date of grant, as reflected in the schedule below.

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Expiration

These Options expire on August 20, 2014 at 2:00 PM, Akron time unless the Options expire earlier due to termination of employment (or 2:00 PM on the last business day prior to such date, if the date falls on a Saturday, Sunday, or other day when the FirstEnergy General Office is closed).

Termination of Employment

Change in Control

In the event of a Change in Control (as defined in section 2.1.7 of the Plan), all options under this Agreement become immediately exercisable as of the date of the Change in Control, and the provisions under the section entitled “Forfeiture and Recovery” shall not apply.

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Forfeiture and Recovery

If it is determined, in the sole discretion of the Compensation Committee (the “Committee”) of the FirstEnergy Board of Directors or its delegate, that the Optionee has breached any of the covenants below, and unless such breach has been waived by the Committee or its delegate in writing, all outstanding Options shall be immediately forfeited back to FE, and any profits resulting from the exercise of Options realized in the twelve (12) months preceding the date of termination through the date of the breach shall be immediately returned to FE. During the term of his/her employment with the Company and for a period of twenty-four (24) months following termination of employment for any reason, including without limitation, termination by mutual agreement, the Optionee expressly covenants and agrees that he/she will not at any time for himself/herself or on behalf of any other person, firm, association or other entity do any of the following:

The term “Customer” shall mean any person, firm, association, corporation or other entity to which the Optionee or the Company has sold the Company’s products or services within the twenty-four (24) month period immediately preceding the termination of Optionee’s employment with the Company or to which the Optionee or the Company is in the process of selling its products or services, or to which the Optionee or the Company has submitted a bid, or is in the process of submitting a bid to sell the Company’s products or services.

FE may offset any amount owed against any compensation due to the Optionee or against any amounts otherwise due and distributable to the Optionee from any benefit plan of FE in which the Optionee has participated, in accordance with the terms of such benefit plan. Should it be necessary for FE to initiate legal action to recover any amounts due, FE shall be entitled to recover from Optionee, in addition to such amounts due, all costs, including reasonable attorneys fees, incurred as a result of such legal action.

Effect on the Employment Relationship

Nothing in this Agreement guarantees employment with the Company, nor does it confer any special rights or privileges to the Optionee as to the terms of employment.

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Adjustments

In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, stock split, combination, distribution, or other change in corporate structure of FE affecting the Common Stock, the Committee will adjust the number and class of securities in this option in a manner determined appropriate to prevent dilution or diminution of the Option under this Agreement.

Administration

SECTION THREE — METHODS OF EXERCISING THE OPTION

Notification to Exercise

To exercise an option, the Optionee must submit to the Administrator of the Plan the information below either on a form provided by FE, a broker form, or a blank sheet of paper:

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Method of Payment

Payment for the transaction and associated brokerage fees may be made through the following methods:

A combination of any of the above based upon Plan administrative rules.

Withholding Tax

FE shall have the right to deduct, withhold, or require the Optionee to surrender an amount sufficient to satisfy federal (including FICA and Medicare), state, and/or local taxes required by law to be withheld for any exercise.

SECTION FOUR — TRANSFER OF OPTION

The Option is not transferable during the life of the Optionee. Only the Optionee shall have the right to exercise an option, unless deceased, at which time the option may be exercised by the Optionee’s beneficiary (as designated under Article 12 of the Plan or by will or by the laws of descent and distribution).

     I acknowledge receipt of this NSO Agreement and I accept and agree with the terms and conditions stated above.

                                                         
           (Date)

(This is RRG’s 1st grant under the FE Stock Option Program.)

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