Exhibit 10.12

 

LOGO [g47843ex10_13.jpg]

          800 Cabin Hill Drive           Greensburg, PA 15601          
724-837-3000           Date

Name

Street

City

 

Dear First Name:

 

I am pleased to inform you that the Board of Directors of Allegheny Energy, Inc.
(“AE”) approved a grant to you of options to purchase shares of Allegheny
Energy, Inc. common stock under the Allegheny Energy, Inc. Long Term Incentive
Plan (the “Plan”). This grant is subject to the terms and conditions of the
Plan, which are incorporated by reference into this Notice Letter. In the event
of any conflict between the terms of this Notice Letter and the Plan, the Plan’s
terms will control.

 

Option Summary

 

Date of Grant:

    

Date

       

Type of Option: Non-Qualified Stock Option

Exercise Price per Share:

    

$

         

Expiration Date:

    

Date

       

Number of Shares Granted: Date

 

Vesting Schedule:

 

   

        Date

   20%  

vested

        

        Date

   40%  

vested

        

        Date

   60%  

vested

        

        Date

   80%  

vested

        

        Date

   100%  

vested

    

 

Upon a Change in Control (as defined in the Plan), the Option will be fully
vested and exercisable.

 

Exercise After Termination Of Employment With AE Or Any Subsidiary:

 

Termination of employment due to retirement or disability (as defined in the
Plan): vested portion of the Option is exercisable by you for three years after
your termination of employment.

 

Death of participant: vested portion of the Option is exercisable by your
beneficiary until the later to occur of one year from the time of death or, if
applicable, three years from the date of termination due to retirement.

 

Termination of employment for any reason other than as described above: vested
portion of the Option is exercisable by you for 90 days after your termination
of employment.

 

Termination of employment for any reason: unvested portion of the Option
terminates immediately and is no longer exercisable.

 

In no event may this Option be exercised after the Expiration Date as provided
above.

--------------------------------------------------------------------------------

Date

Page 2

 

You may exercise your Option only to the extent that it is vested according to
the Vesting Schedule above. Once your Option is vested, you can exercise it by
following the procedure set forth in the Attachment to this Notice Letter. To
exercise your Option, you must pay the total Exercise Price for the number of
shares that you are exercising, as well as any required federal or state tax
withholding. You also may be required to sign other documents at AE’s request.

 

Please note that the date shown above as the expiration date is the latest date
on which the Option can be exercised assuming that you remain employed by AE. If
your employment with AE terminates before that date, your option may expire
before the stated expiration date, as explained above in the box labeled
“Exercise After Termination Of Employment With AE Or Any Subsidiary.” However,
the Board of Directors (or any applicable Board Committee) may, in its
discretion, extend the time in which you will be able to exercise your option.

 

Generally, during your lifetime, only you may exercise the Option granted in
this Notice Letter. That means you may not transfer your Option to anyone else.

 

The Option granted to you does not confer any right to continue your employment
with AE and has no effect on the right of AE or any of its subsidiaries to
terminate your employment, with or without cause.

 

Along with this Notice Letter, we are also providing you with a copy of the Plan
document, Information Statement for the Plan, and the 2003 Annual Report. Please
review all of the enclosed materials carefully and keep them and this Notice
Letter with your important papers.

 

This Notice Letter is delivered to you in two counterparts. Please complete the
acceptance in the space below provided in both of such counterparts, retain one
for your file, and return the other to Scott Summits, Manager, Compensation and
Payroll, Human Resources, Greensburg Corporate Center; whereupon this Notice
Letter shall constitute a legal agreement between you and the Company on all the
terms provided above, and shall be binding upon and inure to the benefit of any
successor(s) of the Company and your heirs and personal representatives.

 

Sincerely,

 

Paul J. Evanson

 

Enclosures

 

AE Long Term Incentive Plan

Stock Option Information Statement

2003 Annual Report

 

ACCEPTED and AGREED on this      day of                     

 

--------------------------------------------------------------------------------

Signature