Exhibit 10(a)
PERFORMANCE SHARE AWARD AGREEMENT

AEP SYSTEM LONG-TERM INCENTIVE PLAN

This Award Agreement is being furnished to you as a participant in the American
Electric Power System Long-Term Incentive Plan (LTIP).

[Participant Name] is hereby granted the number of performance shares listed
below effective January 1, 2018 (Effective Date):
Grant Date
Performance Period
Performance Shares
[Grant Date]
January 1, 2018 - December 31, 2020
[# of Shares Granted]

Overview
Performance Shares are a type of long-term incentive compensation. They do not
convey to you any voting, dividend, or other rights associated with shares of
AEP Common Stock, but they do accrue Dividend Credits that are generally equal
to the value of dividends paid on shares of AEP Common Stock. The value of each
performance share that you may ultimately earn is dependent on the value of AEP
Common Stock, while the number of performance shares that you may ultimately
earn is dependent on the Overall Performance Score, which may range from 0% to
200% and is contingent on the vesting of your performance shares. The Overall
Performance Score is based on the achievement of the Performance Measures
established by the HR Committee of the Board for this Performance Period. These
performance shares generally will vest subject to your continuous AEP employment
through the Vesting Date.

At the end of the Performance Period, these performance shares entitle you to a
payment, to the extent they are not voluntarily or mandatorily deferred, of a
number of shares of AEP Common Stock equal to the number of vested performance
shares, including dividend credits (see Dividend Credits below), multiplied by
the Overall Performance Score. Any fractional shares resulting from this
calculation would be paid in cash or as additional income tax withholding at
AEP’s option.

Your performance share payment will be deferred if you have made a valid
deferral election or if you are subject to an unsatisfied Minimum Stock
Ownership Requirement pursuant to the American Electric Power System Stock
Ownership Requirement Plan. If you have an unsatisfied Minimum Stock Ownership
Requirement, your vested performance shares will be mandatorily deferred into
AEP Career Shares to the extent needed to satisfy your applicable requirement.
The remainder will be paid to you in shares of AEP Common Stock (less applicable
taxes), with any fractional shares being paid in cash or additional income tax
withholding at AEP’s option.

Dividend Credits
Beginning after the later of the Effective Date or the Grant Date, dividend
credits are awarded on all outstanding (un-canceled) performance units as of the
dividend record date as additional performance shares when a dividend is paid on
AEP Common Stock. The number of additional performance shares awarded due to
dividends is calculated by multiplying the value of the dividend on a per share
basis by the number of performance shares credited to you as of the dividend
record date and dividing this result by the closing price of AEP Common Stock on
the dividend payment date. These additional performance shares are subject to
the same performance measures and vesting requirements as the original
underlying performance shares on which they were awarded. As such, they will be
canceled if and to the extent that the underlying performance shares on which
they were granted are or have been canceled.

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Performance Measure
The performance score for the three-year Performance Period will be determined
by two equally weighted performance measures:
•
The percentile of AEP’s total shareholder return (TSR) for the Performance
Period relative to a Comparator Group consisting of the 18 companies included in
AEP’s compensation peer group at the beginning of the Performance Period, and

•
AEP’s three-year cumulative earnings per share (EPS) relative to a target
approved by the Human Resources Committee of AEP’s Board of Directors

The score for each performance measure may range from 0% to 200%. The HR
Committee has adopted procedures for determining the Comparator Group for
purposes of the TSR performance measure in the event there is a merger,
acquisition, disposition, liquidation or other corporate transaction that
affects the Comparator Group during the Performance Period.

Overall Performance Score
The Overall Performance Score for the Performance Period is based on the equally
weighted performance measures described in the preceding section - EPS and TSR
(see example on p. 8). The HR Committee may, at its sole discretion, reduce the
performance score for any or all performance measures and, thereby, reduce or
eliminate award payouts. The HR Committee may also, at its sole discretion,
reduce or eliminate award payouts for one or more individual participants.

Vesting Period
All outstanding (un-canceled) performance shares held with respect to the
Performance Period will vest on the last day of the Performance Period (the
Vesting Date), subject to your continuous AEP employment through that Vesting
Date, except as described below under Termination of Employment (other than
Qualifying Termination) Due to Death, Retirement or Triggering Event and under
Change in Control and Qualifying Termination.

Payment of Earned Performance Share Awards
For those participants who are not subject to minimum stock ownership
requirements1 or who timely satisfied all of their minimum stock ownership
requirements:
Upon the conclusion of the vesting period, earned performance shares will be
either:
1.
Paid in shares of AEP Common Stock to you (or to your beneficiary or estate in
the event of your death); or

2.
Deferred, if you make a timely deferral election pursuant to the AEP System
Incentive Compensation Deferral Plan (ICDP). Eligible participants will be
notified if and when they may make an "election to defer" pursuant to the ICDP.

For those participants who do not timely satisfy all of their minimum stock
ownership requirements:
If you are subject to a minimum stock ownership requirement but you do not
timely meet it in accordance with the American Electric Power System Stock
Ownership Requirement Plan, your earned performance shares will be deferred into
phantom stock shares (AEP Career Shares) to the extent required by the Stock
Ownership Requirement Plan. The Stock Ownership Requirement Plan currently
requires the deferral of earned performance shares into AEP Career Shares to the
extent required to meet each participant’s applicable stock ownership
requirement as of the applicable Determination Date (currently considered to be
the later of the Grant Date or six months prior to the end of the Performance
Period), less any additional AEP Career Shares that accrue due to dividends
prior to the date the performance scores are approved by the HR Committee of
AEP’s Board of Directors. The Stock Ownership Requirement Plan also currently
requires AEP Career Shares to be held until after a participant’s employment
with the Company Terminates. Earned performance shares mandatorily deferred into
AEP Career Shares are converted to AEP Career Shares on a one for one basis. The
balance of earned performance shares not

 

1 Participants are notified if and when they are assigned a stock ownership
requirement.

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deferred into AEP Career Shares, if any, will be paid in shares of AEP Common
Stock or deferred as described in the paragraph above for participants not
subject to minimum stock ownership requirements.

Earned performance shares that are not deferred will be paid within 2-1/2 months
following the Vesting Date unless payment at that time would violate federal
securities laws or other applicable law or if payment at that time is
impracticable due to circumstances prescribed under section 409A of the Internal
Revenue Code. Payments are expected to be made by a deposit of shares into a
brokerage account set up for you at AEP’s stock plan administrator (currently
Fidelity), unless different arrangements are in effect at the time.

Termination of Employment (other than Qualifying Termination) Due to Death,
Retirement or Triggering Event
If your employment Terminates for one or more of the above reasons both prior to
the Vesting Date and 6 months or more after the Effective Date, then a prorated
portion of your performance shares will remain outstanding and the remainder of
your performance shares will be canceled. The prorated portion that will remain
outstanding will equal the number of whole months from the Effective Date
through your Termination date divided by the number of whole months from the
Effective Date through the Vesting Date. The prorated portion that remains
outstanding will vest as of the Vesting Date and will be subjected to the
applicable Overall Performance Score. The value of such performance shares will
become payable after the conclusion of the three-year performance and vesting
period in accordance with the “Payment of Earned Performance Share Awards”
section above. See example on p. 8.

Termination (other than Qualifying Termination) for Reasons Other Than Death,
Retirement or Triggering Event
In the event your employment is Terminated prior to the Vesting Date other than
as a Qualifying Termination or for reasons other than your death, Retirement or
as the result of a Triggering Event, all performance shares granted under this
Award Agreement shall be canceled and your rights under this Award Agreement
shall be forfeited.

Payment Upon Death
In the event of your death, amounts that otherwise would have become payable to
you will be paid to the beneficiary or beneficiaries designated for purposes of
the LTIP, or, if you have no such designated beneficiaries who survive you, to
your estate. Such payments are expected to be made by a deposit of shares into a
brokerage account set up for your beneficiary or your estate, as appropriate, at
Fidelity, unless different arrangements are in effect at the time.

AEP Career Shares
Please refer to the terms of the AEP Stock Ownership Requirement Plan to
determine how performance shares that are deferred into AEP Career Shares will
be administered. An overview of the AEP Minimum Stock Ownership Requirements is
available for those who are subject to one or more minimum stock ownership
requirements.

Definitions:
In addition to the terms defined elsewhere in this Award Agreement, the
following shall be defined terms when used in this Award Agreement:

“Cause” means any one or more of the following grounds: (i) failure or refusal
to perform your assigned duties and responsibilities in a competent or
satisfactory manner as determined by your Company employer; (ii) commission of
an act of dishonesty, including, but not limited to, misappropriation of funds
or any property of the Company; (iii) engagement in activities or conduct
injurious to the best interest or reputation of the Company as determined by
your Company employer; (iv) insubordination; (v) a violation of any of the
materials terms and conditions of any written agreement or agreements you may
from time to time have with the Company; (vi) violation of any of the Company’s
rules of conduct of behavior, such as may be provided in any employee handbook
or as the Company may promulgate from time to time; (vii) commission of a crime

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which is a felony, a misdemeanor involving an act or moral turpitude, or a
misdemeanor committed in connection with your employment with the Company which
is injurious to the best interest or reputation of the Company as determined by
your Company employer; or (viii) disclosure, dissemination, or misappropriation
of confidential, proprietary, and/or trade secret information. If you make a
disclosure that is inconsistent with the requirements of clause (viii), it shall
not be considered “Cause” if your disclosure of confidential, proprietary,
and/or trade secret information in done as a part of reporting an act or event,
that you in good faith believe is a violation of law, to a relevant
law-enforcement agency (such as a federal, state or local law enforcement agency
or official), or to a federal, state or local government agency, such as the
Securities and Exchange Commission, the Internal Revenue Service, the Equal
Employment Opportunity Commission, the Occupational Safety and Health
Administration or the Department of Labor, or as a part of your cooperating in
an investigation conducted by or communicating with such a government agency, or
otherwise making disclosures to such an agency, in each case, that are protected
under federal, state or local whistleblower laws.

“Company” means American Electric Power Company, Inc. and its subsidiaries and
affiliates.

“Disability” or “Disabled” means you that you have an illness or injury for
which you have been determined to be entitled to benefits under the terms of the
LTD Plan. You shall not be considered Disabled for purposes of this Award
Agreement effective at any time you are not entitled to benefits under the LTD
Plan, under such circumstances that include (but are not limited to) the
termination of the LTD Plan or your lack of eligibility to participate in the
LTD Plan.

“Good Reason” means
(i)
an adverse change in your status, duties or responsibilities as an employee of
the Company as in effect immediately prior to the Change In Control;

(ii)
failure of the Company to pay or provide you in a timely fashion the salary or
benefits to which you are entitled under any employment agreement between the
Company and you in effect on the date of the Change In Control, or under any
benefit plans or policies in which you were participating at the time of the
Change In Control;

(iii)
the reduction of your base salary in effect on the date of the Change In
Control;

(iv)
the taking of any action by the Company (including the elimination of a plan
without providing substitutes therefor, the reduction of your awards thereunder
or failure to continue your participation therein) that would substantially
diminish the aggregate projected value of your awards or benefits under the
Company’s benefit plans or policies in which you were participating at the time
of the Change In Control; provided, however, that the diminishment of such
awards or benefits that apply to other employees of the Company holding
positions in your salary grade or lower in addition to you shall be disregarded;
or

(v)
the relocation, without your prior approval, of the office at which you are to
perform services on behalf of the Company to a location more than fifty (50)
miles from its location immediately prior to the Change In Control.

Any circumstance described in this definition shall constitute Good Reason even
if such circumstance would not constitute a breach by the Company of the terms
of an employment agreement between the Company and you in effect on the date of
the Change In Control. However, such circumstance shall not constitute Good
Reason unless (1) within ninety (90) days of the initial existence of such
circumstance, you shall have given the Company written notice of such
circumstance, and (2) the Company shall have failed to remedy such circumstance
within thirty (30) days after its receipt of such notice. Such written notice to
be provided by you to the Company shall specify (A) the effective date for your
proposed Termination of employment (provided that such effective date may not
precede the expiration of the period for the Company’s opportunity to remedy),
(B) reasonable detail of the facts and circumstances claimed to provide the
basis for Termination, and (3) your belief that such facts and circumstance
would constitute Good Reason for

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purposes of this Agreement. Your continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstances
constituting Good Reason hereunder.

“LTD Plan” means the American Electric Power System Long Term Disability Plan,
as amended from time to time, or any plan providing continuation of cash
payments due to your illness or injury that may reasonably be expected to
prevent you from performing the duties of your occupation for a period longer
than at least 6 months that is designated as a successor to that plan or as a
replacement for that plan with respect to you.

“Qualifying Termination” means, coincident with or within one (1) year after the
date of a Change In Control, your Termination for any reason excluding (i) your
death, (ii) your Disability, (iii) the exhaustion of your benefits under the
terms of an applicable Company sick pay plan or long-term disability plan (other
than by reason of the amendment or termination of such a plan), (iv) your
Retirement, (v) by the Company for Cause or (vi) by you without Good Reason. If
your employment is Terminated during the term of this Agreement, but prior to a
Change In Control, it shall not be considered a Qualifying Termination even if
such Termination was (A) by the Company without Cause, or (B) by you based on
events or circumstances that would constitute Good Reason if a Change in Control
had occurred.

“Retirement” means Termination of employment with the Company other than for
Cause (A) after attaining age 55 and having completed at least ten (10) years of
Company service or (B) pursuant to AEP’s Mandatory Retirement Policy.

“Termination” means termination of employment with the Company for any reason;
provided that determinations as to the circumstances that will be considered a
Termination (including a leave of absence other than a leave of absence due to
your Disability) shall be made in a manner consistent with the written policies
adopted by the AEP Human Resources Committee from time to time to the extent
such policies are consistent with the requirements imposed under Code
409A(a)(2)(A)(i). Your employment with the Company will not be considered
Terminated so long as you remain continuously Disabled.

“Triggering Event” means the restructuring, consolidation, downsizing, closing,
sale and/or divestiture of the Company or part thereof under circumstances that
are not a Change in Control.

Capitalized terms that are not defined in this Award Agreement shall have the
meaning set forth in the American Electric Power System Long-Term Incentive
Plan, as amended from time to time.

Recoupment of Incentive Compensation
By accepting this Award, you agree to reimburse the Company for compensation
awarded, earned, received or paid to you under this Award Agreement with respect
to the relevant time period if the Board, in its discretion, determines that:
•
You are a Covered Employee (as defined in the American Electric Power Company,
Inc. Board Policy on Recouping Incentive Compensation, as amended from time to
time), and

•
This performance share award or any compensation resulting from it was
predicated upon the achievement of financial or other results that were
subsequently materially restated or corrected, and

•
A payment that is materially lower would have been made to you had achievement
been calculated based upon the restated or corrected financial or other results.

Therefore, if and to the extent that, in the Board’s view, the above conditions
have been met and such reimbursement is warranted by the facts and circumstances
of the particular case or if the applicable legal requirements impose more
stringent requirements on the Company to obtain reimbursement of such
compensation from you, then you will be required to reimburse the Company for
the value of such compensation paid to you (with such value to be no less than
that determined at the time of payment).

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Any such reimbursement must be paid in full to the Company within ninety (90)
days of the Company’s issuance of its notice to you. By entering into this Award
Agreement, you further agree and consent that the Company may also retain any
deferred compensation previously credited to you and not paid, provided that the
Company will retain such deferred compensation only if, when and to the extent
that it otherwise becomes payable to you.. This right to reimbursement is in
addition to, and not in substitution for, any and all other rights the Company
might have to pursue reimbursement or such other remedies against an employee
(including a Covered Employee) for misconduct in the course of employment by the
Company or otherwise based on applicable legal considerations, all of which are
expressly retained by the Company.

Change in Control and Qualifying Termination
Notwithstanding any provision of the Plan to the contrary, if you incur a
Qualifying Termination prior to the Vesting Date, (a) all of your outstanding
performance shares shall be deemed to have been fully earned at a 100% Overall
Performance Score as of the date of your Qualifying Termination, (b) all
restrictions, terms and conditions applicable to all of your performance shares
then outstanding shall be deemed lapsed and satisfied as of the date of your
Qualifying Termination, and (c) performance shares held by you will be paid in a
lump sum in cash, to you, as soon as administratively feasible after the date of
your Qualifying Termination, but no later than 2-1/2 months following the
calendar year of your Qualifying Termination.2 For this purpose, the value of
the performance shares shall be the closing market price of one share of AEP
Common Stock for the date of your Qualifying Termination, or, if your Qualifying
Termination is coincident with the date of the Change In Control, the value of
your performance shares shall be determined by (i) if the Change in Control is
the result of a tender or exchange offer for, merger of, or sale or disposition
of all or substantially all of the assets of the Company, the consideration per
share of Common Stock received by the shareholders in connection with such
transaction, or, if (i) is not applicable, (ii) the closing price of a share of
Common Stock on the date of the Change in Control. To the extent that the
consideration paid in any such transaction described in (i) above consists all
or in part of securities or other non-cash consideration, the value of such
securities and other non-cash consideration shall be the fair market value as
determined by such reasonable methods or procedures as shall be established by
the Committee.

The Company shall reimburse you for the legal fees and related expenses incurred
if you are required to seek to obtain or enforce your right to a distribution in
connection with a Qualifying Termination as described in this section, provided
that to the extent that any such reimbursements are taxable to you, the
reimbursements shall be paid to you only if the fees and expenses are incurred
prior to the date that the distribution is paid to you and you submit written
documentation of such fees and expenses to the Company within 6 months after
such fees and expenses are incurred. The amount of the fees and expenses that
are eligible for reimbursement during one calendar year shall not affect the
amount of reimbursements to be provided in any subsequent calendar year. The
reimbursement of an eligible expense shall be made on or before the last day of
the calendar year following the calendar year in which the fee or expense was
incurred. The right to reimbursement shall not be subject to liquidation or
exchange for any other benefit.

In the event that it is determined that you are properly entitled to a cash
distribution under this section, you shall also be entitled to interest thereon
at the prime rate of interest as published in The Wall Street Journal plus two
percent from the date such distribution should have been made to and including
the date it is made.

 

2 However, (i) if you are a participant in the AEP System Stock Ownership
Requirement Plan, the availability of your performance shares upon your
Qualifying Termination also will take into account the provisions of the AEP
System Stock Ownership Requirement Plan; and (ii) if you have submitted an
effective election to defer payment of all or any portion of your performance
shares pursuant to the ICDP, the availability of your performance shares
following your Qualifying Termination will be determined in accordance with the
provisions of the ICDP.

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The determination of whether and when a “Change in Control of the Company”
occurs with regard to outstanding performance shares will be made by reference
to the terms of the American Electric Power System Long-Term Incentive Plan, as
amended from time to time, except as otherwise specified in this Award
Agreement.

This Award Agreement becomes void if you do not accept it prior to the Vesting
Date.
/s/ Nicholas K. Akins
 
 
Nicholas K. Akins
 
[Name]
President and Chief Executive Officer
 
 

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Performance Share Award Value Projection
For Example Purposes Only
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant Date
 
Price/
Share
 
Shares
Credited*
 
Share
Balance
 
Value
Performance Shares Awarded
 
Q1
 
$
68.00

 
100.000

 
100.000

 
$
6,800.00

Dividend Credit
 
Q2
 
$
69.02

 
0.898

 
100.898

 
 
Dividend Credit
 
Q3
 
$
70.06

 
0.893

 
101.791

 
 
Dividend Credit
 
Q4
 
$
71.11

 
0.888

 
102.679

 
 
Dividend Credit
 
Q1
 
$
72.18

 
0.882

 
103.561

 
 
Dividend Credit
 
Q2
 
$
73.26

 
0.876

 
104.437

 
 
Dividend Credit
 
Q3
 
$
74.36

 
0.871

 
105.308

 
 
Dividend Credit
 
Q4
 
$
75.48

 
0.865

 
106.173

 
 
Dividend Credit
 
Q1
 
$
76.61

 
0.859

 
107.032

 
 
Dividend Credit
 
Q2
 
$
77.76

 
0.853

 
107.885

 
 
Dividend Credit
 
Q3
 
$
78.93

 
0.847

 
108.732

 
 
Dividend Credit
 
Q4
 
$
80.11

 
0.842

 
109.574

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Shareholder Return Score @ 60th Percentile:
 
 
1.333

 
 
EPS Score @ 100% of Target:
 
 
1.000

 
 
Award Score:
 
 
1.167

 
 
x Share Balance:
 
 
109.574

 
 
Ending Share Balance
 
 
127.873

 
 
 
 
 
 
 
 
 
 
 
 
 
Value at End of Vesting Period:
 
12/31/2020
 
$
80.39

 
 
 
127.873

 
$
10,279.70

Note: Dividend Credits are not applied unless tied to dividends that are paid
after the later of the Effective Date or the Grant Date defined in the
Agreement. The Example assumes that dividends of $0.50 per share are paid as of
the indicated dates and that the share price appreciates at a rate of 1.5% each
quarter.

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EXAMPLE
PERFORMANCE SHARE AWARD AGREEMENT

This Performance Share Award Agreement includes provisions for prorated vesting
in the event that your employment is terminated (other than Qualifying
Termination) due to your death, Retirement or a Triggering Event. The following
examples assume that the award agreement provides the indicated Effective Date
and Vesting Date.
Effective Date:
January 1, 2018
Vesting Date
December 31, 2020

Prorated Vesting in the event of death, Retirement or a Triggering Event: If
your employment Terminates for one or more of the above reasons both prior to
the Vesting Date and 6 months or more after the Effective Date, then a prorated
portion of your performance shares will remain outstanding and the remainder of
your performance shares will be canceled. For example, if your employment
Terminates on October 10, 2018 for one or more of the above reasons, then the
fractional percentage of your Granted RSUs that would remain outstanding would
be determined as follows: there are 9 whole months from the Effective Date to
the Termination Date divided by 36 whole months in the vesting period (9/36 or
25.0%) of your Granted Performance Shares (along with any additional Dividend
Equivalent RSUs related to that portion) would remain outstanding and the
remainder would be canceled as of your termination date. The shares that remain
outstanding would continue to accrue additional performance shares due to
Dividend Credits through the end of the three-year performance period. After the
conclusion of the performance period the outstanding shares would be multiplied
by the applicable performance score and the resulting total would vest and
become payable in accordance with the “Payment of Earned Performance Share
Awards” section above.

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