Exhibit 10(x)
 
November 26, 2012

Lana Hillebrand
202 Matthew Way
Murphy, TX 75094-3758

Dear Lana,

I am excited to be able to offer you the opportunity to join AEP as SVP & Chief
Administrative Officer.  This offer letter provides a written summary of the
job, compensation and benefits for this position, which will report directly to
me.  This offer is subject to the approval of the Human Resources Committee of
the Board at its November 20, 2012 meeting.  It is also contingent upon a
satisfactory pre-placement health evaluation, a satisfactory background check
and production of appropriate identification and employment eligibility
documents.

Your salary for this position will be $470,000 and will be reviewed annually and
your start date will be Monday December 17, 2012 or such other date to which we
might mutually agree.  As we discussed, generally you will be expected to work
three days a week in Columbus and from your home the rest of the week, although
you will be expected to work more days in Columbus on some weeks and less on
others, depending on the needs of the business.

In order to offset the loss of near-term compensation from your current employer
that you will forfeit if you come to work for AEP, AEP will pay $464,000 to you
in 2012 following the start of your employment.  This amount consists of
$204,000 to offset the loss of your eligibility for a 2012 bonus and $260,000 to
offset the loss of performance units that would otherwise vest in the next few
months.

AEP’s incentive programs are reviewed periodically and modified from time to
time at the discretion of senior AEP management and the HR Committee of the
Board.  The current annual incentive target opportunity for this position will
be 60% of base earnings for the year, with a two times target maximum.  Since
your employment starting date is in the last month of the year, your first year
of participation in an annual incentive plan will be 2013.

Your current long-term incentive opportunity, as reflected in the February 2013
award cycle, will have an annual target grant date fair value of $832,000.  This
long-term incentive opportunity comes with a 29,900 share stock ownership
requirement.  You will have 5 years from February 2013 to meet this
requirement.  All performance units earned
 
 
 

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will be mandatorily deferred into AEP career shares to the extent needed to
satisfy this stock ownership requirement.

AEP currently expects to award 70% of the grant date value of its long-term
incentive awards in the form of performance units with three-year goals tied to
AEP’s earning per share relative to a board approved target and total
shareholder return relative to other large electric and diversified
utilities.  AEP currently expects to award the remaining 30% of this value in
the form of restricted stock units (RSUs), which vest in approximately equal
thirds, subject to continuous AEP employment, on the May 1st following the
first, second and third anniversary of the grant date.  The number of long-term
incentive awards granted to you and the ultimate value of these awards, if any,
are based on many factors, including your individual performance, AEP’s
performance and AEP’s share price.

In addition, you will be granted $310,000 in additional RSUs as part of the
first quarter 2013 award cycle to offset the loss of a similar value of stock
units from your current employer that you would forfeit by accepting this
offer.  These RSUs will also vest, subject to your continuous AEP employment, in
approximately equal thirds on the May 1st following the first, second and third
anniversary of the grant date.

In the event that (A) your employment with AEP is Terminated1 either (i) within
the first year of your employment by AEP without Cause2 or (ii) by you because
your duties are changed to require you to work in Columbus, Ohio more than three
days a week on a regular basis without your consent3 and (B) such termination is
not a Qualifying Termination as defined in Restricted Stock Unit Award Agreement
provided to you pursuant to this offer letter, then AEP would provide a lump-sum
severance benefit to you equal to your then current annual salary and target
annual incentive opportunity.  Such payment would be conditioned upon your
agreement to release AEP from any and all claims involving your employment with
or termination from AEP, including claims of any other severance payments and
benefits to which you might otherwise be entitled, and to do so within the
period specified therein, but in no event later than sixty (60) days after the
Termination, in the form established by AEP.  If applicable, the severance
payment would be made no later than the 15th day of the third month of the
Taxable Year following the Taxable Year of your Termination.4

You will be provided with the Change In Control Agreement that will be used for
other senior AEP executives for 2013.  This agreement will provide a multiple of
2.0 times your then current salary and target bonus, as well as other benefits,
in the event of a Change In Control as defined therein.  As a new participant
you will not be considered to be a Grandfathered Executive entitled to the
tax-gross-up provisions under this agreement.

Beginning January 2nd, you will be eligible for up to six months of temporary
living expenses, including reimbursement for reasonable housing accommodations,
airfare, rental car and other travel expenses.  After this period you will be
responsible for all commuting and living expenses.

 
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Beginning in 2013 you will receive five weeks of paid time-off in addition to
company holidays.  This will consist of 22 days of paid vacation and three
personal days.  As we discussed, you will be provided with sufficient vacation
and other paid time-off in 2012 to allow you to be away from work from Monday
December 24 through year-end.

In addition you will be eligible to participate in AEP’s comprehensive health
and welfare benefit program, qualified and non-qualified retirement savings
plans, qualified and non-qualified cash balance pension plans, executive
financial counseling and tax preparation services and other AEP benefit
programs, as amended from time to time.  Under the terms of the plans as
currently in effect, your age and years of service would provide the maximum
8.5% cash balance crediting rate under the terms of AEP’s current qualified and
non-qualified pension plans for 2013; and you would become eligible for retiree
medical benefits if you would remain employed with AEP through your age 55,
since you have already met the 10 year service requirement.  Please contact Andy
Carlin at (614) 716-3417 if you have any questions regarding your compensation
or executive benefits.

The Immigration Reform and Control Act of 1986, requires employers to verify the
identity and employment eligibility of all prospective employees.  Failure to
produce employment eligibility documents as required will result in the
withdrawal of the employment offer.  Therefore, if this offer is acceptable to
you, please fax copies (each on a separate sheet) of your Driver’s License or
Passport, Birth Certificate, Social Security Card, and Marriage Certificate (if
applicable) to Andy Carlin’s confidential fax number at (614) 716-2406.

Lana, I look forward to your joining American Electric Power’s executive team
and working with you again in the coming months.

Sincerely,

/s/ Nicholas K. Akins
Nicholas K. Akins
President & CEO

cc:           Andy Carlin
 
 
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Definitions and Other Conditions
 
 

   

1“Termination” means termination of employment with AEP for any reason; provided
that determinations as to the circumstances that will be considered a
Termination shall be made in a manner consistent with written policies adopted
by the Human Resources Committee of American Electric Power Company, Inc., from
time to time to the extent such policies are consistent with the requirements
imposed under Code 409A(a)(2)(A)(i).
 
2“Cause” means any one or more of the following grounds: (a) failure or refusal
to perform your assigned duties and responsibilities in a competent or
satisfactory manner as determined in good faith by AEP; (b) commission of an act
of dishonesty, including, but not limited to, misappropriation of funds or any
property of AEP; (c) engagement in activities or conduct injurious to the best
interest or reputation of AEP as determined in good faith by AEP; (d)
insubordination; (e) a violation of any of the terms and conditions of any
written agreement or agreements you may from time to time have with AEP; (f) a
violation of any of AEP’s rules of conduct of behavior, such as may be provided
in AEP’s Principles of Business Conduct or any employee handbook or as AEP may
promulgate from time to time; (g) commission of a crime which is a felony, a
misdemeanor involving an act or moral turpitude, or a misdemeanor committed in
connection with your employment with AEP which is injurious to the best interest
or reputation of AEP as determined in good faith by AEP; or (h) disclosure,
dissemination, or misappropriation of confidential, proprietary, and/or trade
secret information.
 
3Your eligibility for a severance payment pursuant to clause (A)(ii) in the
eighth paragraph of the offer letter, is conditioned upon (1) within ninety (90)
days of the initial existence of that circumstance, you must give AEP written
notice of that circumstance and (2) AEP must fail to remedy that circumstance
within thirty (30) days after its receipt of your notice.  Your written notice
to AEP must specify (I) the effective date for your proposed termination of
employment (provided that such effective date may not precede the expiration of
the period for AEP’s opportunity to remedy), (II) reasonable detail of the facts
and circumstances claimed to provide the basis for termination, and (III) your
belief that such facts and circumstance would establish your eligibility for a
severance payment pursuant to clause (A)(ii) in the eighth paragraph of the
offer letter.
 
4 For purposes of the offer letter, “Taxable Year” means your taxable year for
federal income tax purposes.  If any period specified for timely satisfaction of
conditions for you to become entitled to the severance payment ends in a Taxable
Year that is different from the Taxable Year of your Termination, the payment
will not be made to you until the Taxable Year in which that period ends.  In
any event, as stated in the offer letter, the payment, if applicable, will be
made no later than the 15th day of the third month of that later Taxable Year.
 
 
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