Exhibit 10
 
AMERICAN ELECTRIC POWER COMPANY, INC.
SENIOR OFFICER INCENTIVE PLAN
 
ARTICLE I
INTRODUCTION AND PURPOSE
 
American Electric Power Company, Inc. previously adopted the American Electric
Power System Senior Officer Annual Incentive Compensation Plan (the “Incentive
Plan”) effective January 1, 1997. This document amends and restates the
Incentive Plan effective as of February 28, 2012 (the date the changes made by
this Incentive Plan by resolution of the Human Resources Committee were ratified
by Board of Directors of the Company) (the “Effective Date”). Any changes made
to the Incentive Plan by this document shall not affect Awards granted prior to
the Effective Date. Grants of Awards under the Incentive Plan, as amended
hereby, may be made on or after the Effective Date.
 
ARTICLE II
DEFINITIONS
 
For purposes of the Plan, the following terms shall have the following meanings:
 
(a)  “Award” means an incentive award, which entitles a Participant to receive a
payment from the Company or a Subsidiary pursuant to Article IV, subject to such
terms and conditions as the Committee may prescribe.
 
(b)  “Board” means the Board of Directors of the Company.
 
(c) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute, and applicable regulations.
 
(d)  “Committee” means the Human Resources Committee of the Board or such other
committee or subcommittee as may be designated by the Board to oversee the
Company’s executive compensation; provided that any such Committee shall consist
of two or more persons, each of whom is an “outside director” within the meaning
of Code Section 162(m).
 
(e) “Company” means American Electric Power Company, Inc., a New York
corporation.
 
(f) “Covered Employee” means a Participant who the Committee determines meets
the definition of a Covered Employee as defined in Code Section 162(m)(3).
 
(g)  “Effective Date” is defined in Article I.
 
(h) “Participant” means a corporate officer of the Company or of a Subsidiary
who is granted an Award by the Committee.
 
(i) “Performance-Based Compensation” means an Award that is intended to
constitute “remuneration payable solely on account of the attainment of one or
more or performance goals” or “qualified performance-based compensation” within
the meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated
thereunder.
 
(j)  “Performance Objective” is defined in Section 4.2.
 
(k) “Performance Period” is defined in Section 4.2.
 
(l) “Plan” means the American Electric Power System Senior Officer Incentive
Plan, as set forth herein and as amended from time to time.
 
 
 

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

 
         (m) “Subsidiary” means any corporation (other than the Company),
limited liability company, partnership or other business organization of which a
majority of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.
 
ARTICLE III
ELIGIBILITY
 
Awards may be granted to any Participant from time to time by the Committee. The
Committee shall determine the terms, conditions, and limitations applicable to
each Award consistent with the Plan. Designation by the Committee as a
Participant for an Award in one period shall not confer on such Participant the
right to participate in the Plan for any other period.
 
ARTICLE IV
INCENTIVE AWARDS
 
Section 4.1. General.
 
(a)
Awards may be granted to a Participant in such amounts and upon such terms, and
at any time and from time to time, as shall be determined by the Committee. The
Committee, at the time an Award is made, shall specify the terms and conditions
which govern the Award, which terms and conditions shall prescribe that the
Award shall be earned only upon, and to the extent that, Performance Objectives
as described in Section 4.2, are satisfied within a designated time.

 
(b)
Different terms and conditions may be established by the Committee for different
Awards and for different Participants with respect to the same or different
Performance Periods.

 
Section 4.2. Performance Objectives. The vesting and payment of Awards shall be
contingent upon the degree of attainment of such performance goal(s) (the
“Performance Objectives”) over such period (the “Performance Period”) as shall
be specified by the Committee at the time the Award is granted. Performance
Objectives will be established prior to or within the first ninety (90) days of
each Performance Period (or within the first 25% of the Performance Period, if
the Performance Period is shorter than 360 days).
 
The criteria for developing the Performance Objectives upon which payment or
vesting of an Award intended to qualify for the exemption under Code
Section 162(m) may be based shall be limited to one or more of the following, as
determined by the Committee: (i) earnings measures: primary earnings per share;
fully diluted earnings per share; net income; pre-tax income; operating income;
earnings before interest, taxes, depreciation and amortization; net operating
profits after taxes; income before income taxes, minority interest and equity
earnings; income before discontinued operations, extraordinary items and
cumulative effect of accounting changes, or any combination thereof;
(ii) expense control: operations & maintenance expense; total expenditures;
expense ratios; and expense reduction; (iii) customer measures: customer
satisfaction; service cost; service levels; responsiveness; bad debt collections
or losses; and reliability—such as outage frequency, outage duration, and
frequency of momentary outages; (iv) safety measures: recordable case rate;
severity rate; and vehicle accident rate; (v) diversity measures: minority
placement rate and utilization; (vi) environmental measures: emissions; project
completion milestones; regulatory/legislative/cost recovery goals; and notices
of violation; (vii) revenue measures: revenue and margin; (viii) shareholder
return measures: total shareholder return; economic value added; cumulative
shareholder value added; return on equity; return on capital; return on assets;
dividend payout ratio and cash flow(s)—such as operating cash flows, free cash
flow, discounted cash flow return on investment and cash flow in excess of cost
of capital or any combination thereof; (ix) valuation measures: stock price
increase; price to book value ratio; and price to earnings ratio; (x) capital
and risk measures: debt to equity ratio and dividend payout as percentage of net
income; (xi) employee satisfaction; (xii) project measures: completion of key
milestones; (xiii) production measures: generating capacity factor; performance
against the Institute of Nuclear Power Operation index; generating equivalent
availability; heat rates and production cost. The targeted level or levels of
performance with respect to such business criteria may be established at such
levels and in such terms as the Committee may determine, in its discretion,
including in absolute terms, as a goal relative to performance in prior periods
(e.g., earnings growth), or as a goal compared to the performance of one or more
comparable companies or an index covering multiple companies.
 
 
2

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

 
            Performance Objectives may relate to attainment of specified
objectives by the Participant or by the Company or one or more Subsidiaries,
including a division or a department of the Company or of one or more
Subsidiaries.
 
Section 4.3. Payment of Awards. An Award shall not become payable unless, after
the expiration of the Performance Period, the Committee has certified either
that the Performance Objectives with respect to such Award have been satisfied
or the level of attainment of each Performance Objective. Unless otherwise
expressly stated in the terms and conditions of a particular Award, the
Committee retains the power, authority and discretion to reduce or eliminate,
but not to increase, the amount calculated as payable under the terms of any
Award in order to reflect other performance criteria. Payment of such Awards
that have been certified shall be made to Participants in a single lump sum in
cash at such time determined by the Committee, and generally no later than two
and one-half months after the end of the Performance Period; provided that
unless otherwise clearly specified in the terms and conditions of a particular
Award, payment shall be made no later than 2-1/2 months after the end of the
calendar year during which the Award became vested, or as soon as practical
thereafter. In no event shall any Participant receive an Award payment or
payments in any fiscal year that exceeds the lesser of (i) $6,000,000 or
(ii) 400% of the Participant’s base salary (prior to any salary reduction or
deferral elections) as of the date of grant of the Award.
 
Section  4.4. Recoupment of Incentive Compensation. Each Participant who is
granted an Award shall reimburse the amount awarded, earned, received or paid
under such Award if the Committee, in its discretion, determines that: (i) the
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 (ii) the Participant engaged in misconduct that caused or
partially caused the need for the restatement or correction, and (iii) a lower
payment would have been made to the Participant based upon the restated or
corrected financial results. If and to the extent that the Committee, in its
sole discretion, determines that the conditions set forth in (i) through (iii)
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 or any of its Subsidiaries to obtain
reimbursement of such compensation, then the Participant will be required to
reimburse Company or its Subsidiaries, as applicable, for the value of such
compensation paid to that Participant. The Company or its Subsidiaries, as
applicable, also may retain any deferred compensation previously credited to the
Participant and not paid, provided that the Company or its Subsidiaries, as
applicable, will retain such deferred compensation only if, when and to the
extent that it otherwise becomes payable to the Participant. This right to
reimbursement is in addition to, and not in substitution for, any and all other
rights the Company and its Subsidiaries might have to pursue reimbursement or
such other remedies against an employee for misconduct in the course of
employment or otherwise based on applicable legal considerations, all of which
are expressly retained by the Company and its Subsidiaries.
 
ARTICLE V
ADMINISTRATION
 
The Plan shall be administered by the Committee. The Committee shall have all of
the powers necessary to enable it to properly carry out its duties under the
Plan. Not in limitation of the foregoing, the Committee shall have the power and
discretion to construe and interpret the Plan and to determine all questions
that shall arise thereunder. The Committee shall have such other and further
specified duties, powers, authority and discretion as are elsewhere in the Plan
either expressly or by necessary implication conferred upon it. The Committee
may appoint such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties, and may delegate to
such agents such powers and duties as the Committee may deem expedient or
appropriate that are not inconsistent with the intent of the Plan to the fullest
extent permitted under applicable law. The decision of the Committee or any
agent of the Committee upon all matters within the scope of its authority shall
be final and conclusive on all persons.
 
ARTICLE VI
AMENDMENT AND TERMINATION
 
Section 6.1. Amendment of Plan. The Company has the right, at any time and from
time to time, to amend in whole or in part any of the terms and provisions of
the Plan to the extent permitted by law for whatever reason(s) the Company may
deem appropriate; provided, however, that any such amendment which requires
approval of the
 
 
3

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

 
Company’s shareholders in order to maintain the qualification of Awards as
performance-based compensation pursuant to Code Section 162(m) (4)(C) shall not
be made without such approval.
 
Section 6.2. Termination of Plan. The Company expressly reserves the right, at
any time, to suspend or terminate the Plan to the extent permitted by law for
whatever reason(s) the Company may deem appropriate, including, without
limitation, suspension or termination as to any Subsidiary, Employee, or class
of Employees.
 
Section 6.3. Procedure for Amendment or Termination. Any amendment to the Plan
or termination of the Plan shall be made by the Company by resolution of the
Committee and shall not require the approval or consent of any Subsidiary or
Participant to be effective to the extent permitted by law. Any amendment to the
Plan or termination of the Plan may be retroactive to the extent not prohibited
by applicable law.
 
ARTICLE VII
MISCELLANEOUS
 
Section 7.1. Rights of Employees. Status as an eligible Employee shall not be
construed as a commitment that any Award will be made under the Plan to such
eligible Employee or to eligible Employees generally. Nothing contained in the
Plan (or in any other documents related to this Plan or to any Award) shall
confer upon any Employee any right to continue in the employ or service of the
Company or any Subsidiary or constitute any contract or limit in any way the
right of the Company to change such person’s compensation or other benefits or
to terminate the employment or service of such person with or without cause.
 
Section  7.2. Unfunded Status. The Plan shall be unfunded. Neither the Company,
any Subsidiary, the Committee, nor the Board shall be required to segregate any
assets that may at any time be represented by Awards made pursuant to the Plan.
Neither the Company, any Subsidiary, the Committee, nor the Board shall be
deemed to be a trustee of any amounts to be paid under the Plan.
 
Section 7.3. Limits on Liability. Any liability of the Company or any Subsidiary
to any Participant with respect to an Award shall be based solely upon
contractual obligations created by the Plan. Neither the Company nor any
Subsidiary nor any member of the Board or the Committee, nor any other person
participating in any determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall have any
liability to any party for any action taken or not taken in good faith under the
Plan. To the extent permitted by applicable law, the Company shall indemnify and
hold harmless each member of the Board and the Committee from and against any
and all liability, claims, demands, costs, and expenses (including the costs and
expenses of attorneys incurred in connection with the investigation or defense
of claims) in any manner connected with or arising out of any actions or
inactions in connection with the administration of the Plan except for such
actions or inactions which are not in good faith or which constitute willful
misconduct.
 
Section 7.4. Interpretation. Unless otherwise expressly stated by the Committee
with respect to an Award, each Award granted to a Covered Employee under the
Plan is intended to (i) be Performance-Based Compensation that is fully
deductible by the Company for federal income taxes and not subject to the
deduction limitation of Section 162(m) of the Code and (ii) comply with the
requirements of Code Section 409A (including by reason of being exempt from the
application of Code Section 409A), and the Plan shall be construed or deemed
amended to the extent possible to conform any Award to effect such intent. The
Committee shall not have any discretion to determine that an Award will be paid
to a Covered Employee if the Performance Objective for such Award is not
attained.
 
Section 7.5. Tax Withholding. The Company shall be entitled to withhold from any
payment made under the Plan the full amount of any required federal, state or
local taxes or such other amounts as may be required by applicable law.
 
Section 7.6. Nontransferability of Benefits. A Participant may not assign or
transfer any interest in an Award. Notwithstanding the foregoing, upon the death
of a Participant, the Participant’s rights and benefits under the Plan shall
pass by will or by the laws of descent and distribution.
 
 
4

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

 
Section 7.7. Governing Law. To the extent not governed by federal law, the Plan
shall be construed in accordance with and governed by the laws of the State of
Ohio.
 
ARTICLE VIII
EFFECTIVE DATE; DURATION OF THE PLAN
 
The Plan shall be effective as of the Effective Date. Notwithstanding any
provision of this Plan to the contrary, this Plan shall be subject to approval
by a vote of the shareholders of the Company at its 2012 annual meeting, and
such shareholder approval shall be a pre-condition to the right of any
Participant to receive any benefits pursuant to an Award made under this Plan on
or after the Effective Date.
 
 
 
5

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