**Exhibit 10.13**

 

ALLEGHENY ENERGY, INC. 

 

STOCK UNIT PLAN 

 

1. Purpose And Effective Date. The purpose of the Stock Unit Plan (the “Plan”) is to aid Allegheny Energy, Inc. (the“Company”) in attracting and retaining employees who are essential for the growth and profitability of the Company through the issuance of stock units (“Units”). This Plan shall become effective upon its approval bythe Board of Directors of the Company (the “Board”). Upon such approval, and the consent of each of the Executive Officers specified on Exhibit A attached hereto, the 3,414,048 Units, previously granted to such ExecutiveOfficers (the “Outstanding Units”) shall become subject to the terms and conditions of the Plan. 

 

2. Administration. Subject to all applicable legal requirements, including without limitation, compliance with securities, tax or other laws, orrules, regulations or regulatory interpretations thereof, applicable to the Plan, or the requirements of the exchanges, and any requirements of other governmental or regulatory authorities, the Plan shall be administered by the Board, which shallhave the sole authority to construe and interpret the terms and provisions of the Plan. The Board shall have the authority to determine the individuals to whom Units shall be granted (the “Participants”), the conditions under whichsuch Units may become vested and or forfeited, and such other terms and conditions as the Board may establish with respect to such Units. Each Participant shall enter into an agreement with the Company evidencing the terms and conditions of theCompany’s award to such Participant of Units pursuant to this Plan (a “Stock Unit Agreement”). Each Stock Unit Agreement shall provide that, upon vesting, each Participant shall be entitled to receive one share of theCompany’s common stock, $1.25 par value (“Common Stock”), with respect to each Unit and shall be subject to the terms and conditions of this Plan. Each such share of Common Stock shall be registered under the SecuritiesExchange Act of 1933, as amended. In addition, a Stock Unit Agreement may grant a Participant rights with respect to dividends paid by the Company during the period such Unit was held, as well as a right to defer payments with respect to vestedUnits. The Board shall maintain records and disburse payments hereunder. The Board may adopt, amend and rescind such rules and regulations as it deems necessary, desirable or appropriate in administering the Plan, and the Board may act at a meeting,in a written action without meeting or by having actions otherwise taken by a member of the Board pursuant to a delegation of duties from the Board. The determination of the Board as to any calculations or disputed questions arising under the Plan,including questions of construction and interpretation, shall be final, binding and conclusive upon all persons. 

3. Units. 

 

3.1 Subject to adjustment as provided in Section 3.2, the number of Units authorized under the Plan is 4,500,000, inclusiveof the Outstanding Units. If any award pursuant to this Plan is forfeited or otherwise terminates or is canceled prior to the vesting of any Units, then the Units covered by such award, to the extent of such forfeiture, termination or cancellation,shall again be available under the Plan. 

 

3.2 In the event that(A) the Board determines that any distribution, recapitalization, split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares of Common Stock or other securities of the Company,issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar transaction or event affects the Units such that an adjustment is appropriate in order to prevent dilution or enlargement ofthe benefits or potential benefits intended to be made available under the Plan, then the Board shall, in such manner as it may deem equitable, adjust (i) the number of Units with respect to which awards may be granted and (ii) the number of Unitssubject to outstanding awards; provided, that the number of Units subject to any award shall always be a whole number. 

 

3.3 No Units may be awarded under this Plan unless such award is made pursuant to a transaction which qualifies for one of the exemptions from stockholderapproval set forth in Rule 303A.08 of the rules of the New York Stock Exchange and the Company has complied with all applicable stock exchange rules and obtained any required regulatory approvals. 

 

3.4 Participants shall not be deemed for any purpose to be, or have anyrights as, stockholders of the Company with respect to any Units awarded under this Plan except if, as and when the Company issues payment in respect of any vested Units in the form of shares of Common Stock and then only from the date of thecertificates therefor. 

 

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4. Amendment And Discontinuance. 

 

4.1 The Board may amend this Plan or condition or modify Units issued under this Plan (a) to conform this Plan to securitiesor other laws, or rules, regulations or regulatory interpretations thereof, applicable to this Plan, or (b) to comply with stock exchange rules or requirements. 

 

4.2 The Board may suspend or discontinue this Plan in whole or in part, but any such suspension or discontinuance shall not affect the rights of anyParticipants with respect to Units granted under this Plan prior thereto. 

 

4.3 Notwithstanding anything to the contrary in this Section 4, any amendment to this Plan must comply with all applicable legal requirements including without limitation, compliance with securities, tax, or otherlaws, or rules, regulations or regulatory interpretations thereof, applicable to this Plan. 

 

5. Compliance With Applicable Legal Requirements. No payments in respect of any vested Units shall be made unless the Company has complied with all applicable legal requirements including without limitation,compliance with the provisions of the Securities Act of 1933, as amended, the Public Utilities Holding Company Act of 1935, as amended, the requirements of the exchanges on which the Company’s securities are listed, and any requirements ofother governmental or regulatory authorities. 

 

6. Term ofthe Plan. The Plan shall be effective on the date of its approval by the Board and shall continue until the date terminated by the Board or until Units are no longer available for grants of awards under the Plan, whichever occurs first. However,unless otherwise expressly provided in the Plan or in an applicable Stock Unit Agreement granted prior to such termination, any award granted prior to such termination shall extend beyond such termination date. 

 

7. Source of Payments. Any right of a Participant to receive paymentpursuant to this Plan shall be an unfunded entitlement and shall be an unsecured claim against the general assets of the Company. Each Participant shall have only the status of a general unsecured creditor hereunder, and this Plan shall constituteonly a promise by the Company to pay the value of any awards granted on any required payment date. 

 

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8. Withholding. The Company may withhold from any amounts payable pursuant to this Plan suchFederal, state and local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 

 

9. No Right to Employment. Nothing in this Plan shall confer upon a Participant the right to remain employed by the Company. 

 

10. Governing Law. This Plan will be governed by and construed inaccordance with the laws of the State of New York, without regard to its conflict of law principles. 

 

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EXHIBIT A

 

**Executive Officers**
 
**Outstanding Units**

Paul J. Evanson
 2,049,439
Jeffrey D. Serkes
 714,795
David B. Hertzog
 389,888
Joseph H. Richardson
 109,926
Philip L. Goulding
 150,000
**Total**
 3,414,048