Document:

Unassociated Document

    Exhibit
10(k)

       

      AMERICAN
ELECTRIC POWER SERVICE CORPORATION

      

      CHANGE IN
CONTROL AGREEMENT

      

      Effective
January 1, 2008

      

      Whereas, American Electric Power
Service Corporation, a New York corporation, including any of its subsidiary
companies, divisions, organizations, or affiliated entities (collectively
referred to as “AEPSC”) considers it essential to its best interests and the
best interests of the shareholders of the American Electric Power Company, Inc.,
a New York corporation, (hereinafter referred to as “Corporation”) to foster the
continued employment of key management personnel; and

      

      Whereas, the uncertainty attendant to a
Change In Control of the Corporation may result in the departure or distraction
of management personnel to the detriment of AEPSC and the shareholders of the
Corporation; and

      

      Whereas, the Board of the Corporation
has determined that steps should be taken to reinforce and encourage the
continued attention and dedication of members of AEPSC’s management to their
assigned duties in the event of a Change In Control of the Corporation;
and

      

      Now Therefore, AEPSC hereby establishes
the American Electric Power Service Corporation Change In Control Agreement (the
“Agreement”).

      

      

      ARTICLE
I

      DEFINITIONS

      

      As used herein the following words and
phrases shall have the following respective meanings unless the context clearly
indicates otherwise.

      

      (a)  “Anniversary Date” means
January 1 of each Calendar Year.

      

      (b)  “Annual Compensation”
means the sum of the Executive’s Annual Salary and the Executive’s Target Annual
Incentive.

      

      (c)  “Annual Salary” means
the Executive’s regular annual base salary immediately prior to the Executive’s
termination of employment, including compensation converted to other benefits
under a flexible pay arrangement maintained by AEPSC or deferred pursuant to a
written plan or agreement with AEPSC, but excluding sign-on bonuses, allowances
and compensation paid or payable under any of AEPSC’s long-term or short-term
incentive plans or any similar payments, and any salary lump sum amount paid in
lieu of or in addition to a base wage or salary increase.

      

      (d)  “Board”
means the Board of Directors of American Electric Power Company,
Inc.

      

      (e)  “Calendar
Year” means the twelve (12) month period commencing each January 1 and ending
each December 31.

      

      (f)  “Cause” shall
mean

      

      (i) the
willful and continued failure of the Executive to perform substantially the
Executive’s duties with AEPSC (other than any such failure as reasonably and
consistently determined by the Board to have resulted from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board or an elected officer of AEPSC which
specifically identifies the manner in which the Board or the elected officer
believes that the Executive has not substantially performed the Executive’s
duties, or

      

      (ii) the
willful conduct or omission by the Executive, which the Board determines to be
illegal or gross misconduct that is demonstrably injurious to AEPSC or the
Corporation; or a breach of the Executive’s fiduciary duty to AEPSC or the
Corporation, as determined by the Board.

      

      For purposes of this provision, no act
or failure to act, on the part of the Executive, shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the
best interests of AEPSC or the Corporation.  Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the advice of counsel for AEPSC or the Corporation, shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of AEPSC or the Corporation

      

      (g)  “Change In Control” of
the Corporation shall be deemed to have occurred if and as of such date that (i)
any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934 (“Exchange Act”)), other than AEPSC, any
company owned, directly or indirectly, by the shareholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation or a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of more than one
third of the then outstanding voting stock of the Corporation; or (ii) the
consummation of a merger or consolidation of the Corporation with any other
entity, other than a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least two-thirds of the total voting
power represented by the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation; or (iii) the
consummation of the complete liquidation of the Corporation or the sale or
disposition by the Corporation (in one transaction or a series of transactions)
of all or substantially all of the Corporation’s assets.

      

      (h)  “CIC
Multiple” means a factor of (i) two and ninety-nine one-hundredths (2.99) with
respect to the Chief Executive Officer of American Electric Power Service
Corporation and such other Executives who are nominated for such factor by the
Chief Executive Officer of American Electric Power Service Corporation and
approved by the Human Resources Committee of the Board of the Corporation; or
(ii) two (2.00) with respect to all other Executives.

      

      (i)  “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

      

      (j)  “Commencement Date”
means January 1, 2008, which shall be the beginning date of the term of this
Agreement.

      

      (k)  “Disability” means the
Executive’s total and permanent disability as defined in AEPSC’s long-term
disability plan covering the Executive immediately prior to the Change In
Control.

      

      (l)  “Executive” means an
employee of AEPSC or the Corporation who is designated by AEPSC and approved by
the Human Resources Committee of the Board of the Corporation as an employee
entitled to benefits, if any, under the terms of this Agreement.

      

      (m)  “Good Reason”
means

      

      (1) an
adverse change in the Executive’s status, duties or responsibilities as an
executive of AEPSC as in effect immediately prior to the Change In
Control;

      

      (2)
failure of AEPSC to pay or provide the Executive in a timely fashion the salary
or benefits to which the Executive is entitled under any employment agreement
between AEPSC and the Executive in effect on the date of the Change In Control,
or under any benefit plans or policies in which the Executive was participating
at the time of the Change In Control;

      

      (3) the
reduction of the Executive’s base salary as in effect on the date of the Change
In Control;

      

      (4) the
taking of any action by AEPSC (including the elimination of a plan without
providing substitutes therefor, the reduction of the Executive’s awards
thereunder or failure to continue the Executive’s participation therein) that
would substantially diminish the aggregate projected value of the Executive’s
awards or benefits under AEPSC’s benefit plans or policies in which the
Executive was participating at the time of the Change In Control; provided,
however, that the diminishment of such awards or benefits that apply to other
groups of employees of AEPSC in addition to Executives covered by this or a
similar agreement shall be disregarded;

      

      (5) a
failure by AEPSC or the Corporation to obtain from any successor the assent to
this Agreement contemplated by Article IV hereof; or

      

      (6) the
relocation, without the Executive’s prior approval, of the office at which the
Executive is to perform services on behalf of AEPSC to a location more than
fifty (50) miles from its location immediately prior to the Change In
Control.

      

      Any circumstance described in this
Article I(m) shall constitute Good Reason even if such circumstance would not
constitute a breach by AEPSC of the terms of an employment agreement between
AEPSC and the Executive in effect on the date of the Change In
Control.  However, such circumstance shall not constitute Good Reason
unless (i) within ninety (90) days of the initial existence of such
circumstance, the Executive shall have given AEPSC written notice of such
circumstance, and (ii) AEPSC shall have failed to remedy such circumstance
within thirty (30) days after its receipt of such notice.  Such
written notice to be provided by the Executive to AEPSC shall specify (A) the
effective date for the Executive’s proposed termination of employment (provided
that such effective date may not precede the expiration of the period for
AEPSC’s opportunity to remedy), (B) reasonable detail of the facts and
circumstances claimed to provide the basis for termination, and (C) the
Executive’s belief that such facts and circumstance would constitute Good Reason
for purposes of this Agreement.  The Executive’s continued employment
shall not constitute consent to, or a waiver of rights with respect to, any
circumstances constituting Good Reason hereunder.

      

      (n)  “Qualifying Termination”
shall mean following a Change In Control and during the term of this Agreement
the Executive’s employment is terminated for any reason excluding (i) the
Executive’s death, (ii) the Executive’s Disability, (iii) the exhaustion of the
Executive’s benefits under the terms of an applicable AEPSC sick pay plan or
long-term disability plan (other than by reason of the amendment or termination
of such a plan), (iv) the Executive’s Retirement, (v) by AEPSC for Cause or (vi)
by the Executive without Good Reason.  In addition, a Qualifying
Termination shall be deemed to have occurred if, prior to a Change In Control,
the Executive’s employment was terminated during the term of this Agreement (A)
by AEPSC without Cause, or (B) by the Executive based on events or circumstances
that would constitute Good Reason if a Change in Control had occurred, in either
case, (x) at the request of a person who has entered into an agreement with
AEPSC or the Corporation, the consummation of which would constitute a Change In
Control or (y) otherwise in connection with, as a result of or in anticipation
of a Change In Control.  The mere act of approving a Change In Control
agreement shall not in and of itself be deemed to constitute an event or
circumstance in anticipation of a Change In Control for purposes of this Article
I(n).

      

      (o)  “Retirement” shall mean
an Executive’s voluntary termination of employment after attainment of age 55
with five or more years of service with AEPSC without Good Reason.

      

      (p)  “Target Annual
Incentive” shall mean the award that the Executive would have received under the
Senior Officer Annual Incentive Compensation Plan or such other annual incentive
compensation plan applicable to such Executive for the year in which the
Executive’s termination occurs, if one hundred percent (100%) of the annual
target award has been earned.  Executives not participating in an
annual incentive compensation plan that has predefined target levels will be
treated as though they were participants in an annual incentive plan with such
targets and will be assigned the same annual target percent as their
participating peers in a comparable salary grade.

      

      

      ARTICLE
II

      TERM OF
AGREEMENT

      

      2.1           The
initial term of this Agreement shall be for the period beginning on the
Commencement Date and ending on the December 31 immediately following the
Commencement Date.  The term of this Agreement shall automatically be
extended for an additional Calendar Year on the first Anniversary Date
immediately following the initial term of this Agreement without further action
by AEPSC, and shall be automatically extended for an additional Calendar Year on
each succeeding Anniversary Date, unless AEPSC shall have served notice upon the
Executive at least thirty (30) days prior to such Anniversary Date of AEPSC’s
intention that this Agreement shall not be extended, provided, however, that if
a Change In Control of the Corporation shall occur during the term of this
Agreement, this Agreement shall terminate two years after the date the Change In
Control is completed.

      

      2.2           If
an employee is designated as an Executive after the Commencement Date or after
an Anniversary Date, the initial term of this Agreement shall be for the period
beginning on the date the employee is designated as an Executive and ending on
the December 31 immediately following.

      

      2.3           Notwithstanding
Section 2.1, the term of this Agreement shall end upon any termination of the
Executive’s employment that is other than a Qualifying Termination in connection
with a Change In Control of the Corporation.  For example, this
Agreement shall terminate if the Executive’s position is eliminated and the
Executive’s employment is terminated, other than in connection with a Change In
Control of the Corporation, (i) due to a downsizing, consolidation or
restructuring of AEPSC or of any other subsidiary of the Corporation or
(ii) due to the sale, disposition or divestiture of all or a portion of AEPSC or
of any other subsidiary of the Corporation.

      

      

      ARTICLE
III

      COMPENSATION
UPON A QUALIFYING TERMINATION IN CONNECTION WITH A CHANGE IN
CONTROL

      

      3.1           Except
as otherwise provided in Section 3.3, upon a Qualifying Termination, the
Executive shall be under no further obligation to perform services for AEPSC and
shall be entitled to receive the following payments and benefits:

      

      
        	
                 
      

              	
                (a)

              	
                As
      soon as practicable following the Executive’s date of termination, AEPSC
      shall make a lump sum cash payment to the Executive in an amount equal to
      the sum of (1) the Executive’s Annual Salary through the date of
      termination to the extent not theretofore paid, (2) the product of (x) the
      current plan year’s Target Annual Incentive and (y) a fraction, the
      numerator of which is the number of days in such calendar year through the
      date of termination, and the denominator of which is 365, except that
      annual incentive plans which do not have predetermined annual target
      awards for participants shall have their pro-rated incentive compensation
      award for the current plan year paid as soon as practicable, and (3) any
      accrued vacation pay that otherwise would be available upon the
      Executive’s termination of employment with AEPSC, in each case to the
      extent not theretofore paid and in full satisfaction of the rights of the
      Executive thereto; provided, however, in the case of a Qualifying
      Termination in the circumstances specified in Article I(n)(B), payment of
      the amount described in subsection (2) of this Section 3.1(a) shall not be
      made until immediately after the Change in Control event or circumstance;
      and

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Within
      sixty (60) days of the Executive’s return of the signed release form,
      AEPSC shall make a lump sum cash payment to the Executive in an amount
      equal to the CIC Multiple times the Executive’s Annual Compensation. If
      the Qualifying Termination is specified in Article I(n) (A) or (B), no
      such lump sum payment shall be made unless and until the Change in Control
      related to the Qualifying Termination shall have
  occurred.

              

      

      

      3.2           The
Executive shall be entitled to such outplacement services and other non-cash
severance or separation benefits as may then be available under the terms of a
plan or agreement to groups of employees of AEPSC in addition to Executives who
are covered under the terms of this or a similar agreement.  See also
section 3.3(b).  To the extent any benefits described in this Article
III, Section 3.2 cannot be provided pursuant to the appropriate plan or program
maintained by AEPSC, AEPSC shall provide such benefits outside such plan or
program at no additional cost to the Executive.

      

      3.3           Notwithstanding
the foregoing;

      

      
        	
                 
      

              	
                (a)

              	
                The
      severance payments and benefits provided under Sections 3.1(b), 3.2 and,
      if applicable, 3.4 hereof shall be conditioned upon the Executive
      executing a release at the time the Executive’s employment is terminated,
      in the form established by the Corporation or by AEPSC, releasing the
      Corporation, AEPSC and their shareholders, partners, officers, directors,
      employees and agents from any and all claims and from any and all causes
      of action of kind or character, including but not limited to all claims or
      causes of action arising out of Executive’s employment with the
      Corporation or AEPSC or the termination of such
  employment.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      severance payments and benefits provided under Sections 3.1, 3.2 and, if
      applicable, 3.4 hereof shall be subject to, and conditioned upon, the
      waiver of any other cash severance payment or other benefits provided by
      AEPSC pursuant to any other severance agreement between AEPSC and the
      Executive.  No amount shall be payable under this Agreement to,
      or on behalf of the Executive, if the Executive elects benefits under any
      other cash severance plan or program, or any other special pay arrangement
      with respect to the termination of the Executive’s
    employment.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      Executive agrees that at all times following termination, the Executive
      will not, without the prior written consent of AEPSC or the Corporation,
      disclose to any person, firm or corporation any “confidential
      information,” of AEPSC or the Corporation which is now known to the
      Executive or which hereafter may become known to the Executive as a result
      of the Executive’s employment or association with AEPSC or the
      Corporation, unless such disclosure is required under the terms of a valid
      and effective subpoena or order issued by a court or governmental body;
      provided, however, that the foregoing shall not apply to confidential
      information which becomes publicly disseminated by means other than a
      breach of this provision.  It is recognized that damages in the
      event of breach of this Section 3.3(c) by the Executive would be
      difficult, if not impossible, to ascertain, and it is therefore agreed
      that AEPSC and the Corporation, in addition to and without limiting any
      other remedy or right that AEPSC or the Corporation may have, shall have
      the right to an injunction or other equitable relief in any court of
      competent jurisdiction, enjoining any such breach, and the Executive
      hereby waives any and all defenses the Executive may have on the ground of
      lack of jurisdiction or competence of the court to grant such an
      injunction or other equitable relief.  The existence of this
      right shall not preclude AEPSC or the Corporation from pursuing any other
      rights or remedies at law or in equity which AEPSC or the Corporation may
      have.

              

      

      

      
        	
                 
      

              	
                “Confidential
      information” shall mean any confidential, propriety and or trade secret
      information, including, but not limited to, concepts, ideas, information
      and materials relating to AEPSC or the Corporation, client records, client
      lists, economic and financial analysis, financial data, customer
      contracts, marketing plans, notes, memoranda, lists, books,
      correspondence, manuals, reports or research, whether developed by AEPSC
      or the Corporation or developed by the Executive acting alone or jointly
      with AEPSC or the Corporation while the Executive was employed by
      AEPSC.

              

      

      

      3.4           Notwithstanding
anything to the contrary in this Agreement, but subject to the requirements of
Section 3.3, in the event that any payment or distribution by AEPSC to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”) (or any successor
provision thereto) by reason of being “contingent on a change in ownership or
control” of the Corporation, within the meaning of Section 280G of the Code (or
any successor provision thereto) or any interest or penalties with respect to
such excise tax other than any such amount as may become payable by the
Executive by reason of Code Section 409A (such excise tax, together with any
such interest or penalties, are hereinafter collectively referred to as the
"Excise Tax"), and the aggregate total of such Payments (the “Total Payments”)
is determined to be an “excess parachute payment” pursuant to Code Section 280G
with the effect that Executive is liable for the payment of the Excise
Tax.

      

      
        	
                 
      

              	
                (a)

              	
                If
      the Total Payments do not exceed 105% of the amount as would trigger the
      Executive having any “parachute payment” as described in Code Section
      280G(b)(2), then, after taking into account any reduction in the Total
      Payments provided by reason of Code Section 280G in such other plans,
      arrangements or agreements, the cash payments provided in Section 3.2 of
      this Agreement shall first be reduced, and the noncash payments and
      benefits shall thereafter be reduced, to the extent necessary so that no
      portion of the Total Payments is subject to the Excise Tax; provided,
      however, that Executive may elect (at any time prior to the payment of any
      Total Payment under this Agreement) to have the noncash payments and
      benefits reduced (or eliminated) prior to any reduction of the cash
      payments under this Agreement.

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      the Total Payments exceed 105% of the amount as would trigger the
      Executive having any “parachute payment” as described in Code Section
      280G(b)(2), then, AEPSC shall pay to the Executive an additional payment
      (a "Gross-up Payment") in an amount such that after payment by the
      Executive of all taxes (including any interest or penalties imposed with
      respect to such taxes, but excluding any such taxes, interest or penalties
      as may be imposed on the Executive pursuant to Code Section 409A),
      including any Excise Tax imposed on any Gross-up Payment, the Executive
      retains an amount of the Gross-up Payment equal to the Excise Tax imposed
      upon the Payments.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                All
      determinations required to be made under this Section 3.4, including the
      assumptions to be utilized in arriving at such determinations and whether
      an Excise Tax is payable by the Executive and the amount of such Excise
      Tax, shall be made by a nationally recognized tax preparation, financial
      counseling or public accounting firm (the “Tax Firm”) that is experienced
      in 280G calculations and that is selected by AEPSC prior to the Change in
      Control.  The Tax Firm shall be directed by AEPSC to submit its
      preliminary determination and detailed supporting calculations to both
      AEPSC and the Executive within 15 calendar days after the date of the
      Executive’s termination of employment, if applicable, and any other such
      time or times as may be requested by AEPSC or the Executive.  If
      the Tax Firm determines that Excise Tax would be payable by the Executive
      if not for the applicability of Section 3.4(a), AEPSC shall reduce the
      payments as described in said Section 3.4(a) in a manner consistent with
      determinations made by the Tax Firm.  If the Tax Firm determines
      that a Gross-up Payment to the Executive is triggered pursuant to Section
      3.4(b), AEPSC shall make the Gross-Up Payment attributable
      thereto.  If the Tax Firm determines that no Excise Tax is
      payable by the Executive, it shall, at the same time as it makes such
      determination, furnish the Executive with an opinion that she has
      substantial authority not to report any Excise Tax on her federal, state,
      local income or other tax return.  All fees and expenses of the
      Tax Firm shall be paid by AEPSC in connection with the calculations
      required by this section.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      federal, state and local income or other tax returns filed by the
      Executive (or any filing made by a consolidated tax group, which includes
      AEPSC) shall be prepared and filed on a consistent basis with the
      determination of the Tax Firm with respect to the Excise Tax payable by
      the Executive.  The Executive shall make proper payment of the
      amount of any Excise Tax, and at the request of AEPSC, provide to AEPSC
      true and correct copies (with any amendments) of her federal income tax
      return as filed with the Internal Revenue and such other documents
      reasonably requested by AEPSC, evidencing such
  payment.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Executive
      shall notify AEPSC immediately in writing of any claim by the Internal
      Revenue Service that, if successful, would require AEPSC to make a
      Gross-up Payment (or a Gross-up Payment in excess of that, if any,
      initially determined under Section 3.4(b)) within five days of the receipt
      of such claim.  AEPSC shall notify the Executive in writing at
      least five days prior to the due date of any response required with
      respect to such claim, or such shorter time period following AEPSC's
      receipt of the notice, if it plans to contest the claim.  If
      AEPSC decides to contest such claim, the Executive shall cooperate fully
      with AEPSC in such action; provided, however, AEPSC shall bear and pay
      directly or indirectly all costs and expenses (including additional
      interest and penalties) incurred in connection with such action and shall
      indemnify and hold the Executive harmless, on an after-tax basis, for any
      Excise Tax or income tax, including interest and penalties with respect
      thereto, imposed as a result of AEPSC's action.  If the
      Executive receives a refund of any amount paid by AEPSC with respect to
      such claim, the Executive shall promptly pay to AEPSC (i) such refund and
      (ii) the amount of any Gross-up Payment associated with such refund that
      is not included in the amount of such refund (such as taxes other than
      federal taxes included in the Gross-up Payment).  If AEPSC fails
      to timely notify the Executive whether it will contest such claim or AEPSC
      determines not to contest such claim, then AEPSC shall immediately pay to
      the Executive the portion of such claim, if any, which it has not
      previously paid to the Executive as well as the amount of any Gross-up
      Payment (calculated pursuant to Section 3.4) associated with such payment
      but that has not otherwise been paid to the
  Executive.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Unless
      otherwise required by this Agreement to be paid earlier, any Gross-up
      Payment required under this Section 3.4 shall be paid no later than the
      end of the Executive’s taxable year next following the Executive’s taxable
      year in which the related taxes are remitted to the applicable taxing
      authority.

              

      

      

      3.5           The
obligations of AEPSC to pay the benefits described in Sections 3.1, 3.2, and if
applicable, 3.4, shall, subject to Section 3.3, be absolute and unconditional
and shall not be affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right which AEPSC may
have against the Executive; provided, however, AEPSC shall comply with and
enforce obligations of AEPSC or the Executive under law determined by AEPSC to
be applicable, including any withholding in order to comply with a court
order.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned by the
Executive as a result of employment by another employer.

      

      3.6           Executive
alone shall be liable for the payment of any and all tax cost, incremental or
otherwise, incurred by the Executive in connection with the provision of any
benefits described in this Agreement.  No provision of this Agreement
shall be interpreted to provide for the gross-up or other mitigation of any
amount payable or benefit provided to the Executive under the terms of this
Agreement as a result of such taxes, except to the extent specifically set forth
in Section 3.4.

      

      3.7           Notwithstanding
any provision of this Agreement to the contrary, if the Executive is a
“specified employee” (as determined with respect AEPSC for purposes of Code
Section 409A), the Executive shall not be entitled to any payments upon
separation of service prior to the earliest of (1) the date that is six months
after the date of separation from service for any reason other than
death,  (2) the date of the Executive’s death, or (3) such earlier
time that would not cause the Executive to incur any excise tax under Code
Section 409A.

      

      

      ARTICLE
IV

      SUCCESSOR
TO CORPORATION

      

      4.1           This
Agreement shall bind any successor of AEPSC or the Corporation, its assets or
its businesses (whether direct or indirect, by purchase, merger, consolidation
or otherwise) in the same manner and to the same extent that AEPSC or the
Corporation would be obligated under this Agreement if no succession had taken
place.

      

      4.2           In
the case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Agreement, AEPSC and the
Corporation shall require such successor expressly and unconditionally to assume
and agree to perform AEPSC’s and the Corporation’s obligations under this
Agreement, in the same manner and to the same extent that AEPSC and the
Corporation would be required to perform if no such succession had taken
place.  The term “Corporation,” as used in this Agreement, shall mean
the Corporation as hereinbefore defined and any successor or assignee to its
business or assets which by reason hereof becomes bound by this
Agreement.

      

      

      ARTICLE
V

      MISCELLANEOUS

      

      5.1           Any
notices and all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered or mailed, by certified
or registered mail, return receipt requested, postage prepaid addressed to AEPSC
at its principal office and to the Executive at the Executive’s residence or at
such other addresses as AEPSC or the Executive shall designate in
writing.

      

      5.2           Except
to the extent otherwise provided in Article II (Term of Agreement), no provision
of this Agreement may be modified, waived or discharged except in writing
specifically referring to such provision and signed by either AEPSC or the
Executive against whom enforcement of such modification, waiver or discharge is
sought.  No waiver by either AEPSC or the Executive of the breach of
any condition or provision of this Agreement shall be deemed a waiver of any
other condition or provision at the same or any other time.

      

      5.3           The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Ohio.

      

      5.4           The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

      

      5.5           This
Agreement does not constitute a contract of employment or impose on the
Executive, AEPSC or the Corporation any obligation to retain the Executive as an
employee, to change the status of the Executive’s employment, or to change
AEPSC’s policies regarding the termination of employment.

      

      5.6           If
the Executive institutes any legal action in seeking to obtain or enforce or is
required to defend in any legal action the validity or enforceability of, any
right or benefit provided by this Agreement, AEPSC will pay for all actual and
reasonable legal fees and expenses incurred (as incurred) by the Executive,
regardless of the outcome of such action; provided, however, that if such action
instituted by the Executive is found by a court of competent jurisdiction to be
frivolous, the Executive shall not be entitled to legal fees and expenses and
shall be liable to AEPSC for amounts already paid for this purpose.

      

      5.7           If
the Executive makes a written request alleging a right to receive benefits under
this Agreement or alleging a right to receive an adjustment in benefits being
paid under the Agreement, AEPSC shall treat it as a claim for
benefit.  All claims for benefit under the Agreement shall be sent to
the Human Resources Department of AEPSC and must be received within 30 days
after the Executive’s termination of employment.  If AEPSC determines
that the Executive who has claimed a right to receive benefits, or different
benefits, under the Agreement is not entitled to receive all or any part of the
benefits claimed, it will inform the Executive in writing of its determination
and the reasons therefor in terms calculated to be understood by the
Executive.  The notice will be sent within 90 days of the claim unless
AEPSC determines additional time, not exceeding 90 days, is
needed.  The notice shall make specific reference to the pertinent
Agreement provisions on which the denial is based, and describe any additional
material or information, if any, necessary for the Executive to perfect the
claim and the reason any such additional material or information is
necessary.  Such notice shall, in addition, inform the Executive what
procedure the Executive should follow to take advantage of the review procedures
set forth below in the event the Executive desires to contest the denial of the
claim.  The Executive may within 90 days thereafter submit in writing
to AEPSC a notice that the Executive contests the denial of the claim by AEPSC
and desires a further review.  AEPSC shall within 60 days thereafter
review the claim and authorize the Executive to appear personally and review
pertinent documents and submit issues and comments relating to the claim to the
persons responsible for making the determination on behalf of
AEPSC.  AEPSC will render its final decision with specific reasons
therefor in writing and will transmit it to the Executive within 60 days of the
written request for review, unless AEPSC determines additional time, not
exceeding 60 days, is needed, and so notifies the Executive.  If AEPSC
fails to respond to a claim filed in accordance with the foregoing within 60
days or any such extended period, AEPSC shall be deemed to have denied the
claim.

      

      AEPSC has
caused this Change In Control Agreement to be signed on behalf of all
participating employers effective as of the 1st day of
January, 2008.

      

      

      
        	 
      	
                American
      Electric Power Service Corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                By  ___________________________________________

              
	 
      	
                Michael G.
    Morris

              
	 
      	
                Chairman, President &
      CEOUnassociated Document

    Exhibit
10(l)(1)(A)

     

    AMENDED
AND RESTATED

    AMERICAN
ELECTRIC POWER SYSTEM LONG-TERM INCENTIVE PLAN

    Approved
by Shareholders April 26, 2005

    (as
amended through December 12, 2007)

    

    Table
of Contents

    

    
      	
                Section

            	
              Page

            
	 
      	 
      
	
              1. Purpose of the
      Plan 

            	
              A-1

            
	
              2.
    Definitions 

            	
              A-1

            
	
              3. Shares of Common Stock Subject
      to the Plan 

            	
              A-3

            
	
              4. Administration of the
      Plan 

            	
              A-4

            
	
              5. Eligibility and
      Awards 

            	
              A-5

            
	
              6. Stock
    Options 

            	
              A-5

            
	
              7. Stock Appreciation
      Rights 

            	
              A-6

            
	
              8. Restricted
      Stock 

            	
              A-6

            
	
              9. Performance
      Awards 

            	
              A-7

            
	
              10.
      Phantom Stock 

            	
              A-8

            
	
              11.
      Dividend Equivalents 

            	
              A-9

            
	
              12.
      Change in Control 

            	
              A-9

            
	
              13.
      Award Agreements 

            	
              A-10

            
	
              14.
      General Provisions 

            	
              A-10

            
	
              15.
      Effective Date, Termination and Amendment 

            	
              A-12

            

    

     

    

    Amended
and Restated American Electric Power System Long-Term Incentive
Plan

    

    

    1.
Purpose of the Plan

    

    The
purpose of the Amended and Restated American Electric Power System Long-Term
Incentive Plan, dated April 26, 2005, is to promote the interests of AEP and its
shareholders by strengthening AEP’s ability to attract, motivate and retain
employees and directors of AEP and its Subsidiaries upon whose judgment,
initiative and efforts the financial success and growth of the business of AEP
largely depend, to align further the interests of AEP’s management with the
shareholders, and to provide an additional incentive for employees and directors
through stock ownership and other rights that promote and recognize the
financial success and growth of AEP.

    

    

    2.
Definitions

    

    Wherever
the following capitalized terms are used in this Plan they shall have the
meanings specified below:

    

    
      	
              (a)

            	
              “AEP”
      means American Electric Power Company, Inc., a New York corporation, and
      any successor thereto.

            

    

    

    
      	
              (b)

            	
              “Award”
      means an award of an Option, Restricted Stock, Stock Appreciation Right,
      Performance Award, Phantom Stock or Dividend Equivalent granted under the
      Plan.

            

    

     

    
      	
              (c)

            	
              “Award
      Agreement” means an agreement entered into between AEP and a Participant
      setting forth the terms and conditions of an Award granted to a
      Participant.

            

    

    

    
      	
              (d)

            	
              “Board”
      means the Board of Directors of
AEP.

            

    

    

    
      	
              (e)

            	
              “Change
      in Control” shall have the meaning specified in Section 12
      hereof.

            

    

    

    
      	
              (f)

            	
              “Code”
      means the Internal Revenue Code of 1986, as
  amended.

            

    

    

    
      	
              (g)

            	
              “Committee”
      means the Human Resources Committee of the Board consisting of not less
      than a sufficient number of Non-Employee Directors so as to qualify the
      Committee to administer the Plan under Rule 16b-3 and each of whom is an
      “independent” director as defined in the rules of the New York Stock
      Exchange.  If any member of the Committee does not qualify as an
      “outside director” for purposes of Section 162(m) of the Code or a
      Non-Employee Director under Rule 16b-3, the Committee with respect to
      Awards under the Plan for the chief executive officer and the four most
      highly compensated officers of AEP (other than the chief executive
      officer), as such “covered persons” may change from time to time for
      purposes of Section 162(m), shall consist solely of those Committee
      members who qualify as “outside directors” and Non-Employee
      Directors.  If fewer than two Committee members qualify as both
      an “outside director” and a Non-Employee Director, the Board shall appoint
      one or more other members who do qualify as both “outside directors” and
      Non-Employee Directors.

            

    

    

    
      	
              (h)

            	
              “Commission”
      means the Securities and Exchange
Commission.

            

    

    

    
      	
              (i)

            	
              “Common
      Stock” means the common stock of AEP, $6.50 par
  value.

            

    

    

    
      	
              (j)

            	
              “Date
      of Grant” means the date on which the Committee makes an Award under the
      Plan, or such later date as the Committee may specify that the Award
      becomes effective.

            

    

    

    
      	
              (k)

            	
              “Effective
      Date” means the Effective Date of this Plan, as defined in Section 15.1
      hereof.

            

    

    

    
      	
              (l)

            	
              “Dividend
      Equivalent” means an Award under Section 11 hereof entitling the
      Participant to receive payments with respect to dividends declared on the
      Common Stock.

            

    

    

    
      	
              (m)

            	
              “Eligible
      Person” means any person who is an Employee or a Non-Employee
      Director.

            

    

    

    
      	
              (n)

            	
              “Employee”
      means any person who is an employee of AEP or any Subsidiary; provided,
      however, that with respect to Incentive Stock Options, “Employee” means
      any person who is considered an employee of AEP or any Subsidiary for
      purposes of Section 421 of the Code and the applicable regulations issued
      thereunder.

            

    

    

    
      	
              (o)

            	
              “Exchange
      Act” means the Securities Exchange Act of 1934, as amended from time to
      time, or any successor statute.

            

    

    

    
      	
              (p)

            	
              “Fair
      Market Value” means, as of any applicable date, the closing price per
      share of the Common Stock as quoted in the New York Stock
      Exchange—Composite Transactions listing in The Wall Street Journal
      (or such other reliable publication as the Committee, in its discretion,
      may determine to rely upon) for the date as of which Fair Market Value is
      to be determined.  If there are no sales on such date, then Fair
      Market Value shall be the closing price per share of the Common Stock as
      so quoted on the nearest date before the date as of which Fair Market
      Value is to be determined on which there are sales.  If the
      Common Stock is not listed on the New York Stock Exchange on the date as
      of which Fair Market Value is to be determined, the Committee shall
      determine in good faith the Fair Market Value in whatever manner it
      considers appropriate.  Fair Market Value shall be determined
      without regard to any restriction other than a restriction that, by its
      terms, will never lapse.

            

    

    

    
      	
              (q)

            	
              “Full
      Value Share Award” means an award of Restricted Stock, a Performance Award
      denominated in shares or units of Common Stock, Phantom Stock, Dividend
      Equivalents, or Stock Appreciation Rights settled or paid in shares of
      Common Stock.

            

    

    

    
      	
              (r)

            	
              “Incentive
      Stock Option” means an option to purchase Common Stock that is intended to
      qualify as an incentive stock option under Section 422 of the Code, or any
      successor provision thereto.

            

    

    

    
      	
              (s)

            	
              “Non-Employee
      Director” means a member of the Board who is a “non-employee director” as
      defined in Rule 16b-3 promulgated by the Commission pursuant to the
      Exchange Act.

            

    

    

    
      	
              (t)

            	
              “Nonqualified
      Stock Option” means an option to purchase Common Stock that is not an
      Incentive Stock Option.

            

    

    

    
      	
              (u)

            	
              “Option”
      means an Incentive Stock Option or a Nonqualified Stock Option granted
      under Section 6 hereof.

            

    

    

    
      	
              (v)

            	
              “Participant”
      means any Eligible Person who holds an outstanding Award under the
      Plan.

            

    

    

    
      	
              (w)

            	
              “Performance
      Award” means an Award made under Section 9 hereof entitling a Participant
      to a payment based on the Fair Market Value of Common Stock (a
      “Performance Unit”) at the end of a performance period if certain
      conditions established by the Committee are
  satisfied.

            

    

    

    
      	
              (x)

            	
              “Phantom
      Stock” means an Award under Section 10 hereof entitling a Participant to a
      payment based on a measure of value expressed as a share of Common Stock
      (“Phantom Stock Unit”).  No stock certificates shall be issued
      with respect to such Phantom Stock Units, but AEP shall maintain a
      bookkeeping account in the name of the Participant to which the Phantom
      Stock Units shall relate.

            

    

    

    
      	
              (y)

            	
              “Plan”
      means the Amended and Restated American Electric Power System Long-Term
      Incentive Plan, dated April 26, 2005, as set forth herein, as it may be
      amended from time to time.

            

    

    

    
      	
              (z)

            	
              “Plan
      Year” means AEP’s fiscal year, which at the date hereof is the calendar
      year.

            

    

    

    
      	
              (aa)

            	
              “Restricted
      Stock” means an Award under Section 8 hereof entitling a Participant to
      shares of Common Stock that are nontransferable and subject to forfeiture
      until specific conditions established by the Committee are
      satisfied.

            

    

    

    
      	
              (bb)

            	
              “Rule
      16b-3” means Rule 16b-3 promulgated by the Commission pursuant to the
      Exchange Act, or any successor or replacement rule adopted by the
      Commission

            

    

    

    
      	
              (cc)

            	
              “Section
      162(m)” means Section 162(m) of the Code and the Treasury Regulations
      thereunder.

            

    

    

    
      	
              (dd)

            	
              “Section
      162(m) Participant” means any Participant who, in the sole judgment of the
      Committee, could be treated as a “covered employee” under Section 162(m)
      at the time income may be recognized by such Participant in connection
      with an Award that is intended to qualify for exemption under Section
      162(m).

            

    

    

    
      	
              (ee)

            	
              “Stock
      Appreciation Right” or “SAR” means an Award under Section 7 hereof
      entitling a Participant to receive an amount, representing the difference
      between the base price per share of the right and the Fair Market Value of
      a share of Common Stock on the date of
exercise.

            

    

    

    
      	
              (ff)

            	
              “Subsidiary”
      means any corporation (other than AEP) in an unbroken chain of
      corporations beginning with AEP if, at the time of granting an Award, each
      of the corporations, other than the last corporation in the unbroken
      chain, owns stock possessing 50 percent or more of the total combined
      voting power of all classes of stock in one of the other corporations in
      such chain.

            

    

    

     

    
      3.  
Shares of Common Stock Subject to the Plan

    

    3.1.
Calculation of Number of
Shares Available.   Subject to the following provisions of
this Section 3, the aggregate number of shares of Common Stock that may be
issued pursuant to all Awards under the Plan is 19,200,000 shares of Common
Stock; provided, however, that the maximum number of shares of Common Stock
issued in connection with Full Value Share Awards which may be issued under the
Plan shall be limited to 9,000,000.

    

    If any
share of Common Stock that is the subject of an Award is not issued and ceases
to be issuable for any reason, or is forfeited, cancelled or returned to AEP for
failure to satisfy vesting requirements or upon the occurrence of other
forfeiture events, such share of Common Stock will no longer be charged against
the foregoing maximum share limitations and may again be made subject to Awards
under the Plan pursuant to such limitations.

    

    3.2.
Accounting for
Awards.   For purposes of this Section 3, if an Award is
denominated in shares of Common Stock, the number of shares covered by such
Award, or to which such Award relates, shall be counted on the Date of Grant of
such Award against the aggregate number of shares available for granting Awards
under the Plan; provided, however, that Awards that operate in tandem with
(whether granted simultaneously with or at a different time from) other Awards
may be counted or not counted under procedures adopted by the Committee in order
to avoid double counting.

    

    3.3.
Source of Shares of Common
Stock Deliverable Under Awards.   The shares of Common
Stock to be delivered under the Plan may be authorized but unissued shares,
reacquired shares, shares acquired on the open market specifically for
distribution under the Plan, or any combination thereof.

    

    3.4.
Adjustments.   If
there shall occur any recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to the shares of
Common Stock, or any similar corporate transaction or event in respect of the
Common Stock, then the Committee shall, in the manner and to the extent that it
deems appropriate and equitable to the Participants and consistent with the
terms of this Plan, cause a proportionate adjustment to be made in (a) the
maximum numbers and kind of shares provided in Section 3.1 hereof, (b) the
maximum numbers and kind of shares set forth in Sections 6.1, 7.1, 8.2 and 9.4
hereof, (c) the number and kind of shares of Common Stock, share units, or other
rights subject to the then-outstanding Awards, (d) the price for each share or
unit or other right subject to then outstanding Awards without change in the
aggregate purchase price or value as to which such Awards remain exercisable or
subject to restrictions, (e) the performance targets or goals appropriate to any
outstanding Performance Awards (subject to such limitations as appropriate for
Awards intended to qualify for exemption under Section 162(m)) or (f) any other
terms of an Award that are affected by the event. Notwithstanding the foregoing,
in the case of Incentive Stock Options, any such adjustments shall be made in a
manner consistent with the requirements of Section 424(a) of the
Code.

    

    

    4.
Administration of the Plan

    

    4.1.
Committee
Members.   Except as provided in Section 4.4 hereof, the
Committee will administer the Plan.  The Committee may exercise such
powers and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan.  No member of the
Committee will be liable for any action or determination made in good faith by
the Committee with respect to the Plan or any Award under it.

    

    4.2.
Discretionary
Authority.   Subject to the express limitations of the
Plan, the Committee has authority in its discretion to determine the Eligible
Persons to whom, and the time or times at which, Awards may be granted, the
number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable, the performance criteria,
performance goals and other conditions of an Award, and the duration of the
Award.  The Committee also has discretionary authority to interpret
the Plan, to make all factual determinations under the Plan, and to determine
the terms and provisions of the respective Award Agreements and to make all
other determinations necessary or advisable for Plan
administration.  The Committee has authority to prescribe, amend, and
rescind rules and regulations relating to the Plan.  All
interpretations, determinations, and actions by the Committee will be final,
conclusive, and binding upon all parties.

    

    4.3.
Changes to
Awards.   The Committee shall have the authority to
effect, at any time and from time to time, with the consent of the affected
Participants, (a) the cancellation of any or all outstanding Awards and the
grant in substitution therefor of new Awards covering the same or different
numbers of shares of Common Stock and having an exercise or base price which may
be the same as or different than the exercise or base price of the cancelled
Awards or (b) the amendment of the terms of any and all outstanding Awards;
provided, however, that the Committee shall not have the authority to reduce the
exercise or base price of an Award by amendment or cancellation and substitution
of an existing Award without the approval of AEP’s shareholders, and provided
further that the exercise or base price of an Option or Stock Appreciation Right
shall not be reduced to an amount that is less than the 100 percent of Fair
Market Value per share of the Common Stock on the Date of Grant.  The
Committee may in its discretion accelerate the vesting or exercisability of an
Award at any time or on the basis of any specified event.

    

    4.4.
Delegation of
Authority.   As permitted by law, the Committee may
delegate its authority as identified hereunder; provided, however, that the
Committee may not delegate certain of its responsibilities hereunder if such
delegation may jeopardize compliance with the “outside directors” provision of
Section 162(m).

    

    4.5 Awards to Non-Employee
Directors.   The Board shall approve an Award to a
Non-Employee Director under the Plan.  With respect to Awards to
Non-Employee Directors, all rights, powers and authorities vested in the
Committee under the Plan shall instead be exercised by the Board, and all
provisions of the Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a
reference to the Board for such purpose.

    

    

    5.
Eligibility and Awards

    

    All
Eligible Persons are eligible to be designated by the Committee to receive an
Award under the Plan.  The Committee has authority, in its sole
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, the types of Awards to be granted and the number
of shares or units subject to the Awards that are granted under the
Plan.  Each Award will be evidenced by an Award Agreement as described
in Section 13 hereof between AEP and the Participant that shall include the
terms and conditions consistent with the Plan as the Committee may
determine.

    

    

    6. 
Stock Options

    

    6.1.
Grant of
Option.   An Option may be granted to any Eligible Person
selected by the Committee; provided, however, that only Employees shall be
eligible for Awards of Incentive Stock Options.  Each Option shall be
designated, at the discretion of the Committee, as an Incentive Stock Option (if
applicable) or a Nonqualified Stock Option.  The maximum number of
shares of Common Stock that may be granted under Options to any one Participant
during any three calendar year period shall be limited to 2,000,000 shares
(subject to adjustment as provided in Section 3.4 hereof).

    

    6.2.
Exercise
Price.   The exercise price of the Option shall be
determined by the Committee; provided, however, that the exercise price per
share of an Option shall not be less than 100 percent of the Fair Market Value
per share of the Common Stock on the Date of Grant.

    

    6.3.
Vesting; Term of
Option.   The Committee, in its sole discretion, shall
prescribe in the Award Agreement the time or times at which, or the conditions
upon which, an Option or portion thereof shall become vested and exercisable,
and may accelerate the exercisability of any Option at any time.

    

    6.4.
Option Exercise;
Withholding.   Subject to such terms and conditions as
shall be specified in an Award Agreement and to all applicable legal
requirements, an Option may be exercised in whole or in part at any time during
the term thereof by written notice to AEP together with payment of the aggregate
exercise price therefor.  Payment of the exercise price shall be made
(a) in cash or by cash equivalent, (b) at the discretion of the Committee, in
shares of Common Stock acceptable to the Committee, valued at the Fair Market
Value of such shares on the date of exercise or such lower price as the
Committee may determine, (c) at the discretion of the Committee, by a delivery
of a notice that the Participant has placed a market sell order (or similar
instruction) with a third party with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the third party has been directed
to pay a sufficient portion of the net proceeds of the sale to AEP in
satisfaction of the Option exercise price or (d) at the discretion of the
Committee, by a combination of the methods described above or such other method
as may be approved by the Committee.  In addition to and at the time
of payment of the exercise price, the Participant shall pay to AEP the full
amount of any and all applicable income tax and employment tax amounts required
to be withheld in connection with such exercise.

    

    6.5.
Additional Rules for Incentive
Stock Options.   The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions of
Section 422 of the Code, or any successor provision thereto, and any regulations
promulgated thereunder.

    

    7. 
Stock Appreciation Rights

    

    7.1. Grant of
SARs.   A Stock Appreciation Right granted to a
Participant is an Award in the form of a right to receive, upon surrender of the
right, but without other payment, an amount based on appreciation in the Fair
Market Value of the Common Stock over a base price established for the Award,
exercisable at such time or times and upon conditions as may be approved by the
Committee.  The maximum number of shares of Common Stock that may be
subject to SARs granted to any one Participant during any three calendar year
period shall be limited to 2,000,000 shares (subject to adjustment as provided
in Section 3.4 hereof).

    

    7.2.
Tandem
SARs.   A Stock Appreciation Right may be granted in
connection with an Option, either at the time of grant or at any time thereafter
during the term of the Option.  A SAR granted in connection with an
Option will entitle the holder, upon exercise, to surrender such Option or any
portion thereof to the extent unexercised, with respect to the number of shares
as to which such SAR is exercised, and to receive payment of an amount computed
as described in Section 7.4 hereof.  Such Option will, to the extent
and when surrendered, cease to be exercisable.  A SAR granted in
connection with an Option hereunder will have a base price per share equal to
the per share exercise price of the Option, will be exercisable at such time or
times, and only to the extent, that a related Option is exercisable, and will
expire no later than the related Option expires.

    

    7.3.
Freestanding
SARs.   A Stock Appreciation Right may be granted without
relationship to an Option and, in such case, will be exercisable as determined
by the Committee.  The base price of a SAR granted without
relationship to an Option shall be determined by the Committee in its sole
discretion; provided, however, that the base price per share of a freestanding
SAR shall not be less than 100 percent of the Fair Market Value of the Common
Stock on the Date of Grant.

    

    7.4.
Payment of
SARs.   A SAR will entitle the holder, upon exercise of
the SAR, to receive payment of an amount determined by multiplying: (i) the
excess of the Fair Market Value of a share of Common Stock on the date of
exercise of the SAR over the base price of such SAR, by (ii) the number of
shares as to which such SAR will have been exercised.  Payment of the
amount determined under the foregoing may be made, in the discretion of the
Committee, in cash, in Restricted Stock or shares of unrestricted Common Stock
(both valued at their Fair Market Value on the date of exercise or such lower
price as the Committee may determine), or a combination thereof; provided,
however, that any shares of Common Stock used to settle or pay SARs will be
counted as Full Value Share Awards.

    

    

    8.
Restricted Stock

    

    8.1.
Grants of Restricted
Stock.   An Award of Restricted Stock to a Participant
represents shares of Common Stock that are issued subject to such restrictions
on transfer and other incidents of ownership and such forfeiture conditions as
the Committee may determine.  The Committee may grant and designate
Awards of Restricted Stock that are intended to qualify for exemption under
Section 162(m), as well as Awards of Restricted Stock that are not intended to
so qualify.

    

    8.2.
Vesting
Requirements.   The restrictions imposed on an Award of
Restricted Stock shall lapse in accordance with the vesting requirements
specified by the Committee in the Award Agreement.  Such vesting
requirements may be based on the continued employment of the Participant with
AEP or its Subsidiaries for a specified time period or periods.  Such
vesting requirements may also be based on the attainment of specified business
goals or measures established by the Committee in its sole
discretion.  In the case of any Award of Restricted Stock that is
intended to qualify for exemption under Section 162(m), the vesting requirements
shall be limited to the performance criteria identified in Section 9.3 below,
and the terms of the Award shall otherwise comply with the Section 162(m)
requirements described in Section 9.4 hereof; provided, however, that the
maximum number of shares of Common Stock that may be subject to an Award of
Restricted Stock granted to a Section 162(m) Participant during any one calendar
year shall be separately limited to 400,000 shares (subject to adjustment as
provided in Section 3.4 hereof).

    

    8.3.
Restrictions.   Shares
of Restricted Stock may not be transferred, assigned or subject to any
encumbrance, pledge or charge until all applicable restrictions are removed or
expire or unless otherwise allowed by the Committee.  The Committee
may require the Participant to enter into an escrow agreement providing that the
certificates representing Restricted Stock granted pursuant to the Plan will
remain in the physical custody of an escrow holder until all restrictions are
removed or expire.  Failure to satisfy any applicable restrictions
shall result in the subject shares of Restricted Stock being forfeited and
returned to AEP, unless otherwise provided by the Committee.  The
Committee may require that certificates representing Restricted Stock granted
under the Plan bear a legend making appropriate reference to the restrictions
imposed.

    

    8.4.
Rights as
Shareholder.   Subject to the foregoing provisions of this
Section 8 and the applicable Award Agreement, the Participant will have all
rights of a shareholder with respect to shares of Restricted Stock granted to
the Participant, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto, unless the
Committee determines otherwise at the time the Restricted Stock is granted, as
set forth in the Award Agreement.

    

    8.5.
Section 83(b)
Election.   The Committee may provide in an Award
Agreement that the Award of Restricted Stock is conditioned upon the Participant
refraining from making an election with respect to the Award under Section 83(b)
of the Code.  Irrespective of whether an Award is so conditioned, if a
Participant makes an election pursuant to Section 83(b) of the Code with respect
to an Award of Restricted Stock, the Participant shall be required to promptly
provide a copy of such election to AEP as directed by the Award Agreement or the
Committee.

    

    

    9. 
Performance Awards

    

    9.1.
Grant of Performance
Awards.   The Committee may grant Performance Awards under
the Plan, which shall be represented by units denominated on the Date of Grant
either in shares of Common Stock (Performance Shares) or in specified dollar
amounts (Performance Units).  The Committee may grant and designate
Performance Awards that are intended to qualify for exemption under Section
162(m), as well as Performance Awards that are not intended to so
qualify.  At the time a Performance Award is granted, the Committee
shall determine, in its sole discretion, one or more performance periods and
performance goals to be achieved during the applicable performance periods, as
well as such other restrictions and conditions as the Committee deems
appropriate.  In the case of Performance Units, the Committee shall
also determine a target unit value or a range of unit values for each
Award.  The performance goals applicable to a Performance Award grant
may be subject to such later revisions as the Committee shall deem appropriate
to reflect significant unforeseen events such as changes in law, accounting
practices or unusual or nonrecurring items or occurrences.  Any such
adjustments shall be subject to such limitations as the Committee deems
appropriate in the case of a Performance Award granted to a Section 162(m)
Participant that is intended to qualify for exemption under Section
162(m).

    

    9.2.
Payment of Performance
Awards.   At the end of the performance period, the
Committee shall determine the extent to which performance goals have been
attained or a degree of achievement between minimum and maximum levels in order
to establish the level of payment to be made, if any.  The Committee
shall determine if payment is to be made in cash, Restricted Stock, shares of
unrestricted Common Stock, Options or Phantom Stock, or a combination
thereof.  For any cash conversion to or from Performance Shares or
Units, Phantom Stock units or shares of Common Stock, payment shall be
calculated on the basis of the average of the Fair Market Value of the Common
Stock for the last 20 trading days prior to the date such award becomes
payable.  Unless deferred in a manner that meets the requirements of
Code Section 409A, payment of Performance Awards shall be made within such
period as would not constitute a “deferral of compensation” for purposes of Code
Section 409A.

    

    9.3.
Performance
Criteria.   The performance criteria upon which the
payment or vesting of a Performance Award intended to qualify for exemption
under Section 162(m) may be based shall be limited to the following business
measures, which may be applied with respect to AEP, any Subsidiary or any
business unit, and which may be measured on an absolute or
relative-to-peer-group basis: earnings measures (including, for example, primary
earnings per share, fully diluted earnings per share, net income, pre-tax
income, operating income, earnings before interest, taxes, depreciation and
amortization or any combination thereof, and net operating profits after taxes);
expense control (including, for example, operations & maintenance expense,
total expenditures, expense ratios, and expense reduction); customer measures
(including, for example, 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); safety measures
(including, for example, recordable case rate, severity rate, and vehicle
accident rate); diversity measures (including, for example, minority placement
rate and utilization); environmental measures (including, for example,
emissions, project completion milestones, regulatory/legislative/cost recovery
goals, and notices of violation), revenue measures (including, for example,
revenue and direct margin); stakeholder return measures (including, for example,
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); valuation measures (including, for example,
stock price increase, price to book value ratio, and price to earnings ratio);
capital and risk measures (including, for example, debt to equity ratio,
dividend payout as percentage of net income and diversification of business
opportunities); employee satisfaction; project measures (including, for example,
completion of key milestones); production measures (including, for example,
generating capacity factor, performance against the INPO index, generating
equivalent availability, heat rates and production cost); and such other
individual performance objective that is measured solely in terms of
quantitative targets related to the Company, any Subsidiary or the Company’s or
Subsidiary’s business.  In any event, the Committee may, at its
discretion and at any time prior to payment, reduce the number of Performance
Awards earned by any Participant for a performance period.  In the
case of Performance Awards that are not intended to qualify for exemption under
Section 162(m), the Committee shall designate performance criteria from among
the foregoing or such other business criteria as it shall determine in its sole
discretion.

    

    9.4.
Section 162(m)
Requirements.   In the case of a Performance Award granted
to a Section 162(m) Participant that is intended to comply with the requirements
for exemption under Section 162(m), the Committee shall make all determinations
necessary to establish a Performance Award within 90 days of the beginning of
the performance period (or such other time period required under Section
162(m)), including, without limitation, the designation of the Section 162(m)
Participants to whom Performance Awards are made, the performance criteria or
criterion applicable to the Award and the performance goals that relate to such
criteria, and the dollar amounts or number of shares of Common Stock, Restricted
Stock or Phantom Stock units payable upon achieving the applicable performance
goals.  As and to the extent required by Section 162(m), the terms of
a Performance Award granted to a Section 162(m) Participant must include
objective formula(s) or standard(s) for computing the amount of compensation
payable to the Section 162(m) Participant, and must preclude discretion to
increase the amount of compensation payable that would otherwise be due under
the terms of the Award.  The maximum amount of compensation that may
be payable to a Section 162(m) Participant during any one calendar year under a
Performance Unit Award shall be $15,000,000.  The maximum number of
Performance Share units that may be earned by a Section 162(m) Participant
during any one calendar year shall be 400,000 (subject to adjustment as provided
in Section 3.4 hereof).

    

    

    10. 
Phantom Stock

    

    10.1.
Grant of Phantom
Stock.   Phantom Stock is an Award to a Participant of a
number of hypothetical share units with respect to shares of Common
Stock.  Phantom Stock shall be subject to such restrictions and
conditions as the Committee shall determine.  Sections 8.1 and 8.2
shall apply to Awards of Phantom Stock units in similar manner as they apply to
shares of Restricted Stock, as interpreted by the Committee, with the limitation
in Section 8.2 on the number of shares of Restricted Stock that may be granted
applicable separately to Phantom Stock units.  An Award of Phantom
Stock may be granted, at the discretion of the Committee, together with an Award
of Dividend Equivalent rights for the same number of shares covered
thereby.

    

    10.2.
Payment of Phantom
Stock.   Upon the vesting date applicable to Phantom Stock
granted to a Participant, an amount equal to one share of Common Stock upon such
date shall be paid with respect to such Phantom Stock unit granted to the
Participant.  Payment may be made, at the discretion of the Committee,
in cash, Restricted Stock, shares of unrestricted Common Stock, Options, or a
combination thereof.  Cash payments of Phantom Stock units shall be
calculated on the basis of the average of the Fair Market Value of the Common
Stock for the last 20 trading days prior to the date such award becomes
payable.

    

    

    11. 
Dividend Equivalents

    

    A
Dividend Equivalent granted to a Participant is an Award in the form of a right
to receive cash, shares of Common Stock, or other property equal in value to
dividends paid with respect to a specific number of shares of Common
Stock.  Dividend Equivalents may be awarded on a free-standing basis
or in connection with another Award (other than an Option or a Stock
Appreciation Right), and may be paid currently or on a deferred
basis.  The Committee may provide at the Date of Grant or thereafter
that the Dividend Equivalent shall be paid or distributed when accrued or shall
be deemed to have been reinvested in additional shares of Common Stock or such
other investment vehicles as the Committee may specify; provided, however, that
Dividend Equivalents (other than free-standing Dividend Equivalents) shall be
subject to all conditions and restrictions of the underlying Awards to which
they relate.

    

    

    12. 
Change in Control

    

    12.1.
Effect of Change in
Control.   The Committee may, in an Award Agreement,
provide for the effect of a Change in Control on an Award.  Such
provisions may include any one or more of the following: (a) the acceleration or
extension of time periods for purposes of exercising, vesting in, or realizing
gain from any Award, (b) the waiver or modification of performance or other
conditions related to the payment or other rights under an Award; (c) provision
for the cash settlement of an Award for an equivalent cash value, as determined
by the Committee, or (d) such other modification or adjustment to an Award as
the Committee deems appropriate to maintain and protect the rights and interests
of Participants upon or following a Change in Control.

    

    12.2.
Definition of Change in
Control.   For purposes hereof, a “Change in Control”
shall be deemed to have occurred if:

    

    
      	
              (a)

            	
              any
      “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
      the Securities Exchange Act of 1934 (“Exchange Act”)), other than any
      company owned, directly or indirectly, by the shareholders of AEP in
      substantially the same proportions as their ownership of shares of Common
      Stock or a trustee or other fiduciary holding securities under an employee
      benefit plan of AEP, becomes the “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of more than 33-1/3
      percent of the then outstanding voting stock of
  AEP;

            

    

    

    
      	
              (b)

            	
              AEP
      consummates a merger or consolidation with any other entity, other than a
      merger or consolidation which would result in the voting securities of AEP
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) at least 66-2/3% percent of the total voting power
      represented by the voting securities of AEP or such surviving entity
      outstanding immediately after such merger or consolidation;
    or

            

    

    

    
      	
              (c)

            	
              the
      shareholders of AEP approve a plan of complete liquidation of AEP, or an
      agreement for the sale or disposition by AEP (in one transaction or a
      series of transactions) of all or substantially all of AEP’s
      assets.

            

    

    

    

    13.
Award Agreements

    

    13.1.
Form of
Agreement.   Each Award under this Plan shall be evidenced
by an Award Agreement in a form approved by the Committee setting forth the
number of shares of Common Stock, units or other rights (as applicable) subject
to the Award, the exercise, base or purchase price (if any) of the Award, the
time or times at which an Award will become vested, exercisable or payable, the
duration of the Award and, in the case of Performance Awards, the applicable
performance criteria and goals.  The Award Agreement shall also set
forth other material terms and conditions applicable to the Award as determined
by the Committee consistent with the limitations of this Plan.  Award
Agreements evidencing Awards intended to qualify for exemption under Section
162(m) may be designated as such and shall contain such terms and conditions as
may be necessary to meet the applicable requirements of Section
162(m).  Award Agreements evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the Code.

    

    13.2.
Contract Rights;
Amendment.   Any obligation of AEP to any Participant with
respect to an Award shall be based solely upon contractual obligations created
by an Award Agreement.  No Award shall be enforceable until the Award
Agreement has been signed on behalf of AEP by its authorized representative and
signed by the Participant and returned to AEP as directed by the Award Agreement
or the Committee.  By executing the Award Agreement, a Participant
shall be deemed to have accepted and consented to the terms of this Plan and any
action taken in good faith under this Plan by and within the discretion of the
Committee, the Board or their delegates.  Award Agreements covering
outstanding Awards may be amended or modified by the Committee in any manner
that may be permitted for the grant of Awards under the Plan, subject to the
consent of the Participant to the extent provided in the Award
Agreement.  However, the offer of an Award Agreement to a particular
Eligible Person shall not infer any obligation to offer any other Award
Agreements at that or any other time.

    

    

    14.
General Provisions

    

    14.1.
Limits on Transfer of Awards;
Beneficiaries.   Except to the extent specifically
provided by the terms of an Award Agreement, Awards shall be
nontransferable.  During the lifetime of a Participant, Awards shall
be exercised only by such Participant or by his guardian or legal
representative.  Notwithstanding the foregoing, the Committee may
provide in the terms of an Award Agreement that the Participant shall have the
right to designate a beneficiary or beneficiaries who shall be entitled to any
rights, payments or other benefits specified under an Award Agreement following
the Participant’s death.

    

    14.2.
Deferrals of
Payment.   In an Award Agreement or under a separate
policy or program adopted by the Committee, a Participant may be permitted or
required to defer the receipt of payment of cash or delivery of shares of Common
Stock that would otherwise be due to the Participant by virtue of the exercise
of a right or the satisfaction of vesting or other conditions with respect to an
Award other than an Option or a Stock Appreciation Right.  Any such
policy or program shall establish the rules and procedures relating to such
deferral, including, without limitation, the period of time in advance of
payment when an election to defer may be made, the time period of the deferral
and the events that would result in payment of the deferred amount, the interest
or other earnings attributable to the deferral and the method of funding, if
any, attributable to the deferred amount.

    

    14.3.
Rights as
Shareholder.   A Participant shall have no rights as a
holder of Common Stock with respect to any unissued securities covered by an
Award until the date the Participant becomes the holder of record of these
securities.  Except as provided in Section 3.4 hereof, no adjustment
or other provision shall be made for dividends or other shareholder rights,
except to the extent that the Award Agreement provides for Dividend Equivalents,
dividend payments or similar economic benefits.

    

    14.4.
Employment or
Service.   Nothing in the Plan, in the grant of any Award
or in any Award Agreement shall confer upon any Eligible Person the right to
continue in the capacity in which he is employed by or otherwise serves AEP or
any Subsidiary.

    

    14.5.
Securities
Laws.   No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges upon which the Common Stock may be listed, have been fully
met.  As a condition precedent to the issuance of shares pursuant to
the grant or exercise of an Award, AEP may require the Participant to take any
reasonable action to meet such requirements.  The Committee may impose
such conditions on any shares of Common Stock issuable under the Plan as it may
deem advisable, including, without limitation, restrictions under the Securities
Act of 1933, as amended, under the requirements of any stock exchange upon which
such shares of the same class are then listed, and under any blue sky or other
securities laws applicable to such shares.

    

    14.6.
Taxes and
Withholding.   The Participant shall be responsible for
payment of any taxes or similar charges required by law with respect to each
Award or an amount paid in satisfaction of an Award. AEP and its Subsidiaries,
as applicable, shall comply with the terms of a deduction election made by a
Participant with any payment made under the terms of an Award Agreement, but
only if and to the extent applicable thereto. AEP and its Subsidiaries, as
applicable, may withhold and disburse such amount or amounts it determines to be
required for purposes of complying with obligations for tax withholding or such
other obligations under applicable federal, state and local law.  The
Committee in its sole discretion may direct AEP to satisfy all or part of
applicable tax withholding obligations incident to a Participant’s exercise of a
Stock Option or to the vesting of Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units or Phantom Stock by AEP’s withholding of a
portion of the Common Stock that otherwise would have been issued to such
Participant.

    

    14.7.
Unfunded
Plan.   The adoption of this Plan and any setting aside of
cash amounts or shares of Common Stock by AEP with which to discharge its
obligations hereunder shall not be deemed to create a trust or other funded
arrangement. The benefits provided under this Plan shall be a general, unsecured
obligation of AEP payable solely from the general assets of AEP, and neither a
Participant nor the Participant’s permitted transferees or estate shall have any
interest in any assets of AEP by virtue of this Plan, except as a general
unsecured creditor of AEP.  Notwithstanding the foregoing, AEP shall
have the right to implement or set aside funds in a grantor trust subject to the
claims of AEP’s creditors to discharge its obligations under the
Plan.

    

    14.8.
Other Compensation and Benefit
Plans.   The adoption of the Plan shall not affect any
other stock incentive or other compensation plans in effect for AEP or any
Subsidiary, nor shall the Plan preclude AEP from establishing any other forms of
stock incentive or other compensation for employees of AEP or any
Subsidiary.  The amount of any compensation deemed to be received by
the Participant pursuant to an Award shall not constitute compensation with
respect to which any other employee benefits of such Participant are determined,
including, without limitation, benefits under any bonus, pension, profit
sharing, life insurance or salary continuation plan, except as otherwise
specifically provided by the terms of such plan.

    

    14.9.
Plan Binding on
Successors.   The Plan shall be binding upon AEP, its
successors and assigns, and the Participant, his executor, administrator and
permitted transferees and beneficiaries.

    

    14.10.
Construction and
Interpretation.   Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.  Headings of Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.

    

    14.11.
Severability.   If
any provision of the Plan or any Award Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

    

    14.12.
Governing
Law.   The laws of the State of Ohio shall govern the
validity and construction of this Plan and of the Award Agreements, without
giving effect to principles relating to conflict of laws, except to the extent
that such laws may be preempted by Federal law.

    

    14.13.
Compliance with Rule
16b-3.   It is the intent of AEP that this Plan comply in
all respects with Rule 16b-3 in connection with any Award granted to a
person who is subject to Section 16 of the Exchange Act.  Accordingly,
if any provision of this Plan or any Award Agreement does not comply with the
requirements of Rule 6b-3 as then applicable to any such person, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.

    

    
      15.
Effective Date, Termination and Amendment

    

    15.1.   Effective Date; Shareholder
Approval.   Subject to approval by the Securities and
Exchange Commission, the Effective Date of the Plan shall be the date following
adoption of the Plan by the Board on which the Plan is approved by the
shareholders of AEP.  Grants of Awards under the Plan may be made
prior to the Effective Date (but after adoption of the Plan by the Board),
subject to approval of the Plan by the Securities and Exchange Commission and
the shareholders.  At the sole discretion of the Board, in order to
comply with the requirements of Section 162(m) for certain types of Awards under
the Plan, the performance criteria set forth in Section 9.3 shall be reapproved
by the shareholders no later than the first shareholder meeting that occurs in
the fifth calendar year following the calendar year of the initial shareholder
approval of such performance criteria.

    

    15.2.
Termination.   The
Plan shall remain in effect until terminated by action of the Board; provided,
however, that no Award may be granted hereunder after April 26,
2015.

    

    Notwithstanding
the foregoing, no termination of the Plan shall in any manner affect any Award
theretofore granted without the consent of the Participant or the permitted
transferee of the Award.

    

    15.3.
Amendment.   The
Board may at any time and from time to time and in any respect, amend or modify
the Plan; provided, however, that no amendment or modification of the Plan shall
be effective without the consent of AEP’s shareholders that would (a) increase
the number of shares of Common Stock reserved for issuance or (b) allow the
grant of Options at an exercise price below Fair Market Value, or allow the
repricing of Options without AEP shareholder approval.  In addition,
the Board may seek the approval of any amendment or modification by AEP’s
shareholders to the extent it deems necessary or advisable in its sole
discretion for purposes of compliance with Section 162(m) or Section 422 of the
Code, the listing requirements of the New York Stock Exchange or for any other
purpose.  No amendment or modification of the Plan shall in any manner
affect any Award theretofore granted without the consent of the Participant or
the permitted transferee of the Award.

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