Document:

Exhibit

EXHIBIT 10.a

POLARIS INDUSTRIES INC.
SENIOR EXECUTIVE
ANNUAL INCENTIVE COMPENSATION PLAN

As Amended and Restated
Effective February 27, 2018

1.     Purpose. The Polaris Industries Inc. Senior Executive Annual Incentive Compensation Plan is intended to provide incentives for Eligible Senior Executives to attain and maintain the highest standards of performance, to attract and retain key executives of outstanding competence and ability, to stimulate the active interest of key executives in the development and financial success of the Company, to further align the identity of interests of employees with those of the Company’s shareholders generally and to reward executives for outstanding performance when certain objectives are achieved. This amendment and restatement of the Plan is effective as of February 27, 2018.

2.     Definitions. As used herein, the terms set forth below shall have the following respective meanings:

(a)    “Board” means the Board of Directors of the Company.

(b)    “Code” means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.

(c)    “Committee” means the Committee appointed by the Board to administer the Plan. 

(d)    “Company” means Polaris Industries Inc., a Minnesota corporation and its successors and assigns.

(e)    “Effective Date” means January 1, 2004.

(f)    “Eligible Senior Executive” means any senior executive employee of the Company designated by the Committee as eligible to receive an Incentive Compensation Award pursuant to the Plan.

(g)    “Incentive Compensation Award” means an incentive compensation award payable under this Plan.

(h)    “Incentive Compensation Award Period” means, with respect to an Incentive Compensation Award, as determined by the Committee, the calendar year beginning on or after the Effective Date with respect to which the achievement of the performance objective(s) applicable to such Incentive Compensation Award is to be determined. It is expressly intended that any particular calendar year may be included in the Incentive Compensation Award Period of multiple Incentive Compensation Awards.

(i)    “Participant” means, with respect to an Incentive Compensation Award Period, an Eligible Senior Executive selected by the Committee to receive an Incentive Compensation Award for such Incentive Compensation Award Period as provided in Section 5 of this Plan.

(j)    “Plan” means the Polaris Industries Inc. Senior Executive Annual Incentive Compensation Plan, as it may be amended from time to time.

3.     Administration. The Committee shall interpret the Plan, prescribe, amend, and rescind rules relating to it, select eligible Participants, and take all other actions necessary for its administration, which actions shall be final and binding upon all Participants. To the extent permitted by law, all members of the Board of Directors, including the members of the Committee, shall be indemnified and held harmless by the Company with respect to any loss, cost, liability or expense that may be reasonably incurred in connection with any claim, action, suit or proceeding which arises by reason of any act or omission under the Plan so long as such act or omission is taken in good faith and within the scope of the authority delegated herein.

4.     Compliance with Section 409A. The Plan shall be administered to comply with Section 409A of the Code, and if any Plan provision is found not to be in compliance with Section 409A of the Code, the provision shall be deemed modified as necessary to meet the requirements of Section 409A of the Code.

5.     Selection of Participants and Performance Objectives. Prior to the commencement of each Incentive Compensation Award Period, or at such later time as determined by the Committee in its discretion, the Committee shall determine in writing (i) the Participants who shall be eligible to receive an Incentive Compensation Award for such Incentive Compensation Award Period, (ii) the performance objective(s) applicable to such Incentive Compensation Award, which shall be based on any one or more of the business criteria determined by the Committee, and (iii) the formula for computing the amount of the Incentive Compensation Award payable to each Participant if the performance objective(s) is(are) achieved. The amount of an Incentive Compensation Award may be denominated in cash and/or in shares of the Company’s common stock, provided that all amounts paid under the Plan shall be in cash.  Any performance objective based on one or more business criteria may, in the Committee’s discretion, be expressed in absolute amounts, on a per share basis, relative to one or more other business criteria, as a growth rate or change from preceding periods, or as a comparison to the performance of specified companies or a published or special index (including stock market indices) or other external measures, and may relate to the performance of one or any combination of the Company as whole, a business unit, a geographic region, or one or more subsidiaries of the Company or a Participant’s individual performance .

6.    Establishing Performance Objectives. In establishing and measuring achievement against a performance objective applicable to any Incentive Compensation Award Period, the Committee may provide that one or more adjustments may be made to the business criteria on which the performance objective is based under such circumstances as the Committee shall determine in its discretion, which may include adjustments for events such as the following that occur during an Incentive Compensation Award Period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) acquisitions or divestitures, (vii) foreign exchange gains and losses and (viii) other events that are unusual in nature or occur infrequently. 

7.    Incentive Compensation Award Determination. The Committee shall make a written determination prior to payment of an Incentive Compensation Award as to the degree to which the applicable performance objective(s) has(have) been attained and the resulting Incentive Compensation Award payment amount. With respect to any such Committee determination, approved minutes of the meeting in which the determination is made shall be treated as written determination.

8.     Discretion to Reduce or Increase Awards. The Committee, in its sole and absolute discretion, may reduce or increase the amount of any Incentive Compensation Award that would otherwise be payable to a Participant based on such factors as the Committee deems relevant and appropriate.

9.     Active Employment Requirement. Except as provided below, an Incentive Compensation Award shall be paid for an Incentive Compensation Award Period only to a Participant who is actively employed by the Company (or on approved vacation or other approved leave of absence) throughout the Incentive Compensation Award Period and who is employed by the Company on the date the Incentive Compensation Award is paid. The Committee may in its sole discretion (i) grant an Incentive Compensation Award for an Incentive Compensation Award Period to a Participant who is first employed or who is first promoted to a position conferring eligibility to participate in this Plan during the Incentive Compensation Award Period, or (ii) authorize payment of an Incentive Compensation Award to a Participant whose employment is terminated during the Incentive Compensation Award Period because of the Participant’s retirement (as defined in the Company’s 401(k) plan), death, or disability as defined in Section 22(e)(3) of the Code. In such cases of active employment for part of an Incentive Compensation Award Period, a pro rata Incentive Compensation Award may be paid for the Incentive Compensation Award Period.

10.     Payment and Deferrals of Incentive Compensation Award.

(a)    An Incentive Compensation Award shall be paid to the Participant for the Incentive Compensation Award Period as provided in this Plan. The Company shall pay the Incentive Compensation Award to the Participant in such form as the Committee may determine and at such time as the Committee may determine after the Committee certifies that the Incentive Compensation Award is payable as provided in Section 8, but no later than March 15 of the year following the year in which the Incentive Compensation Award Period ends. In the event of the Participant’s death, any Incentive Compensation Award shall be paid to the Participant’s spouse or, if there is no surviving spouse, the Participant’s estate. Payments under this Section shall operate as a complete discharge of the Committee and the Company. The Company shall deduct from any Incentive Compensation Award paid under the Plan the amount of any taxes required to be withheld by the federal or any state or local government.

(b)    The Committee may, in its sole and absolute discretion, permit an Eligible Senior Executive who is entitled to receive an Incentive Compensation Award to elect to defer payment of such Incentive Compensation Award in accordance with the terms of the Polaris Industries Inc. Supplemental Retirement/Savings Plan.

11.     Limitation of Rights. Nothing in this Plan shall be construed to (a) give any employee of the Company any right to be awarded an Incentive Compensation Award; (b) give a Participant any rights whatsoever with respect to shares of common stock of the Company; (c) limit in any way the right of the Company to terminate an Eligible Senior Executive’s employment with the Company at any time for any reason or no reason; (d) give a Participant or any other person any interest in any fund or in any specific asset or assets of the Company; or (e) be evidence of any agreement or understanding, express or implied, that the Company will employ an Eligible Senior Executive in any particular position or at any particular rate of remuneration.

12.     Non-Exclusive Arrangement. The adoption and operation of this Plan shall not preclude the Board or the Committee from approving other short-term incentive compensation arrangements for the benefit of individuals who are Participants hereunder as the Board or Committee, as the case may be, deems appropriate and in the best interests of the Company.

13.     Nonassignment. The right of a Participant to the payment of any Incentive Compensation Award under the Plan may not be assigned, transferred, pledged, or encumbered, nor shall such right or other interests be subject to attachment, garnishment, execution, or other legal process.

14.     Amendment or Termination of the Plan. The Board may amend or terminate the Plan at any time, except that no amendment or termination shall be made that would impair the rights of any Participant to an Incentive Compensation Award that would be payable were the Participant to terminate employment on the effective date of such amendment or termination, unless the Participant consents to such amendment or termination. 

15.     Governing Law. The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely in accordance with the laws of the State of Minnesota, other than the conflict of law provisions of such laws.Exhibit

Exhibit 10(a)
	
	
	PERFORMANCE SHARE AWARD AGREEMENT

AEP SYSTEM LONG-TERM INCENTIVE PLAN

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

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

	[Grant Date]
	January 1, 2018 - December 31, 2020
	[# of Shares Granted]

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

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

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

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

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

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

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

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

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

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

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

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

	
	
	 

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

2

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

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

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

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

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

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

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

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

3

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

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

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

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

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

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

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

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

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

4

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

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

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

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

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

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

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

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

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

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

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

5

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

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

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

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

	
	
	 

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

6

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

This Award Agreement becomes void if you do not accept it prior to the Vesting Date.
	
			
	/s/ Nicholas K. Akins
	 
	 

	Nicholas K. Akins
	 
	[Name]

	President and Chief Executive Officer
	 
	 

7

	
																	
	Performance Share Award Value Projection

	For Example Purposes Only

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	Grant Date
	 
	Price/
Share
	 
	Shares
Credited*
	 
	Share
Balance
	 
	Value

	Performance Shares Awarded
	 
	Q1
	 
	$
	68.00
	

	 
	100.000
	

	 
	100.000
	

	 
	$
	6,800.00
	

	Dividend Credit
	 
	Q2
	 
	$
	69.02
	

	 
	0.898
	

	 
	100.898
	

	 
	 

	Dividend Credit
	 
	Q3
	 
	$
	70.06
	

	 
	0.893
	

	 
	101.791
	

	 
	 

	Dividend Credit
	 
	Q4
	 
	$
	71.11
	

	 
	0.888
	

	 
	102.679
	

	 
	 

	Dividend Credit
	 
	Q1
	 
	$
	72.18
	

	 
	0.882
	

	 
	103.561
	

	 
	 

	Dividend Credit
	 
	Q2
	 
	$
	73.26
	

	 
	0.876
	

	 
	104.437
	

	 
	 

	Dividend Credit
	 
	Q3
	 
	$
	74.36
	

	 
	0.871
	

	 
	105.308
	

	 
	 

	Dividend Credit
	 
	Q4
	 
	$
	75.48
	

	 
	0.865
	

	 
	106.173
	

	 
	 

	Dividend Credit
	 
	Q1
	 
	$
	76.61
	

	 
	0.859
	

	 
	107.032
	

	 
	 

	Dividend Credit
	 
	Q2
	 
	$
	77.76
	

	 
	0.853
	

	 
	107.885
	

	 
	 

	Dividend Credit
	 
	Q3
	 
	$
	78.93
	

	 
	0.847
	

	 
	108.732
	

	 
	 

	Dividend Credit
	 
	Q4
	 
	$
	80.11
	

	 
	0.842
	

	 
	109.574
	

	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Total Shareholder Return Score @ 60th Percentile:
	 
	 
	1.333
	

	 
	 

	EPS Score @ 100% of Target:
	 
	 
	1.000
	

	 
	 

	Award Score:
	 
	 
	1.167
	

	 
	 

	x Share Balance:
	 
	 
	109.574
	

	 
	 

	Ending Share Balance
	 
	 
	127.873
	

	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

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

	 
	 
	 
	127.873
	

	 
	$
	10,279.70
	

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

8

EXAMPLE
PERFORMANCE SHARE AWARD AGREEMENT

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

	Vesting Date
	December 31, 2020

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

9

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