Document:

ex10transmissionagreement.htm

    
 

    
 

    
 

    
 

    TRANSMISSION
COORDINATION AGREEMENT

    

    

    

    

    

    

    Between

    

    Public
Service Company of Oklahoma,

    Southwestern
Electric Power Company,

    West
Texas Utilities Company,

    

    and

    

    American
Electric Power Service Corporation

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    ARTICLE
I

    TERM OF
AGREEMENT

    1.1           Effective
Date

    1.2           Periodic
Review 

    

    ARTICLE
II

    DEFINITIONS

    2.1           Agreement

    2.2           Ancillary
Services 

    2.3           Company
Demand 

    2.4           Company
Peak Demand 

    2.5           Control
Area 

    2.6           Coordinating
Committee 

    2.7           Designated
Agent 

    2.8           Direct
Assignment Facilities 

    2.9           Generating
Unit 

    2.10           Hour

    2.11           Month

    2.12           Network
Integration Transmission Service

    2.13           Open
Access Transmission Tariff

    2.14           Point-to-Point
Transmission Service

    2.15           PUCT

    2.16           Scheduling,
System Control and Dispatch Service 

    2.17           SPP

    2.18           Transmission
Customer

    2.19           Transmission
Service 

    2.20           Transmission
System

    2.21           Transmission
System Operator 

    

    ARTICLE
III

    OBJECTIVES

    3.1           Purposes

    

    ARTICLE
IV

    COORDINATING
COMMITTEE

    4.1           Coordinating
Committee 

    4.2           Responsibilities
of the Coordinating Committee 

    4.3           Delegation
and Acceptance of Authority

    4.4          
Reporting

    ARTICLE
V

    PLANNING

    5.1           Transmission
Planning 

    

    ARTICLE
VI

    TRANSMISSION

    6.1           Delegation
to the Transmission System Operator

    6.2           Transmission
Facilities

    6.3           Direct
Assignment Facilities 

    6.4           Transmission
Service Revenues 

    6.5           Payment
of Costs for Network Use

    6.6           Payment
of Costs for Point-to-Point Transmission Service

    

    ARTICLE
VII

    ANCILLARY
SERVICES 

    7.1           Ancillary
Services 

    

    ARTICLE
VIII

    GENERAL

    8.1           Regulatory
Authorization

    8.2           Effect
on Other Agreements

    8.3           Waivers

    8.4           Successors
and Assigns; No Third Party Beneficiary

    8.5           Amendment

    8.6           Independent
Contractors 

    8.7           Responsibility
and Liability 

    

    SCHEDULE
A

    ALLOCATION
OF TRANSMISSION REVENUES 

    

    SCHEDULE
B

    ANNUAL
TRANSMISSION REVENUE REQUIREMENTS RATIOS

    

    SCHEDULE
C

    ALLOCATION
OF ANCILLARY SERVICE REVENUES 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TRANSMISSION
COORDINATION AGREEMENT

    

    Between

    

    Public
Service Company of Oklahoma,

    Southwestern
Electric Power Company,

    West
Texas Utilities Company

    

    and

    

    American
Electric Power Service Corporation

    

    This
TRANSMISSION COORDINATION AGREEMENT, hereinafter called “Agreement,”
is made and entered into as of the _____ day of _________, 2002, by and among
West Texas Utilities Company (“WTU”), Public Service Company of Oklahoma (“PSO”)
and Southwestern Electric Power Company (“SWEPCO”), hereinafter separately
referred to as “Company” and jointly as “Companies,” and American Electric Power
Service Corporation (“AEPSC”).

     

    WHEREAS,
Companies are the owners and operators of interconnected generation,
transmission and distribution facilities with which they are engaged in the
business of transmitting and selling electric power to the general public, to
other entities and to other electric utilities; and

     

    WHEREAS,
Companies achieve economic benefits for their customers through coordinated
planning, operation and maintenance of their transmission facilities in the
SPP;

     

    NOW,
THEREFORE, the Companies and AEPSC mutually agree as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
I

     

    TERM OF
AGREEMENT

    1.1           Effective
Date

     

    This
Agreement shall become effective as of the date American Electric Power
Company,
Inc. restructures its operating companies pursuant to Orders issued by the
Federal Energy Regulatory Commission ("FERC" or "Commission") in Docket Nos.
EC01-130-000 and ER01-2668-000, or such later date as is established by the
FERC. This Agreement shall continue in force and effect for a term of one year
from the effective date and continue from year to year thereafter until
terminated by written notice given by any Company to the other Companies and to
AEPSC. Such written notice shall become effective within 30 days of
receipt.

     

    
      	
              1.2  

            	
              Periodic
      Review

            

    

     

    This
Agreement will be reviewed periodically by the Coordinating Committee, as
defined
herein, to determine whether revisions are necessary to meet changing
conditions. In the event that revisions are made by the Companies pursuant to
Section 8.5, and after requisite approval or acceptance for filing by the
appropriate regulatory authorities, the Coordinating Committee may thereafter,
for the purpose of ready reference to a single document, prepare for
distribution to the Companies an amended document reflecting all changes in and
additions to this Agreement with notations thereon of the date
amended.

    ARTICLE
II

     

    DEFINITIONS

    For
purposes of this Agreement, the following definitions shall apply:

     

    2.1           Agreement shall mean
this Transmission Coordination Agreement including all attachments and schedules
applying thereto and any amendments made hereafter.

     

    2.2           Ancillary Services
shall mean those services that are necessary to support the transmission of
capacity and energy from resources to loads while maintaining reliable operation
of the Companies’ transmission facilities in accordance with Good Utility
Practice, as that term is defined in the Open Access Transmission
Tariff.

     

    2.3           Company Demand shall
mean the demand in megawatts of all retail and wholesale
power customers in the SPP on whose behalf the Company, by statute, franchise,
regulatory requirement, or contract, has undertaken an obligation to construct
and operate its transmission system to meet the reliable electric needs of such
customers, integrated over a period of one hour, plus the losses incidental to
that service.

     

    2.4           Company Peak Demand
for a period shall be the highest Company Demand for any hour during the
period.

     

    2.5           Control Area shall
mean an electric power system or combination of electric power systems to which
a common automatic generation control scheme is applied for the purposes
specified in the Open Access Transmission Tariff.

    

    2.6           Coordinating
Committee shall mean the organization established pursuant to Section 4.1
of this Agreement and whose duties are more fully set forth herein.

     

    2.7           Designated Agent
shall mean any entity that performs actions or functions on behalf of the
Companies, an Eligible Customer (as that term is defined in the Open Access
Transmission Tariff), or the Transmission Customer required under the Open
Access Transmission Tariff.

     

    2.8           Direct Assignment
Facilities shall mean facilities or portions of facilities located in the
SPP that are constructed by the Companies for the sole use or benefit of a
particular Transmission Customer requesting service under the Open Access
Transmission Tariff.

     

    2.9           Generating Unit shall
mean an electric generator, together with its prime mover and all auxiliary and
appurtenant devices and equipment designed to be operated as a unit for the
production of electric capacity and energy.

     

    2.10           Hour shall mean a
clock-hour.

     

    2.11           Month shall mean a
calendar month consisting of the applicable 24-Hour periods as measured by
Central Standard Time.

     

    2.12           Network Integration
Transmission Service shall mean the transmission service provided in the
SPP under Part III of the Open Access Transmission Tariff.

     

    2.13           Open Access Transmission
Tariff shall mean the Open Access Transmission Tariff or Tariffs filed on
behalf of the Companies with the Federal Energy Regulatory Commission by AEPSC
or a regional transmission entity, as such may be amended from
time to time.

     

    2.14           Point-to-Point Transmission
Service shall mean the reservation and transmission of capacity and
energy on either a firm or non-firm basis from the points of receipt to the
points of delivery in the SPP under Part II of the Open Access Transmission
Tariff.

     

    2.15           PUCT shall mean the
Public Utility Commission of Texas.

     

    2.16           Scheduling, System Control
and Dispatch Service shall mean the service required to schedule the
movement of power through, out of, within, or into a Control Area, as specified
in Schedule 1 of the Open Access Transmission Tariff.

     

    2.17           SPP shall mean the
Southwest Power Pool, or its successor in function.

     

    2.18           Transmission Customer
shall mean any Eligible Customer as defined in the Open Access Transmission
Tariff (or its Designated Agent) that (i) executes a Service Agreement, or (ii)
requests in writing that the Companies, or their agent, file with the Federal
Energy Regulatory Commission a proposed unexecuted Service Agreement to receive
service under the Open Access Transmission Tariff. This term is used in the Part
I Common Service Provisions of the Open Access Transmission Tariff to include
customers receiving service under Part II and Part III of the Open Access
Transmission Tariff.

     

    2.19           Transmission Service
shall mean service provided in the SPP under Part II or Part III of the Open
Access Transmission Tariff.

     

    2.20           Transmission System
shall mean the facilities owned, controlled or operated by the Companies that
are used to provide transmission service in the SPP under Parts II and III of
the Open Access Transmission Tariff.

     

    2.21           Transmission
System Operator shall mean that party that is charged with monitoring
the reliability of the Companies’ Transmission System.

     

    ARTICLE
III

     

    OBJECTIVES

    3.1           Purposes

     

    The
purposes of this Agreement are (a) to provide the contractual basis for the
coordinated planning and operation of the Companies’ transmission facilities in
the SPP to achieve optimal economies, consistent with reliable electric service
and regulatory and environmental requirements and (b) to provide the means by
which the Companies will allocate among themselves the revenue that they receive
for Part II and Part III and Ancillary Services provided in the SPP under the
Open Access Transmission Tariff. Any revenue received by a Company(ies) from the
provision of service under any other Part of the Open Access Transmission Tariff
or any agreement, tariff or rate schedule other than the Open Access
Transmission Tariff, will be kept by the Company(ies) that is (are) the
party(ies) to such Part, agreement, tariff or rate schedule.

     

    ARTICLE
IV

     

    COORDINATING
COMMITTEE

    4.1           Coordinating
Committee

     

    The
Coordinating Committee is the organization established to oversee planning,
construction, operation, and maintenance of the Transmission System. The
Coordinating Committee members shall include at least one member representing
each of the parties hereto who is not a member of the Operating Committee
established under the Restated and Amended AEP-West Operating Agreement. The
chairperson, who shall be appointed by the chief executive officer of the holder
of the majority of the common stock of the Companies, shall appoint the member
representative(s) of the Companies. Other than the chairperson, there shall be
the same number of members representing each Company. The majority of the
members on the Coordinating Committee shall be representatives of the Companies.
Coordinating Committee decisions shall be by a majority vote of those present.
However, any member not present may vote by proxy. The chairperson shall vote
only in case of a tie. No employee of the Companies engaged in marketing, sales
or brokering of electricity or an employee of any affiliate engaged or involved
in the transmission, sale, or marketing of electricity or natural gas shall be
appointed
to, or serve on, the Coordinating Committee.

     

    4.2           Responsibilities of the
Coordinating Committee

     

    The
Coordinating Committee shall be responsible for overseeing:

     

    (a) the
Companies in the coordinated planning of their transmission facilities in the
SPP, including studies for transmission planning purposes and their interaction
with independent system operators and other regional bodies that are interested
in transmission planning; and

     

    (b)
compliance with the terms of the Open Access Transmission Tariff and the rules
and regulations of the Federal Energy Regulatory Commission relating
thereto.

     

    4.3           Delegation and Acceptance of
Authority

     

    The
Companies hereby delegate to the Coordinating Committee, and the Coordinating
Committee hereby accepts, responsibility and authority for the duties listed in
this Article and elsewhere in this Agreement.

     

    4.4           Reporting

     

                   The
Coordinating Committee shall provide periodic summary reports of its activities
under this Agreement to the transmission and reliability function employees of
the Companies and shall keep such employees of the Companies informed of
situations or problems that may materially affect the reliability of the
Transmission System. Furthermore, the Coordinating Committee agrees to report to
the transmission and reliability function employees of the Companies in such
additional detail as is requested regarding specific issues or projects under
its oversight.

     

    ARTICLE
V

     

    PLANNING

     

    5.1           Transmission
Planning

     

                                  
The Companies agree that their respective transmission facilities in the SPP
shall be planned and developed on the basis that their combined individual
systems constitute a coordinated transmission system and that the objective of
their planning shall be to maximize the economy, efficiency and reliability of
the Transmission System as a whole. In this connection, the Coordinating
Committee will from time to time, as it deems appropriate, direct studies for
transmission planning purposes.

     

    ARTICLE
VI

     

    TRANSMISSION

     

    6.1           Delegation to the
Transmission System Operator

     

                  
The Companies shall delegate to the Transmission System Operator the
responsibility
and authority to act on behalf of the Companies for all of the requirements and
purposes of the Open Access Transmission Tariff.

     

    6.2           Transmission
Facilities

     

    Each
Company shall make its transmission facilities in the SPP available to the
Transmission System Operator.

     

    6.3           Direct Assignment
Facilities

     

    Each
Company shall make Direct Assignment Facilities available to the Transmission
System Operator as may be required to provide service to a
particular

    Transmission
Customer requesting service under the Open Access Transmission
Tariff.

     

    6.4           Transmission Service
Revenues

     

    (a) The
Companies shall share transmission service revenues obtained from the use of the
transmission facilities that comprise the Transmission System in accordance with
Schedule A to this Agreement. Transmission service revenues are those revenues
received for service provided under the Open Access Transmission Tariff. The
Companies’ annual transmission revenue requirements are shown on Schedule B to
this Agreement and shall be revised whenever there is a change to the annual
transmission revenue requirements in Attachment H to the Open Access
Transmission Tariff or a change to the annual transmission revenue requirements
underlying the rates set forth in Schedules 7 and 8 to the Open Access
Transmission Tariff. Future revisions to the transmission revenue requirements
ratios set forth in Schedule B will be made by the Companies’ making an
appropriate filing with the Commission, if required by law. Such changes shall
become effective as of the date accepted or approved by the Commission, subject
to refund if the Commission so orders.

     

                                   
(b) Revenues received for Ancillary Services shall be allocated among the
Companies
in accordance with the revenue ratios set forth in Schedule C. Future revisions
to the revenue ratios set forth in Schedule C will be made by the Companies’
making an appropriate filing with the Commission, if required by la w. Such
changes shall become effective as of the date accepted or approved by the
Commission, subject to refund if the Commission so orders.

     

    (c)
Revenues received for third-party use of Direct Assignment Facilities shall be
distributed to the Company(ies) owning such facilities.

     

    (d) The
distribution to the Companies of revenues received for stranded costs received
from third-party customers under the Open Access Transmission Tariff shall be
determined on a case-by-case basis and shall be filed with the Commission, if
required by law.

     

                                   
(e) The distribution to the Companies of revenues received for new transmission
facilities received from third-party customers under the Open Access
Transmission Tariff shall be determined on a case-by-case basis and shall be
filed with the Commission, if required by law.

     

               
(f) Revenues received for Transmission System studies performed for the
benefit
of a Transmission Customer under Part II or Part III of the Open Access
Transmission Tariff shall be allocated to each Company as applicable, in
proportion to the ratio of each Company’s number of transmission pole miles of
the Transmission System, as such number of transmission pole miles is reported
in each Company’s Form 1 annual report, over the total number of transmission
pole miles of the Transmission System.

     

    6.5           Payment of Costs for Network
Use

     

    The
Transmission System Operator shall bill each of the Companies for the amount due
to the Transmission System Operator in each Month for their use of Network
Integration Transmission Service and Ancillary Services under the Open Access
Transmission Tariff on the basis set forth in the Open Access Transmission
Tariff.

     

    6.6           Payment of Costs for
Point-to-Point Transmission Service

     

    (a) The
cost of Transmission Service on the Transmission System for third party
off-system sales by a Company shall be borne by the selling
Company(ies).

     

    (b) The
cost of Transmission Service provided by a third-party for off-system sales by a
Company shall be borne by the selling Company(ies).

     

    ARTICLE
VII

     

    ANCILLARY
SERVICES

     

    7.1           Ancillary
Services

     

    (a) Each
Company shall make available Ancillary Services as required to provide
service under the Open Access Transmission Tariff.

     

    (b)
Revenues received for Ancillary Services will be allocated between the
Companies
in accordance with Section 6.4(b) of this Agreement.

    ARTICLE
VIII

     

    GENERAL

    8.1           Regulatory
Authorization

     

    This
Agreement is subject to certain regulatory approvals and the Companies shall
diligently seek all necessary regulatory authorization for this
Agreement.

     

    8.2           Effect on Other
Agreements

     

    This
Agreement shall not modify the obligations of any of the Companies under any
agreement between such Company and others not parties to this Agreement in
effect on the effective date of this Agreement.

     

    8.3           Waivers

     

    Any
waiver at any time by a Company of its rights with respect to a default by any
other Company under this Agreement shall not be deemed a waiver with respect to
any subsequent default of similar or different nature.

     

    8.4           Successors and Assigns; No
Third Party Beneficiary

     

    This
Agreement shall inure to and be binding upon the successors and assigns of the
respective Companies, but shall not be assignable by any of the Companies
without the written consent of the other Companies, except upon foreclosure of a
mortgage or deed of trust.  Nothing expressed or mentioned or to which
reference is made in this Agreement is intended or shall be construed to give
any person or corporation other than the Companies any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained, expressly or by reference, or any schedule hereto, this Agreement,
any such schedule and any and all conditions and provisions hereof and thereof
being intended to be and being for the sole exclusive benefit of the Companies,
and for the benefit of no other person or corporation.

     

    8.5           Amendment

     

    It is
contemplated by the Companies that it may be appropriate from time to time to
change, amend, modify or supplement this Agreement or the schedules that are
attached to this Agreement, to reflect changes in operating practices or costs
of operations or for other reasons.  This Agreement or such schedules
may be changed, amended, modified or supplemented by an instrument in writing
executed by all of the Companies subject to any required approval or acceptance
for filing by the appropriate regulatory authorities.

     

    8.6           Independent
Contractors

     

    By
entering into this Agreement the Companies shall not become partners, and as to
each other and to third persons, the Companies shall remain independent
contractors in all matters relating to this Agreement.

     

    8.7           Responsibility and
Liability

     

    The
liability of the Companies shall be several, not joint or collective. Each
Company shall be responsible only for its obligations, and shall be liable only
for its

    proportionate
share of the costs and expenses as provided in this Agreement, and any liability
resulting here from. Each Company will defend, indemnify, and save harmless the
other Companies hereto from and against any and all liability, loss, costs,
damages, and expenses, including reasonable attorney’s fees, caused by or
growing out of the gross negligence, willful misconduct, or breach of this
Agreement by such indemnifying Company.

     

    IN
WITNESS WHEREOF, each Company has caused this Agreement to be executed and
attested by its duly authorized officers.

     

    WEST
TEXAS UTILITIES COMPANY

    Attest:

    

    ________________________                                                       
By:________________________________

    Secretary                                                                                                      
AEP – Texas State President

    

    

    

    PUBLIC
SERVICE COMPANY OF OKLAHOMA

    Attest:

    

    ________________________                                                        By:________________________________

    Secretary                                                                                                      
Vice President

    

    

    

    SOUTHWESTERN
ELECTRIC POWER

    COMPANY

    Attest:

    

    _________________________                                                      By:________________________________

    Secretary                                                                                                      
Vice President

    

    

    

    AMERICAN
ELECTRIC POWER SERVICE

    CORPORATION

    Attest:

    

    _________________________                                                      By:________________________________

    Secretary                                                                                                      
Senior Vice President

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
A

     

    ALLOCATION
OF TRANSMISSION REVENUES

     

    The
revenue the Transmission System Operator receives pursuant to Section 6.4 of the
Agreement for service provided in the SPP by the Companies under Parts II and
III of the Open Access Transmission Tariff, other than revenues received
pursuant to Sections 26 (Stranded Cost Recovery), 27 (Compensation for New
Facilities and Redispatch Costs), and 34.4 (Redispatch Charge) thereof and for
System and Facilities Studies made pursuant to Sections 19 (Additional Study
Procedures for Firm Point-to-Point Transmission Service Requests) and 32
(Additional Study Procedures for Network Integration Transmission Service
Requests), will be allocated among the Companies based on the ratios determined
in accordance with Schedule B and Schedule C.

     

    Revenues
related to studies of the Transmission System performed for the benefit of
Transmission Customers under Part II or Part III of the Open Access Transmission
Tariff will be allocated among the Companies as applicable, in proportion to
their respective number of transmission pole miles on the Transmission System.
Direct Assignment Facilities revenues will be assigned to the Companies in
proportion to the related costs that each of them
incurred.  Assignment of revenues received from a third party related
to stranded cost or new transmission facilities shall be determined on a
case-by-case basis.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
B

     

    ANNUAL
TRANSMISSION REVENUE REQUIREMENTS RATIOS

     

    From time
to time the Coordinating Committee will calculate for each of the Companies its
Transmission Revenue Requirements Ratios set forth below. A Company’s
Transmission Revenue Requirements Ratio for revenue received under Part III of
the Open Access Transmission Tariff shall be a fraction, the numerator of which
is the Company’s transmission revenue requirement that is used to calculate the
Annual Transmission Revenue Requirements amount for the AEP West Zone – SPP set
forth on Attachment H to the Open Access Transmission Tariff (herein called the
Company Revenue Requirement) and the denominator of which is the sum of the
Company Revenue Requirement for all of the Companies. A Company’s Transmission
Revenue Requirement Ratio for revenue received under Part II of the Open Access
Transmission Tariff shall be a fraction, the numerator of which is the Company’s
transmission revenue
requirement that is used to calculate the Annual Transmission Revenue
Requirements underlying the rates set forth for the AEP West Zone – SPP on
Schedules 7 and 8 to the Open Access Transmission Tariff and the denominator of
which is the sum of the Company Revenue Requirements for all of the
Companies.

    Allocation
Ratio for Revenue Received Under Part II and Part III of the Open

    Access
Transmission Tariff for service in the SPP.

     

     

     

     

    Revenue
Requirement                                                      Revenue
Requirement Ratio

    PSO                               $
37,353,669                                                              
                     
42.12112%

    SWEPCO                     
$ 51,123,364                                                                                    
57.64823%

    WTU                             $     
204,546                                                                                      
0.23065%

    TOTAL                         $
88,681,579                                                                                    100.00000%

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
C

     

    ALLOCATION
OF ANCILLARY SERVICE REVENUES

     

    The
revenues the Transmission System Operator receives pursuant to Schedules 1
through 6
under the Open Access Transmission Tariff shall be allocated among the Companies
as set forth below. Future revisions to the revenue ratios set forth in Schedule
C will be made by the Companies’ making an appropriate filing with the
Commission, if required by law. Such changes shall become effective as of the
date accepted or approved by the Commission, subject to refund if the Commission
so orders.

     

    (a)           Revenues
received from System Scheduling, System Control and Dispatch Service
(AEP West Zone – SPP) under Schedule 1 of the Open Access Transmission Tariff
will be allocated among PSO, SWEPCO and WTU based on the following
ratio:

     

    PSO                      49.23%

    SWEPCO             50.63%

    WTU                      0.14%

     

    (b)           Revenues
received from System Reactive Supply and Voltage Control from Generation Sources
Service (AEP West Zone – SPP) under Schedule 2 of the Open Access Transmission
Tariff will be allocated between PSO and SWEPCO based on the following
ratio:

     

    PSO                      
39.53%

    SWEPCO             
60.47%

     

                   
(c)           Revenues
received from System Regulation and Frequency Response Service (AEP West Zone –
SPP) under Schedule 3 will be allocated between PSO and SWEPCO based on the
following ratio:

    PSO                      40.00%

    SWEPCO             60.00%

     

                   
(d)           Revenues
received for and energy exchanged as part of System Energy Imbalance Service
rendered under Schedule 4 will be allocated in the same manner as margin from
off system sales and purchases as set forth in Service Schedule B to the
Restated and Amended AEP-West Operating Agreement.

     

                    (e)           Revenues
received from System Operating Reserve - Spinning Reserve Service (AEP West Zone
– SPP) under Schedule 5 and from System Operating Reserve – Supplemental Reserve
Service (AEP West Zone – SPP) under Schedule 6 for load served in the PSO/SWEPCO
Control Area will be allocated between PSO and SWEPCO based on the following
ratio:

     

    PSO                      35.91%

    SWEPCO             64.09%ex10changeincontrolagreement.htm

    AMERICAN
ELECTRIC POWER SERVICE CORPORATION

    

    CHANGE IN
CONTROL AGREEMENT

    

    As
Revised Effective November 1, 2009

    

    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

    

    Whereas, AEPSC therefore previously
established the American Electric Power Service Corporation Change In Control
Agreement (the “Agreement”), the current version of which is set forth in a
document dated effective January 1, 2008; and

    

    Whereas,
the Human Resources Committee of the Board of the Corporation has decided to
change the payments that should be provided to employees who are named as
participating Executives (as defined in Article I(l) of the Agreement) on or
after October 1, 2009;

    

    Now,
Therefore, AEPSC hereby amends the Agreement in its entirety.

    

    

    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.  References in this agreement to the Executive shall be
construed to include a Grandfathered Executive.

    

    (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)  “Grandfathered
Executive” means an individual who became an Executive [as defined in Article
I(l)] prior to October 1, 2009, and who continuously has remained such an
Executive until becoming entitled to benefits set forth in this
Agreement.

    

    (o)  “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).

    

    (p)  “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.

    

    (q)  “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(o)(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(o) (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 any Grandfathered 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 Grandfathered 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 the Grandfathered 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
      Grandfathered 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 the Grandfathered 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
      Grandfathered Executive having any “parachute payment” as described in
      Code Section 280G(b)(2), then, AEPSC shall pay to the Grandfathered
      Executive an additional payment (a "Gross-up Payment") in an amount such
      that after payment by the Grandfathered 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
      Grandfathered Executive pursuant to Code Section 409A), including any
      Excise Tax imposed on any Gross-up Payment, the Grandfathered 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 Grandfathered 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 Grandfathered Executive within 15
      calendar days after the date of the Grandfathered Executive’s termination
      of employment, if applicable, and any other such time or times as may be
      requested by AEPSC or the Grandfathered Executive.  If the Tax
      Firm determines that Excise Tax would be payable by the Grandfathered
      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 Grandfathered 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 Grandfathered Executive, it shall, at the
      same time as it makes such determination, furnish the Grandfathered
      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
      Grandfathered 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 Grandfathered Executive.  The Grandfathered
      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)

            	
              The
      Grandfathered 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 Grandfathered
      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
      Grandfathered 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
      Grandfathered 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 Grandfathered
      Executive receives a refund of any amount paid by AEPSC with respect to
      such claim, the Grandfathered 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 Grandfathered
      Executive whether it will contest such claim or AEPSC determines not to
      contest such claim, then AEPSC shall immediately pay to the Grandfathered
      Executive the portion of such claim, if any, which it has not previously
      paid to the Grandfathered 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 Grandfathered
      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 Grandfathered Executive’s taxable year next following the
      Grandfathered 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 November, 2009.

    

    

    
      	 
      	
              American
      Electric Power Service Corporation

            
	 
      	 
      
	 
      	 
      
	 
      	
              By  /s/ Michael G.
      Morris

            
	 
      	
                    
      Michael G. Morris

            
	 
      	
                    
      Chairman, President & CEO

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