AEP, APCO, OPCO, Item 1.01, Stock Ownership Requirement Plan
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported)
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May
30, 2006
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AMERICAN
ELECTRIC POWER COMPANY,
INC.
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(Exact
Name of Registrant as Specified in Its Charter)
(State
or
Other Jurisdiction of Incorporation)
1-3525
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13-4922640
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(Commission
File Number)
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(IRS
Employer Identification No.)
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APPALACHIAN
POWER COMPANY
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(Exact
Name of Registrant as Specified in Its Charter)
(State
or
Other Jurisdiction of Incorporation)
1-3457
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54-0124790
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(Commission
File Number)
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(IRS
Employer Identification No.)
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(Exact
Name of Registrant as Specified in Its Charter)
(State
or
Other Jurisdiction of Incorporation)
1-6543
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31-4271000
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1
Riverside Plaza, Columbus, OH
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43215
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement
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On
May
30, 2006, the Company executed a Stock Ownership Requirement Plan in the
form of
Exhibit 1 of this Current Report on Form 8-K. The Stock Ownership Requirement
Plan specifies the terms and conditions that apply to eligible employees
who are
assigned one or more minimum stock ownership requirements (approximately
50 AEP
employees). Participants are expected to reach each minimum stock ownership
requirement assigned to them within five years of the date it becomes effective
through the mandatory deferral into AEP Career Shares of earned performance
units granted under the AEP Long-Term Incentive Plan and, to the extent
necessary, by committing to retain AEP shares or share equivalents that they
may
otherwise hold. In addition, participants who do not satisfy a minimum stock
ownership requirement within five years of when it was issued will have fifty
percent of their annual bonus for any subsequent year subject to a mandatory
deferral into AEP Career Shares. Participants who have not met a minimum
stock
ownership requirement for which the five-year window period has closed also
will
be required to retain all AEP shares realized through stock option exercises,
except to the extent they are sold to cover the exercise costs and taxes
applicable to these exercises. Executives will then be expected to commit
to
retain the net shares realized for the purpose of satisfying their minimum
stock
ownership requirement.
Mandatorily
deferred amounts (denominated in unfunded share equivalents called "AEP Career
Shares") earn a rate of return equivalent to the total return on AEP common
stock with dividends reinvested. AEP career shares become payable in cash
or
shares following the employee’s termination of employment.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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AMERICAN
ELECTRIC POWER COMPANY, INC.
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APPALACHIAN
POWER COMPANY
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OHIO
POWER COMPANY
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By:
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/s/
Thomas G. Berkemeyer
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Name:
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Thomas
G. Berkemeyer
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Title:
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Assistant
Secretary
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June
1,
2006
EXHIBIT
INDEX
Exhibit
No.
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Description
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1
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American
Electric Power System Stock Ownership Requirement Plan
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EXHIBIT
1
AMERICAN
ELECTRIC POWER SYSTEM
STOCK
OWNERSHIP REQUIREMENT PLAN
(As
Amended and Restated Effective January 1, 2005)
ARTICLE
I
PURPOSE
AND EFFECTIVE DATE
1.1
The
Human
Resources Committee (“HRC”) of the Board of Directors of American Electric Power
Company, Inc. believes that it is critical to AEP’s long-term success to
effectively align the long-term financial interests of senior executives with
those of AEP’s shareholders and that an effective alignment is best accomplished
by substantial, long-term stock ownership. The American Electric Power System
Stock Ownership Requirement Plan (the “Plan”) was established by American
Electric Power Service Corporation (the “Company”) and such subsidiaries of the
Parent Corporation that have Eligible Employees to facilitate the achievement
and maintenance of Minimum Stock Ownership Requirements assigned to Eligible
Employees.
1.2 The
effective
date of the Plan, as amended and restated by this document, is January 1, 2005.
ARTICLE
II
DEFINITIONS
2.1 “Account”
means the separate memo account established and maintained by the Committee
(or
the recordkeeper employed by the Company) to record the number of Shares and
Share Equivalents that have been designated in accordance with the terms of
this
Plan to satisfy all Minimum Stock Ownership Requirements assigned to a
Participant.
2.2 “AEP”
means
the Parent Corporation and its direct and indirect subsidiaries.
2.3
“Annual
Incentive Compensation” means incentive compensation payable pursuant to the
terms of an annual incentive compensation plan approved by the Committee for
inclusion in the Plan, provided that such annual incentive compensation shall
be
determined without regard to any salary or wage reductions made pursuant to
sections 125 or 402(e)(3) of the Code or participant contributions pursuant
to a
pay reduction agreement under the American Electric Power System Supplemental
Retirement Savings Plan, as amended or the American Electric Power System
Incentive Compensation Deferral Plan. Annual Incentive Compensation will not
include an employee’s base pay, non-annual bonuses (such as but not limited to
project bonuses and sign-on bonuses), severance pay, or relocation
payments.
2.4 ”Applicable
Tax Payments” means the following types of taxes that AEP may withhold and pay
that are applicable to the amount then credited to the Career Share
Account:
(a) Federal
Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a)
and 3121(v)(2) (the “FICA Amount”);
(b) Income
tax at source on wages imposed under Code Section 3401 or the corresponding
withholding provisions of applicable state, local and foreign tax laws as a
result of the payment of the FICA Amount; and
(c) The
additional income tax at source on wages attributable to pyramiding Code Section
3401 wages and taxes;
provided,
however, that the total Applicable Tax Payments may not exceed such limits
as
may be applicable to comply with the requirements of Code Section
409A.
2.5 “Career
Share
Account” means a separate memo account that is a subset of the Account that is
maintained to identify the Career Share Units used to satisfy a Participant’s
Minimum Stock Ownership Requirements. The portion of the Career Share Account
attributable to Career Shares earned and Vested prior to January 1, 2005 shall
be referred to as the Participant’s “Legacy Career Share Account Balance.” The
portion of the Career Share Account attributable to Career Shares other than
that described in the immediately preceding sentence shall be referred to as
the
Participant’s “Active Career Share Account Balance.”
2.6
“Career
Share Units” or “Career Shares” means the Share Equivalents tracked in a
Participant’s Career Share Account in order to determine whether and when the
Participant has satisfied his or her Minimum Stock Ownership Requirements.
Phantom stock units that become earned and vested under the Long-Term Incentive
Plan represent an example of an award that may become Career Shares under the
terms of this Plan. Career Shares also have been referred to as “Phantom Stock
Units” in Company communications.
2.7
“Claims
Reviewer” means the person or committee designated by the Company (or by a duly
authorized person) as responsible for the review of claims for benefits under
the Plan in accordance with Section 8.1. Until changed, the Claims Reviewer
shall be the Company’s employee who is the head of the Executive Benefits area
of the Human Resources department.
2.8 “Code”
means
the Internal Revenue Code of 1986 as amended from time to time.
2.9 “Committee”
means the committee designated by the Company (or by a duly authorized person)
as responsible for the administration of the Plan. Until changed, the Committee
shall consist of the employees of the Company holding the following positions:
chief executive officer of the Company; head of the Human Resources department
(currently, Vice President Human Resources); the employee to whom the head
of
the Human Resources department reports (currently, Senior Vice President -
Shared Services) and the chief financial officer of the Company. The Committee
may authorize any person or persons to act on its behalf with full authority
in
regard to any of its duties and hereunder other than those set forth in Section
9.2.
2.10 “Common
Stock” means the common stock, $6.50 par value, of the Parent
Corporation.
2.11 “Company”
means American Electric Power Service Corporation.
2.12 “Eligible
Employee” means any employee of AEP who is hired into or promoted to a position
that is eligible to be assigned a Minimum Stock Ownership Requirement, and
only
so long as a Minimum Stock Ownership Requirement applies. At the date of
execution of this document, a Minimum Stock Ownership Requirement is assigned
to
those employees employed at exempt salary grade 36 or higher. An individual
who
is not directly compensated by AEP or who is not treated by AEP as an active
employee shall not be considered an Eligible Employee.
2.13 “First
Date
Available” or “FDA” means the last day of the month coincident with or next
following the date that is six (6) months after the date of the Participant’s
Termination.
2.14 “Incentive
Compensation Deferral Plan” means the American Electric Power System Incentive
Compensation Deferral Plan, as amended from time to time.
2.15 “Long
Term
Incentive Plan” or “LTIP” means the American Electric Power System Long-Term
Incentive Plan, as amended from time to time, including any successor plan
or
plans. The LTIP that is in effect as of the date this Plan is executed is
entitled the “Amended and Restated American Electric Power System Long-Term
Incentive Plan - April 26, 2005.”
2.16 “Market
Value” means the closing price of a Share, as published in The
Wall Street Journal
report
of the New York Stock Exchange - Composite Transactions on the date in question
or, if the Share shall not have been traded on such date or if the New York
Stock Exchange is closed on such date, then the first day prior thereto on
which
the Common Stock was so traded.
2.17
“Minimum
Stock Ownership Requirement” or “MSOR” means the targeted aggregate number of
Share and Share Equivalents specified under the terms of this Plan as applicable
to the Participant. Participants may be assigned multiple minimum stock
ownership requirements. Any MSOR assigned to a Participant shall no longer
be
applicable to such Participant after the date of the Participant’s
Termination.
2.18 “MSOR
Window
Period” means the period that begins as of the date a particular MSOR is
assigned to an Eligible Employee (or Participant, with regard to any increase
in
his or her MSOR) and ends on the five (5) year anniversary of that
date.
2.19
“Next
Date
Available” or “NDA” means the June 30 of the calendar year immediately following
the calendar year in which falls the Participant’s Termination.
2.20 “Parent
Corporation” means American Electric Power Company, Inc., a New York
corporation, and any successor thereto.
2.21
“Participant” is defined in Article IV.
2.22
“Performance-Based Compensation” has the meaning set forth in Section
409A(a)(4)(B)(iii) of the Code.
2.23 “Performance
Shares” means performance shares or performance share units (or other similar
types of equity incentive compensation) awarded under the American Electric
Power System Performance Share Incentive Plan or the Long-Term Incentive Plan.
Reference in this Plan to the “12/10/2003 Performance Share Awards” shall be
deemed to refer to those Performance Shares that were issued with a grant date
of December 10, 2003 and subject to a performance period from December 10,
2003
through December 31, 2004.
2.24
“Phantom
Stock Units” are also referred to as “Career Shares.” See definition of “Career
Share Units,” above.
2.25 “Plan
Year”
means the twelve-month period commencing each January 1 and ending the following
December 31.
2.26 “Share”
means
a share of common stock of the Parent Corporation, and includes, but is not
limited to, such shares as may be purchased directly by or for the Participant
or through the American Electric Power Company, Inc. Dividend Reinvestment
and
Direct Stock Purchase Plan or issued in connection with the Participant’s
performance of services for AEP, such as pursuant to the American Electric
Power
System Long-Term Incentive Plan.
2.27 “Share
Equivalents” is determined by reference to the amount credited to the
Participant’s Career Share Account under this Plan and to the Participant’s AEP
Stock Fund accounts maintained in connection with the American Electric Power
Retirement Savings Plan, the American Electric Power System Supplemental
Retirement Savings Plan, and the American Electric Power System Incentive
Compensation Deferral Plan. To the extent that the amount credited under these
arrangements are not otherwise reported under the terms of the applicable plan
as a number of shares of Common Stock, the number of Share Equivalents
attributable to such amount shall be determined by dividing the dollar amount
so
credited by the Market Value of a Share determined as of the applicable
valuation date. No certificates shall have been issued with respect to such
Share Equivalents.
2.28 “Termination”
means termination of employment with AEP for any reason.
2.29 “Vested”
means that the Participant would not forfeit the Share or Share Equivalent
upon
the termination of the Participant’s employment with AEP for reasons other than
the Participant’s death.
2.30
“2006
Distribution Election Period” means the period or periods designated by the
Committee during which Participants (or Former Participants) are given the
opportunity to select among the distribution options set forth in Article VII,
provided that any such period shall end no later than December 31,
2006.
ARTICLE
III
ADMINISTRATION
3.1 The
Plan
shall be administered by the Committee. The Committee shall have full
discretionary power and authority (i) to administer and interpret the terms
and
conditions of the Plan and (ii) to establish reasonable procedures with which
Participants, Former Participant and beneficiaries must comply to exercise
any
right or privilege established hereunder. The rights and duties of the
Participants and all other persons and entities claiming an interest under
the
Plan shall be subject to, and bound by, actions taken by or in connection with
the exercise of the powers and authority granted under this
Article.
3.2 The
Committee
may employ agents, attorneys, accountants, or other persons and allocate or
delegate to them powers, rights, and duties all as the Committee may consider
necessary or advisable to properly carry out the administration of the
Plan.
3.3 The
Company
shall maintain, or cause to be maintained, records showing the individual
balances in each Participant’s Account, including each Participant’s Career
Share Account. Statements setting forth the value of the amount credited to
the
Participant's Account shall be made available to each Participant no less often
than once per year. The maintenance of the Account records and the distribution
of statements may be delegated to a recordkeeper by either the Company or the
Committee.
ARTICLE
IV
PARTICIPATION
An
Eligible Employee shall become a Participant as of the date that the Eligible
Employee is first assigned a Minimum Stock Ownership Requirement.
ARTICLE
V
SATISFACTION
OF MINIMUM STOCK OWNERSHIP REQUIREMENT
5.1 Accounts. The
Committee
shall establish and maintain an Account for each Participant that will record
the number of Shares and Share Equivalents that have been designated in
accordance with the terms of this Plan to satisfy the Minimum Stock Ownership
Requirement applicable to such Participant.
5.2 Share
Commitment Designated by Participant.
(a) A
Participant may from time to time designate that certain Shares or Share
Equivalents that are owned by the Participant or otherwise credited to the
Participant be credited to the Account of such Participant. A Participant shall
be permitted to so designate any Shares or Share Equivalents only to the extent
the following requirements have been satisfied:
(i) |
The
Shares or Share Equivalents have been earned by the Participant,
if
applicable;
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(ii) |
The
Shares or Share Equivalents are then Vested;
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(iii) |
The
Shares or Share Equivalents are not automatically allocated to the
Participant’s Career Share Account pursuant to Section 5.3, below;
and
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(iv) |
The
Shares or Share Equivalents are not encumbered, pledged or hypothecated
in
any way.
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(b) Any
designation made by a Participant under this Section shall be made in writing
and in a form that is satisfactory to the Committee.
5.3 Accrual
of Career Shares.
(a) Determination
Date.
For
purposes of this Section 5.3, the term “Determination Date” means
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(i)
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the
date that is six months prior to the end of the performance period,
with
respect to an award of Performance Shares that qualifies as
Performance-Based Compensation and that is based on services performed
over a period of at least 12 months; or
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(ii)
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the
June 30 that falls within the calendar year to which Annual Incentive
Compensation relates (or the last day of the sixth month of such
year,
with respect o Annual Incentive Compensation that is not based on
a
calendar year), provided that such Annual Incentive Compensation
qualifies
as Performance-Based Compensation that is based on services performed
over
a period of at least 12 months; or
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(iii)
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to
the extent that the awarded Performance Shares or the Annual Incentive
Compensation are not Performance-Based Compensation that is based
on
services performed over a period of at least 12 months, the later
of (A)
the December 31 immediately prior to the year in which the services
on
which the Performance Shares or Annual Incentive Compensation is
based are
to be performed, or (B) the date the Participant first became an
Eligible
Employee
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(b) Participant
Has Not Satisfied MSOR.
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(i)
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If
a Participant has not satisfied his or her MSOR on or before the
Determination Date applicable to Performance Shares that have been
awarded
to such Participant, the Participant’s Career Share Account shall be
credited with the number of Shares or Share Equivalents that become
earned
and Vested (reduced, however, to the extent of any Applicable Tax
Payments) by the Participant as a result of the award of such Performance
Shares; and
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(ii)
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If
a Participant has not satisfied the applicable MSOR on or before
the
Determination Date that falls within or after the final year of the
Participant’s MSOR Window Period, the Participant’s Career Share Account
shall be credited with the number of Shares or Share Equivalents,
as
appropriate, attributable to 25% (50%, effective beginning January
1,
2006) of the Annual Incentive Compensation that becomes earned and
Vested
by the Participant.
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If
the
same Determination Date applies to both the Performance Shares and the Annual
Incentive Compensation for a particular Participant, the determination of
whether the Participant has satisfied an applicable MSOR as of that
Determination Date shall be made by applying the provisions of subsection (b)(i)
of this Section before applying the provisions of subsection (b)(ii) of this
Section. The Participant’s Career Share Account shall be credited even if the
Participant shall have satisfied his or her MSOR or shall have ceased to remain
an Eligible Employee during the period between the Determination Date and the
date the Performance Shares or Annual Incentive Compensation are earned and
Vested. However, if a Participant shall have no MSOR as of an applicable
Determination Date by reason of the Participant’s having ceased to remain an
Eligible Employee, the payment or deferral of the amounts that become payable
to
the Participant relative to Annual Incentive Compensation or as a result of
an
award of Performance Shares to which such Determination Date applies shall
be
determined in accordance with other plans and programs as may apply, including,
for example, the Incentive Compensation Deferral Plan.
(c) Participant
Has Satisfied MSOR.
If a
Participant has satisfied his or her MSOR on or before the applicable
Determination Date, the payment or deferral of the amounts that become payable
to the Participant relative to Annual Incentive Compensation or as a result
of
an award of Performance Shares shall be determined in accordance with other
plans and programs as may apply, including, for example, the Incentive
Compensation Deferral Plan.
5.4 Holding
Requirement For Exercised Stock Options. If
a
Participant has not satisfied the applicable MSOR on or before the close of
the
related MSOR Window Period, then, the Participant shall be required to retain
until Termination all Shares acquired through stock options exercised by the
Participant between the date immediately following the close of such MSOR Window
Period until the date the Participant has satisfied such MSOR; provided,
however, the Participant shall be permitted to cause the sale of such Shares
as
would allow the Participant to cover the costs and applicable taxes directly
associated with such exercises. However, the retention requirement set forth
in
this Section 5.4 shall not apply once and so long as the Participant has no
MSOR
by reason of the Participant’s having ceased to remain an Eligible
Employee.
ARTICLE
VI
CAREER
SHARE ACCOUNT
DIVIDENDS
AND ADJUSTMENTS
6.1 Reinvestment
of Dividends. On
each
dividend payment date with respect to the Common Stock, the Career Share Account
of a Participant shall be credited with an additional number of whole and
fractional Share Equivalents, computed to three decimal places, equal to the
product of the dividend per share then payable, multiplied by the number of
Share Equivalents then credited to such Career Share Account, divided by the
Market Value on the dividend payment date.
6.2
Adjustments. The
number of
Share Equivalents credited to a Participant’s Career Share Account shall be
appropriately adjusted for any change in the Common Stock by reason of any
merger, reclassification, consolidation, recapitalization, stock dividend,
stock
split or any similar change affecting the Common Stock.
ARTICLE
VII
CAREER
SHARE ACCOUNT
DISTRIBUTIONS
7.1 Upon
a
Participant’s Termination for any reason, the Company shall cause the
Participant to be paid the full amount credited to his or her Career Share
Account in accordance with the following rules:
(a) Cash
or Stock.
Payments
may be made in cash, shares of Common Stock, or a combination of both as elected
by the Participant on a form that is acceptable to the Company and submitted
within a reasonable period of time before the distribution is scheduled to
commence. Cash payments of Career Shares shall be calculated on the basis of
the
average of the Fair Market Value of the Common Stock for the last 20 trading
days prior to the applicable distribution date (i.e., the Participant’s date of
Termination, deferred distribution date, respective installment payment dates
or
the date of the Participant’s death, as the case may be).
(b) Timing
and Form of Distribution.
Except
as otherwise provided in Section 7.2, the following rules shall apply with
regard to the timing and form of the distributions to be made from the
Participant’s Career Share Account:
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(1)
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Form
of Distribution.
The Company shall cause the Participant to be paid the full amount
credited to his or her Active Career Share Account in accordance
with his
or her effective election in one of the following
forms:
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(A)
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A
single lump sum distribution
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(i)
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as
of the First Date Available; or
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(ii)
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as
of the Next Date Available; or
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(iii)
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as
of the fifth anniversary of the First Date Available;
or
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(iv)
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as
of the fifth anniversary of the Next Date Available;
or
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(B)
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In
five (5) annual installments
commencing
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(i)
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as
of the First Date Available; or
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(ii)
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as
of the Next Date Available; or
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(iii)
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as
of the fifth anniversary of the First Date Available;
or
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(iv)
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as
of the fifth anniversary of the Next Date Available;
or
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(C)
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In
ten (10) annual installments
commencing.
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(i)
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as
of the First Date Available; or
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(ii)
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as
of the Next Date Available.
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(2)
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Effective
Election.
For this purpose, a Participant’s election with respect to the
distribution of his or her Career Share Account shall not be effective
unless all of the following requirements are
satisfied.
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(A)
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The
election is submitted to the Company in writing in a form determined
by
the Committee to be acceptable;
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(B)
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The
election is submitted timely. For purposes of this paragraph, a
distribution election will be considered “timely” only if it is submitted
prior to the Participant’s Termination and it satisfies the requirements
of (i), (ii) or (iii), below, as may be
applicable:
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(i)
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Submitted
within 30 days of the date that the individual first becomes a Participant
in the Plan; or
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(ii)
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Submitted
during the 2006 Distribution Election Period, but only with regard
to the
first distribution election form submitted by such Participant during
that
period; or
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(iii)
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Submitted
at least one year prior to the date of the Participant’s
Termination.
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(C)
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If
the Participant is submitting the election pursuant to paragraph
(b)(2)(B)(iii) to change the timing or form of distribution that
is then
in effect with respect to the Participant’s Career Share Account (i.e.,
the Participant is not submitting an election with his initial deferral
election [(B)(i)] nor during the 2006 Distribution Election Period
[(B)(ii)], the newly selected option must result in the deferral
of the
first scheduled payment by at least 5 years. For purposes of compliance
with the rule set forth in Section 409A(a)of the Code (and the regulations
issued thereunder), each distribution option described in Section
7.1(b)(1) shall be treated as a single payment as of the first scheduled
payment date.
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(D)
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If
the Participant is submitting the election pursuant to paragraph
(b)(2)(B)(ii) to change the timing or form of distribution that is
then in
effect with respect to the Participant’s Career Share Account, the newly
selected option may not defer payments that the Participant would
have
received in 2006 if not for the new distribution election nor cause
payments to be made in 2006 if not for the new distribution
election.
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(3)
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For
purposes of this Section 7.1(b), if a Participant’s effective distribution
election form was submitted using the options that had been made
available
under the Plan as in effect prior to January 1, 2005 [i.e., as either
(A)
a single lump-sum payment, or in annual installment payments over
not less
than two nor more than ten years; (B) commencing within 60 days after
the
date of the Participant’s Termination or the first, second, third, fourth
or fifth anniversary of the Participant’s Termination],
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(A)
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If
the Participant’s Termination occurs prior to the commencement of the 2006
Distribution Election Period, the Participant’s effective distribution
election form shall be given full effect. Solely for purposes of
this
paragraph (3)(A), a participant’s distribution election form shall be
considered effective notwithstanding the requirement of Section
7.1(b)(2)(B)(iii) (which requires that a form be submitted at least
one
year prior to the date of the Participant’s Termination), provided that
such form had become effective prior to the Participant’s Termination in
accordance with the terms applicable to such election form at the
time it
was submitted by the Participant;
and
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|
(B)
|
If
the Participant’s Termination occurs during or after the 2006 Distribution
Election Period, the Participant shall be considered to have elected
the
corresponding option as set forth in Schedule A attached to this
Plan.
|
|
(4)
|
If
a Participant fails to submit an effective distribution election
with
regard to his Career Share Account that satisfies the requirements
of this
Section 7.1(b), his or her Career Share Account shall be distributed
in a
single lump sum as of the First Date
Available.
|
7.2 Events
Affecting Timing or Amount of Distributions.
(a) “Election”
To Accelerate Payment of Career Shares Attributable to 12/10/2003 Performance
Share Award.
Notwithstanding any provision of Section 7.1 to the contrary, if a Participant
had not satisfied his or her MSOR on or before June 30, 2004 (the Determination
Date applicable to the 12/10/2003 Performance Share Awards), but as of June
30,
2006 either (i) does satisfy his or her applicable MSOR(s) or (ii) has no
applicable MSOR because the participant is longer an Eligible Employee, the
Participant will be deemed to have elected as of June 30, 2006 a lump sum
payment with respect to the Share or Share Equivalents that would have been
credited to the Participant’s Career Share Account as a result of the 12/10/2003
Performance Share Award. Such payment shall be made as of the date that the
12/10/2003 Performance Share Awards otherwise would have become payable if
the
Participant were not a participant in this Plan.
(b) Avoiding
Violation of Applicable Law.
Notwithstanding any provision of Section 7.1 to the contrary, payment to a
Participant will be delayed at any time that the Company reasonably anticipates
that the making of such payment will violate Federal securities laws or other
applicable law; provided however, that any payments so delayed shall be paid
at
the earliest date at which the Company reasonably anticipates that the making
of
such payment will not cause such violation.
ARTICLE
VIII
BENEFICIARIES
8.1 Each
Participant may designate a beneficiary or beneficiaries who shall receive
the
balance of the Participant's Account if the Participant dies prior to the
complete distribution of the Participant's Account. Any designation, or change
or rescission of a beneficiary designation shall be made by the Participant’s
completion, signature and submission to the Committee of the appropriate
beneficiary form prescribed by the Committee. A beneficiary form shall take
effect as of the date the form is signed provided that the Committee receives
it
before taking any action or making any payment to another beneficiary named
in
accordance with this Plan and any procedures implemented by the Committee.
If
any payment is made or other action is taken before a beneficiary form is
received by the Committee, any changes made on a form received thereafter will
not be given any effect. If a Participant fails to designate a beneficiary,
or
if all beneficiaries named by the Participant do not survive the Participant,
the Participant’s Account will be paid to the Participant’s estate. Unless
clearly specified otherwise in an applicable court order presented to the
Committee prior to the Participant’s death, the designation of a Participant’s
spouse as a beneficiary shall be considered automatically revoked as to that
spouse upon the legal termination of the Participant’s marriage to that
spouse.
8.2 Distribution
to a Participant’s beneficiary shall be in the form of a single lump-sum payment
within 60 days after the Committee makes a final determination as to the
beneficiary or beneficiaries entitled to receive such distribution.
ARTICLE
IX
CLAIMS
PROCEDURE
9.1 The
following
procedures shall apply with respect to claims for benefits under the
Plan.
(a) Any
Participant or beneficiary who believes he or she is entitled to receive a
distribution under the Plan which he or she did not receive or that amounts
credited to his or her Account are inaccurate, may file a written claim signed
by the Participant, beneficiary or authorized representative with the Claims
Reviewer, specifying the basis for the claim. The Claims Reviewer shall provide
a claimant with written or electronic notification of its determination on
the
claim within ninety days after such claim was filed; provided, however, if
the
Claims Reviewer determines special circumstances require an extension of time
for processing the claim, the claimant shall receive within the initial
ninety-day period a written notice of the extension for a period of up to ninety
days from the end of the initial ninety day period. The extension notice shall
indicate the special circumstances requiring the extension and the date by
which
the Plan expects to render the benefit determination.
(b) If
the
Claims Reviewer renders an adverse benefit determination under Section 8.1(a),
the notification to the claimant shall set forth, in a manner calculated to
be
understood by the claimant:
|
(1)
|
The
specific reasons for the denial of the
claim;
|
|
(2)
|
Specific
reference to the provisions of the Plan upon which the denial of
the claim
was based;
|
|
(3)
|
A
description of any additional material or information necessary for
the
claimant to perfect the claim and an explanation of why such material
or
information is necessary, and
|
|
(4)
|
An
explanation of the review procedure specified in Section 9.2, and
the time
limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under section 502(a) of the
Employee Retirement Income Security Act of 1974, as amended, following
an
adverse benefit determination on
review.
|
9.2 The
following
procedures shall apply with respect to the review on appeal of an adverse
determination on a claim for benefits under the Plan.
(a) Within
sixty days after the receipt by the claimant of an adverse benefit
determination, the claimant may appeal such denial by filing with the Committee
a written request for a review of the claim. If such an appeal is filed within
the sixty day period, the Committee, or a duly appointed representative of
the
Committee, shall conduct a full and fair review of such claim that takes into
account all comments, documents, records and other information submitted by
the
claimant relating to the claim, without regard to whether such information
was
submitted or considered in the initial benefit determination. The claimant
shall
be entitled to submit written comments, documents, records and other information
relating to the claim for benefits and shall be provided, upon request and
free
of charge, reasonable access to, and copies of all documents, records and other
information relevant to the claimant’s claim for benefits. If the claimant
requests a hearing on the claim and the Committee concludes such a hearing
is
advisable and schedules such a hearing, the claimant shall have the opportunity
to present the claimant’s case in person or by an authorized representative at
such hearing.
(b) The
claimant shall be notified of the Committee’s benefit determination on review
within sixty days after receipt of the claimant’s request for review, unless the
Committee determines that special circumstances require an extension of time
for
processing the review. If the Committee determines that such an extension is
required, written notice of the extension shall be furnished to the claimant
within the initial sixty-day period. Any such extension shall not exceed a
period of sixty days from the end of the initial period. The extension notice
shall indicate the special circumstances requiring the extension and the date
by
which the Committee expects to render the benefit determination.
(c) The
Committee shall provide a claimant with written or electronic notification
of
the Plan’s benefit determination on review. The determination of the Committee
shall be final and binding on all interested parties. Any adverse benefit
determination on review shall set forth, in a manner calculated to be understood
by the claimant:
|
(1)
|
The
specific reason(s) for the adverse
determination;
|
|
(2)
|
Reference
to the specific provisions of the Plan on which the determination
was
based;
|
|
(3)
|
A
statement that the claimant is entitled to receive, upon request
and free
of charge, reasonable access to, and copies of, all documents, records
and
other information relevant to the claimant’s claim for benefits;
and
|
|
(4)
|
A
statement of the claimant’s right to bring an action under Section 502(a)
of ERISA.
|
ARTICLE
X
MISCELLANEOUS
PROVISIONS
10.1 Each
Participant agrees that as a condition of participation in the Plan, the Company
may withhold applicable federal, state and local taxes, Social Security taxes
and Medicare taxes from any deferral and distribution hereunder to the extent
that such taxes are then payable.
10.2
In
the event
the Committee, in its sole discretion, shall find that a Participant or
beneficiary is unable to care for his or her affairs because of illness or
accident, the Committee may direct that any payment due the Participant or
the
beneficiary be paid to the duly appointed personal representative of the
Participant or beneficiary, and any such payment so made shall be a complete
discharge of the liabilities of the Plan and the Company with respect to such
Participant or beneficiary.
10.3 The
Company
intends to continue the Plan indefinitely but reserves the right, in its sole
discretion, to modify the Plan from time to time, or to terminate the Plan
entirely or to direct the permanent discontinuance or temporary suspension
of
deferral contributions under the Plan; provided that no such modification,
termination, discontinuance or suspension shall reduce the benefits accrued
for
the benefit of any Participant or beneficiary under the Plan as of the date
of
such modification, termination, discontinuance or suspension.
10.4 Nothing
in
the Plan shall interfere with or limit in any way the right of AEP to terminate
any Participant’s employment at any time, or confer upon a Participant any right
to continue in the employ of AEP.
10.5 The
Company
intends the following with respect to this Plan: (1) Section 451(a) of the
Code
would apply to the Participant's recognition of gross income as a result of
participation herein; (2) the Participants will not recognize gross income
as a
result of participation in the Plan unless and until and then only to the extent
that distributions are received; (3) the Company will not receive a deduction
for amount credited to any Account unless and until and then only to the extent
that amounts are actually distributed; (4) the provisions of Parts 2, 3, and
4
of Subtitle B of Title I of ERISA shall not be applicable; and (5) the design
and administration of the Plan are intended to comply with the requirements
of
Section 409A of the Code, to the extent such section is effective and applicable
to amounts deferred hereunder. However, no Eligible Employee, Participant,
beneficiary or any other person shall have any recourse against the Corporation,
the Company, the Committee or any of their affiliates, employees, agents,
successors, assigns or other representatives if any of those conditions are
determined not to be satisfied.
10.6 The
Plan
shall be construed and administered according to the applicable provisions
of
ERISA and the laws of the State of Ohio.
American
Electric Power Service Corporation has caused this amendment and restatement
of
the American Electric Power System Stock Ownership Requirement Plan to be signed
as of this 30th day of May, 2006.
|
AMERICAN
ELECTRIC POWER SERVICE CORPORATION
|
|
|
|
|
|
By /s/
Genevieve A.
Tuchow
|
|
Genevieve
A. Tuchow, Vice
President, Human Resources
|
SCHEDULE
A
AEP
Stock Ownership Requirement Plan
Option
Elected on Last Filed Prior Form
|
Option
Deemed Elected Under Plan
|
Form
|
Commencement
Date
|
Form
|
Commencement
Date
|
Lump
sum
|
Termination
(T)
|
Lump
sum
|
First
Date Available (FDA)
|
Lump
sum
|
1
year after termination (T+1)
|
Lump
sum
|
Next
Date Available (NDA)
|
Lump
sum
|
T
+
2 or T + 3
|
Lump
sum
|
NDA
|
Lump
sum
|
T
+
4
|
Lump
sum
|
5th
anniversary of FDA (FDA + 5)
|
Lump
sum
|
T
+
5
|
Lump
sum
|
FDA
+ 5
|
Two
(2) annual installments
|
T
or T + 1
|
Lump
sum
|
NDA
|
Two
(2) annual installments
|
T
+
2 or T + 3 or T + 4
|
Five
(5) annual installments
|
NDA
|
Two
(2) annual installments
|
T
+
5
|
Lump
sum
|
FDA
+ 5
|
Three
(3) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Three
(3) annual installments
|
T
+
1 or T + 2 or T + 3
|
Five
(5) annual installments
|
NDA
|
Three
(3) annual installments
|
T
+
4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Four
(4) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Four
(4) annual installments
|
T
+
1 or T + 2
|
Five
(5) annual installments
|
NDA
|
Four
(4) annual installments
|
T
+
3 or T + 4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Five
(5) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Five
(5) annual installments
|
T
+
1 or T + 2
|
Five
(5) annual installments
|
NDA
|
Five
(5) annual installments
|
T
+
3 or T + 4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Six
(6) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Six
(6) annual installments
|
T
+
1 or T + 2
|
Five
(5) annual installments
|
NDA
|
Six
(6) annual installments
|
T
+
3 or T + 4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Seven
(7) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Seven
(7) annual installments
|
T
+
1 or T + 2
|
Five
(5) annual installments
|
NDA
|
Seven
(7) annual installments
|
T
+
3 or T + 4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Eight
(8) annual installments
|
T
|
Five
(5) annual installments
|
FDA
|
Eight
(8) annual installments
|
T
+
1 or T + 2
|
Five
(5) annual installments
|
NDA
|
Eight
(8) annual installments
|
T
+
3 or T + 4 or T + 5
|
Five
(5) annual installments
|
FDA
+ 5
|
Nine
(9) annual installments
|
T
|
Ten
(10) annual installments
|
FDA
|
Nine
(9) annual installments
|
T
+
1 or T + 2 or T + 3
|
Ten
(10) annual installments
|
NDA
|
Nine
(9) annual installments
|
T
+
4 or T + 5
|
Ten
(10) annual installments
|
FDA
+ 5
|
Ten
(10) annual installments
|
T
|
Ten
(10) annual installments
|
FDA
|
Ten
(10) annual installments
|
T
+
1 or T + 2 or T + 3
|
Ten
(10) annual installments
|
NDA
|
Ten
(10) annual installments
|
T
+
4 or T + 5
|
Ten
(10) annual installments
|
FDA
+
5
|
Schedule
A - Page 1 of 1