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<SEC-DOCUMENT>0000004904-04-000055.txt : 20040311
<SEC-HEADER>0000004904-04-000055.hdr.sgml : 20040311
<ACCEPTANCE-DATETIME>20040311154752
ACCESSION NUMBER: 0000004904-04-000055
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 19
CONFORMED PERIOD OF REPORT: 20031231
FILED AS OF DATE: 20040311
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMERICAN ELECTRIC POWER CO INC
CENTRAL INDEX KEY: 0000004904
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911]
IRS NUMBER: 134922640
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-03525
FILM NUMBER: 04663003
BUSINESS ADDRESS:
STREET 1: 1 RIVERSIDE PLZ
CITY: COLUMBUS
STATE: OH
ZIP: 43215
BUSINESS PHONE: 6142231000
FORMER COMPANY:
FORMER CONFORMED NAME: KINGSPORT UTILITIES INC
DATE OF NAME CHANGE: 19660906
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>form10k.txt
<DESCRIPTION>10-K 2003
<TEXT>
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
----------------
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from __________ to_________
<TABLE>
<CAPTION>
Commission Registrants; States of Incorporation; I.R.S. Employer
File Number Address and Telephone Number Identification Nos.
<S> <C> <C>
1-3525 AMERICAN ELECTRIC POWER COMPANY, INC. (A New York Corporation) 13-4922640
0-18135 AEP GENERATING COMPANY (An Ohio Corporation) 31-1033833
0-346 AEP TEXAS CENTRAL COMPANY (A Texas Corporation) 74-0550600
0-340 AEP TEXAS NORTH COMPANY (A Texas Corporation) 75-0646790
1-3457 APPALACHIAN POWER COMPANY (A Virginia Corporation) 54-0124790
1-2680 COLUMBUS SOUTHERN POWER COMPANY (An Ohio Corporation) 31-4154203
1-3570 INDIANA MICHIGAN POWER COMPANY (An Indiana Corporation) 35-0410455
1-6858 KENTUCKY POWER COMPANY (A Kentucky Corporation) 61-0247775
1-6543 OHIO POWER COMPANY (An Ohio Corporation) 31-4271000
0-343 PUBLIC SERVICE COMPANY OF OKLAHOMA (An Oklahoma Corporation) 73-0410895
1-3146 SOUTHWESTERN ELECTRIC POWER COMPANY (A Delaware Corporation) 72-0323455
1 Riverside Plaza, Columbus, Ohio 43215
Telephone (614) 716-1000
</TABLE>
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes [X]. No. [ ]
Indicate by check mark if disclosure of delinquent filers with respect to
American Electric Power Company, Inc. pursuant to Item 405 of Regulation S-K
(229.405 of this chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark if disclosure of delinquent filers with respect to
Appalachian Power Company, Indiana Michigan Power Company or Ohio Power Company
pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements of Appalachian Power
Company or Ohio Power Company incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether American Electric Power Company, Inc. is an
accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of
1934). Yes [X] No [ ]
Indicate by check mark whether AEP Generating Company, AEP Texas Central
Company, AEP Texas North Company, Appalachian Power Company, Columbus Southern
Power Company, Indiana Michigan Power Company, Kentucky Power Company, Ohio
Power Company, Public Service Company of Oklahoma and Southwestern Electric
Power Company are accelerated filers (as defined in Rule 12b-2 of the Securities
Exchange Act of 1934). Yes [ ] No [X]
AEP Generating Company, AEP Texas North Company, Columbus Southern Power
Company, Kentucky Power Company and Public Service Company of Oklahoma meet the
conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and are
therefore filing this Form 10-K with the reduced disclosure format specified in
General Instruction I(2) to such Form 10-K.
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Registrant Title of each class on which registered
<S> <C> <C>
AEP Generating Company None
AEP Texas Central Company None
AEP Texas North Company None
American Electric Common Stock, $6.50 par value.............New York Stock Exchange
Power Company, Inc. 9.25% Equity Units........................New York Stock Exchange
Appalachian Power Company None
Columbus Southern Power None
Company
CPL Capital I 8.00% Cumulative Quarterly Income
Preferred Securities, Series A, Liquidation
Preference $25 per Preferred Security.....New York Stock Exchange
Indiana Michigan Power
Company 6% Senior Notes, Series D, Due 2032.......New York Stock Exchange
Kentucky Power Company None
Ohio Power Company 7 3/8% Senior Notes, Series A, Due 2038...New York Stock Exchange
Public Service Company of 6% Senior Notes, Series B, Due 2032.......New York Stock Exchange
Oklahoma
PSO Capital I 8.00% Trust Originated Preferred
Securities, Series A, Liquidation
Preference $25 per Preferred Security.....New York Stock Exchange
Southwestern Electric Power None
Company
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
<TABLE>
<CAPTION>
Registrant Title of each class
<S> <C>
AEP Generating Company None
AEP Texas Central Company 4.00% Cumulative Preferred Stock, Non-Voting, $100 par value
4.20% Cumulative Preferred Stock, Non-Voting, $100 par value
AEP Texas North Company None
American Electric Power Company, Inc. None
Appalachian Power Company 4.50% Cumulative Preferred Stock, Voting, no par value
Columbus Southern Power Company None
Indiana Michigan Power Company 4.125% Cumulative Preferred Stock, Non-Voting, $100 par value
Kentucky Power Company None
Ohio Power Company 4.50% Cumulative Preferred Stock, Voting, $100 par value
Public Service Company of Oklahoma None
Southwestern Electric Power Company 4.28% Cumulative Preferred Stock, Non-Voting, $100 par value
4.65% Cumulative Preferred Stock, Non-Voting, $100 par value
5.00% Cumulative Preferred Stock, Non-Voting, $100 par value
</TABLE>
Aggregate market value
of voting and non-voting Number of shares
common equity held of common stock
by non-affiliates of outstanding of
the registrants at the registrants at
June 30, 2003 December 31, 2003
AEP Generating Company None 1,000
($1,000 par value)
AEP Texas Central Company None 2,211,678
($25 par value)
AEP Texas North Company None 5,488,560
($25 par value)
American Electric Power Company, Inc. $11,782,905,274 395,016,421
($6.50 par value)
Appalachian Power Company None 13,499,500
(no par value)
Columbus Southern Power Company None 16,410,426
(no par value)
Indiana Michigan Power Company None 1,400,000
(no par value)
Kentucky Power Company None 1,009,000
($50 par value)
Ohio Power Company None 27,952,473
(no par value)
Public Service Company of Oklahoma None 9,013,000
($15 par value)
Southwestern Electric Power Company None 7,536,640
($18 par value)
NOTE ON MARKET VALUE OF COMMON EQUITY HELD BY NON-AFFILIATES
American Electric Power Company, Inc. owns, directly or indirectly, all of
the common stock of AEP Generating Company, AEP Texas Central Company, AEP Texas
North Company, Appalachian Power Company, Columbus Southern Power Company,
Indiana Michigan Power Company, Kentucky Power Company, Ohio Power Company,
Public Service Company of Oklahoma and Southwestern Electric Power Company (see
Item 12 herein).
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Into Which Document
Description Is Incorporated
Portions of Annual Reports of the following companies for Part II
the fiscal year ended December 31, 2003:
AEP Generating Company
AEP Texas Central Company
AEP Texas North Company
American Electric Power Company, Inc.
Appalachian Power Company
Columbus Southern Power Company
Indiana Michigan Power Company
Kentucky Power Company
Ohio Power Company
Public Service Company of Oklahoma
Southwestern Electric Power Company
Portions of Proxy Statement of American Electric Power Part III
Company, Inc. for 2004 Annual Meeting of Shareholders,
to be filed within 120 days after December 31, 2003
Portions of Information Statements of the following Part III
companies for 2004 Annual Meeting of Shareholders, to
be filed within 120 days after December 31, 2003:
Appalachian Power Company
Ohio Power Company
----------------
This combined Form 10-K is separately filed by AEP Generating Company, AEP
Texas Central Company, AEP Texas North Company, American Electric Power Company,
Inc., Appalachian Power Company, Columbus Southern Power Company, Indiana
Michigan Power Company, Kentucky Power Company, Ohio Power Company, Public
Service Company of Oklahoma and Southwestern Electric Power Company. Information
contained herein relating to any individual registrant is filed by such
registrant on its own behalf. Except for American Electric Power Company, Inc.,
each registrant makes no representation as to information relating to the other
registrants.
You can access financial and other information at AEP's website, including
AEP's Principles of Business Conduct (which also serves as a code of ethics
applicable to Item 10 of this Form 10-K), certain committee charters and
Principles of Corporate Governance. The address is www.aep.com. AEP makes
available, free of charge on its website, copies of its annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 as soon as reasonably practicable after filing
such material electronically or otherwise furnishing it to the SEC.
==============================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
Number
<S> <C>
Glossary of Terms................................................................... i
Forward-Looking Information......................................................... 1
PART I
Item 1. Business.............................................................. 2
Item 2. Properties............................................................ 26
Item 3. Legal Proceedings..................................................... 29
Item 4. Submission of Matters to a Vote of Security Holders................... 29
Executive Officers of the Registrants............................................ 30
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities................................. 31
Item 6. Selected Financial Data............................................... 31
Item 7. Management's Financial Discussion and Analysis and Financial Condition 32
Item 7A. Quantitative and Qualitative Disclosures About Market Risk............ 32
Item 8. Financial Statements and Supplementary Data........................... 32
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.................................................. 32
Item 9A. Controls and Procedures............................................... 32
PART III
Item 10. Directors and Executive Officers of the Registrants................... 33
Item 11. Executive Compensation................................................ 34
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters........................................... 34
Item 13. Certain Relationships and Related Transactions........................ 36
Item 14. Principal Accountant Fees and Services................................ 36
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K...... 37
Signatures.......................................................................... 39
Index to Financial Statement Schedules.............................................. S-1
Independent Auditors' Report........................................................ S-2
Exhibit Index....................................................................... E-1
</TABLE>
<PAGE>
GLOSSARY OF TERMS
The following abbreviations or acronyms used in this Form 10-K are defined
below:
<TABLE>
<CAPTION>
Abbreviation or Acronym Definition
<S> <C>
AEGCo......................... AEP Generating Company, an electric utility subsidiary of AEP
AEP........................... American Electric Power Company, Inc.
AEPES......................... AEP Energy Services, Inc., a subsidiary of AEP
AEP Power Pool................ APCo, CSPCo, I&M, KPCo and OPCo, as parties to the Interconnection Agreement
AEPR.......................... AEP Resources, Inc., a subsidiary of AEP
AEPSC or Service Corporation.. American Electric Power Service Corporation, a service subsidiary of AEP
AEP System or the System...... The American Electric Power System, an integrated electric utility system, owned and
operated by AEP's electric utility subsidiaries
AEP Utilities................. AEP Utilities, Inc., subsidiary of AEP, formerly Central and South West Corporation
AFUDC......................... Allowance for funds used during construction. Defined in regulatory systems of
accounts as the net cost of borrowed funds
used for construction and a reasonable rate of
return on other funds when so used.
ALJ........................... Administrative law judge
APCo.......................... Appalachian Power Company, an electric utility subsidiary of AEP
Btu........................... British thermal unit
Buckeye....................... Buckeye Power, Inc., an unaffiliated corporation
CAA........................... Clean Air Act
CAAA.......................... Clean Air Act Amendments of 1990
Cardinal Station.............. Generating facility co-owned by Buckeye and OPCo
Centrica...................... Centrica U.S. Holdings, Inc., and its affiliates collectively, unaffiliated companies
CERCLA........................ Comprehensive Environmental Response, Compensation and Liability Act of 1980
CG&E.......................... The Cincinnati Gas & Electric Company, an unaffiliated utility company
Cook Plant.................... The Donald C. Cook Nuclear Plant, owned by I&M, located near Bridgman, Michigan
CSPCo......................... Columbus Southern Power Company, a public utility subsidiary of AEP
CSW Operating Agreement....... Agreement, dated January 1, 1997, by and among PSO, SWEPCo, TCC and TNC
governing generating capacity allocation
DOE........................... United States Department of Energy
DP&L.......................... The Dayton Power and Light Company, an unaffiliated utility company
East zone public utility
subsidiaries................ APCo, CSPCo, I&M, KPCo and OPCo
ECOM.......................... Excess cost over market
EMF........................... Electric and Magnetic Fields
EPA........................... United States Environmental Protection Agency
ERCOT......................... Electric Reliability Council of Texas
EWG........................... Exempt wholesale generator, as defined under PUHCA
FERC.......................... Federal Energy Regulatory Commission
Fitch......................... Fitch Ratings, Inc.
FPA........................... Federal Power Act
FUCO.......................... Foreign utility company as defined under PUHCA
I&M........................... Indiana Michigan Power Company, a public utility subsidiary of AEP
I&M Power Agreement........... Unit Power Agreement Between AEGCo and I&M, dated March 31, 1982
Interconnection Agreement..... Agreement, dated July 6, 1951, by and among APCo, CSPCo, I&M, KPCo and OPCo,
defining the sharing of costs and benefits associated with their respective
generating plants
IURC.......................... Indiana Utility Regulatory Commission
KPCo.......................... Kentucky Power Company, a public utility subsidiary of AEP
KPSC.......................... Kentucky Public Service Commission
LLWPA......................... Low-Level Waste Policy Act of 1980
LPSC.......................... Louisiana Public Service Commission
MECPL......................... Mutual Energy CPL, L.P., a Texas REP and former AEP affiliate
MEWTU......................... Mutual Energy WTU, L.P., a Texas REP and former AEP affiliate
MISO.......................... Midwest Independent Transmission System Operator
Moody's....................... Moody's Investors Service, Inc.
MTM........................... Marked-to-market
MW............................ Megawatt
NOx........................... Nitrogen oxide
NPC........................... National Power Cooperatives, Inc., an unaffiliated corporation
NRC........................... Nuclear Regulatory Commission
OASIS......................... Open Access Same-time Information System
OATT.......................... Open Access Transmission Tariff, filed with FERC
OCC........................... Corporation Commission of the State of Oklahoma
Ohio Act...................... Ohio electric restructuring legislation
OPCo.......................... Ohio Power Company, a public utility subsidiary of AEP
OVEC.......................... Ohio Valley Electric Corporation, anelectric utility company in which
AEP and CSPCo together own a 44.2% equity interest
PJM........................... PJM Interconnection, L.L.C.
Pro Serv...................... AEP Pro Serv, Inc., a subsidiary of AEP
PSO........................... Public Service Company of Oklahoma, a public utility subsidiary of AEP
PTB........................... Price to beat, as defined by the Texas Act
PUCO.......................... The Public Utilities Commission of Ohio
PUCT.......................... Public Utility Commission of Texas
PUHCA......................... Public Utility Holding Company Act of 1935, as amended
QF............................ Qualifying facility, as defined under the Public Utility Regulatory Policies Act of 1978
RCRA.......................... Resource Conservation and Recovery Act of 1976, as amended
REP........................... Retail electricity provider
Rockport Plant................ A generating plant, consisting of two 1,300,000-kilowatt coal-fired generating units,
near Rockport, Indiana
RTO........................... Regional Transmission Organization
SEC........................... Securities and Exchange Commission
S&P........................... Standard & Poor's Ratings Service
SO2........................... Sulfur dioxide
SO2 Allowance................. An allowance to emit one ton of sulfur dioxide granted under the Clean Air Act
Amendments of 1990
SPP........................... Southwest Power Pool
STPNOC........................ STP Nuclear Operating Company, a non-profit Texas corporation which operates STP
on behalf of its joint owners, including TCC
SWEPCo........................ Southwestern Electric Power Company, a public utility subsidiary of AEP
TCA........................... Transmission Coordination Agreement dated January 1, 1997 by and among, PSO,
SWEPCo, TCC, TNC and AEPSC, which allocates costs and benefits in connection
with the operation of the transmission assets of the four public utility subsidiaries
TCC........................... AEP Texas Central Company, formerly Central Power and Light Company, a public
utility subsidiary of AEP
TEA........................... Transmission Equalization Agreement dated April 1, 1984 by and among APCo,
CSPCo, I&M, KPCo and OPCo, which allocates costs and benefits in connection
with the operation of transmission assets
Texas Act..................... Texas electric restructuring legislation
TNC........................... AEP Texas North Company, formerly West Texas Utilities Company, a public utility
subsidiary of AEP
TVA........................... Tennessee Valley Authority
Virginia Act.................. Virginia electric restructuring legislation
VSCC.......................... Virginia State Corporation Commission
WVPSC......................... West Virginia Public Service Commission
West zone public utility
subsidiaries................ PSO, SWEPCo, TCC and TNC
</TABLE>
<PAGE>
FORWARD-LOOKING INFORMATION
These reports made by AEP and its registrant subsidiaries contain
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. Although AEP and its registrant subsidiaries
believe that their expectations are based on reasonable assumptions, any such
statements may be influenced by factors that could cause actual outcomes and
results to be materially different from those projected. Among the factors
that could cause actual results to differ materially from those in the
forward-looking statements are:
o Electric load and customer growth.
o Weather conditions.
o Available sources and costs of fuels.
o Availability of generating capacity and the performance of AEP's
generating plants.
o The ability to recover regulatory assets and stranded costs in connection
with deregulation.
o New legislation and government regulation including requirements for
reduced emissions of sulfur, nitrogen, carbon and other substances.
o Resolution of pending and future rate cases, negotiations and other
regulatory decisions (including rate or other recovery for environmental
compliance).
o Oversight and/or investigation of the energy sector or its participants.
o Resolution of litigation (including pending Clean Air Act enforcement
actions and disputes arising from the bankruptcy of Enron Corp.)
o AEP's ability to reduce its operation and maintenance costs.
o The success of disposing of investments that no longer match AEP's
corporate profile.
o AEP's ability to sell assets at attractive prices and on other attractive
terms.
o International and country-specific developments affecting foreign
investments including the disposition of any current foreign investments.
o The economic climate and growth in AEP's service territory and changes in
market demand and demographic patterns.
o Inflationary trends.
o AEP's ability to develop and execute on a point of view regarding prices
of electricity, natural gas, and other energy-related commodities.
o Changes in the creditworthiness and number of participants in the energy
trading market.
o Changes in the financial markets, particularly those affecting the
availability of capital and AEP's ability to refinance existing debt at
attractive rates.
o Actions of rating agencies, including changes in the ratings of debt and
preferred stock.
o Volatility and changes in markets for electricity, natural gas, and other
energy-related commodities.
o Changes in utility regulation, including the establishment of a regional
transmission structure.
o Accounting pronouncements periodically issued by accounting
standard-setting bodies.
o The performance of AEP's pension plan.
o Prices for power that we generate and sell at wholesale.
o Changes in technology and other risks and unforeseen events, including
wars, the effects of terrorism (including increased security costs),
embargoes and other catastrophic events.
<PAGE>
Item 1. Business
General
Overview and Description of Subsidiaries
AEP was incorporated under the laws of the State of New York in 1906 and
reorganized in 1925. It is a registered public utility holding company under
PUHCA that owns, directly or indirectly, all of the outstanding common stock of
its public utility subsidiaries and varying percentages of other subsidiaries.
The service areas of AEP's public utility subsidiaries cover portions of the
states of Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma,
Tennessee, Texas, Virginia and West Virginia. The generating and transmission
facilities of AEP's public utility subsidiaries are interconnected, and their
operations are coordinated, as a single integrated electric utility system.
Transmission networks are interconnected with extensive distribution facilities
in the territories served. The public utility subsidiaries of AEP, which do
business as "American Electric Power," have traditionally provided electric
service, consisting of generation, transmission and distribution, on an
integrated basis to their retail customers. Restructuring legislation in
Michigan, Ohio, Texas and Virginia has caused or will cause AEP public utility
subsidiaries in those states to unbundle previously integrated regulated rates
for their retail customers.
The AEP System is an integrated electric utility system and, as a result, the
member companies of the AEP System have contractual, financial and other
business relationships with the other member companies, such as participation in
the AEP System savings and retirement plans and tax returns, sales of
electricity and transportation and handling of fuel. The member companies of the
AEP System also obtain certain accounting, administrative, information systems,
engineering, financial, legal, maintenance and other services at cost from a
common provider, AEPSC.
At December 31, 2003, the subsidiaries of AEP had a total of 22,075
employees. AEP, because it is a holding company rather than an operating
company, has no employees. The public utility subsidiaries of AEP are:
APCo (organized in Virginia in 1926) is engaged in the generation,
transmission and distribution of electric power to approximately 929,000
retail customers in the southwestern portion of Virginia and southern West
Virginia, and in supplying and marketing electric power at wholesale to other
electric utility companies, municipalities and other market participants. At
December 31, 2003, APCo and its wholly owned subsidiaries had 2,371
employees. Among the principal industries served by APCo are coal mining,
primary metals, chemicals and textile mill products. In addition to its AEP
System interconnections, APCo also is interconnected with the following
unaffiliated utility companies: Carolina Power & Light Company, Duke Energy
Corporation and Virginia Electric and Power Company. APCo has several points
of interconnection with TVA and has entered into agreements with TVA under
which APCo and TVA interchange and transfer electric power over portions of
their respective systems.
CSPCo (organized in Ohio in 1937, the earliest direct predecessor company
having been organized in 1883) is engaged in the generation, transmission and
distribution of electric power to approximately 698,000 retail customers in
Ohio, and in supplying and marketing electric power at wholesale to other
electric utilities, municipalities and other market participants. At December
31, 2003, CSPCo had 1,125 employees. CSPCo's service area is comprised of two
areas in Ohio, which include portions of twenty-five counties. One area
includes the City of Columbus and the other is a predominantly rural area in
south central Ohio. Among the principal industries served are food
processing, chemicals, primary metals, electronic machinery and paper
products. In addition to its AEP System interconnections, CSPCo also is
interconnected with the following unaffiliated utility companies: CG&E, DP&L
and Ohio Edison Company.
I&M (organized in Indiana in 1925) is engaged in the generation,
transmission and distribution of electric power to approximately 575,000
retail customers in northern and eastern Indiana and southwestern Michigan,
and in supplying and marketing electric power at wholesale to other electric
utility companies, rural electric cooperatives, municipalities and other
market participants. At December 31, 2003, I&M had 2,634 employees. Among the
principal industries served are primary metals, transportation equipment,
electrical and electronic machinery, fabricated metal products, rubber and
miscellaneous plastic products and chemicals and allied products. Since 1975,
I&M has leased and operated the assets of the municipal system of the City of
Fort Wayne, Indiana. In addition to its AEP System interconnections, I&M also
is interconnected with the following unaffiliated utility companies: Central
Illinois Public Service Company, CG&E, Commonwealth Edison Company, Consumers
Energy Company, Illinois Power Company, Indianapolis Power & Light Company,
Louisville Gas and Electric Company, Northern Indiana Public Service Company,
PSI Energy Inc. and Richmond Power & Light Company.
KPCo (organized in Kentucky in 1919) is engaged in the generation,
transmission and distribution of electric power to approximately 175,000
retail customers in an area in eastern Kentucky, and in supplying and
marketing electric power at wholesale to other electric utility companies,
municipalities and other market participants. At December 31, 2003, KPCo had
394 employees. In addition to its AEP System interconnections, KPCo also is
interconnected with the following unaffiliated utility companies: Kentucky
Utilities Company and East Kentucky Power Cooperative Inc. KPCo is also
interconnected with TVA.
Kingsport Power Company (organized in Virginia in 1917) provides electric
service to approximately 46,000 retail customers in Kingsport and eight
neighboring communities in northeastern Tennessee. Kingsport Power Company
does not own any generating facilities. It purchases electric power from APCo
for distribution to its customers. At December 31, 2003, Kingsport Power
Company had 57 employees.
OPCo (organized in Ohio in 1907 and re-incorporated in 1924) is engaged in
the generation, transmission and distribution of electric power to
approximately 704,000 retail customers in the northwestern, east central,
eastern and southern sections of Ohio, and in supplying and marketing
electric power at wholesale to other electric utility companies,
municipalities and other market participants. At December 31, 2003, OPCo had
2,153 employees. Among the principal industries served by OPCo are primary
metals, rubber and plastic products, stone, clay, glass and concrete
products, petroleum refining and chemicals. In addition to its AEP System
interconnections, OPCo also is interconnected with the following unaffiliated
utility companies: CG&E, The Cleveland Electric Illuminating Company, DP&L,
Duquesne Light Company, Kentucky Utilities Company, Monongahela Power
Company, Ohio Edison Company, The Toledo Edison Company and West Penn Power
Company.
PSO (organized in Oklahoma in 1913) is engaged in the generation,
transmission and distribution of electric power to approximately 505,000
retail customers in eastern and southwestern Oklahoma, and in supplying and
marketing electric power at wholesale to other electric utility companies,
municipalities, rural electric cooperatives and other market participants. At
December 31, 2003, PSO had 1,067 employees. Among the principal industries
served by PSO are natural gas and oil production, oil refining, steel
processing, aircraft maintenance, paper manufacturing and timber products,
glass, chemicals, cement, plastics, aerospace manufacturing,
telecommunications, and rubber goods. In addition to its AEP System
interconnections, PSO also is interconnected with Ameren Corporation, Empire
District Electric Co., Oklahoma Gas & Electric Co., Southwestern Public
Service Co. and Westar Energy Inc.
SWEPCo (organized in Delaware in 1912) is engaged in the generation,
transmission and distribution of electric power to approximately 439,000
retail customers in northeastern Texas, northwestern Louisiana and western
Arkansas, and in supplying and marketing electric power at wholesale to other
electric utility companies, municipalities, rural electric cooperatives and
other market participants. At December 31, 2003, SWEPCo had 1,351 employees.
Among the principal industries served by SWEPCo are natural gas and oil
production, petroleum refining, manufacturing of pulp and paper, chemicals,
food processing, and metal refining. The territory served by SWEPCo also
includes several military installations, colleges, and universities. In
addition to its AEP System interconnections, SWEPCo is also interconnected
with CLECO Corp., Empire District Electric Co., Entergy Corp. and Oklahoma
Gas & Electric Co.
TCC (organized in Texas in 1945) is engaged in the generation, transmission
and sale of power to affiliated and non-affiliated entities and the
distribution of electric power to approximately 711,000 retail customers
through REPs in southern Texas, and in supplying and marketing electric power
at wholesale to other electric utility companies, municipalities, rural
electric cooperatives and other market participants. At December 31, 2003,
TCC had 1,203 employees. Among the principal industries served by TCC are oil
and gas extraction, food processing, apparel, metal refining, chemical and
petroleum refining, plastics, and machinery equipment. In addition to its AEP
System interconnections, TCC is a member of ERCOT.
TNC (organized in Texas in 1927) is engaged in the generation, transmission
and sale of power to affiliated and non-affiliated entities and the
distribution of electric power to approximately 190,000 retail customers
through REPs in west and central Texas, and in supplying and marketing
electric power at wholesale to other electric utility companies,
municipalities, rural electric cooperatives and other market participants. At
December 31, 2003, TNC had 472 employees. The principal industry served by
TNC is agriculture. The territory served by TNC also includes several
military installations and correctional facilities. In addition to its AEP
System interconnections, TNC is a member of ERCOT.
Wheeling Power Company (organized in West Virginia in 1883 and
reincorporated in 1911) provides electric service to approximately 41,000
retail customers in northern West Virginia. Wheeling Power Company does not
own any generating facilities. It purchases electric power from OPCo for
distribution to its customers. At December 31, 2003, Wheeling Power Company
had 57 employees.
AEGCo (organized in Ohio in 1982) is an electric generating company. AEGCo
sells power at wholesale to I&M and KPCo. AEGCo has no employees.
Service Company Subsidiary
AEP also owns a service company subsidiary, AEPSC. AEPSC provides accounting,
administrative, information systems, engineering, financial, legal, maintenance
and other services at cost to the AEP System companies. The executive officers
of AEP and its public utility subsidiaries are all employees of AEPSC. At
December 31, 2003, AEPSC had 6,215 employees.
Classes of Service
The principal classes of service from which the public utility subsidiaries
of AEP derive revenues and the amount of such revenues during the year ended
December 31, 2003 are as follows:
<TABLE>
<CAPTION>
AEP
System(a) APCo CSPCo I&M KPCo
<S> <C> <C> <C> <C> <C>
(in thousands)
Utility Operations:
Retail Sales
Residential.............. $3,171,000 $ 623,435 $ 509,919 $ 352,710 $120,001
Commercial............... 2,348,000 321,515 455,304 272,319 68,904
Industrial............... 1,977,000 342,593 133,242 319,783 94,567
Other Retail Sales....... 173,000 41,060 17,975 6,154 926
---------- --------- --------- --------- --------
Total Retail.......... 7,669,000 1,328,603 1,116,440 950,966 284,398
Wholesale
System Sales and
Transmission............... 2,554,000 311,056 183,490 337,275 69,451
Other Wholesale Revenues. - - - - -
Risk Management Realized. 205,000 17,391 10,491 11,440 4,038
Risk Management Mark-
to-Market ............ (198,000) (2,249) (5,134) - -
---------- --------- --------- --------- --------
Total Wholesale......... 2,561,000 326,198 188,847 348,715 73,489
Other Operating Revenues... 745,000 79,583 42,195 46,712 18,775
Sales to Affiliates........ - 222,793 84,369 249,203 39,808
---------- --------- --------- --------- --------
Gross Utility Operations 10,975,000 1,957,177 1,431,851 1,595,596 416,470
Provision for Rate Refund.. (104,000) 181 - - -
----------- --------- --------- --------- --------
Net Utility Operations 10,871,000 1,957,358 1,431,851 1,595,596 416,470
Investments- Gas Operations.. 3,097,000 - - - -
Investments- Other........... 577,000 - - - -
---------- --------- --------- --------- --------
Total Revenues........ $14,545,000 $1,957,358 $1,431,851 $1,595,596 $416,470
=========== ========== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
OPCo PSO SWEPCo TCC TNC
(in thousands)
<S> <C> <C> <C> <C> <C>
Utility Operations:
Retail Sales
Residential.............. $ 474,323 $ 402,988 $ 350,386 $ 215,330 $ 57,191
Commercial............... 314,526 275,852 291,859 158,307 28,395
Industrial............... 522,449 231,638 215,805 43,469 8,199
Other Retail Sales....... 8,413 83,491 6,478 8,824 11,484
---------- --------- --------- --------- ---------
Total Retail.......... 1,319,711 993,969 864,528 425,930 105,269
Wholesale
System Sales and
Transmission............... 263,397 61,173 147,885 894,509 279,973
Other Wholesale Revenues. - - - - -
Risk Management Realized. 13,882 3,667 4,325 26,331 9,590
Risk Management
Mark-to-Market......... (11,381) - 3,439 2,801 911
----------- --------- --------- --------- ---------
Total Wholesale....... 265,898 64,840 155,649 923,641 290,474
Other Operating Revenues... 74,766 20,883 66,373 339,696 39,292
Sales to Affiliates........ 584,278 23,130 68,854 141,698 51,625
---------- --------- --------- --------- ---------
Gross Utility Operations 2,244,653 1,102,822 1,155,404 1,830,965 486,660
Provision for Rate Refund.. - - (8,562) (83,454) (20,714)
---------- --------- ---------- ---------- ----------
Net Utility Operations 2,244,653 1,102,822 1,146,842 1,747,511 465,946
Investments- Gas Operations.. - - - - -
Investments- Other........... - - - - -
---------- --------- --------- --------- ---------
Total Revenues...........$2,244,653 $1,102,822$1,146,842 $1,747,511 $ 465,946
========== ==================== ========== =========
</TABLE>
- ----------
(a) Includes revenues of other subsidiaries not shown. Intercompany transactions
have been eliminated, including AEGCo's total revenues of $233,165,000 for
the year ended December 31, 2003, all of which resulted from its wholesale
business, including its marketing and trading of power.
Holding Company Regulation
The provisions of PUHCA, administered by the SEC, regulate many aspects of a
registered holding company system, such as the AEP System. PUHCA limits the
operations of a registered holding company system to a single integrated public
utility system and such other businesses as are incidental or necessary to the
operations of the system. In addition, PUHCA governs, among other things,
financings, sales or acquisitions of utility assets and intra-system
transactions.
PUHCA and the rules and orders of the SEC currently require that transactions
between associated companies in a registered holding company system be performed
at cost with limited exceptions. Over the years, the AEP System has developed
numerous affiliated service, sales and construction relationships and, in some
cases, invested significant capital and developed significant operations in
reliance upon the ability to recover its full costs under these provisions.
The Division of Investment Management of the SEC has recommended the
conditional repeal of PUHCA. Under its recommendation, certain oversight
authority would be transferred to the FERC. Legislation has since been
introduced in numerous sessions of Congress that would repeal PUHCA, but such
legislation has not passed.
AEP-CSW Merger
On June 15, 2000, CSW (now known as AEP Utilities, Inc.) merged with and into
a wholly owned merger subsidiary of AEP. As a result, CSW became a wholly owned
subsidiary of AEP. The four wholly owned public utility subsidiaries of
CSW--PSO, SWEPCo, TCC and TNC--became indirect wholly owned public utility
subsidiaries of AEP as a result of the merger. The merger was approved by the
FERC and the SEC (with respect to PUHCA).
On January 18, 2002, the U.S. Court of Appeals for the District of Columbia
ruled that the SEC failed to properly explain how the merger met the
requirements of PUHCA and remanded the case to the SEC for further review. The
court held that the SEC had not adequately explained its conclusions that the
merger met PUHCA requirements that the merging entities be "physically
interconnected" and that the combined entity was confined to a "single area or
region."
Management believes that the merger meets the requirements of PUHCA and
expects the matter to be resolved favorably.
Financing
General
Companies within the AEP System generally use short-term debt to finance
working capital needs, acquisitions and construction. The companies periodically
issue long-term debt to reduce short-term debt. Short-term debt has in recent
history been provided by AEP's commercial paper program and revolving credit
facilities. Proceeds were made available to subsidiaries under the AEP corporate
borrowing program. Throughout 2003, AEP was successful in accessing the
commercial paper market. Certain public utility subsidiaries of AEP also sell
accounts receivable to provide liquidity.
AEP's revolving credit agreements (which backstop the commercial paper
program) include covenants and events of default typical for this type of
facility, including a maximum debt/capital test and a $50 million
cross-acceleration provision. At December 31, 2003, AEP was in compliance with
its debt covenants. With the exception of a voluntary bankruptcy or insolvency,
any event of default has either or both a cure period or notice requirement
before termination of the agreements. A voluntary bankruptcy or insolvency would
be considered an immediate termination event. See Management's Financial
Discussion and Analysis of Results of Operations, included in the 2003 Annual
Reports, under the heading entitled Financial Condition for additional
information with respect to AEP's credit agreements.
AEP's subsidiaries have also utilized, and expect to continue to utilize,
additional financing arrangements, such as leasing arrangements, including the
leasing of utility assets and coal mining and transportation equipment and
facilities.
Credit Ratings
In 2003, the rating agencies conducted credit reviews of AEP and its
registrant subsidiaries. The agencies also reviewed many companies in the energy
sector due to issues that impact the entire industry.
Moody's completed its review of AEP and its rated subsidiaries in February
2003. The results of that review were downgrades of the following ratings for
unsecured debt: AEP from Baa2 to Baa3, APCo from Baa1 to Baa2, TCC from Baa1 to
Baa2, PSO from A2 to Baa1, SWEPCo from A2 to Baa1. TNC, which had no senior
unsecured notes outstanding at the time of the ratings action, had its mortgage
bond debt downgraded from A2 to A3. AEP's commercial paper was also concurrently
downgraded from P-2 to P-3. The completion of this review was a culmination of
earlier ratings action in 2002 that had included a downgrade of AEP from Baa1 to
Baa2. With the completion of the reviews, Moody's placed AEP and its rated
subsidiaries on stable outlook.
S&P completed its review of AEP and its rated subsidiaries in March 2003. The
results of that review were downgrades of the ratings for unsecured debt for AEP
and its rated subsidiaries from BBB+ to BBB. AEP's commercial paper rating was
affirmed at A-2. With the completion of the reviews, S&P placed AEP and its
rated subsidiaries on stable outlook.
Fitch completed its review of AEP and its rated subsidiaries in March 2003.
The result of that review was a downgrade of AEP's unsecured debt rating from
BBB+ to BBB. AEP's commercial paper rating was affirmed at F-2. With the
completion of the reviews, Fitch placed AEP and its rated subsidiaries on stable
outlook.
See Management's Financial Discussion and Analysis of Results of Operations,
included in the 2003 Annual Reports, under the heading entitled Financial
Condition for additional information with respect to AEP's credit ratings,
liquidity and specific financing activities.
Environmental and Other Matters
General
AEP's subsidiaries are currently subject to regulation by federal, state and
local authorities with regard to air and water-quality control and other
environmental matters, and are subject to zoning and other regulation by local
authorities. The environmental issues that are potentially material to the AEP
system include:
o The CAA and CAAA and state laws and regulations (including State
Implementation Plans) that require compliance, obtaining permits and
reporting as to air emissions. See Management's Financial Discussion and
Analysis of Results of Operations under the heading entitled The Current
Air Quality Regulatory Framework.
o Litigation with the federal and certain state governments and certain
special interest groups regarding whether modifications to or maintenance
of certain coal-fired generating plants required additional permitting or
pollution control technology. See Management's Financial Discussion and
Analysis of Results of Operations under the headings entitled The Current
Air Quality Regulatory Framework and New Source Review Litigation and Note
9 to the consolidated financial statements entitled Commitments and
Contingencies, included in the 2003 Annual Reports, for further
information.
o Rules issued by the EPA and certain states that require substantial
reductions in SO2, mercury and NOx emissions, some of which became
effective in 2003. The remaining compliance dates and proposals would take
effect periodically through as late as 2018. AEP is installing (or has
installed) emission control technology and is taking other measures to
comply with required reductions. See Management's Financial Discussion and
Analysis of Results of Operations under the headings entitled Future
Reduction Requirements for NOx, SO2 and Hg and Estimated Air Quality
Investments and Note 7 to the consolidated financial statements entitled
Commitments and Contingencies, included in the 2003 Annual Reports under
the heading entitled NOx Reductions for further information.
o CERCLA, which imposes upon owners and previous owners of sites, as well as
transporters and generators of hazardous material disposed of at such
sites, costs for environmental remediation. AEP does not, however,
anticipate that any of its currently identified CERCLA-related issues will
result in material costs or penalties to the AEP System. See Management's
Financial Discussion and Analysis of Results of Operations, included in the
2003 Annual Reports, under the heading entitled Superfund and State
Remediation for further information.
o The Federal Clean Water Act, which prohibits the discharge of pollutants
into waters of the United States except pursuant to appropriate permits.
The EPA recently adopted a new Clean Water Act rule to reduce the number of
fish and other aquatic organisms killed at once-through cooled power
plants. See Management's Financial Discussion and Analysis of Results of
Operations, included in the 2003 Annual Reports, under the heading entitled
Clean Water Act Regulation for additional information.
o Solid and hazardous waste laws and regulations, which govern the management
and disposal of certain wastes. The majority of solid waste created from
the combustion of coal and fossil fuels is fly ash and other coal
combustion byproducts, which the EPA has determined are not hazardous waste
governed subject to RCRA.
In addition to imposing continuing compliance obligations, these laws and
regulations authorize the imposition of substantial penalties for noncompliance,
including fines, injunctive relief and other sanctions. See Management's
Financial Discussion and Analysis of Results of Operations, included in the 2003
Annual Reports, under the heading entitled Environmental Matters for information
on current environmental issues.
If our expenditures for pollution control technologies, replacement
generation and associated operating costs are not recoverable from customers
through regulated rates (in regulated jurisdictions) or market prices (in
deregulated jurisdictions), those costs could adversely affect future results of
operations and cash flows, and possibly financial condition.
AEP's international operations are subject to environmental regulation by
various authorities within the host countries. Under certain circumstances,
these authorities may require modifications to these facilities and operations
or impose fines and other costs for violations of applicable statutes and
regulations. From time to time, these operations are named as parties to various
legal claims, actions, complaints or other proceedings related to environmental
matters. AEP's UK generation facilities will be subject to additional
environmental constraints in 2008 (which become more stringent after 2015)
because they are subject to regulation governing large combustion plants. In the
fourth quarter of 2002, AEP decided not to install certain emission control
technology on its Fiddler's Ferry and Ferrybridge generation facilities in 2008.
This decision and its legal and regulatory consequences resulted in a
significant reduction in the estimated economic life of those facilities. See
also Investments--UK Operations for a discussion of AEP's planned disposition of
these assets in 2004.
The cost of complying with applicable environmental laws, regulations and
rules is expected to be material to the AEP System.
See Management's Financial Discussion and Analysis of Results of Operations
under the heading entitled Environmental Matters and Note 7 to the consolidated
financial statements entitled Commitments and Contingencies, included in the
2003 Annual Reports, for further information with respect to environmental
matters.
Environmental Investments
Investments related to improving AEP System plants' environmental performance
and compliance with air and water quality standards during 2002 and 2003 and the
current estimate for 2004 are shown below. Substantial investments in addition
to the amounts set forth below are expected by the System in future years in
connection with the modification and addition of facilities at generating plants
for environmental quality controls in order to comply with air and water quality
standards which have been or may be adopted. Future investments could be
significantly greater if litigation regarding whether AEP properly installed
emission control equipment on its plants is resolved against any AEP
subsidiaries or emissions reduction requirements are accelerated or otherwise
become more onerous. See Management's Financial Discussion and Analysis of
Results of Operations under the headings entitled Future Reduction Requirements
for NOx, SO2 and Hg and Estimated Air Quality Investments Note 7 to the
consolidated financial statements, entitled Commitments and Contingencies,
included in the 2003 Annual Reports, for more information regarding this
litigation and environmental expenditures in general.
2002 2003 2004
Actual Actual Estimate
(in thousands)
AEGCo....................... $ 1,200 11,800 9,800
APCo........................ 108,400 70,600 145,500
CSPCo....................... 25,400 31,400 18,000
I&M......................... 1,200 14,900 12,100
KPCo........................ 110,600 40,500 3,500
OPCo........................ 110,300 40,000 108,400
PSO......................... 1,200 1,700 0
SWEPCo...................... 3,400 3,200 2,700
TCC......................... 600 500 0
TNC......................... 1,900 2,600 800
-------- -------- --------
AEP System.................. $364,200 $217,200 $300,800
======== ======== ========
Electric and Magnetic Fields
EMF are found everywhere there is electricity. Electric fields are created by
the presence of electric charges. Magnetic fields are produced by the flow of
those charges. This means that EMF are created by electricity flowing in
transmission and distribution lines, electrical equipment, household wiring, and
appliances.
A number of studies in the past several years have examined the possibility
of adverse health effects from EMF. While some of the epidemiological studies
have indicated some association between exposure to EMF and health effects, none
has produced any conclusive evidence that EMF does or does not cause adverse
health effects.
Management cannot predict the ultimate impact of the question of EMF exposure
and adverse health effects. If further research shows that EMF exposure
contributes to increased risk of cancer or other health problems, or if the
courts conclude that EMF exposure harms individuals and that utilities are
liable for damages, or if states limit the strength of magnetic fields to such a
level that the current electricity delivery system must be significantly
changed, then the results of operations and financial condition of AEP and its
operating subsidiaries could be materially adversely affected unless these costs
can be recovered from customers.
SEC Subpoena, CFTC Complaint ant Other Energy Market Investigations
AEP received data requests, subpoenas and information requests from the SEC,
CFTC and other state and federal governmental agencies relating to certain
energy market investigations. On September 30, 2003, the CFTC filed a complaint
against AEP in federal district court alleging that it provided false or
misleading information about market conditions and prices of natural gas in an
attempt to manipulate the price of natural gas. See Management's Financial
Discussion and Analysis of Results of Operations, included in the 2003 Annual
Reports, under the heading Energy Market Investigations.
Utility Operations
General
Utility operations constitute the majority of AEP's business operations.
Utility operations include (i) the generation, transmission and distribution of
electric power to retail customers and (ii) the supplying and marketing of
electric power at wholesale (through the electric generation function) to other
electric utility companies, municipalities and other market participants. AEPSC,
as agent for AEP's public utility subsidiaries performs marketing, generation
dispatch, fuel procurement and power-related risk management and trading
activities.
Electric Generation
Facilities
AEP's public utility subsidiaries own approximately 38,000 MW of domestic
generation. See Deactivation and Planned Disposition of Generating Facilities
for a discussion of planned sales of certain of AEP's generating facilities.
Pursuant to regulatory orders, the AEP public utility subsidiaries operate their
generating facilities as a single interconnected and coordinated electric
utility system. See Item 2 -- Properties for more information regarding AEP's
generation capacity.
AEP Power Pool and CSW Operating Agreement
APCo, CSPCo, I&M, KPCo and OPCo are parties to the Interconnection Agreement,
dated July 6, 1951, as amended (Interconnection Agreement), defining how they
share the costs and benefits associated with their generating plants. This
sharing is based upon each company's "member-load-ratio." The Interconnection
Agreement has been approved by the FERC.
The member-load ratio is calculated monthly by dividing such company's
highest monthly peak demand for the last twelve months by the aggregate of the
highest monthly peak demand for the last twelve months for all east zone
operating companies. As of December 31, 2003, the member-load ratios were as
follows:
Peak
Demand Member-Load
(MW) Ratio (%)
APCo............... 6,873 31.7
CSPCo.............. 3,871 17.9
I&M................ 4,243 19.6
KPCo............... 1,564 7.2
OPCo............... 5,121 23.6
Although the FERC has approved CSPCo's and OPCo's request to withdraw from
the AEP Power Pool as part of its order approving the settlement agreements and
AEP's FERC restructuring application, CSPCo and OPCo plan to remain functionally
separated through at least December 31, 2008 as provided by their rate
stabilization plan filed with the PUCO. See Management's Financial Discussion
and Analysis and Financial Condition, under the heading entitled Corporate
Separation, included in the 2003 Annual Reports and Note 6 to the consolidated
financial statements, entitled Customer Choice and Industry Restructuring,
included in the 2003 Annual Reports, for a discussion of AEP's corporate
separation plan.
The following table shows the net (credits) or charges allocated among the
parties under the Interconnection Agreement and AEP System Interim Allowance
Agreement during the years ended December 31, 2001, 2002 and 2003:
2001 2002 2003
--------- --------- -------
(in thousands)
APCo............... $ 256,700 $ 127,000 $ 218,000
CSPCo.............. 251,200 267,000 276,800
I&M................ (166,200) (113,600) (118,800)
KPCo............... 27,600 46,500 38,400
OPCo............... (369,300) (326,900) (414,400)
PSO, SWEPCo, TCC, TNC, and AEPSC are parties to a Restated and Amended
Operating Agreement originally dated as of January 1, 1997 (CSW Operating
Agreement), which has been approved by the FERC. The CSW Operating Agreement
requires the west zone public utility subsidiaries to maintain adequate annual
planning reserve margins and requires the subsidiaries that have capacity in
excess of the required margins to make such capacity available for sale to other
AEP west zone public utility subsidiaries as capacity commitments. Parties are
compensated for energy delivered to recipients based upon the deliverer's
incremental cost plus a portion of the recipient's savings realized by the
purchaser that avoids the use of more costly alternatives. Revenues and costs
arising from third party sales are shared based on the amount of energy each
west zone public utility subsidiary contributes that is sold to third parties.
Upon the sale of its generation assets, TCC will no longer supply generating
capacity under the CSW Operating Agreement.
The following table shows the net (credits) or charges allocated among the
parties under the CSW Operating Agreement during the years ended December 31,
2001, 2002 and 2003:
2001 2002 2003
-------- -------- ------
(in thousands)
PSO................. $ 6,500 $ 53,700 $ 44,000
SWEPCo.............. (62,300) (67,800) (46,600)
TCC................. 13,500 (15,400) (29,500)
TNC................. 42,300 29,500 32,100
Power generated by or allocated or provided under the Interconnection
Agreement or CSW Operating Agreement to any public utility subsidiary is
primarily sold to customers (or in the case of the ERCOT area of Texas, REPs) by
such public utility subsidiary at rates approved (other than in the ERCOT area
of Texas) by the public utility commission in the jurisdiction of sale. In Ohio,
Virginia and the ERCOT area of Texas, such rates are based on a statutory
formula as those jurisdictions transition to the use of market rates for
generation. See Regulation -- Rates.
Under both the Interconnection Agreement and CSW Operating Agreement, power
generated that is not needed to serve the native load of any public utility
subsidiary is sold in the wholesale market by AEPSC on behalf of the generating
subsidiary. See Risk Management and Trading for a discussion of the trading and
marketing of such power.
AEP's System Integration Agreement, which has been approved by the FERC,
provides for the integration and coordination of AEP's east and west zone
operating subsidiaries. This includes joint dispatch of generation within the
AEP System and the distribution, between the two zones, of costs and benefits
associated with the transfers of power between the two zones (including sales to
third parties and risk management and trading activities). It is designed to
function as an umbrella agreement in addition to the Interconnection Agreement
and the CSW Operating Agreement, each of which controls the distribution of
costs and benefits within each zone.
Risk Management and Trading
AEPSC, as agent for AEP's public utility subsidiaries, sells excess power
into the market and engages in power and natural gas risk management and trading
activities focused in regions in which AEP traditionally operates. These
activities primarily involve the purchase and sale of electricity (and to a
lesser extent, natural gas) under physical forward contracts at fixed and
variable prices. These contracts include physical transactions, over-the-counter
swaps and exchange-traded futures and options. The majority of physical forward
contracts are typically settled by entering into offsetting contracts. These
transactions are executed with numerous counterparties or on exchanges.
Counterparties and exchanges may require cash or cash related instruments to be
deposited on these transactions as margin against open positions. As of December
31, 2003, counterparties have posted approximately $45 million in cash, cash
equivalents or letters of credit with AEPSC for the benefit of AEP's public
utility subsidiaries. Since open trading contracts are valued based on changes
in market power prices, exposures change daily.
Fuel Supply
The following table shows the sources of power generated by the AEP System:
2001 2002 2003
Coal.......................... 74% 78% 80%
Natural Gas................... 12% 8% 7%
Nuclear....................... 11% 11% 9%
Hydroelectric and other....... 3% 3% 4%
Variations in the generation of nuclear power are primarily related to
refueling and maintenance outages. Variations in the generation of natural gas
power are primarily related to the availability of cheaper alternatives to
fulfill certain power requirements and the deactivation of certain gas-fired
plants owned by TCC and TNC.
Coal and Lignite: AEP's public utility subsidiaries procure coal and lignite
under a combination of purchasing arrangements including long-term contracts,
affiliate operations, short-term, and spot agreements with various producers and
coal trading firms. Management believes, but cannot provide assurances that,
AEP's public utility subsidiaries will be able to secure coal and lignite of
adequate quality and in adequate quantities to operate their coal and
lignite-fired units. See Investments-Other for a discussion of AEP's coal
marketing and transportation operations.
The following table shows the amount of coal delivered to the AEP System
during the past three years and the average delivered price of spot coal
purchased by System companies:
2001 2002 2003
---- ---- ----
Total coal delivered to AEP operated plants
(thousands of tons)........................... 73,889 76,442 76,042
Average price per ton of spot-purchased coal... $27.30 $27.06 $28.91
The coal supplies at AEP System plants vary from time to time depending on
various factors, including customers' usage of electric power, space
limitations, the rate of consumption at particular plants, labor issues and
weather conditions which may interrupt deliveries. At December 31, 2003, the
System's coal inventory was approximately 42 days of normal usage. This estimate
assumes that the total supply would be utilized through the operation of plants
that use coal most efficiently.
In cases of emergency or shortage, system companies have developed programs
to conserve coal supplies at their plants. Such programs have been filed and
reviewed with officials of federal and state agencies and, in some cases, the
relevant state regulatory agency has prescribed actions to be taken under
specified circumstances by System companies, subject to the jurisdiction of such
agency.
The FERC has adopted regulations relating, among other things, to the
circumstances under which, in the event of fuel emergencies or shortages, it
might order electric utilities to generate and transmit electric power to other
regions or systems experiencing fuel shortages, and to ratemaking principles by
which such electric utilities would be compensated. In addition, the federal
government is authorized, under prescribed conditions, to allocate coal and to
require the transportation thereof, for the use of power plants or major
fuel-burning installations.
Natural Gas: AEP, through its public utility subsidiaries, consumed over 138
billion cubic feet of natural gas during 2003 for generating power. A majority
of the gas-fired power plants are connected to at least two natural gas
pipelines, which provides greater access to competitive supplies and improves
reliability. A portfolio of long-term and short-term purchase and transportation
agreements (that are entered into on a competitive basis and based on market
prices) supplies natural gas requirements for each plant.
Nuclear: I&M and STPNOC have made commitments to meet certain of the nuclear
fuel requirements of the Cook Plant and STP, respectively. Steps currently are
being taken, based upon the planned fuel cycles for the Cook Plant, to review
and evaluate I&M's requirements for the supply of nuclear fuel. I&M has made and
will make purchases of uranium in various forms in the spot, short-term, and
mid-term markets until it decides that deliveries under long-term supply
contracts are warranted. TCC and the other STP participants have entered into
contracts with suppliers for (i) 100% of the uranium concentrate sufficient for
the operation of both STP units through spring 2006 and (ii) 50% of the uranium
concentrate needed for STP through spring 2007. See Deactivation and Planned
Disposition of Generation Facilities for more information about TCC's interest
in STP.
For purposes of the storage of high-level radioactive waste in the form of
spent nuclear fuel, I&M has completed modifications to its spent nuclear fuel
storage pool. AEP anticipates that the Cook Plant has storage capacity to permit
normal operations through 2012. STP has on-site storage facilities with the
capability to store the spent nuclear fuel generated by the STP units over their
licensed lives.
Nuclear Waste and Decommissioning
I&M, as the owner of the Cook Plant, and TCC, as a partial owner of STP, have
a significant future financial commitment to safely dispose of spent nuclear
fuel and decommission and decontaminate the plants. The ultimate cost of
retiring the Cook Plant and STP may be materially different from estimates and
funding targets as a result of the:
o Type of decommissioning plan selected;
o Escalation of various cost elements (including, but not limited to,
general inflation);
o Further development of regulatory requirements governing decommissioning;
o Limited availability to date of significant experience in
decommissioning such facilities;
o Technology available at the time of decommissioning differing significantly
from that assumed in these studies;
o Availability of nuclear waste disposal facilities; and
o Approval of the Cook Plant's license extension.
Accordingly, management is unable to provide assurance that the ultimate cost of
decommissioning the Cook Plant and STP will not be significantly different than
current projections.
See Management's Financial Discussion and Analysis of Results of Operations
and Note 7 to the consolidated financial statements, entitled Commitments and
Contingencies, included in the 2003 Annual Reports, for information with respect
to nuclear waste and decommissioning and related litigation.
Low-Level Radioactive Waste: The LLWPA mandates that the responsibility for
the disposal of low-level radioactive waste rests with the individual states.
Low-level radioactive waste consists largely of ordinary refuse and other items
that have come in contact with radioactive materials. Michigan and Texas do not
currently have disposal sites for such waste available. AEP cannot predict when
such sites may be available, but South Carolina and Utah operate low-level
radioactive waste disposal sites and accept low-level radioactive waste from
Michigan and Texas. AEP's access to the South Carolina facility is currently
allowed through the end of fiscal year 2008. There is currently no set date
limiting AEP's access to the Utah facility.
Deactivation and Planned Disposition of Generation Facilities
In September 2002, AEP indicated to ERCOT its intent to deactivate 16
gas-fired power plants (8 TCC plants and 8 TNC plants). ERCOT subsequently
conducted reliability studies that determined that seven plants (4 TCC plants
and 3 TNC plants) would be required to ensure reliability of the electricity
grid. As a result of these studies, ERCOT and AEP mutually agreed to enter into
reliability must run agreements to continue operation of these seven plants.
With ERCOT's approval, AEP deactivated the remaining nine plants. The agreements
allowed ERCOT to terminate the agreement with 90 days notice if the facility was
no longer needed to ensure reliability of the electricity grid. ERCOT provided
such notice with respect to one TNC plant in August 2003 and the plant was
deactivated. AEP and ERCOT agreed to new reliability must run contracts at the
remaining six plants through December 2004, subject to the same termination
provision.
TCC is conducting an auction to sell all of its generation facilities in
Texas to establish the market value of the assets and TCC's stranded costs in
accordance with the Texas Act. See Texas Regulatory Assets and Stranded Cost
Recovery and Post-Restructuring Wires Charges. The competitive bidding process
began in June 2003 after the PUCT issued a rule confirming TCC's ability to
establish the value of its generation assets and amount of stranded costs by
selling the generation assets. The PUCT has engaged a consultant and designated
a team to monitor the auction and advise TCC on the sale of its generating
assets, including requirements of the Texas Act for establishing stranded costs.
The assets to be sold have a generating capacity of 4,497 MW and include
eight gas-fired generating plants, one coal-fired plant, TCC's interest in
Oklaunion Power Station, a hydroelectric facility and TCC's interest in STP. TCC
has entered into agreements to sell its 7.8% share of Oklaunion Power Station
and 25.2% share in STP and is continuing to evaluate bids for its remaining
generation assets. See Note 6 to the consolidated financial statements entitled
Customer Choice and Industry Restructuring, included in the 2003 Annual Reports,
for more information on the planned disposition of TCC generation facilities.
Structured Arrangements Involving Capacity, Energy, and Ancillary Services
In January 2000, OPCo and NPC, an affiliate of Buckeye, entered into an
agreement relating to the construction and operation of a 510 MW gas-fired
electric generating peaking facility to be owned by NPC. OPCo is entitled to
100% of the power generated by the facility, and is responsible for the fuel and
other costs of the facility through 2005. After 2005, NPC and OPCo will be
entitled to 80% and 20%, respectively, of the power of the facility, and both
parties will generally be responsible for the fuel and other costs of the
facility.
Certain Power Agreements
AEGCo: Since its formation in 1982, AEGCo's business has consisted of the
ownership and financing of its 50% interest in Unit 1 of the Rockport Plant and,
since 1989, leasing of its 50% interest in Unit 2 of the Rockport Plant. The
operating revenues of AEGCo are derived from the sale of capacity and energy
associated with its interest in the Rockport Plant to I&M and KPCo pursuant to
unit power agreements, which have been approved by the FERC.
The I&M Power Agreement provides for the sale by AEGCo to I&M of all the
capacity (and the energy associated therewith) available to AEGCo at the
Rockport Plant. I&M is obligated, whether or not power is available from AEGCo,
to pay as a demand charge for the right to receive such power (and as an energy
charge for any associated energy taken by I&M). Such amounts, when added to
amounts received by AEGCo from any other sources, will be at least sufficient to
enable AEGCo to pay all its operating and other expenses, including a rate of
return on the common equity of AEGCo as approved by FERC, currently 12.16%. The
I&M Power Agreement will continue in effect until the date that the last of the
lease terms of Unit 2 of the Rockport Plant has expired unless extended in
specified circumstances.
Pursuant to an assignment between I&M and KPCo, and a unit power agreement
between KPCo and AEGCo, AEGCo sells KPCo 30% of the capacity (and the energy
associated therewith) available to AEGCo from both units of the Rockport Plant.
KPCo has agreed to pay to AEGCo the same amounts which I&M would have paid AEGCo
under the terms of the I&M Power Agreement for such entitlement. The KPCo unit
power agreement expires on December 31, 2004.
AEGCo and AEP have entered into a capital funds agreement pursuant to which,
among other things, AEP has unconditionally agreed to make cash capital
contributions, or in certain circumstances subordinated loans, to AEGCo to the
extent necessary to enable AEGCo to (i) maintain such an equity component of
capitalization as required by governmental regulatory authorities; (ii) provide
its proportionate share of the funds required to permit commercial operation of
the Rockport Plant; (iii) enable AEGCo to perform all of its obligations,
covenants and agreements under, among other things, all loan agreements, leases
and related documents to which AEGCo is or becomes a party (AEGCo Agreements);
and (iv) pay all indebtedness, obligations and liabilities of AEGCo (AEGCo
Obligations) under the AEGCo Agreements, other than indebtedness, obligations or
liabilities owing to AEP. The capital funds agreement will terminate after all
AEGCo Obligations have been paid in full.
OVEC: AEP, CSPCo and several unaffiliated utility companies jointly own OVEC.
The aggregate equity participation of AEP and CSPCo in OVEC is 44.2%. Until
September 1, 2001, OVEC supplied from its generating capacity the power
requirements of a uranium enrichment plant near Portsmouth, Ohio owned by the
DOE. The sponsoring companies are now entitled to receive and pay for all OVEC
capacity (approximately 2,200 MW) in proportion to their power participation
ratios. The aggregate power participation ratio of APCo, CSPCo, I&M and OPCo is
42.1%. The proceeds from the sale of power by OVEC are designed to be sufficient
for OVEC to meet its operating expenses and fixed costs and to provide a return
on its equity capital. The Inter-Company Power Agreement, which defines the
rights of the owners and sets the power participation ratio of each, will expire
by its terms on March 12, 2006. The AEP-affiliated owners of OVEC are evaluating
the need for environmental investments related to their ownership interests.
Buckeye: Contractual arrangements among OPCo, Buckeye and other
investor-owned electric utility companies in Ohio provide for the transmission
and delivery, over facilities of OPCo and of other investor-owned utility
companies, of power generated by the two units at the Cardinal Station owned by
Buckeye and back-up power to which Buckeye is entitled from OPCo under such
contractual arrangements, to facilities owned by 25 of the rural electric
cooperatives which operate in the State of Ohio at 342 delivery points. Buckeye
is entitled under such arrangements to receive, and is obligated to pay for, the
excess of its maximum one-hour coincident peak demand plus a 15% reserve margin
over the 1,226,500 kilowatts of capacity of the generating units which Buckeye
currently owns in the Cardinal Station. Such demand, which occurred on January
23, 2003, was recorded at 1,409,726 kilowatts.
Electric Transmission and Distribution
General
AEP's public utility subsidiaries (other than AEGCo) own and operate
transmission and distribution lines and other facilities to deliver electric
power. See Item 2--Properties for more information regarding the transmission
and distribution lines. Most of the transmission and distribution services are
sold, in combination with electric power, to retail customers of AEP's public
utility subsidiaries in their service territories. These sales are made at rates
established and approved by the state utility commissions of the states in which
they operate, and in some instances, approved by the FERC. See Regulation--
Rates. The FERC regulates and approves the rates for wholesale transmission
transactions. See Regulation-- FERC. As discussed below, some transmission
services also are separately sold to non-affiliated companies.
AEP's public utility subsidiaries (other than AEGCo) hold franchises or other
rights to provide electric service in various municipalities and regions in
their service areas. In some cases, these franchises provide the utility with
the exclusive right to provide electric service. These franchises have varying
provisions and expiration dates. In general, the operating companies consider
their franchises to be adequate for the conduct of their business. For a
discussion of competition in the sale of power, see Competition.
AEP Transmission Pool
Transmission Equalization Agreement: APCo, CSPCo, I&M, KPCo and OPCo operate
their transmission lines as a single interconnected and coordinated system and
are parties to the Transmission Equalization Agreement, dated April 1, 1984, as
amended (TEA), defining how they share the costs and benefits associated with
their relative ownership of the extra-high-voltage transmission system
(facilities rated 345 KV and above) and certain facilities operated at lower
voltages (138 KV and above). The TEA has been approved by the FERC. Sharing
under the TEA is based upon each company's "member-load ratio." The member-load
ratio is calculated monthly by dividing such company's highest monthly peak
demand for the last twelve months by the aggregate of the highest monthly peak
demand for the last twelve months for all east zone operating companies. As of
December 31, 2003, the member-load ratios were as follows:
Peak
Demand Member-Load
(MW) Ratio (%)
APCo............... 6,873 31.7
CSPCo.............. 3,871 17.9
I&M................ 4,243 19.6
KPCo............... 1,564 7.2
OPCo............... 5,121 23.6
The following table shows the net (credits) or charges allocated among the
parties to the TEA during the years ended December 31, 2001, 2002 and 2003:
2001 2002 2003
-------- -------- ------
(in thousands)
APCo..................... $ (3,100) $(13,400)$ 0
CSPCo.................... 40,200 42,200 38,200
I&M...................... (41,300) (36,100) (39,800)
KPCo..................... (4,600) (5,400) (5,600)
OPCo..................... 8,800 12,700 7,200
Transmission Coordination Agreement: PSO, SWEPCo, TCC, TNC and AEPSC are
parties to a Transmission Coordination Agreement originally dated as of January
1, 1997 (TCA). The TCA has been approved by the FERC and establishes a
coordinating committee, which is charged with the responsibility of overseeing
the coordinated planning of the transmission facilities of the west zone public
utility subsidiaries, including the performance of transmission planning
studies, the interaction of such subsidiaries with independent system operators
and other regional bodies interested in transmission planning and compliance
with the terms of the OATT filed with the FERC and the rules of the FERC
relating to such tariff.
Under the TCA, the west zone public utility subsidiaries have delegated to
AEPSC the responsibility of monitoring the reliability of their transmission
systems and administering the AEP OATT on their behalf. The TCA also provides
for the allocation among the west zone public utility subsidiaries of revenues
collected for transmission and ancillary services provided under the AEP OATT.
The following table shows the net (credits) or charges allocated among the
parties to the TCA during the years ended December 31, 2001, 2002 and 2003:
2001 2002 2003
------- ------- ------
(in thousands)
PSO....................... $ 4,000 $ 4,200 $ 4,200
SWEPCo.................... 5,400 5,000 5,000
TCC....................... (3,900) (3,600) (3,600)
TNC....................... (5,500) (5,600) (5,600)
Transmission Services for Non-Affiliates: In addition to providing
transmission services in connection with their own power sales, AEP's public
utility subsidiaries and other System companies also provide transmission
services for non-affiliated companies. See Regional Transmission Organizations.
AEP's public utility subsidiaries are subject to regulation by the FERC under
the FPA in respect of transmission of electric power.
Coordination of East and West Zone Transmission: AEP's System Transmission
Integration Agreement provides for the integration and coordination of the
planning, operation and maintenance of the transmission facilities of AEP's east
and west zone public utility subsidiaries. The System Transmission Integration
Agreement functions as an umbrella agreement in addition to the TEA and the TCA.
The System Transmission Integration Agreement contains two service schedules
that govern:
o The allocation of transmission costs and revenues and
o The allocation of third-party transmission costs and revenues and System
dispatch costs.
The System Transmission Integration Agreement contemplates that additional
service schedules may be added as circumstances warrant.
Regional Transmission Organizations
On April 24, 1996, the FERC issued orders 888 and 889. These orders require
each public utility that owns or controls interstate transmission facilities to
file an open access network and point-to-point transmission tariff that offers
services comparable to the utility's own uses of its transmission system. The
orders also require utilities to functionally unbundle their services, by
requiring them to use their own tariffs in making off-system and third-party
sales. As part of the orders, the FERC issued a pro-forma tariff that reflects
the Commission's views on the minimum non-price terms and conditions for
non-discriminatory transmission service. In addition, the orders require all
transmitting utilities to establish an Open Access Same-time Information System
(OASIS), which electronically posts transmission information such as available
capacity and prices, and require utilities to comply with Standards of Conduct
that prohibit utilities' system operators from providing non-public transmission
information to the utility's merchant energy employees. The orders also allow a
utility to seek recovery of certain prudently incurred stranded costs that
result from unbundled transmission service.
In December 1999, FERC issued Order 2000, which provides for the voluntary
formation of RTOs, entities created to operate, plan and control utility
transmission assets. Order 2000 also prescribes certain characteristics and
functions of acceptable RTO proposals.
AEP is required, as a condition of FERC's approval in 2000 of AEP's merger
with CSW, to transfer functional control of its transmission facilities to one
or more RTOs. In May 2002, AEP announced an agreement with PJM to pursue terms
for its east zone public utility subsidiaries to participate in PJM, a
FERC-approved RTO. In July 2002, the FERC tentatively approved AEP subsidiaries'
decision to join PJM, subject to certain conditions being met. The satisfaction
of these conditions may only be partially within AEP's control.
In December 2002, AEP's public utility subsidiaries filed applications with
the state utility commissions of Indiana, Kentucky, Ohio and Virginia requesting
approval of the transfer of functional control of transmission assets in those
states to PJM. The status of these applications is as follows:
o The IURC conditionally approved the transfer of functional control of
I&M's transmission assets to an RTO in September 2003, though the
satisfaction of these conditions is not fully within I&M's or AEP's
control;
o In July 2003, the KPSC denied KPCo's request to join PJM based on a
lack of evidence that it would benefit Kentucky retail customers, but
granted KPCo's request for rehearing. KPCo filed a cost/benefit study
in December 2003 and a rehearing has been scheduled for April 2004;
o CSPCo and OPCo filed an application seeking approval of their plan to
join PJM in December 2002. In addition, a group of complainants
have filed a complaint with the PUCO alleging that CSPCo and OPCo
have violated Ohio law by not participating in an RTO and seeking
(i) a suspension of certain transmission-related charges to
customers, (ii) requiring that CSPCo and OPCo continue to offer
service at the prices set forth in their 1999 transition plan filing
until January 1, 2006 and (iii) a penalty of $25,000 for each day
that CSPCo and OPCo do not participate in an RTO. The PUCO
consolidated our application with the complaint in February 2003.
The PUCO has stayed the matter pending greater clarification with
respect to RTO matters at the FERC and elsewhere;
o In February 2003, the Virginia legislature enacted legislation that
would prohibit the transfer of functional control of transmission
assets to an RTO until at least July 2004 and thereafter only with
VSCC approval. The legislation requires a transfer by January 2005.
In January 2004, APCo filed a supplement to its application with the
VSCC consisting of a cost/benefit analysis of its participation in
PJM and additional information required by the VSCC. A hearing on
APCo's Virginia application is scheduled for July 2004.
In November 2003, the FERC issued an order (i) proposing to exempt AEP's east
zone public utility subsidiaries from Kentucky and Virginia laws requiring state
approval of the AEP east zone public utility subsidiaries' transfer of
functional control of their transmission assets to an RTO and (ii) directing
AEP's east zone public utility subsidiaries to join PJM by October 1, 2004.
Several issues, including whether the FERC may exempt AEP's east zone public
utility subsidiaries from Kentucky and Virginia law preventing them from joining
an RTO, have been heard by an administrative law judge. The FERC has directed
that an initial decision be issued by the ALJ by March 15, 2004.
SWEPCo and PSO currently intend to transfer functional control of their
transmission assets to SPP subject to receipt of appropriate regulatory
approvals. In February 2004, the FERC conditionally approved SPP as an RTO. The
Arkansas Public Service Commission and LPSC have required filings related to
SWEPCo's and PSO's transfer of functional control of transmission facilities to
an RTO. The remaining west zone public utility subsidiaries (TCC and TNC) are
members of ERCOT.
See Note 4 to the consolidated financial statements, entitled Rate Matters,
included in the 2003 Annual Reports and Management's Financial Discussion and
Analysis of Results of Operations under the heading entitled RTO Formation for a
discussion of public utility subsidiary participation in RTOs.
Regional Through and Out Rates
The FERC has proposed to eliminate our ability to collect certain
transmission charges associated with the transmission assets of our east zone
public utility subsidiaries and implement transitional rates to mitigate the
lost revenues for a two-year period commencing May 1, 2004. The FERC did not
indicate how or if the lost revenues would be recovered after the expiration of
the transitional rates. Management, however, believes that we are entitled to
recover costs of owning and operating these facilities, including a reasonable
rate of return. See Management's Financial Discussion and Analysis of Results of
Operations under the heading entitled FERC Order on Regional Through and Out
Rates for more information.
Regulation
General
Except for retail generation sales in Ohio, Virginia and the ERCOT area of
Texas, AEP's public utility subsidiaries' retail rates and certain other matters
are subject to traditional regulation by the state utility commissions. Retail
sales in Michigan, while still regulated, are now made at unbundled rates. Other
states in AEP's service territory have also passed restructuring legislation
that has not been implemented or has been repealed. See Electric Restructuring
and Customer Choice Legislation and Rates. AEP's subsidiaries are also subject
to regulation by the FERC under the FPA. I&M and TCC are subject to regulation
by the NRC under the Atomic Energy Act of 1954, as amended, with respect to the
operation of the Cook Plant and STP, respectively. AEP and certain of its
subsidiaries are also subject to the broad regulatory provisions of PUHCA
administered by the SEC.
Rates
Historically, state utility commissions have established electric service
rates on a cost-of-service basis, which is designed to allow a utility an
opportunity to recover its cost of providing service and to earn a reasonable
return on its investment used in providing that service. A utility's cost of
service generally reflects its operating expenses, including operation and
maintenance expense, depreciation expense and taxes. State utility commissions
periodically adjust rates pursuant to a review of (i) a utility's revenues and
expenses during a defined test period and (ii) such utility's level of
investment. Absent a legal limitation, such as a law limiting the frequency of
rate changes or capping rates for a period of time as part of a transition to
customer choice of generation suppliers, a state utility commission can review
and change rates on its own initiative. Some states may initiate reviews at the
request of a utility, customer, governmental or other representative of a group
of customers. Such parties may, however, agree with one another not to request
reviews of or changes to rates for a specified period of time.
The rates of AEP's public utility subsidiaries are generally based on the
cost of providing traditional bundled electric service (i.e., generation,
transmission and distribution service). In Ohio, Virginia and the ERCOT area of
Texas, rates are transitioning from bundled cost-based rates for electric
service to unbundled cost-based rates for transmission and distribution service
on the one hand, and market pricing for and/or customer choice of generation on
the other.
Historically, the state regulatory frameworks in the service area of the AEP
System reflected specified fuel costs as part of bundled (or, more recently,
unbundled) rates or incorporated fuel adjustment clauses in a utility's rates
and tariffs. Fuel adjustment clauses permit periodic adjustments to fuel cost
recovery from customers and therefore provide protection against exposure to
fuel cost changes. While the historical framework remains in a portion of AEP's
service territory, recovery of increased fuel costs is no longer provided for in
Ohio. Fuel recovery is also limited in the ERCOT area of Texas, but because AEP
sold MECPL and MEWTU, there is little impact on AEP of fuel recovery procedures
related to service in ERCOT.
The following state-by-state analysis summarizes the regulatory environment
of each jurisdiction in which AEP operates. Several public utility subsidiaries
operate in more than one jurisdiction.
Indiana: I&M provides retail electric service in Indiana at a bundled rate
approved by the IURC. While rates are set on a cost-of-service basis, utilities
may also generally seek to adjust fuel clause rates quarterly. I&M's base rate
is capped through December 31, 2004. Its fuel recovery rate was capped through
February 29, 2004 but is expected to return to traditional cost recovery.
Ohio: CSPCo and OPCo each operates as a functionally separated utility and
provides "default" retail electric service to customers at unbundled rates
pursuant to the Ohio Act through December 31, 2005. Market-based default retail
generation service rates will be determined in accordance with PUCO rules after
December 31, 2005, unless the rate stabilization plan filed by CSPCo and OPCo
(which, among other things, addresses default retail generation service rates
from January 1, 2006 through December 31, 2008) is approved by the PUCO, in
which case retail generation rates would be determined consistent with the rate
stabilization plan until December 31, 2008. CSPCo and OPCo are and will continue
to provide distribution services to retail customers at rates approved by the
PUCO. These rates will be frozen from their levels as of December 31, 2005 to
(i) December 31, 2008 for CSPCo and (ii) December 31, 2007 (December 31, 2008,
if the rate stabilization plan is approved) for OPCo. Transmission services will
continue to be provided at rates established by the FERC. See Note 6 to the
consolidated financial statements, entitled Customer Choice and Industry
Restructuring, included in the 2003 Annual Reports, for more information.
Oklahoma: PSO provides retail electric service in Oklahoma at a bundled rate
approved by the OCC. PSO's rates are set on a cost-of-service basis. Fuel and
purchased energy costs above the amount included in base rates are recovered by
applying a fuel adjustment factor to retail kilowatt-hour sales. The factor is
adjusted quarterly and is based upon forecasted fuel and purchased energy costs.
Over or under collections of fuel costs for prior periods can be recovered when
new quarterly factors are established. See Note 4 to the consolidated financial
statements, entitled Rate Matters, included in the 2003 Annual Reports, for
information regarding current rate proceedings.
Texas: The Texas Act requires the legal separation of generation-related
assets from transmission and distribution assets. TCC and TNC currently operate
on a functionally separated basis. In January 2002, TCC and TNC transferred all
their retail customers in the ERCOT area of Texas to MECPL, MEWTU and AEP
Commercial and Industrial REP (an AEP affiliate). TNC's retail SPP customers
were ultimately transferred to Mutual Energy SWEPCo L.P. (an AEP affiliate). TCC
and TNC provide retail transmission and distribution service on a
cost-of-service basis at rates approved by the PUCT and wholesale transmission
service under tariffs approved by the FERC consistent with PUCT rules. See Note
4 to the consolidated financial statements, entitled Rate Matters, included in
the 2003 Annual Reports, for information on current rate proceedings.
In May 2003, the PUCT delayed competition in the SPP area of Texas until at
least January 1, 2007. As such, SWEPCo's Texas operations continue to operate
and to be regulated as a traditional bundled utility with both base and fuel
rates.
Virginia: APCo provides unbundled retail electric service in Virginia. APCo's
unbundled generation, transmission (which reflect FERC approved transmission
rates) and distribution rates as well as its functional separation plan were
approved by the VSCC in December 2001.
The Virginia Act capped base rates at their mid-1999 levels until the end of
the transition period (July 1, 2007), or sooner if the VSCC finds that a
competitive market for generation exists in Virginia. The Virginia Act permits
APCo to seek a one-time change to its capped non-generation rates after January
1, 2004. The Virginia Act allows adjustments to fuel rates during the transition
period and continues to permit utilities to recover their actual fuel costs, the
fuel component of their purchased power costs and certain capacity charges. APCo
recovers its generation capacity charges through capped base rates.
West Virginia: APCo and Wheeling Power Company provide retail electric
service at bundled rates approved by the WVPSC. A plan to introduce customer
choice was approved by the West Virginia Legislature in its 2000 legislative
session. However, implementation of that plan was placed on hold pending
necessary changes to the state's tax laws in a subsequent session. Those changes
have not been made. Management currently believes that implementation of the
plan is unlikely.
While West Virginia generally allows recovery of fuel costs, the most recent
proceeding resulted in the suspension of an active fuel clause for APCo and WPCo
(though they continue to recover fuel costs through fixed bundled rates). APCo
and Wheeling Power Company are currently unable to change the current level of
fuel cost recovery, though this ability could be reinstated in a future
proceeding.
Other Jurisdictions: The public utility subsidiaries of AEP also provide
service at regulated bundled rates in Arkansas, Kentucky, Louisiana and
Tennessee and regulated unbundled rates in Michigan.
The table below illustrates the current rate regulation status of the states
in which the public utility subsidiaries of AEP operate:
<TABLE>
<CAPTION>
Percentage
Fuel Clause Rates Of AEP
System Sales System
Status of Base Rates for Profits Shared Retail
Jurisdiction Power Supply Energy Delivery Status Includes w/Ratepayers Revenues(1)
------------ -------------- --------------- -------- ---------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Ohio Frozen Distribution None Not applicable Not applicable 32%
through frozen through
2005(2) 2007 for OPCo and
2008 for CSP;
Transmission frozen
through 2005
Texas-ERCOT
(TCC, TNC) See footnote 3 Not capped or frozen Not applicable Not applicable Not applicable 9%(3)
Texas- SPP
(SWEPCo, TNC) Not capped or Active Fuel and fuel Yes, above base 5%
frozen portion of levels
purchased
power
Oklahoma Not capped or Active Fuel and fuel Yes 13%
frozen portion of
purchased
power
Indiana Capped until Active Fuel and Fuel No 10%
1/1/05 (4) portion of
purchased
power
Virginia Capped until Capped until Active Fuel and fuel No 9%
as late as late portion of
as 7/1/07(5) as 7/1/07(5) purchased
power
West Not capped or Suspended(6) Fuel and fuel Yes, but 9%
Virginia frozen portion of suspended
purchased
power
Louisiana Capped until Active Fuel and fuel Yes, above 4%
6/15/05 portion of base levels
purchased
power
Kentucky(7) Not capped or Active Fuel and fuel Yes, above 4%
frozen portion of base levels
purchased
power
Arkansas Not capped or Active Fuel and fuel Yes, above 2%
frozen portion of base levels
purchased
power
Michigan Capped until Capped until Active Fuel and fuel Yes, in some 2%
1/1/05(8) 1/1/05(8) portion of areas
purchased
power
Tennessee Not capped or Active Fuel and fuel No 1%
frozen portion of
purchased
power
</TABLE>
- -------------
(1) Represents the percentage of revenues from sales to retail customers from
AEP utility companies operating in each state to the total AEP System
revenues from sales to retail customers for the year ended December 31, 2003.
(2) CSPCo and OPCo have filed a rate stabilization plan with the PUCO to
establish (after the market development period) a rate stabilization period
from January 1, 2006 through December 31, 2008 during which their default
retail generation rates would be established pursuant to such filing. The
rate stabilization plan would also extend OPCo's distribution rate freeze
through the end of 2008.
(3) Retail electric service in the ERCOT area of Texas is provided to most
customers through unaffiliated REPs which must offer PTB rates until January
1, 2007.
(4) Capped base rates pursuant to a 1999 settlement with base rate freeze
extended pursuant to merger stipulation.
(5) Base rates are capped until the earlier of July 1, 2007 or a finding by the
VSCC that a competitive market for generation exists. One-time change in
non-generation rates is allowed in Virginia.
(6) Expanded net energy clause suspended in West Virginia pursuant to a 1999
rate case stipulation, but subject to change in a future proceeding.
(7) KPCo applied for an environmental surcharge to recover costs incurred in
connection with the installation of emission control equipment and in 2003
the KPSC granted recovery of $18 million.
(8) Capped base and fuel rates pursuant to a 1999 settlement and base rates
extended pursuant to merger stipulation.
FERC
Under the FPA, FERC regulates rates for interstate sales at wholesale,
transmission of electric power, accounting and other matters, including
construction and operation of hydroelectric projects. FERC regulations require
AEP to provide open access transmission service at FERC-approved rates. The
transmission service regulated by FERC is predominantly wholesale transmission
service, which is service not associated with bundled electricity sales to
retail customers. FERC also regulates unbundled transmission service to retail
customers.
Under the FPA, the FERC regulates the sale of power for resale in interstate
commerce by (i) approving contracts for wholesale sales to municipal and
cooperative utilities and (ii) granting authority to public utilities to sell
power at wholesale at market-based rates upon a showing that the seller lacks
the ability to improperly influence market prices. AEP has market-rate authority
from FERC, under which most of its wholesale marketing activity takes place. In
November 2001, the FERC issued an order in connection with its triennial review
of AEP's market based pricing authority requiring (i) certain actions by AEP in
connection with its sales and purchases within its control area and (ii) posting
of information related to generation facility status on AEP's website. AEP has
appealed this order, and the FERC has issued an order delaying the effective
date of the order. This was done in connection with the FERC's adoption of a new
test called supply management assessment (SMA). In December 2003, the FERC
issued a staff paper discussing alternatives to SMA and held a technical
conference in January 2004. See Note 7 to the consolidated financial statements,
entitled Commitments and Contingencies, included in the 2003 Annual Reports, for
more information on the current status of this proceeding.
Electric Restructuring and Customer Choice Legislation
Certain states in AEP's service area have adopted restructuring or customer
choice legislation. In general, this legislation provides for a transition from
bundled cost-based rate regulated electric service to unbundled cost-based rates
for transmission and distribution service and market pricing for the supply of
electricity with customer choice of supplier. At a minimum, this legislation
allows retail customers to select alternative generation suppliers. Electric
restructuring and/or customer choice began on January 1, 2001 in Ohio and on
January 1, 2002 in Michigan, Virginia and the ERCOT area of Texas. Electric
restructuring in the SPP area of Texas has been delayed by the PUCT until at
least 2007. AEP's public utility subsidiaries operate in both the ERCOT and SPP
areas of Texas.
Implementation of legislation enacted in West Virginia to allow retail
customers to choose their electricity supplier is on hold. Before West
Virginia's choice plan can be effective, tax legislation must be passed to
preserve pre-legislation levels of funding for state and local governments. No
further legislation has been passed. Management currently believes that
implementation of the plan is unlikely. In February 2003, Arkansas repealed its
restructuring legislation.
See Note 5 to the consolidated financial statements, entitled Effects of
Regulation, included in the 2003 Annual Reports, for a discussion of the effect
of restructuring and customer choice legislation on accounting procedures. See
Note 6 to the consolidated financial statements entitled Customer Choice and
Industry Restructuring and Management's Financial Discussion and Analysis and
Financial Condition, included in the 2003 Annual Reports, under the heading
entitled Corporate Separation for a discussion of AEP's corporate separation
plan.
Michigan Customer Choice
Customer choice commenced for I&M's Michigan customers on January 1, 2002.
Rates for retail electric service for I&M's Michigan customers were unbundled
(though they continue to be regulated) to allow customers the ability to
evaluate the cost of generation service for comparison with other suppliers. At
December 31, 2003, none of I&M's Michigan customers had elected to change
suppliers and no alternative electric suppliers are registered to compete in
I&M's Michigan service territory.
Ohio Restructuring
The Ohio Act requires vertically integrated electric utility companies that
offer competitive retail electric service in Ohio to separate their generating
functions from their transmission and distribution functions. Following the
market development period (which will terminate no later than December 31,
2005), retail customers will receive distribution and, where applicable,
transmission service from the incumbent utility whose distribution rates will be
approved by the PUCO and whose transmission rates will be approved by the FERC.
CSPCo and OPCo have filed a rate stabilization plan with the PUCO that, among
other things, addresses default generation service rates from January 1, 2006
through December 31, 2008. See Regulation--FERC for a discussion of FERC
regulation of transmission rates and Regulation--Rates--Ohio for a discussion of
the impact of restructuring on distribution rates. If the PUCO approves the rate
stabilization plan filed by CSPCo and OPCo, they will remain functionally
separated through at least December 31, 2008.
Texas Restructuring
Signed into law in June of 1999, the Texas Act substantially amended the
regulatory structure governing electric utilities in Texas in order to allow
retail electric competition for all customers. Among other things, the Texas
Legislation:
o gave Texas customers the opportunity to choose their REP beginning January
1, 2002 (delayed until at least 2007 in the SPP portion of Texas),
o required each utility to legally separate into a REP, a power generation
company, and a transmission and distribution utility, and
o required that REPs obtain electricity at generally unregulated rates,
except that the prices that may be charged to residential and small
commercial customers by REPs affiliated with a utility within the
affiliated utility's service area are set by the PUCT, at the PTB, until
certain conditions in the Texas Legislation are met.
The Texas Act provides each affected utility an opportunity to recover its
generation related regulatory assets and stranded costs resulting from the legal
separation of the transmission and distribution utility from the generation
facilities and the related introduction of retail electric competition.
Regulatory assets consist of the Texas jurisdictional amount of
generation-related regulatory assets and liabilities in the audited financial
statements as of December 31, 1998. Stranded costs consist of the positive
excess of the net regulated book value of generation assets (as of December 31,
2001) over the market value of those assets, taking specified factors into
account, as ultimately determined in a PUCT true-up proceeding (the True-Up
Proceeding).
For a discussion of (i) regulatory assets and stranded costs subject to
recovery by TCC and (ii) rate adjustments made after implementation of
restructuring to allow recovery of certain costs by or with respect to TCC and
TNC, see Texas Regulatory Asset and Stranded Cost Recovery and
Post-Restructuring Wires Charges.
Virginia Restructuring
The Virginia Act was enacted in 1999 providing for retail choice of
generation suppliers to be phased in over the January 1, 2002 to January 1, 2004
period. The Virginia Act required jurisdictional utilities to unbundle their
power supply and energy delivery rates and to file functional separation plans
by January 1, 2002. APCo filed its plan and, following VSCC approval of a
settlement agreement, now operates in Virginia as a functionally separated
electric utility charging unbundled rates for its retail sales of electricity.
The settlement agreement addressed functional separation, leaving decisions
related to legal separation for later VSCC consideration.
Texas Regulatory Assets and Stranded Cost Recovery and Post-Restructuring
Wires Charges
TCC and TNC may recover generation-related regulatory assets and
plant-related stranded costs. Regulatory assets consist of the Texas
jurisdictional amount of generation-related regulatory assets and liabilities in
the audited financial statements as of December 31, 1998. Plant-related stranded
costs consist of the positive excess of the net regulated book value of
generation assets (as of December 31, 2001) over the market value of those
assets, taking specified factors into account. The Texas Act allows alternative
methods of valuation to determine the fair market value of generation assets,
including outright sale, full and partial stock valuation and asset exchanges,
and also, for nuclear generation assets, the ECOM model.
The Texas Act further permits utilities to establish a special purpose entity
to issue securitization bonds for the recovery of generation-related regulatory
assets and, after the 2004 true-up proceeding, the amount of plant-related
stranded costs and remaining generation-related regulatory assets not previously
securitized. Securitization bonds allow for regulatory assets and plant-related
stranded costs to be refinanced with recovery of the bond principal and
financing costs ensured through a non-bypassable rate surcharge by the regulated
transmission and distribution utility over the life of the securitization bonds.
Any plant-related stranded costs or generation-related regulatory assets not
recovered through the sale of securitization bonds may be recovered through a
separate non-bypassable competitive transition charge to transmission and
distribution customers.
Generation-Related Regulatory Assets
In 1999, TCC filed an application with the PUCT to securitize approximately
$1.27 billion of its retail generation-related regulatory assets and
approximately $47 million in other qualified restructuring costs. On March 27,
2000, the PUCT issued an order authorizing issuance of up to $797 million of
securitization bonds including $764 million for recovery of net generation-
related regulatory assets and $33 million for other qualified refinancing costs.
The securitization bonds were issued in February 2002. TCC has included a
transition charge in its distribution rates to repay the bonds over a 14-year
period. Another $185 million of regulatory assets are being recovered through
distribution rates beginning in January 2002. Remaining generation related
regulatory assets of approximately $195 million will be included in TCC's
request to recover stranded costs in the True-Up Proceeding.
Plant-Related Stranded Costs
It is anticipated that TCC will have significant plant-related stranded
costs following the planned sale of its generation assets. As noted, stranded
costs are ultimately determined in the True-Up Proceeding. The PUCT adopted a
rule regarding the timing of the True-Up Proceedings scheduling TNC's filing
(which has no generation related stranded costs) in May 2004 and TCC's filing in
September 2004 or 60 days after the completion of the sale of TCC's generation
assets, if later.
2004 True-Up Proceedings
The purpose of the True-Up Proceeding is to (i) quantify and reconcile the
amount of plant-related stranded costs and generation-related regulatory assets
taking into account amounts that have not been securitized; (ii) conduct
wholesale capacity auction true-ups; (iii) establish final fuel recovery
balances; (iv) determine the retail clawback component; and (v) quantify
unrefunded excess earnings (collectively, the True-Up Adjustment). The True-Up
Adjustment will be reflected as either additional charges or credits to retail
customers through transmission and distribution rates collected by REPs and
remitted to the utility.
After final determination of True-Up Adjustments by the PUCT, TCC may
issue securitization bonds in an amount equal to the sum of (i) its
plant-related stranded costs (where applicable) and (ii) generation-related
regulatory assets, less its generation-related regulatory assets that have been
previously securitized. If securitization bonds are not issued to finance all
such amounts, TCC will seek recovery of these amounts as well as the other
components of the True-Up Adjustments through non-bypassable competition
transition charges in transmission and distribution rates.
Plant-Related Stranded Cost Determination: The Texas Legislation
authorized the use of several valuation methodologies to quantify plant-related
stranded costs in the True-Up Proceeding, including by the sale of assets. TCC
intends to sell its generation assets in order to obtain their market value for
the purpose of determining plant-related stranded costs for the True-Up
Proceeding and comply with the Texas Legislation. In the True-Up Proceeding, the
amount of plant-related stranded costs under this market valuation methodology
will be the amount by which net book value of TCC's generating assets exceeds
the market value of the generation assets as measured by the net proceeds from
the sale of the assets.
Wholesale Capacity Auction True-Up Component: The PUCT used a computer model
or projection, called an ECOM model, to estimate stranded costs related to
generation plant assets in the unbundled cost of service proceedings. See Note 4
to the consolidated financial statements, entitled Rate Matters, included in the
2003 Annual Reports for further discussion. In connection with using the ECOM
model to calculate the stranded cost estimate, the PUCT estimated the market
power prices that will be received in the competitive wholesale generation
market. Any difference between the ECOM model market prices and actual market
power prices as measured by generation capacity auctions required by the Texas
Legislation during the period of January 1, 2002 through December 31, 2003 will
be a component of the True-Up Proceeding, either increasing or decreasing the
amount of recovery for TCC. Actual market prices have been lower than the ECOM
model market prices. Therefore, TCC recorded a $480 million regulatory asset and
related revenues for 2002 and 2003.
Fuel Recovery Balance Determination: The fuel component will be determined by
the amount of fuel costs and expenses the PUCT approves based on a final fuel
reconciliation that TCC and TNC have filed. In 2002, TNC filed with the PUCT to
reconcile fuel costs and to defer any unrecovered portion applicable to retail
sales within its ERCOT service area for inclusion in the True-Up Proceeding. In
January 2004, the PUCT announced a final ruling in TNC's fuel reconciliation
case that established TNC's unrecovered fuel balance, including interest for the
ERCOT service territory, at $6.2 million. This balance will be included in TNC's
2004 true-up proceeding. In 2002, TCC filed with the PUCT to reconcile fuel
costs and to establish its deferred over-recovery of fuel balance for inclusion
in the 2004 True-Up Proceeding. In February 2004, an ALJ issued recommendations
finding a $205 million over-recovery in this fuel proceeding. See TCC Fuel
Reconciliation and TNC Fuel Reconciliation in Note 4 to the consolidated
financial statements, entitled Rate Matters, included in the 2003 Annual
Reports, for further discussion. Any over-recovery, plus interest thereon, will
be credited to customers as a component of the True-Up Proceeding.
Retail Clawback Component: The Texas Legislation provides for each price to
beat (PTB) retail electricity provider (REP) to refund to its affiliated
transmission and distribution utility the excess of the PTB revenues over market
prices (subject to certain conditions and a limitation of $150 per customer).
This retail clawback applies only to the (i) residential and (ii) small
commercial classes of customers. If 40% of the load for such customer class is
served by competitive REPs, the retail clawback is not applied for such class.
During 2003, TCC and TNC filed to notify the PUCT that competitive REPs serve
over 40% of the load in the small commercial class. The PUCT has ruled that this
threshold has been met with respect to the small commercial class for each of
TCC and TNC. AEP had accrued a total regulatory liability of approximately $66
million for all obligations related to retail clawback on its REP's books. As a
result of the PUCT ruling on the small commercial retail clawback, $9 million of
this regulatory liability was no longer required and was reversed.
Unrefunded Excess Earnings Component: The Texas Legislation provides, as a
component of the True-Up Proceeding, for an earnings test each year from 1999
through 2001. The Texas Legislation requires PUCT approval of the annual
earnings test calculation. The PUCT has ruled that each of SWEPCo, TCC and TNC
has excess earnings and, in certain instances, has ordered a reduction in
distribution rates for the purpose of eliminating such excess earnings. AEP has
appealed both the methodology of determining excess earnings and the reduction
of distribution rates. See Note 4 to the consolidated financial statements,
entitled Rate Matters, included in the 2003 Annual Reports, for further
discussion, including the specific amounts in dispute. The PUCT rulings and the
reduction in distribution rates effectively removes unrefunded excess earnings
as a component to be determined by the True-Up Proceedings. To the extent AEP
prevails in its appeal of the reduction in distribution rates, unrefunded excess
earnings, as finally determined, would be included in the True-Up Proceedings
and result in a reduction of the True-Up Adjustment.
Pursuant to PUCT rules, if total stranded costs determined in the 2004
True-Up Proceeding are less than the amount of previously securitized regulatory
assets, the PUCT can implement an offsetting credit to transmission and
distribution rates. The Texas Third Court of Appeals ruled in February 2003 that
the Texas Legislation does not contemplate the refunding to customers of
negative stranded costs. In addition, the Court ruled that negative stranded
costs cannot be offset against other true-up adjustments including final
under-recovered fuel amounts. Portions of this ruling have been appealed to the
Texas Supreme Court. See Note 4 to the consolidated financial statements,
entitled Rate Matters, included in the 2003 Annual Reports, for more
information.
Further Securitization Bonds and Wires Charges: After final determination of
its stranded costs and other true-up adjustments by the PUCT, TCC expects to
issue securitization bonds in the amount of its currently non-securitized
plant-related stranded costs and generation-related regulatory assets determined
in the 2004 true-up proceeding. The bonds can have a maximum term of 15 years.
If securitization bonds are not issued to finance all currently non-securitized
plant-related stranded costs and generation-related regulatory assets, TCC will
seek recovery of these amounts as well as its other true-up adjustments, through
a non-bypassable competition transition charge in transmission and distribution
rates.
For a discussion of recovery of regulatory assets and stranded costs in Ohio
and Virginia, see Note 6 to the consolidated financial statements entitled
Customer Choice and Industry Restructuring, included in the 2003 Annual Reports.
Competition
AEP's public utility subsidiaries have the right (which in some cases is
exclusive) to sell electric power at retail within their respective service
areas in the states of Arkansas, Indiana, Kentucky, Louisiana, Oklahoma,
Tennessee, West Virginia and the SPP area of Texas. In Michigan, Ohio and
Virginia, AEP's public utility subsidiaries continue to provide service to
customers who have not been offered or have not selected alternate service from
competing suppliers. In those states, service is currently being provided
according to prescribed rules and rates. In the ERCOT area of Texas, TCC and TNC
sell power (through December 31, 2004) to Centrica, which provides PTB service
to certain former customers of TCC and TNC and must compete for customers. See
Regulation -- Rates for a description of the setting of rates for power sold at
bundled or unbundled state-regulated rates.
The public utility subsidiaries of AEP, like many other electric utilities,
have traditionally provided electric generation and energy delivery, consisting
of transmission and distribution services, as a single product to their retail
customers. Legislation has been enacted in Michigan, Ohio, Texas and Virginia
that allows for customer choice of generation supplier. Although restructuring
legislation has been passed in Oklahoma and West Virginia, it has been delayed
indefinitely in Oklahoma and not implemented in West Virginia. In addition,
restructuring legislation in Arkansas has been repealed. See Electric
Restructuring Legislation. Customer choice legislation generally allows
competition in the generation and sale of electric power, but not in its
transmission and distribution.
See Management's Financial Discussion and Analysis of Results of Operations
and Note 6 to the consolidated financial statements entitled Customer Choice and
Industry Restructuring, included in the 2003 Annual Reports, for further
information with respect to restructuring legislation affecting AEP
subsidiaries.
The public utility subsidiaries of AEP, like the electric industry generally,
face increasing competition in the sale of available power on a wholesale basis,
primarily to other public utilities and power marketers. The Energy Policy Act
of 1992 was designed, among other things, to foster competition in the wholesale
market by creating a generation market with fewer barriers to entry and
mandating that all generators have equal access to transmission services. As a
result, there are more generators able to participate in this market. The
principal factors in competing for wholesale sales are price (including fuel
costs), availability of capacity and power and reliability of service.
AEP's public utility subsidiaries also compete with self-generation and with
distributors of other energy sources, such as natural gas, fuel oil and coal,
within their service areas. The primary factors in such competition are price,
reliability of service and the capability of customers to utilize sources of
energy other than electric power. With respect to competing generators and
self-generation, the public utility subsidiaries of AEP believe that they
generally maintain a favorable competitive position. With respect to alternative
sources of energy, the public utility subsidiaries of AEP believe that the
reliability of their service and the limited ability of customers to substitute
other cost-effective sources for electric power place them in a favorable
competitive position, even though their prices may be higher than the costs of
some other sources of energy.
Significant changes in the global economy in recent years have led to
increased price competition for industrial customers in the United States,
including those served by the AEP System. Some of these industrial customers
have requested price reductions from their suppliers of electric power. In
addition, industrial customers that are downsizing or reorganizing often close a
facility based upon its costs, which may include, among other things, the cost
of electric power. The public utility subsidiaries of AEP cooperate with such
customers to meet their business needs through, for example, providing various
off-peak or interruptible supply options pursuant to tariffs filed with the
various state commissions. Occasionally, these rates are first negotiated, and
then filed with the state commissions. The public utility subsidiaries believe
that they are unlikely to be materially adversely affected by this competition.
Seasonality
The sale of electric power is generally a seasonal business. In many parts of
the country, demand for power peaks during the hot summer months, with market
prices also peaking at that time. In other areas, power demand peaks during the
winter. The pattern of this fluctuation may change due to the nature and
location of AEP's facilities and the terms of power sale contracts into which
AEP enters. In addition, AEP has historically sold less power, and consequently
earned less income, when weather conditions are milder. Unusually mild weather
in the future could diminish AEP's results of operations and may impact its
financial condition.
Investments-Gas Operations
AEP, through certain subsidiaries, operates and owns an interest in a
significant amount of gas-related assets, including:
o 6,400 miles of natural gas pipelines between two systems;
o 127 billion cubic feet of storage among two facilities;
o Five natural gas processing plants; and
o Certain gas marketing contracts.
AEP, in operating its natural gas assets, enters into transactions for the
purchase and sale of natural gas. These transactions involve (i) purchases of
natural gas from producers and subsequent sales to end users and local
distribution companies, (ii) physical gas transactions along our natural gas
pipelines to maximize revenue, based on price differences between various
locations along those assets and (iii) physical (some of which involve purchases
of gas that is stored in AEP storage assets) and financial transactions to
mitigate price volatility risk. Gas transactions are executed (i) with numerous
counterparties, (ii) directly with brokers or (iii) through brokerage accounts
with brokers who are registered with the Commodity Futures Trading Commission.
Brokers and counterparties may require cash or cash related instruments to be
deposited on these transactions as margin against open positions. As of December
31, 2003, counterparties posted approximately $224 million in cash, cash
equivalents and letters of credit with AEPES to satisfy the counterparties'
obligations in connection with natural gas transactions. AEPES posted
approximately $42 million. Since AEP's open gas trading contracts are valued
based on changes in gas market prices, our exposures change daily.
AEP's trading and marketing operations are generally limited to risk
management and are focused in regions in which AEP owns assets.
AEP acquired its Bammel storage facility (which has approximately 118 billion
cubic feet of storage capacity) from Enron Corporation and certain of its
subsidiaries. Because Enron and its relevant subsidiary are now bankrupt, the
bankruptcy trustee and other third parties have taken and may take additional
positions in the bankruptcy proceedings or litigation that seek to limit or
compromise our use of this facility. See Notes 7 and 10 to the consolidated
financial statements entitled Commitments and Contingencies and Acquisitions,
Dispositions, Discontinued Operations, Impairments, Assets Held for Sale and
Assets Held and Used, respectively, included in the 2003 Annual Reports for more
information.
During the third quarter of 2003, we selected an advisor to review our
options regarding the assets of our gas operations business. In February 2004,
we signed a definitive agreement to sell Louisiana Intrastate Gas (which has
approximately 2000 miles of pipeline) and intend to complete the sale of the
Jefferson Island storage facility (which has approximately 9 billion cubic feet
of storage capacity) in 2004. We are considering our options with respect to our
Houston Pipe Line and related assets. See Note 10 to the consolidated financial
statements entitled Dispositions, Discontinued Operations, Impairments, Assets
Held for Sale and Assets Held and Used, included in the 2003 Annual Reports for
more information.
Investments-UK Operations
AEP, through certain subsidiaries, operates and owns 4,000 MW of power
generation facilities in the UK and engaged in the following activities
throughout 2003:
o Selling wholesale power in the UK;
o Trading and marketing power transactions, with numerous counterparties,
predominantly limited to risk management around assets used or managed by
AEP subsidiaries in the UK. Since AEP's open power trading contracts are
valued based on changes in market power prices, our exposures change daily;
and
o Procuring and transporting coal to fuel AEP's UK generation facilities and
for sale to third parties. Its third party transactions exist because
transporting coal is more economical in quantities exceeding those required
to operate AEP assets. AEP uses financial instruments executed with
numerous counterparties to manage the financial risk of these activities.
Since AEP's open coal and freight contracts are based on changes in market
prices, our exposures change daily.
AEP expects to sell all its UK operations assets and contracts as a going
concern, in one or more transactions, by the end of 2004. During the fourth
quarter of 2003, AEP selected an advisor for the disposition of its UK business.
Investments- Other
General
AEP, through certain subsidiaries, conducts certain business operations other
than those included in other segments in which it uses and manage a portfolio of
energy-related assets. Consistent with its business strategy, AEP intends to
dispose of many of these non-core assets. The assets currently used and managed
include:
o 1,354 MW of domestic and 1,235 MW of international power generation
facilities (of which its ownership is approximately 827 MW and 680 MW,
respectively);
o Coal mines and related facilities; and
o Barge, rail and other fuel transportation related assets.
These operations include the following activities:
o Entering into long-term transactions to buy or sell capacity, energy, and
ancillary services of electric generating facilities, either existing or to
be constructed, at various locations in North America and Europe;
o Holding and/or operating various properties, coal reserves, mining
operations and royalty interests in Colorado, Kentucky, Louisiana, Ohio,
Pennsylvania and West Virginia; and
o Through MEMCO Barge Line Inc., transporting coal and dry bulk commodities,
primarily on the Ohio, Illinois, and Lower Mississippi rivers for AEP, as
well as unaffiliated customers. AEP, through certain subsidiaries, owns or
leases 7,000 railcars, 1,800 barges, 37 towboats and two coal handling
terminals with 20 million tons of annual capacity.
AEP has in the past two years written down the value of certain of these
investments. See Management's Financial Discussion and Analysis of Results of
Operations and Note 10 to the consolidated financial statements entitled
Acquisitions, Dispositions, Discontinued Operations, Impairments, Assets Held
for Sale and Assets Held and Used, included in the 2003 Annual Reports.
Dow Chemical Cogeneration Facility
AEP has entered into an agreement with The Dow Chemical Company to construct
a 900 MW cogeneration facility at Dow's chemical facility in Plaquemine,
Louisiana. AEP's subsidiary, OPCo, is entitled to 100% of the facility's
capacity and energy over The Dow Chemical Company's requirements and has
contracted to sell the power from this facility for twenty years to Tractebel
Energy Marketing, Inc. (Tractebel). The power supply contract with Tractebel is
in dispute. See Notes 7 and 10 to the consolidated financial statements,
entitled Commitments and Contingencies and Acquisitions, Dispositions,
Discontinued Operations, Impairments, Assets Held for Sale and Assets Held and
Used, respectively, included in the 2003 Annual Reports, for more information.
Item 2. Properties
Generation Facilities
General
At December 31, 2003, the AEP System owned (or leased where indicated)
generating plants with net power capabilities (east zone public utility
subsidiaries-winter rating; west zone public utility subsidiaries-summer rating)
shown in the following table:
Coal Natural Hydro Nuclear Lignite Oil Total
Company Stations MW Gas MW MW MW MW MW MW
------- -------- ------ ------- ---- ----- ---- ---- ----
AEGCo...... 1(a) 1,300 1,300
APCo....... 17(b) 5,073 798 5,871
CSPCo...... 6(e) 2,595 2,595
I&M........ 10(a) 2,295 11 2,143 4,449
KPCo....... 1 1,060 1,060
OPCo....... 8(b)(f) 8,472 48 8,520
PSO........ 8(c) 1,018 3,139 25 4,182
SWEPCo..... 9 1,848 1,797 842 4,487
TCC........ 12(c)(d)(g) 686 3,175 6 630 4,497
TNC........ 12(c) 377 999 10 1,386
-- ----- ---- --- ---- --- -- -----
Totals: 84 24,724 9,110 863 2,773 842 35 38,347
-- ------ ----- --- ----- --- -- ------
(a) Unit 1 of the Rockport Plant is owned one-half by AEGCo and one-half by I&M.
Unit 2 of the Rockport Plant is leased one-half by AEGCo and one-half by I&M.
The leases terminate in 2022 unless extended.
(b) Unit 3 of the John E. Amos Plant is owned one-third by APCo and two-thirds
by OPCo.
(c) PSO, TCC and TNC jointly own the Oklaunion power station. Their respective
ownership interests are reflected in this table.
(d) Reflects TCC's interest in STP.
(e) CSPCo owns generating units in common with CG&E and DP&L. Its ownership
interest of 1,330 MW is reflected in this table.
(f) The scrubber facilities at the General James M. Gavin Plant are leased. The
lease terminates in 2010 unless extended.
(g) See Item 1 -- Utility Operations -- Electric Generation -- Deactivation and
Planned Disposition of Generation Facilities for a discussion of TCC's
planned disposition of all its generation facilities.
In addition to the generating facilities described above, AEP has ownership
interests in other electrical generating facilities, both foreign and domestic.
Information concerning these facilities at December 31, 2003 is listed below.
Capacity Ownership
Facility Fuel Location Total MW Interest Status
-------- --------- -------- ---------- --------- ------
Brush II (a)........... Natural gas Colorado 68 47.75% QF
Desert Sky Wind Farm... Wind Texas 161 100% EWG
Mulberry............... Natural gas Florida 120 46.25% QF
Orange Cogen........... Natural gas Florida 103 50% QF
Sweeny................. Natural gas Texas 480 50% QF
Thermo Cogeneration (a) Natural gas Colorado 272 50% QF
Trent Wind Farm........ Wind Texas 150 100% EWG
----
Total U.S. 1,354
-----
Bajio.................. Natural gas Mexico 605 50% FUCO
Ferrybridge (b)........ Coal United 2,000 100% FUCO
Kingdom
Fiddler's Ferry (b).... Coal United 2,000 100% FUCO
Kingdom
Nanyang (a)............ Coal China 250 70% FUCO
Southcoast (a)......... Natural gas United 380 50% FUCO
Kingdom ----
Total International 5,235
-----
(a) See Note 10 to the consolidated financial statements entitled Acquisitions,
Dispositions, Discontinued Operations, Impairments, Assets Held for Sale and
Assets Held and Used, included in the 2003 Annual Reports, for a discussion
of AEP's planned use and/or disposition of independent power producer and
foreign generation assets.
(b) Ferrybridge and Fiddler's Ferry are properties that have been designated as
discontinued operations and intended to be sold in 2004. See Note 10 to the
consolidated financial statements entitled Acquisitions, Dispositions,
Discontinued Operations, Impairments, Assets Held for Sale and Assets Held
and Used, included in the 2003 Annual Reports, for more information.
Cook Nuclear Plant and STP
The following table provides operating information relating to the Cook Plant
and STP.
Cook Plant STP(a)
Unit 1 Unit 2 Unit 1 Unit 2
Year Placed in Operation.......... 1975 1978 1988 1989
Year of Expiration of NRC
License (b)...................... 2014 2017 2027 2028
Nominal Net Electrical Rating in
Kilowatts........................ 1,036,000 1,107,000 1,250,600 1,250,600
Net Capacity Factors
2003 (c)........................ 73.5% 74.5% 62.0% 81.2%
2002............................. 86.6% 80.5% 99.2% 75.0%
2001 (d)......................... 87.3% 83.4% 94.4% 87.1%
- ------------
(a) Reflects total plant.
(b) For economic or other reasons, operation of the Cook Plant and STP for the
full term of their operating licenses cannot be assured.
(c) The capacity factors for both units of the Cook Plant were reduced in 2003
due to an unplanned maintenance outage to implement upgrades to the traveling
water screens system following an alewife fish intrusion.
(d) The capacity factor for both units of the Cook Plant was significantly
reduced in 2001 due to an unplanned dual maintenance outage in September 2001
to implement design changes that improved the performance of the essential
service water system.
Costs associated with the operation (excluding fuel), maintenance and
retirement of nuclear plants continue to be more significant and less
predictable than costs associated with other sources of generation, in large
part due to changing regulatory requirements and safety standards, availability
of nuclear waste disposal facilities and experience gained in the construction
and operation of nuclear facilities. I&M and TCC may also incur costs and
experience reduced output at Cook Plant and STP, respectively, because of the
design criteria prevailing at the time of construction and the age of the
plant's systems and equipment. Nuclear industry-wide and Cook Plant and STP
initiatives have contributed to slowing the growth of operating and maintenance
costs at these plants. However, the ability of I&M and TCC to obtain adequate
and timely recovery of costs associated with the Cook Plant and STP,
respectively, including replacement power, any unamortized investment at the end
of the useful life of the Cook Plant and STP (whether scheduled or premature),
the carrying costs of that investment and retirement costs, is not assured. See
Item 1 -- Utility Operations -- Electric Generation -- Planned Deactivation and
Planned Disposition of Generation Facilities for a discussion of TCC's planned
disposition of its interest in STP.
Potential Uninsured Losses
Some potential losses or liabilities may not be insurable or the amount of
insurance carried may not be sufficient to meet potential losses and
liabilities, including liabilities relating to damage to the Cook Plant or STP
and costs of replacement power in the event of a nuclear incident at the Cook
Plant or STP. Future losses or liabilities which are not completely insured,
unless allowed to be recovered through rates, could have a material adverse
effect on results of operations and the financial condition of AEP, I&M, TCC and
other AEP System companies. See Note 7 to the consolidated financial statements
entitled Commitments and Contingencies, incorporated by reference in Item 8, for
information with respect to nuclear incident liability insurance.
Transmission and Distribution Facilities
The following table sets forth the total overhead circuit miles of
transmission and distribution lines of the AEP System and its operating
companies and that portion of the total representing 765,000-volt lines:
Total Overhead
Circuit Miles of
Transmission and Circuit Miles of
Distribution Lines 765,000-volt Lines
------------------ ------------------
AEP System (a)......................... 216,685(b) 2,026
APCo.................................. 50,969 644
CSPCo. (a)............................ 14,016 --
I&M................................... 21,957 615
Kingsport Power Company............... 1,338 --
KPCo.................................. 10,703 258
OPCo.................................. 30,559 509
PSO................................... 21,531 --
SWEPCo................................ 20,879 --
TCC................................... 29,424 --
TNC................................... 13,622 --
Wheeling Power Company................ 1,688 --
- ------------
(a) Includes 766 miles of 345,000-volt jointly owned lines.
(b) Includes 73 miles of transmission lines not identified with an operating
company.
Titles
The AEP System's generating facilities are generally located on lands owned
in fee simple. The greater portion of the transmission and distribution lines of
the System has been constructed over lands of private owners pursuant to
easements or along public highways and streets pursuant to appropriate statutory
authority. The rights of AEP's public utility subsidiaries in the realty on
which their facilities are located are considered adequate for use in the
conduct of their business. Minor defects and irregularities customarily found in
title to properties of like size and character may exist, but such defects and
irregularities do not materially impair the use of the properties affected
thereby. AEP's public utility subsidiaries generally have the right of eminent
domain whereby they may, if necessary, acquire, perfect or secure titles to or
easements on privately held lands used or to be used in their utility
operations.
Substantially all the fixed physical properties and franchises of the AEP
System operating companies, except for limited exceptions, are subject to the
lien of the mortgage and deed of trust securing the first mortgage bonds of each
such company.
System Transmission Lines and Facility Siting
Legislation in the states of Arkansas, Indiana, Kentucky, Louisiana,
Michigan, Ohio, Texas, Tennessee, Virginia, and West Virginia requires prior
approval of sites of generating facilities and/or routes of high-voltage
transmission lines. Delays and additional costs in constructing facilities have
been experienced as a result of proceedings conducted pursuant to such statutes,
as well as in proceedings in which operating companies have sought to acquire
rights-of-way through condemnation, and such proceedings may result in
additional delays and costs in future years.
Construction Program
General
The AEP System, with input from its state utility commissions, continuously
assesses the adequacy of its generation, transmission, distribution and other
facilities to plan and provide for the reliable supply of electric power and
energy to its customers. In this assessment process, assumptions are continually
being reviewed as new information becomes available, and assessments and plans
are modified, as appropriate. Thus, System reinforcement plans are subject to
change, particularly with the restructuring of the electric utility industry.
Proposed Transmission Facilities
APCo is proceeding with its plan to build the Wyoming-Jacksons Ferry
765,000-volt transmission line. The WVPSC and the VSCC have issued certificates
authorizing construction and operation of the line. On December 31, 2002, the
U.S. Forest Service issued a final environmental impact statement and record of
decision to allow the use of federal lands in the Jefferson National Forest for
construction of a portion of the line. APCo must still receive additional
federal permits, but does not expect that obtaining these will negatively affect
its ability to complete construction.
Construction Expenditures
The following table shows construction expenditures (including environmental
and non-utility plant expenditures) during 2001, 2002 and 2003 and current
estimates of 2004 construction expenditures, in each case including AFUDC but
excluding assets acquired under leases.
2001 2002 2003 2004
Actual Actual Actual Estimate
(in thousands)
AEP System (a)........... $1,832,000 $1,709,800 $1,358,400 $1,531,300
AEGCo.................. 6,900 5,300 22,200 18,400
APCo................... 306,000 276,500 288,800 405,900
CSPCo.................. 132,500 136,800 136,300 130,300
I&M.................... 91,100 159,400 184,600 185,600
KPCo................... 37,200 178,700 81,700 36,100
OPCo................... 344,600 354,800 249,700 303,800
PSO.................... 124,900 89,400 86,800 80,100
SWEPCo................. 112,100 111,800 121,100 99,600
TCC.................... 194,100 151,500 141,800 150,500
TNC.................... 39,800 43,600 46,700 57,800
- ---------
(a) Includes expenditures of other subsidiaries not shown. Amounts in 2001 and
2002 include construction expenditures related to entities classified in 2003 as
discontinued operations. Those amounts were $186,500,000 and $24,900,000,
respectively.
See Note 7 to the consolidated financial statements entitled Commitments and
Contingencies, incorporated by reference in Item 8, for further information with
respect to the construction plans of AEP and its operating subsidiaries for the
next three years.
The System construction program is reviewed continuously and is revised from
time to time in response to changes in estimates of customer demand, business
and economic conditions, the cost and availability of capital, environmental
requirements and other factors. Changes in construction schedules and costs, and
in estimates and projections of needs for additional facilities, as well as
variations from currently anticipated levels of net earnings, Federal income and
other taxes, and other factors affecting cash requirements, may increase or
decrease the estimated capital requirements for the System's construction
program.
Item 3. Legal Proceedings
For a discussion of material legal proceedings, see Note 7 to the
consolidated financial statements, entitled Commitments and Contingencies,
incorporated by reference in Item 8.
Item 4. Submission of Matters to a Vote of Security Holders
AEP, APCo, I&M, OPCo, SWEPCo and TCC. None.
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(c).
---------------
Executive Officers of the Registrants
AEP. The following persons are, or may be deemed, executive officers of AEP.
Their ages are given as of March 1, 2004.
Name Age Office (a)
Michael G. Morris...... 57 Chairman of the Board, President and Chief
Executive Officer of AEP and of AEPSC
Thomas V. Shockley, III 58 Vice Chairman of AEP and Vice Chairman and Chief
Operating Officer of AEPSC
Henry W. Fayne......... 57 Vice President of AEP, Executive Vice President
of AEPSC
Thomas M. Hagan........ 59 Executive Vice President-Shared Services of AEPSC
Holly K. Koeppel....... 45 Executive Vice President of AEPSC
Robert P. Powers....... 50 Executive Vice President-Generation of AEPSC
Susan Tomasky.......... 50 Vice President of AEP, Executive Vice President-
Policy, Finance and Strategic Planning of AEPSC
- ----------
(a) Messrs. Fayne and Powers and Ms. Tomasky have been employed by AEPSC or
System companies in various capacities (AEP, as such, has no employees) for
the past five years. Prior to joining AEPSC in June 2000 as Senior Vice
President-Governmental Affairs, Mr. Hagan was Senior Vice President-External
Affairs of CSW (1996-2000). Prior to joining AEPSC in July 2000 as Vice
President-New Ventures, Ms. Koeppel was Regional Vice President of
Asia-Pacific Operations for Consolidated Natural Gas International
(1996-2000). Messrs. Hagan and Powers, Ms. Koeppel and Ms. Tomasky became
executive officers of AEP effective with their promotions to Executive Vice
President on September 9, 2002, October 24, 2001, November 18, 2002 and
January 26, 2000, respectively. Prior to joining AEPSC in his current
position upon the merger with CSW, Mr. Shockley was President and Chief
Operating Officer of CSW (1997-2000) and Executive Vice President of CSW
(1990-1997). Prior to joining AEPSC in his current position in January 2004,
Mr. Morris was Chairman of the Board, President and Chief Executive Officer
of Northeast Utilities (1997-2003). All of the above officers are appointed
annually for a one-year term by the board of directors of AEP, the board of
directors of AEPSC, or both, as the case may be.
APCo, I&M, OPCo, SWEPCo and TCC. The names of the executive officers of APCo,
I&M, OPCo, SWEPCo and TCC, the positions they hold with these companies, their
ages as of March 1, 2004, and a brief account of their business experience
during the past five years appear below. The directors and executive officers of
APCo, I&M, OPCo, SWEPCo and TCC are elected annually to serve a one-year term.
<TABLE>
<CAPTION>
Name Age Position (a)(b) Period
- ---- ----- --------------- ------
<S> <C> <C> <C>
Michael G. Morris (a)(b)....... 57 Chairman of the Board, President, Chief Executive 2004-Present
Officer and Director of AEP
Chairman of the Board, Chief Executive
Officer and 2004-Present Director of
AEPSC, APCo, I&M, OPCo, SWEPCo and TCC
Chairman of the Board, President and
Chief Executive 1997-2003 Officer of
Northeast Utilities
Thomas V. Shockley, III (a).... 58 Director and Vice President of APCo, I&M, OPCo,
SWEPCo and TCC 2000-Present
Chief Operating Officer of AEPSC 2001-Present
Vice Chairman of AEP and AEPSC 2000-Present
President and Chief Operating Officer of CSW 1997-2000
Executive Vice President of CSW 1990-1997
Henry W. Fayne (a)............. 57 President of APCo, I&M, OPCo, SWEPCo and TCC 2001-Present
Director of SWEPCo and TCC 2000-Present
Director of APCo 1995-Present
Director of OPCo 1993-Present
Director of I&M 1998-Present
Vice President of SWEPCo and TCC 2000-2001
Vice President of APCo, I&M and OPCo 1998-2001
Vice President of AEP 1998-Present
Chief Financial Officer of AEP 1998-2001
Executive Vice President of AEPSC 2001-Present
Executive Vice President-Finance and Analysis of
AEPSC 2000-2001
Executive Vice President-Financial Services of AEPSC 1998-2000
Thomas M. Hagan (a)............ 59 Director and Vice President of APCo, I&M, OPCo,
SWEPCo and TCC 2002-Present
Executive Vice President-Shared Services of AEPSC 2002-Present
Senior Vice President-Governmental Affairs of AEPSC 2000-2002
Senior Vice President-External Affairs of CSW 1996-2000
Holly K. Koeppel............... 45 Executive Vice President of AEPSC 2002-Present
Vice President-New Ventures 2000-2002
Regional Vice President of Asia-Pacific Operations
for Consolidated Natural Gas International 1996-2000
Robert P. Powers (a)........... 50 Director and Vice President of APCo, I&M, OPCo,
SWEPCo and TCC 2001-Present
Director of I&M 2001-Present
Vice President of I&M 1998-Present
Executive Vice President- Generation 2003-Present
Executive Vice President-Nuclear Generation and
Technical Services of AEPSC 2001-2003
Senior Vice President-Nuclear Operations of AEPSC 2000-2001
Senior Vice President-Nuclear Generation of AEPSC 1998-2000
Susan Tomasky (a).............. 50 Director and Vice President of APCo, I&M, OPCo,
SWEPCo and TCC 2000-Present
Executive Vice President-Policy, Finance and
Strategic Planning of AEPSC 2001-Present
Executive Vice President-Legal, Policy and
Corporate Communications and General Counsel of
AEPSC 2000-2001
Senior Vice President and General Counsel of AEPSC 1998-2000
</TABLE>
- ----------
(a) Messrs. Fayne, Hagan, Morris, Powers and Shockley and Ms. Tomasky are
directors of AEGCo, CSPCo, KPCo, PSO and TNC. Messrs. Morris and Shockley are
also directors of AEP.
(b) Mr. Morris is a director of Cincinnati Bell, Inc., Spinnaker Exploration Co.
and Flint Ink.
PART II
Item 5. Market for Registrants' Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
AEP. The information required by this item is incorporated herein by
reference to the material under Common Stock and Dividend Information in the
2003 Annual Report.
AEGCo, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC and TNC. The common
stock of these companies is held solely by AEP. The amounts of cash dividends on
common stock paid by these companies to AEP during 2003 and 2002 are
incorporated by reference to the material under Statement of Retained Earnings
in the 2003 Annual Reports.
Item 6. Selected Financial Data
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(a).
AEP, APCo, I&M, OPCo, SWEPCo and TCC. The information required by this item
is incorporated herein by reference to the material under Selected Consolidated
Financial Data in the 2003 Annual Reports.
Item 7. Management's Financial Discussion and Analysis and Financial
Condition
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(a).
Management's narrative analysis of the results of operations and other
information required by Instruction I(2)(a) is incorporated herein by reference
to the material under Management's Financial Discussion and Analysis in the 2003
Annual Reports.
AEP, APCo, I&M, OPCo, SWEPCo and TCC. The information required by this item
is incorporated herein by reference to the material under Management's Financial
Discussion and Analysis in the 2003 Annual Reports.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
AEGCo, AEP, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC and TNC. The
information required by this item is incorporated herein by reference to the
material under Management's Financial Discussion and Analysis in the 2003 Annual
Reports.
Item 8. Financial Statements and Supplementary Data
AEGCo, AEP, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC and TNC. The
information required by this item is incorporated herein by reference to the
financial statements and financial statement schedules described under Item 15
herein.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
AEGCo, AEP, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC and TNC. None.
Item 9A. Controls and Procedures
During 2003, AEP's management, including the principal executive officer and
principal financial officer, evaluated AEP's disclosure controls and procedures
relating to the recording, processing, summarization and reporting of
information in AEP's periodic reports that it files with the SEC. These
disclosure controls and procedures have been designed to ensure that (a)
material information relating to AEP, including its consolidated subsidiaries,
is made known to AEP's management, including these officers, by other employees
of AEP and its subsidiaries, and (b) this information is recorded, processed,
summarized, evaluated and reported, as applicable, within the time periods
specified in the SEC's rules and forms. AEP's controls and procedures can only
provide reasonable, not absolute, assurance that the above objectives have been
met.
As of December 31, 2003, these officers concluded that the disclosure
controls and procedures in place provide reasonable assurance that the
disclosure controls and procedures can accomplish their objectives. AEP
continually strives to improve its disclosure controls and procedures to enhance
the quality of its financial reporting and to maintain dynamic systems that
change as events warrant.
There have not been any changes in AEP's internal controls over financial
reporting (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act) during the fourth quarter of 2003 that have materially affected,
or are reasonably likely to affect, AEP's internal control over financial
reporting.
PART III
Item 10. Directors and Executive Officers of the Registrants
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by
reference to the material under Nominees for Director and Section 16(a)
Beneficial Ownership Reporting Compliance of the definitive proxy statement of
AEP for the 2004 annual meeting of shareholders, to be filed within 120 days
after December 31, 2003. Reference also is made to the information under the
caption Executive Officers of the Registrants in Part I of this report.
APCo and OPCo. The information required by this item is incorporated herein
by reference to the material under Election of Directors of the definitive
information statement of each company for the 2004 annual meeting of
stockholders, to be filed within 120 days after December 31, 2003. Reference
also is made to the information under the caption Executive Officers of the
Registrants in Part I of this report.
SWEPCo and TCC. The information required by this item is incorporated herein
by reference to the material under Election of Directors of the definitive
information statement of APCo for the 2004 annual meeting of stockholders, to be
filed within 120 days after December 31, 2003. Reference also is made to the
information under the caption Executive Officers of the Registrants in Part I of
this report.
I&M. The names of the directors and executive officers of I&M, the positions
they hold with I&M, their ages as of March 12, 2004, and a brief account of
their business experience during the past five years appear below and under the
caption Executive Officers of the Registrants in Part I of this report.
<TABLE>
<CAPTION>
Name Age Position (a) Period
---- ------ ------------ ------
<S> <C> <C> <C>
K. G. Boyd.................... 52 Director 1997-Present
Vice President (Appointed)--Fort
Wayne Region Distribution Operations 2000-Present
Indiana Region Manager 1997-2000
John E. Ehler................. 47 Director 2001-Present
Manager of Distribution Systems-Fort
Wayne District 2000-Present
Region Operations Manager 1997-2000
Patrick C. Hale............... 49 Director 2003-Present
Plant Manager, Rockport Plant 2003-Present
Energy Production Manager, Rockport
Plant 2001-2003
Energy Production Manager, Mountaineer
Plant (APCo) 1997-2001
David L. Lahrman.............. 52 Director and Manager, Region Support 2001-Present
Fort Wayne District Manager 1997-2001
Marc E. Lewis................. 49 Director 2001-Present
Assistant General Counsel of the
Service Corporation 2001-Present
Senior Counsel of AEPSC 2000-2001
Senior Attorney of AEPSC 1994-2000
Susanne M. Moorman............ 54 Director and General Manager,
Community Services 2000-Present
Manager, Customer Services Operations 1997-2000
John R. Sampson............... 51 Director and Vice President 1999-Present
Indiana State President 2000-Present
Indiana & Michigan State President 1999-2000
Site Vice President, Cook Nuclear Plant1998-1999
Plant Manager, Cook Nuclear Plant 1996-1998
</TABLE>
- ----------
(a) Positions are with I&M unless otherwise indicated.
Item 11. Executive Compensation
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by
reference to the material under Directors Compensation and Stock Ownership
Guidelines, Executive Compensation and the performance graph of the definitive
proxy statement of AEP for the 2004 annual meeting of shareholders to be filed
within 120 days after December 31, 2003.
APCo and OPCo. The information required by this item is incorporated herein
by reference to the material under Executive Compensation of the definitive
information statement of each company for the 2004 annual meeting of
stockholders, to be filed within 120 days after December 31, 2003.
I&M, SWEPCo and TCC. The information required by this item is incorporated
herein by reference to the material under Executive Compensation of the
definitive information statement of APCo for the 2004 annual meeting of
stockholders, to be filed within 120 days after December 31, 2003.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
AEGCo, CSPCo, KPCo, PSO and TNC. Omitted pursuant to Instruction I(2)(c).
AEP. The information required by this item is incorporated herein by
reference to the material under Share Ownership of Directors and Executive
Officers of the definitive proxy statement of AEP for the 2004 annual meeting of
shareholders to be filed within 120 days after December 31, 2003.
APCo and OPCo. The information required by this item is incorporated herein
by reference to the material under Share Ownership of Directors and Executive
Officers in the definitive information statement of each company for the 2004
annual meeting of stockholders, to be filed within 120 days after December 31,
2003.
I&M. All 1,400,000 outstanding shares of Common Stock, no par value, of I&M
are directly and beneficially held by AEP. Holders of the Cumulative Preferred
Stock of I&M generally have no voting rights, except with respect to certain
corporate actions and in the event of certain defaults in the payment of
dividends on such shares.
SWEPCo and TCC. The information required by this item is incorporated herein
by reference to the material under Share Ownership of Directors and Executive
Officers in the definitive information statement of APCo for the 2004 annual
meeting of stockholders, to be filed within 120 days after December 31, 2003.
The table below shows the number of shares of AEP Common Stock and
stock-based units that were beneficially owned, directly or indirectly, as of
January 1, 2004, by each director and nominee of I&M and each of the executive
officers of I&M named in the summary compensation table, and by all directors
and executive officers of I&M as a group. It is based on information provided to
I&M by such persons. No such person owns any shares of any series of the
Cumulative Preferred Stock of I&M. Unless otherwise noted, each person has sole
voting power and investment power over the number of shares of AEP Common Stock
and stock-based units set forth opposite his or her name. Fractions of shares
and units have been rounded to the nearest whole number.
Stock
Name Shares (a) Units (b) Total
- ---- ------------ --------- ------
Karl G. Boyd...................... 12,296 248 12,554
E. Linn Draper, Jr................ 822,359(c) 125,233 947,592
John E. Ehler..................... -- -- --
Henry W. Fayne.................... 236,177(d) 13,143 249,320
Thomas M. Hagan................... 105,943 149 106,092
Patrick C. Hale................... 3,025 -- 3,025
David L. Lahrman.................. 497 -- 497
Marc E. Lewis..................... 6,364 -- 6,364
Susanne M. Moorman................ 41 -- 41
Michael G. Morris................. -- -- --
Robert P. Powers.................. 139,665 1,378 141,043
John R. Sampson................... 18,005 -- 18,005
Thomas V. Shockley, III........... 345,323(d)(e) -- 345,323
Susan Tomasky..................... 231,300(d) 6,502 237,802
All Directors and Executive Officers
Officers.......................... 1,920,995(d)(f) 146,653 2,067,648
- ----------
(a) Includes share equivalents held in the AEP Retirement Savings Plan in the
amounts listed below:
AEP Retirement Savings
Name Plan (Share Equivalents)
---- ------------------------
Mr. Boyd............................... 96
Dr. Draper............................. 4,938
Mr. Ehler.............................. --
Mr. Fayne.............................. 6,152
Mr. Hagan.............................. 3,617
Mr. Hale............................... 25
Mr. Lahrman............................ 497
Mr. Lewis.............................. 1,282
Ms. Moorman............................ 41
Mr. Morris............................. --
Mr. Powers............................. 632
Mr. Sampson............................ 805
Mr. Shockley........................... 7,530
Ms. Tomasky............................ 1,967
All Directors and Executive Officers...27,582
With respect to the share equivalents held in the AEP Retirement Savings
Plan, such persons have sole voting power, but the investment/disposition
power is subject to the terms of the Plan. Also, includes the following
numbers of shares attributable to options exercisable within 60 days: Mr.
Boyd, 12,000; Dr. Draper, 816,666; Mr. Hagan, 91,833, Mr. Hale, 3,000; Mr.
Lewis, 5,082; Mr. Powers, 139,033; Mr. Sampson, 17,200; Mr. Shockley,
300,000; and Mr. Fayne and Ms. Tomasky, 229,333.
(b) This column includes amounts deferred in stock units and held under AEP's
officer benefit plans.
(c) Includes 661 shares held by Dr. Draper in joint tenancy with a family
member.
(d) Does not include, for Messrs. Fayne, and Shockley and Ms. Tomasky, 85,231
shares in the American Electric Power System Educational Trust Fund over
which Messrs. Fayne and Shockley and Ms. Tomasky share voting and investment
power as trustees (they disclaim beneficial ownership). The amount of shares
shown for all directors and executive officers as a group includes these
shares.
(e) Includes 496 shares held by family members of Mr. Shockley over which he
disclaimed beneficial ownership.
(f) Represents less than 1% of the total number of shares outstanding.
Equity Compensation Plan Information
The following table summarizes the ability of AEP to issue common stock
pursuant to equity compensation plans as of December 31, 2003:
<TABLE>
<CAPTION>
Number of securities
Number of remaining available
securities Weighted for future issuance
to be average under equity
issued upon exercise compensation
exercise of price of plans
outstanding outstanding (excluding
options, options, securities
warrants warrants reflected in
and rights and rights column (a))
Plan Category (a) (b) (c)
- ------------- ----------- --------- -----------
<S> <C> <C> <C>
Equity compensation plans approved by security holders(1)......... 9,094,241 $ 33.0294 4,890,143
Equity compensation plans not approved by security holders... 0 N/A 0
Total............................................................. 9,094,241 $ 33.0294 4,890,143
</TABLE>
- ------------
(1) Consists of shares to be issued upon exercise of outstanding options granted
under the American Electric Power System 2000 Long-Term Incentive Plan, the
CSW 1992 Long-Term Incentive Plan (CSW Plan). The CSW Plan was in effect
prior to the consummation of the AEP-CSW merger. All unexercised options
granted under the CSW Plan were converted into 0.6 options to purchase AEP
common shares, vested on the merger date and will expire ten years after
their grant date. No additional options will be issued under the CSW Plan.
Item 13. Certain Relationships and Related Transactions
AEP, AEGCo, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC and TNC: None.
Item 14. Principal Accountants Fees and Services
AEP. The information required by this item is incorporated herein by
reference to the material under Audit and Non-Audit Fees of the definitive proxy
statement of AEP for the 2004 annual meeting of shareholders to be filed within
120 days after December 31, 2003.
APCo and OPCo. The information required by this item is incorporated herein
by reference to the material under Audit and Non-Audit Fees of the definitive
information statement of each company for the 2004 annual meeting of
stockholders, to be filed within 120 days after December 31, 2003.
AEGCo, CSPCo, I&M, KPCo, PSO, SWEPCo, TCC and TNC.
Each of the above are wholly-owned subsidiaries of AEP and does not have a
separate audit committee. A description of the AEP Audit Committee pre-approval
policies, which apply to these companies, is contained in the definitive proxy
statement of AEP for the 2004 annual meeting of shareholders to be filed within
120 days after December 31, 2003. The following table presents fees for
professional services rendered by Deloitte & Touche LLP for the audit of these
companies' annual financial statements for the years ended December 31, 2002 and
2003, and fees billed for other services rendered by Deloitte & Touche LLP
during those periods. [These fees include an allocation of amounts billed
directly to AEPSC].
<TABLE>
<CAPTION>
AEGCo CSPCo I&M KPCo
----- ----- --- ----
2003 2002 2003 2002 2003 2002 2003 2002
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Audit Fees $136,100 $126,000 $385,000 $269,900 $366,900 $540,400 289,000 251,400
Audit-Related Fees...... 0 0 0 155,000 0 0 0 0
Tax Fees................ 1,000 1,000 349,000 119,000 26,000 231,000 8,000 34,000
All Other Fees.......... 0 0 0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
PSO SWEPCo TCC TNC
--- ------ --- ---
2003 2002 2003 2002 2003 2002 2003 2002
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Audit Fees.............. $187,300 $156,200 $212,900 $178,700 $511,000 $446,770 188,900 92,800
Audit-Related Fees...... 0 0 0 0 0 274,800 0 213,000
Tax Fees................ 35,000 103,000 89,000 102,000 89,000 $125,000 54,000 77,000
All Other Fees.......... 0 0 0 0 0 0 0 0
</TABLE>
- ------------
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
1. FINANCIAL STATEMENTS:
The following financial statements have been incorporated herein by reference
pursuant to Item 8.
<TABLE>
<CAPTION>
Page
<S> <C>
AEGCo:
Statements of Income for the years ended December 31, 2003, 2002, and 2001;
Statements of Retained Earnings for the years ended December 31, 2003, 2002,
and 2001; Balance Sheets as of December 31, 2003 and 2002; Statements of Cash
Flows for the years ended December 31, 2003, 2002, and 2001; Statements of
Capitalization as of December 31, 2003 and 2002; Combined Notes to Financial
Statements; Independent Auditors' Report.
AEP and Subsidiary Companies:
Consolidated Statements of Operations for the years ended December 31, 2003,
2002, and 2001; Consolidated Balance Sheets as of December 31, 2003 and 2002;
Consolidated Statements of Cash Flows for the years ended December 31, 2003,
2002, and 2001; Consolidated Statements of Common Shareholders' Equity and
Comprehensive Income for the years ended December 31, 2003, 2002, and 2001;
Schedule of Consolidated Cumulative Preferred Stocks of Subsidiaries at
December 31, 2003 and 2002; Schedule of Consolidated Long-term Debt of
Subsidiaries at December 31, 2003 and 2002; Combined Notes to Consolidated
Financial Statements; Independent Auditors' Report.
APCo, CSPCo, I&M, PSO, SWEPCo and TCC:
Consolidated Statements of Income for the years ended December 31, 2003, 2002,
and 2001; Consolidated Statements of Comprehensive Income for the years ended
December 31, 2003, 2002, and 2001; Consolidated Statements of Retained
Earnings for the years ended December 31, 2003, 2002, and 2001; Consolidated
Balance Sheets as of December 31, 2003 and 2002; Consolidated Statements of
Cash Flows for the years ended December 31, 2003, 2002, and 2001; Consolidated
Statements of Capitalization as of December 31, 2003 and 2002; Schedule of
Long-term Debt as of December 31, 2003 and 2002; Combined Notes to
Consolidated Financial Statements; Independent Auditors' Report.
KPCo, OPCo and TNC:
Statements of Income (or Statements of Operations) for the years ended
December 31, 2003, 2002, and 2001; Statements of Comprehensive Income for the
years ended December 31, 2003, 2002, and 2001; Statements of Retained Earnings
for the years ended December 31, 2003, 2002, and 2001; Balance Sheets as of
December 31, 2003 and 2002; Statements of Cash Flows for the years ended
December 31, 2003, 2002, and 2001; Statements of Capitalization as of December
31, 2003 and 2002; Schedule of Long-term Debt as of December 31, 2003 and
2002; Combined Notes to Financial Statements; Independent Auditors' Report.
2. FINANCIAL STATEMENT SCHEDULES:
Financial Statement Schedules are listed in the Index to Financial S-1
Statement Schedules (Certain schedules have been omitted because the
required information is contained in the notes to financial statements or
because such schedules are not required or are not applicable). Independent
Auditors' Report
3. EXHIBITS:
Exhibits for AEGCo, AEP, APCo, CSPCo, I&M, KPCo, OPCo, PSO, SWEPCo, TCC E-1
and TNC are listed in the Exhibit Index and are incorporated herein by
reference
</TABLE>
(b) Reports on Forms 8-K:
Company Reporting Date of Report Item Reported
----------------- ---------------- -------------------
CSPCo............ December 3, 2003 Item 5. Other Events and Regulation FD
Disclosure
Item 7. Financial Statements and Exhibits
SWEPCo........... October 3, 2003 Item 5. Other Events and Regulation FD
Disclosure
Item 7. Financial Statements and Exhibits
(c) Exhibits: See Exhibit Index beginning on page E-1.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: /s/ SUSAN TOMASKY
(Susan Tomasky, Vice President,
Secretary and Chief Financial Officer)
Date: March 10, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
(i) Principal Executive Officer:
*MICHAEL G. MORRIS Chairman of the Board, President, March 10, 2004
Chief Executive Officer
And Director
(ii)Principal Financial Officer:
/s/ SUSAN TOMASKY Vice President, Secretary and March 10, 2004
(Susan Tomasky) Chief Financial Officer
(iii) Principal Accounting Officer:
/s/ JOSEPH M. BUONAIUTO Controller and March 10, 2004
(Joseph M. Buonaiuto) Chief Accounting Officer
(iv) A Majority of the Directors:
*E. R. BROOKS
*DONALD M. CARLTON
*JOHN P. DESBARRES
*ROBERT W. FRI
*WILLIAM R. HOWELL
*LESTER A. HUDSON, JR.
*LEONARD J. KUJAWA
*RICHARD L. SANDOR
*THOMAS V. SHOCKLEY, III
*DONALD G. SMITH
*LINDA GILLESPIE STUNTZ
*KATHRYN D. SULLIVAN March 10, 2004
*By: /s/ SUSAN TOMASKY
(Susan Tomasky, Attorney-in-Fact)
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
AEP GENERATING COMPANY AEP TEXAS CENTRAL COMPANY
AEP TEXAS NORTH COMPANY APPALACHIAN POWER COMPANY
COLUMBUS SOUTHERN POWER COMPANY KENTUCKY POWER
COMPANY OHIO POWER COMPANY PUBLIC SERVICE COMPANY
OF OKLAHOMA SOUTHWESTERN ELECTRIC POWER COMPANY
By: /s/ SUSAN TOMASKY
(Susan Tomasky, Vice President)
Date: March 10, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company and any subsidiaries thereof.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
(i) Principal Executive Officer:
*MICHAEL G. MORRIS Chairman of the Board, March 10, 2004
Chief Executive Officer and Director
(ii) Principal Financial Officer:
/s/ SUSAN TOMASKY Vice President, Secretary, March 10, 2004
(Susan Tomasky) Chief Financial Officer and Director
(iii) Principal Accounting Officer:
/s/ JOSEPH M. BUONAIUTO Controller and March 10, 2004
(Joseph M. Buonaiuto) Chief Accounting Officer
(iv) A Majority of the Directors:
*JEFFREY D. CROSS
*HENRY W. FAYNE
*THOMAS M. HAGAN
*A. A. PENA
*ROBERT P. POWERS
*THOMAS V. SHOCKLEY, III
*STEPHEN P. SMITH March 10, 2004
*By: /s/ SUSAN TOMASKY
(Susan Tomasky, Attorney-in-Fact)
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.
INDIANA MICHIGAN POWER COMPANY
By: /s/ SUSAN TOMASKY
(Susan Tomasky, Vice President)
Date: March 10, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company and any subsidiaries thereof.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
(i) Principal Executive Officer:
*MICHAEL G. MORRIS Chief Executive Officer March 10, 2004
and Director
(ii)Principal Financial Officer:
/s/ SUSAN TOMASKY Vice President, Secretary, March 10, 2004
(Susan Tomasky) Chief Financial Officer
and Director
(iii)Principal Accounting Officer:
/s/ JOSEPH M. BUONAIUTO Controller and March 10, 2004
(Joseph M. Buonaiuto) Chief Accounting Officer
(iv) A Majority of the Directors:
*K. G. BOYD
*JOHN E. EHLER
*HENRY W. FAYNE
*THOMAS M. HAGAN
*PATRICK C. HALE
*DAVID L. LAHRMAN
*MARC E. LEWIS
*SUSANNE M. MOORMAN
*ROBERT P. POWERS
*JOHN R. SAMPSON
*THOMAS V. SHOCKLEY, III March 10, 2004
*By: /s/ SUSAN TOMASKY
(Susan Tomasky, Attorney-in-Fact)
</TABLE>
<PAGE>
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
INDEPENDENT AUDITORS' REPORT.............................................. S-2
The following financial statement schedules are included in this report on
the pages indicated
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES S-3
Schedule II-- Valuation and Qualifying Accounts and Reserves........
AEP TEXAS CENTRAL COMPANY AND SUBSIDIARY
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-3
AEP TEXAS NORTH COMPANY
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-3
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-4
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-4
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-4
KENTUCKY POWER COMPANY
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-5
OHIO POWER COMPANY CONSOLIDATED
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-5
PUBLIC SERVICE COMPANY OF OKLAHOMA
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-5
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
Schedule II-- Valuation and Qualifying Accounts and Reserves......... S-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARIES:
We have audited the consolidated financial statements of American Electric Power
Company, Inc. and subsidiaries and the financial statements of certain of its
subsidiaries, listed in Item 15 herein, as of December 31, 2003 and 2002, and
for each of the three years in the period ended December 31, 2003, and have
issued our reports thereon dated March 5, 2004 (which reports express
unqualified opinions and include explanatory paragraphs concerning the adoption
of new accounting pronouncements in 2002 and 2003); such financial statements
and reports are included in the 2003 Annual Reports and are incorporated herein
by reference. Our audits also included the financial statement schedules of
American Electric Power Company, Inc. and subsidiaries and of certain of its
subsidiaries, listed in Item 15. These financial statement schedules are the
responsibility of the respective company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial statement
schedules, when considered in relation to the corresponding basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
/s/ Deloitte & Touche LLP
Columbus, Ohio
March 5, 2004
<PAGE>
AMERICAN ELECTRIC POWER COMPANY, INC. AND SUBSIDIARY COMPANIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts:
Year Ended December 31, 2003 $107,578 $55,087 $ 7,234 $46,214 $123,685
======== ======= ======= ======= ========
Year Ended December 31, 2002(c) $68,429 $87,044 $11,767 $59,662 $107,578
======= ======= ======= ======= ========
Year Ended December 31, 2001(c) $31,460 $108,760 $20,763 $92,554 $68,429
======= ======== ======= ======= =======
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
(c) 2002 and 2001 amounts have been adjusted to reflect the treatment of LIG
and UK generation assets as discontinued operations in AEP's Consolidated
Statements of Operations.
AEP TEXAS CENTRAL COMPANY AND SUBSIDIARY
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts:
Year Ended December 31, 2003 $ 346 $1,712 $-- $ 348 $1,710
====== ====== === ===== ======
Year Ended December 31, 2002 $ 186 $ 162 $ 1 $ 3 $ 346
====== ===== === ===== =====
Year Ended December 31, 2001 $ 1,675 $ 186 $-- $1,675 $ 186
====== ===== === ====== =====
</TABLE>
- ----------
(a)Recoveries on accounts previously written off.
(b)Uncollectible accounts written off.
AEP TEXAS NORTH COMPANY
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision
for Uncollectible Accounts:
Year Ended December 31, 2003 $5,041 $ 123 $-- $4,989 $ 175
====== ===== === ====== =====
Year Ended December 31, 2002 $196 $4,846 $17 $ 18 $5,041
==== ====== === ===== ======
Year Ended December 31, 2001 $288 $ 13 $35 $ 140 $ 196
==== ===== === ===== =====
</TABLE>
- ----------
(a)Recoveries on accounts previously written off.
(b)Uncollectible accounts written off.
APPALACHIAN POWER COMPANY AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision
for Uncollectible Accounts:
Year Ended December 31, 2003.. $13,439 $4,708 $ 433 $16,495 $ 2,085
======= ====== ======= ======= =======
Year Ended December 31, 2002.. $1,877 $3,937 $12,367 $4,742 $13,439
====== ====== ======= ====== =======
Year Ended December 31, 2001.. $2,588 $2,644 $ 1,017 $4,372 $ 1,877
====== ====== ======= ====== =======
</TABLE>
- ----------
(a)Recoveries on accounts previously written off.
(b)Uncollectible accounts written off.
COLUMBUS SOUTHERN POWER COMPANY AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision
for Uncollectible Accounts:
Year Ended December 31, 2003 $ 634 $ 96 $ -- $ 199 $ 531
====== ===== ====== ===== =====
Year Ended December 31, 2002 $ 745 $(100) $ -- $ 11 $ 634
====== ===== ====== ===== =====
Year Ended December 31, 2001 $ 659 $ 331 $ -- $ 245 $ 745
====== ===== ====== ===== =====
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
INDIANA MICHIGAN POWER COMPANY AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts:
Year Ended December 31, 2003 $ 578 $ 37 $ -- $ 84 $ 531
====== ===== ==== ===== =====
Year Ended December 31, 2002 $ 741 $(161) $ -- $ 2 $ 578
====== ===== ==== ===== =====
Year Ended December 31, 2001 $ 759 $ 65 $ 3 $ 86 $ 741
====== ===== ==== ===== =====
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
KENTUCKY POWER COMPANY
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision
for Uncollectible Accounts:
Year Ended December 31, 2003 $192 $ 8 $912 $ 376 $ 736
==== ===== ==== ===== =====
Year Ended December 31, 2002 $264 $ (68) $ -- $ 4 $ 192
==== ===== ==== ===== =====
Year Ended December 31, 2001 $282 $ -- $(24) $ (6) $ 264
==== ===== ==== ===== =====
</TABLE>
- -----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
OHIO POWER COMPANY CONSOLIDATED
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision
for Uncollectible Accounts:
Year Ended December 31, 2003 $ 909 $ 42 $ 18 $ 180 $ 789
====== ===== ==== ===== =====
Year Ended December 31, 2002 $1,379 $(457) $ -- $ 13 $ 909
====== ===== ==== ===== =====
Year Ended December 31, 2001 $1,054 $ 554 $ -- $ 229 $1,379
====== ===== ==== ===== ======
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
PUBLIC SERVICE COMPANY OF OKLAHOMA
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts:
Year Ended December 31, 2003 $ 84 $ 37 $-- $ 84 $ 37
==== ===== === ===== =====
Year Ended December 31, 2002 $ 44 $ 7 $33 $ -- $ 84
==== ===== === ===== =====
Year Ended December 31, 2001 $467 $ 44 $-- $ 467 $ 44
==== ===== === ===== =====
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
SOUTHWESTERN ELECTRIC POWER COMPANY CONSOLIDATED
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Charged to Balance at
Beginning Costs and Other End of
Description Of Period Expenses Accounts(a) Deductions(b) Period
(in thousands)
<S> <C> <C> <C> <C> <C>
Deducted from Assets:
Accumulated Provision for
Uncollectible Accounts:
Year Ended December 31, 2003 $2,128 $ 103 $ -- $ 138 $2,093
====== ===== ====== ===== ======
Year Ended December 31, 2002 $ 89 $2,036 $ 4 $ 1 $2,128
====== ====== ====== ===== ======
Year Ended December 31, 2001 $ 911 $ 89 $ -- $ 911 $ 89
====== ===== ====== ===== =====
</TABLE>
- ----------
(a) Recoveries on accounts previously written off.
(b) Uncollectible accounts written off.
<PAGE>
EXHIBIT INDEX
Certain of the following exhibits, designated with an asterisk (*), are filed
herewith. The exhibits not so designated have heretofore been filed with the
Commission and, pursuant to 17 C.F.R. 229.10(d) and 240.12b-32, are incorporated
herein by reference to the documents indicated in brackets following the
descriptions of such exhibits. Exhibits, designated with a dagger (+), are
management contracts or compensatory plans or arrangements required to be filed
as an Exhibit to this Form pursuant to Item 14(c) of this report.
Exhibit Number Description
AEGCo
3(a) -- Articles of Incorporation of AEGCo [Registration Statement
on Form 10 for the Common Shares of AEGCo, File No. 0-18135,
Exhibit 3(a)].
3(b) -- Copy of the Code of Regulations of AEGCo (amended as of
June 15, 2000) [Annual Report on Form 10-K of AEGCo for the
fiscal year ended December 31, 2000, File No. 0-18135, Exhibit
3(b)].
10(a) -- Capital Funds Agreement dated as of December 30, 1988
between AEGCo and AEP [Registration Statement No. 33-32752,
Exhibit 28(a)].
10(b)(1) -- Unit Power Agreement dated as of March 31, 1982 between
AEGCo and I&M, as amended [Registration Statement No.
33-32752, Exhibits 28(b)(1)(A) and 28(b)(1)(B)].
10(b)(2) -- Unit Power Agreement, dated as of August 1, 1984, among
AEGCo, I&M and KPCo [Registration Statement No. 33-32752,
Exhibit 28(b)(2)].
10(c) -- Lease Agreements, dated as of December 1, 1989, between AEGCo
and Wilmington Trust Company, as amended [Registration
Statement No. 33-32752, Exhibits 28(c)(1)(C), 28(c)(2)(C),
28(c)(3)(C), 28(c)(4)(C), 28(c)(5)(C) and 28(c)(6)(C); Annual
Report on Form 10-K of AEGCo for the fiscal year ended
December 31, 1993, File No. 0-18135, Exhibits 10(c)(1)(B),
10(c)(2)(B), 10(c)(3)(B), 10(c)(4)(B), 10(c)(5)(B) and
10(c)(6)(B)].
*13 -- Copy of those portions of the AEGCo 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
AEP++
3(a) -- Restated Certificate of Incorporation of AEP, dated October
29, 1997 [Quarterly Report on Form 10-Q of AEP for the quarter
ended September 30, 1997, File No. 1-3525, Exhibit 3(a)].
3(b) -- Certificate of Amendment of the Restated Certificate of
Incorporation of AEP, dated January 13, 1999 [Annual Report on
Form 10-K of AEP for the fiscal year ended December 31, 1998,
File No. 1-3525, Exhibit 3(b)].
3(c) -- Composite of the Restated Certificate of Incorporation of
AEP, as amended [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1998, File No. 1-3525, Exhibit
3(c)].
*3(d) -- By-Laws of AEP, as amended through December 15, 2003.
4(a) -- Indenture (for unsecured debt securities), dated as of May 1,
2001, between AEP and The Bank of New York, as Trustee
[Registration Statement No. 333-86050, Exhibits 4(a), 4(b) and
4(c); Registration Statement No. 333-105532, Exhibits 4(d),
and 4(e) and 4(f)].
4(b) -- Forward Purchase Contract Agreement, dated as of June 11,
2002, between AEP and The Bank of New York, as Forward
Purchase Contract Agent [Annual Report on Form 10-K of AEP for
the fiscal year ended December 31, 2002, File No. 1-3525,
Exhibit 4(c)].
10(a) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, OPCo and I&M and with AEPSC, as amended
[Registration Statement No. 2-52910, Exhibit 5(a);
Registration Statement No. 2-61009, Exhibit 5(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1990, File No. 1-3525, Exhibit 10(a)(3)].
10(b) -- Restated and Amended Operating Agreement, dated as of
January 1, 1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 2002, File No. 1-3525; Exhibit 10(b)].
10(c) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo and with AEPSC as agent, as amended
[Annual Report on Form 10-K of AEP for the fiscal year ended
December 31, 1985, File No. 1-3525, Exhibit 10(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1988, File No. 1-3525, Exhibit 10(b)(2)].
10(d) -- Transmission Coordination Agreement, dated October 29,
1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual Report on
Form 10-K of AEP for the fiscal year ended December 31, 2002,
File No. 1-3525; Exhibit 10(d)].
10(e) -- Lease Agreements, dated as of December 1, 1989, between AEGCo
or I&M and Wilmington Trust Company, as amended [Registration
Statement No. 33-32752, Exhibits 28(c)(1)(C), 28(c)(2)(C),
28(c)(3)(C), 28(c)(4)(C), 28(c)(5)(C) and 28(c)(6)(C);
Registration Statement No. 33-32753, Exhibits 28(a)(1)(C),
28(a)(2)(C), 28(a)(3)(C), 28(a)(4)(C), 28(a)(5)(C) and 28(a)
(6)(C); and Annual Report on Form 10-K of AEGCo for the fiscal
year ended December 31, 1993, File No. 0-18135, Exhibits 10(c)
(1)(B), 10(c)(2)(B), 10(c)(3)(B), 10(c)(4)(B), 10(c)(5)(B) and
10(c)(6)(B); Annual Report on Form 10-K of I&M for the fiscal
year ended December 31, 1993, File No. 1-3570, Exhibits 10(e)
(1)(B), 10(e)(2)(B), 10(e)(3)(B), 10(e)(4)(B), 10(e)(5)(B) and
10(e)(6)(B)].
10(f) -- Lease Agreement dated January 20, 1995 between OPCo and JMG
Funding, Limited Partnership, and amendment thereto
(confidential treatment requested) [Annual Report on Form 10-K
of OPCo for the fiscal year ended December 31, 1994, File No.
1-6543, Exhibit 10(l)(2)].
10(g) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1996, File No. 1-3525, Exhibit
10(l)].
10(h)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, by and among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(h)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
AEP dated December 15, 1999, File No. 1-3525, Exhibit 10].
+10(i)(1) -- AEP Deferred Compensation Agreement for certain executive
officers [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1985, File No. 1-3525, Exhibit 10(e)].
+10(i)(2) -- Amendment to AEP Deferred Compensation Agreement for
certain executive officers [Annual Report on Form 10-K of AEP
for the fiscal year ended December 31, 1986, File No. 1-3525,
Exhibit 10(d)(2)].
+10(j) -- AEP Accident Coverage Insurance Plan for directors [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1985, File No. 1-3525, Exhibit 10(g)].
*+10(k)(1) -- AEP Deferred Compensation and Stock Plan for Non-Employee
Directors, as amended December 10, 2003.
*+10(k)(2) -- AEP Stock Unit Accumulation Plan for Non-Employee
Directors, as amended December 10, 2003.
+10(l)(1)(A) -- AEP System Excess Benefit Plan, Amended and Restated as of
January 1, 2001 [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 2000, File No. 1-3525, Exhibit
10(j)(1)(A)].
+10(l)(1)(B) -- Guaranty by AEP of AEPSC Excess Benefits Plan [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1990, File No. 1-3525, Exhibit 10(h)(1)(B)].
+10(l)(1)(C) -- First Amendment to AEP System Excess Benefit Plan, dated as
of March 5, 2003 [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 2002, File No. 1-3525; Exhibit
10(1)(1)(c)].
*+10(l)(2) -- AEP System Supplemental Retirement Savings Plan, Amended
and Restated as of January 1, 2003 (Non-Qualified)
+10(l)(3) -- Service Corporation Umbrella Trust for Executives [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1993, File No. 1-3525, Exhibit 10(g)(3)].
*+10(m)(1) -- Employment Agreement between AEP, AEPSC and Michael G.
Morris dated December 15, 2003.
+10(m)(2) -- Memorandum of agreement between Susan Tomasky and AEPSC
dated January 3, 2001 [Annual Report on Form 10-K of AEP for
the fiscal year ended December 31, 2000, File No. 1-3525,
Exhibit 10(s)].
+10(m)(3) -- Letter Agreement dated June 23, 2000 between AEPSC and
Holly K. Koeppel [Annual Report on Form 10-K of AEP for the
Fiscal year ended December 31, 2002, File No. 1-3525; Exhibit
10(m)(3)(A)].
+10(m)(4) -- Employment Agreement dated July 29, 1998 between AEPSC and
Robert P. Powers [Annual Report on Form 10-K of AEP for the
Fiscal year ended December 31, 2002, File No. 1-3525; Exhibit
10(m)(4)].
+10(n) -- AEP System Senior Officer Annual Incentive Compensation
Plan [Annual Report on Form 10-K of AEP for the fiscal year
ended December 31, 1996, File No. 1-3525, Exhibit 10(i)(1)].
+10(o)(1) -- AEP System Survivor Benefit Plan, effective January 27,
1998 [Quarterly Report on Form 10-Q of AEP for the quarter
ended September 30, 1998, File No. 1-3525, Exhibit 10].
+10(o)(2) -- First Amendment to AEP System Survivor Benefit Plan, as
amended and restated effective January 31, 2000 [Annual Report
on Form 10-K of AEP for the fiscal year ended December 31,
2002, File No. 1-3525; Exhibit 10(o)(2)].
+10(p) -- AEP Senior Executive Severance Plan for Merger with Central
and South West Corporation, effective March 1, 1999 [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1998, File No. 1-3525, Exhibit 10(o)].
*+10(q)(1) -- AEP System Incentive Compensation Deferral Plan Amended and
Restated as of January 1, 2003.
+10(r) -- AEP System Nuclear Performance Long Term Incentive
Compensation Plan dated August 1, 1998 [Annual Report on Form
10-K of AEP for the fiscal year ended December 31, 2002, file
No. 1-3525; Exhibit 10(r)].
+10(s) -- Nuclear Key Contributor Retention Plan dated May 1, 2000
[Annual Report on Form 10-K of AEP for the Fiscal year ended
December 31, 2002, File No. 1-3525; Exhibit 10(s)].
+10(t) -- AEP Change In Control Agreement [Annual Report on Form 10-K
of AEP for the fiscal year ended December 31, 2001, File No.
1-3525, Exhibit 10(o)].
*+10(u) -- AEP System 2000 Long-Term Incentive Plan, as amended
December 10, 2003.
+10(v)(1) -- Central and South West System Special Executive Retirement
Plan as amended and restated effective July 1, 1997 [Annual
Report on Form 10-K of CSW for the fiscal year ended December
31, 1998, File No. 1-1443, Exhibit 18].
+10(v)(2) -- Certified CSW Board Resolution of April 18, 1991 [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 2001, File No. 1-3525, Exhibit 10(r)(2)].
*+10(v)(3) -- Certified AEP Utilities, Inc. (formerly CSW) Board
Resolutions of July 16, 1996.
+10(v)(4) -- CSW 1992 Long-Term Incentive Plan [Proxy Statement of CSW,
March 13, 1992].
+10(v)(5) -- Central and South West Corporation Executive Deferred
Savings Plan as amended and restated effective as of January
1, 1997 [Annual Report on Form 10-K of CSW for the fiscal year
ended December 31, 1998, File No. 1-1443, Exhibit 24].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the AEP 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
*21 -- List of subsidiaries of AEP.
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
APCo++
3(a) -- Restated Articles of Incorporation of APCo, and amendments
thereto to November 4, 1993 [Registration Statement No.
33-50163, Exhibit 4(a); Registration Statement No. 33-53805,
Exhibits 4(b) and 4(c)].
3(b) -- Articles of Amendment to the Restated Articles of
Incorporation of APCo, dated June 6, 1994 [Annual Report on
Form 10-K of APCo for the fiscal year ended December 31, 1994,
File No. 1-3457, Exhibit 3(b)].
3(c) -- Articles of Amendment to the Restated Articles of
Incorporation of APCo, dated March 6, 1997 [Annual Report on
Form 10-K of APCo for the fiscal year ended December 31, 1996,
File No. 1-3457, Exhibit 3(c)].
3(d) -- Composite of the Restated Articles of Incorporation of APCo
(amended as of March 7, 1997) [Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1996, File No.
1-3457, Exhibit 3(d)].
3(e) -- By-Laws of APCo (amended as of October 24, 2001) [Annual
Report on Form 10-K of APCo for the fiscal year ended December
31, 2001, File No. 1-3457, Exhibit 3(e)].
4(a) -- Mortgage and Deed of Trust, dated as of December 1, 1940,
between APCo and Bankers Trust Company and R. Gregory Page, as
Trustees, as amended and supplemented [Registration Statement
No. 2-7289, Exhibit 7(b); Registration Statement No. 2-19884,
Exhibit 2(1); Registration Statement No. 2-24453, Exhibit
2(n); Registration Statement No. 2-60015, Exhibits 2(b)(2),
2(b)(3), 2(b)(4), 2(b)(5), 2(b)(6), 2(b)(7), 2(b)(8), 2(b)(9),
2(b)(10), 2(b)(12), 2(b)(14), 2(b)(15), 2(b)(16), 2(b)(17),
2(b)(18), 2(b)(19), 2(b)(20), 2(b)(21), 2(b)(22), 2(b)(23),
2(b)(24), 2(b)(25), 2(b)(26), 2(b)(27) and 2(b)(28);
Registration Statement No. 2-64102, Exhibit 2(b)(29);
Registration Statement No. 2-66457, Exhibits (2)(b)(30) and
2(b)(31); Registration Statement No.2-69217, Exhibit 2(b)(32);
Registration Statement No. 2-86237, Exhibit 4(b); Registration
Statement No. 33-11723, Exhibit 4(b); Registration Statement
No. 33-17003, Exhibit 4(a)(ii), Registration Statement No.
33-30964, Exhibit 4(b); Registration Statement No. 33-40720,
Exhibit 4(b); Registration Statement No. 33-45219, Exhibit
4(b); Registration Statement No. 33-46128, Exhibits 4(b) and
4(c); Registration Statement No. 33-53410, Exhibit 4(b);
Registration Statement No. 33-59834, Exhibit 4(b);
Registration Statement No. 33-50229, Exhibits 4(b) and 4(c);
Registration Statement No. 33-58431, Exhibits 4(b), 4(c), 4(d)
and 4(e); Registration Statement No. 333-01049, Exhibits 4(b)
and 4(c); Registration Statement No. 333-20305, Exhibits 4(b)
and 4(c); Annual Report on Form 10-K of APCo for the fiscal
year ended December 31, 1996, File No. 1-3457, Exhibit 4(b);
Annual Report on Form 10-K of APCo for the fiscal year ended
December 31, 1998, File No. 1-3457, Exhibit 4(b)].
4(b) -- Indenture (for unsecured debt securities), dated as of January
1, 1998, between APCo and The Bank of New York, As Trustee
[Registration Statement No. 333-45927, Exhibit 4(a);
Registration Statement No. 333-49071, Exhibit 4(b);
Registration Statement No. 333-84061, Exhibits 4(b) and
4(c); Annual Report on Form 10-K of APCo for the fiscal year
ended December 31, 1999, File No. 1-3457, Exhibit 4(c);
Registration Statement No. 333-81402, Exhibits 4(b), 4(c) and
4(d); Registration Statement No. 333-100451, Exhibit 4(b); and
Annual Report on Form 10-K of APCo for fiscal year ended
December 31, 2002, File 1-3457, Exhibit 4(c)].
*4(c) -- Company Order and Officer's Certificate, dated May 5, 2003,
establishing terms of 3.60% Senior Notes, Series G, due 2008
and 5.95% Senior Notes, Series H, due 2033.
10(a)(1) -- Power Agreement, dated October 15, 1952, between OVEC and
United States of America, acting by and through the United
States Atomic Energy Commission, and, subsequent to January
18, 1975, the Administrator of the Energy Research and
Development Administration, as amended [Registration
Statement No. 2-60015, Exhibit 5(a); Registration Statement
No. 2-63234, Exhibit 5(a)(1)(B); Registration Statement
No 2-66301, Exhibit 5(a)(1)(C); Registration Statement
No. 2-67728, Exhibit 5(a)(1)(D); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1989, File No.
1-3457, Exhibit 10(a)(1)(F); and Annual Report on Form
10-K of APCo for the fiscal year ended December 31, 1992, File
No. 1-3457, Exhibit 10(a)(1)(B)].
10(a)(2) -- Inter-Company Power Agreement, dated as of July 10, 1953,
among OVEC and the Sponsoring Companies, as amended
[Registration Statement No. 2-60015, Exhibit 5(c);
Registration Statement No. 2-67728, Exhibit 5(a)(3)(B); and
Annual Report on Form 10-K of APCo for the fiscal year ended
December 31, 1992, File No. 1-3457, Exhibit 10(a)(2)(B)].
10(a)(3) -- Power Agreement, dated July 10, 1953, between OVEC and
Indiana-Kentucky Electric Corporation, as amended
[Registration Statement No. 2-60015, Exhibit 5(e)].
10(b) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, OPCo and I&M and with AEPSC, as amended
[Registration Statement No. 2-52910, Exhibit 5(a);
Registration Statement No. 2-61009, Exhibit 5(b); Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1990, File No. 1-3525, Exhibit 10(a)(3)].
10(c) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo and with AEPSC as agent, as amended
[Annual Report on Form 10-K of AEP for the fiscal year ended
December 31, 1985, File No. 1-3525, Exhibit 10(b); Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1988, File No. 1-3525, Exhibit 10(b)(2)].
10(d) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1996, File No. 1-3525, Exhibit
10(l)].
10(e)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, By and Among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(e)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
APCo dated December 15, 1999, File No. 1-3457, Exhibit 10].
+10(f)(1) -- AEP Deferred Compensation Agreement for certain executive
officers [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1985, File No. 1-3525, Exhibit 10(e)].
+10(f)(2) -- Amendment to AEP Deferred Compensation Agreement for
certain executive officers [Annual Report on Form 10-K of AEP
for the fiscal year ended December 31, 1986, File No. 1-3525,
Exhibit 10(d)(2)].
+10(g) -- AEP System Senior Officer Annual Incentive Compensation
Plan [Annual Report on Form 10-K of AEP for the fiscal year
ended December 31, 1996, File No. 1-3525, Exhibit 10(i)(1)].
+10(h)(1)(A) -- AEP System Excess Benefit Plan, Amended and Restated as of
January 1, 2001 [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 2000, File No. 1-3525, Exhibit
10(j)(1)(A)].
+10(h)(1)(B) -- First Amendment to AEP System Excess Benefit Plan, dated as
of March 5, 2003 [Annual Report on Form 10-K of APCo for the
fiscal year ended December 31, 2002, File No. 1-3457; Exhibit
10(h)(1)(B)].
*+10(h)(2) -- AEP System Supplemental Retirement Savings Plan, Amended
and Restated as of January 1, 2003 (Non-Qualified).
+10(h)(3) -- Service Corporation Umbrella Trust for Executives [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1993, File No. 1-3525, Exhibit 10(g)(3)].
*+10(i)(1) -- Employment Agreement between AEP, AEPSC and Michael G.
Morris dated December 15, 2003.
+10(i)(2) -- Memorandum of agreement between Susan Tomasky and AEPSC
dated January 3, 2001 [Annual Report on Form 10-K of AEP for
the fiscal year ended December 31, 2000, File No. 1-3525,
Exhibit 10(s)].
+10(i)(3) -- Employment Agreement dated July 29, 1998 between AEPSC and
Robert P. Powers [Annual Report on Form 10-K of APCo for the
fiscal year ended December 31, 2002, File No. 1-3457; Exhibit
10(i)(3)].
+10(j)(1) -- AEP System Survivor Benefit Plan, effective January 27,
1998 [Quarterly Report on Form 10-Q of AEP for the quarter
ended September 30, 1998, File No. 1-3525, Exhibit 10].
+10(j)(2) -- First Amendment to AEP System Survivor Benefit Plan, as
amended and restated effective January 31, 2000 [Annual Report
on Form 10-K of APCo for the fiscal year ended December 31,
2002, File No. 1-3457; Exhibit 10(j)(2)].
+10(k) -- AEP Senior Executive Severance Plan for Merger with Central
and South West Corporation, effective March 1, 1999[Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1998, File No. 1-3525, Exhibit 10(o)].
+10(l) -- AEP Change In Control Agreement [Annual Report on Form 10-K
of AEP for the fiscal year ended December 31, 2001, File No.
1-3525, Exhibit 10(o)].
*+10(m) -- AEP System 2000 Long-Term Incentive Plan, as amended
December 10, 2003.
+10(n)(1) -- Central and South West System Special Executive Retirement
Plan as amended and restated effective July 1, 1997 [Annual
Report on Form 10-K of CSW for the fiscal year ended December
31, 1998, File No. 1-1443, Exhibit 18].
+10(n)(2) -- Certified CSW Board Resolution of April 18, 1991 [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 2001, File No. 1-3525, Exhibit 10(r)(2)].
*+10(n)(3) -- Certified AEP Utilities, Inc. (formerly CSW) Board
Resolutions of July 16, 1996.
+10(n)(4) -- CSW 1992 Long-Term Incentive Plan [Proxy Statement of CSW,
March 13, 1992].
*+10(o)(1) -- AEP System Incentive Compensation Deferral Plan Amended and
Restated as of January 1, 2003.
+10(p) -- AEP System Nuclear Performance Long Term Incentive
Compensation Plan dated August 1, 1998 [Annual Report on Form
10-K of APCo for the fiscal year ended December 31, 2002, file
No. 1-3457; Exhibit 10(p)].
+10(q) -- Nuclear Key Contributor Retention Plan dated May 1, 2000
[Annual Report on Form 10-K of APCo for the fiscal year ended
December 31, 2002, File No. 1-3457; Exhibit 10(q)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the APCo 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of APCo [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21].
*23 -- Consent of Deloitte & Touche LLP
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
CSPCo++
3(a) -- Amended Articles of Incorporation of CSPCo, as amended to
March 6, 1992 [Registration Statement No. 33-53377, Exhibit
4(a)].
3(b) -- Certificate of Amendment to Amended Articles of
Incorporation of CSPCo, dated May 19, 1994 [Annual Report on
Form 10-K of CSPCo for the fiscal year ended December 31,
1994, File No. 1-2680, Exhibit 3(b)].
3(c) -- Composite of Amended Articles of Incorporation of CSPCo, as
amended [Annual Report on Form 10-K of CSPCo for the fiscal
year ended December 31, 1994, File No. 1-2680, Exhibit 3(c)].
3(d) -- Code of Regulations and By-Laws of CSPCo [Annual Report on
Form 10-K of CSPCo for the fiscal year ended December 31,
1987, File No. 1-2680, Exhibit 3(d)].
4(a) -- Indenture of Mortgage and Deed of Trust, dated September 1,
1940, between CSPCo and City Bank Farmers Trust Company (now
Citibank, N.A.), as trustee, as supplemented and amended
[Registration Statement No. 2-59411, Exhibits 2(B) and 2(C);
Registration Statement No.2-80535, Exhibit 4(b); Registration
Statement No. 2-87091, Exhibit 4(b); Registration Statement
No. 2-93208, Exhibit 4(b); Registration Statement No. 2-97652,
Exhibit 4(b); Registration Statement No. 33-7081, Exhibit
4(b); Registration Statement No. 33-12389, Exhibit 4(b);
Registration Statement No. 33-19227, Exhibits 4(b), 4(e),
4(f), 4(g) and 4(h); Registration Statement No. 33-35651,
Exhibit 4(b); Registration Statement No. 33-46859, Exhibits
4(b) and 4(c); Registration Statement No. 33-50316,
Exhibits 4(b) and 4(c); Registration Statement No. 33-60336,
Exhibits 4(b), 4(c) and 4(d); Registration Statement No.
33-50447, Exhibits 4(b) and 4(c); Annual Report on Form 10-K
of CSPCo for the fiscal year ended December 31, 1993, File No.
1-2680, Exhibit 4(b)].
4(b) -- Indenture (for unsecured debt securities), dated as of
September 1, 1997, between CSPCo and Bankers Trust Company, as
Trustee [Registration Statement No. 333-54025, Exhibits 4(a),
4(b), 4(c) and 4(d); Annual Report on Form 10-K of CSPCo for
the fiscal year ended December 31, 1998, File No. 1-2680,
Exhibits 4(c) and 4(d)].
*4(c) -- First Supplemental Indenture between CSPCo and Deutsche
Bank Trust Company Americas, as Trustee, dated November 25,
2003, establishing terms of 4.40% Senior Notes, Series E, due
2010.
*4(d) -- Indenture (for unsecured debt securities), dated as of
February 1, 2003, between CSPCo and Bank One, N.A., as Trustee
*4(e) -- First Supplemental Indenture, dated as of February 1, 2003,
between CSPCo and Bank One, N.A., as trustee, establishing the
terms of 5.50% Senior Notes, Series A, due 2013 and 5.50%
Senior Notes, Series C, due 2013.
*4(f) -- Second Supplemental Indenture, dated as of February 1,
2003, between CSPCo and Bank One, N.A. establishing the terms
of 6.60% Senior Notes, Series B, due 2033 and 6.60% Senior
Notes, Series D, due 2033.
10(a)(1) -- Power Agreement, dated October 15, 1952, between OVEC and
United States of America, acting by and through the United
States Atomic Energy Commission, and, subsequent to January
18, 1975, the Administrator of the Energy Research and
Development Administration, as amended [Registration
Statement No. 2-60015, Exhibit 5(a); Registration Statement
No. 2-63234, Exhibit 5(a)(1)(B); Registration Statement
No. 2-66301, Exhibit 5(a)(1)(C); Registration Statement
No. 2-67728, Exhibit 5(a)(1)(B); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1989, File No.
1-3457, Exhibit 10(a)(1)(F); and Annual Report on Form
10-K of APCo for the fiscal year ended December 31, 1992,
File No. 1-3457, Exhibit 10(a)(1)(B)].
10(a)(2) -- Inter-Company Power Agreement, dated July 10, 1953, among
OVEC and the Sponsoring Companies, as amended [Registration
Statement No. 2-60015, Exhibit 5(c); Registration Statement
No. 2-67728, Exhibit 5(a)(3)(B); and Annual Report on Form
10-K of APCo for the fiscal year ended December 31, 1992, File
No. 1-3457, Exhibit 10(a)(2)(B)].
10(a)(3) -- Power Agreement, dated July 10, 1953, between OVEC and
Indiana-Kentucky Electric Corporation, as amended
[Registration Statement No. 2-60015, Exhibit 5(e)].
10(b) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, OPCo and I&M and AEPSC, as amended [Registration
Statement No. 2-52910, Exhibit 5(a); Registration Statement
No. 2-61009, Exhibit 5(b); and Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 1990, File No.
1-3525, Exhibit 10(a)(3)].
10(c) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo, and with AEPSC as agent, as amended
[Annual Report on Form 10-K of AEP for the fiscal year ended
December 31, 1985, File No. 1-3525, Exhibit 10(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1988, File No. 1-3525, Exhibit 10(b)(2)].
10(d) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1996, File No. 1-3525, Exhibit
10(l)].
10(e)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, By and Among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(e)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
CSPCo dated December 15, 1999, File No. 1-2680, Exhibit 10].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the CSPCo 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of CSPCo [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21]
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
I&M++
3(a) -- Amended Articles of Acceptance of I&M and amendments
thereto [Annual Report on Form 10-K of I&M for fiscal year
ended December 31, 1993, File No. 1-3570, Exhibit 3(a)].
3(b) -- Articles of Amendment to the Amended Articles of Acceptance
of I&M, dated March 6, 1997 [Annual Report on Form 10-K of I&M
for fiscal year ended December 31, 1996, File No. 1-3570,
Exhibit 3(b)].
3(c) -- Composite of the Amended Articles of Acceptance of I&M
(amended as of March 7, 1997) [Annual Report on Form 10-K of
I&M for the fiscal year ended December 31, 1996, File No.
1-3570, Exhibit 3(c)].
3(d) -- By-Laws of I&M (amended as of November 28, 2001) [Annual
Report on Form 10-K of I&M for the fiscal year ended December
31, 2001, File No. 1-3570, Exhibit 3(d)].
4(a) -- Mortgage and Deed of Trust, dated as of June 1, 1939, between
I&M and Irving Trust Company (now The Bank of New York) and
various individuals, as Trustees, as amended and supplemented
[Registration Statement No. 2-7597, Exhibit 7(a); Registration
Statement No. 2-60665, Exhibits 2(c)(2), 2(c)(3), 2(c)(4),
2(c)(5), 2(c)(6), 2(c)(7), 2(c)(8), 2(c)(9), 2(c)(10),
2(c)(11), 2(c)(12), 2(c)(13), 2(c)(14), 2(c)(15), (2)(c)(16),
and 2(c)(17); Registration Statement No. 2-63234, Exhibit
2(b)(18); Registration Statement No. 2-65389,
Exhibit 2(a)(19); Registration Statement No. 2-67728,
Exhibit 2(b)(20); Registration Statement No. 2-85016,
Exhibit 4(b); Registration Statement No.33-5728, Exhibit 4(c);
Registration Statement No. 33-9280, Exhibit 4(b); Registration
Statement No. 33-11230, Exhibit 4(b); Registration Statement
No. 33-19620, Exhibits 4(a)(ii), 4(a)(iii), 4(a)(iv)
and 4(a)(v); Registration Statement No.33-46851, Exhibits
4(b)(i), 4(b)(ii) and 4(b)(iii); Registration Statement
No. 33-54480, Exhibits 4(b)(i) and 4(b)(ii); Registration
Statement No. 33-60886, Exhibit 4(b)(i); Registration
Statement No. 33-50521, Exhibits 4(b)(i), 4(b)(ii)
and 4(b)(iii); Annual Report on Form 10-K of I&M for the
fiscal year ended December 31, 1993, File No. 1-3570,
Exhibit 4(b); Annual Report on Form 10-K of I&M for the fiscal
year ended December 31, 1994, File No. 1-3570, Exhibit 4(b);
Annual Report on Form 10-K of I&M for the fiscal year ended
December 31, 1996, File No. 1-3570, Exhibit 4(b)].
4(b) -- Indenture (for unsecured debt securities), dated as of
October 1, 1998, between I&M and The Bank of New York, as
Trustee [Registration Statement No. 333-88523, Exhibits 4(a),
4(b) and 4(c); Registration Statement No. 333-58656, Exhibits
4(b) and 4(c); Registration Statement No. 333-108975, Exhibits
4(b), 4(c) and 4(d)].
10(a)(1) -- Power Agreement, dated October 15, 1952, between OVEC and
United States of America, acting by and through the United
States Atomic Energy Commission, and, subsequent to
January 18, 1975, the Administrator of the Energy Research and
Development Administration, as amended [Registration
Statement No. 2-60015, Exhibit 5(a); Registration Statement
No. 2-63234, Exhibit 5(a)(1)(B); Registration Statement
No. 2-66301, Exhibit 5(a)(1)(C); Registration Statement
No. 2-67728, Exhibit 5(a)(1)(D); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1989, File No.
1-3457, Exhibit 10(a)(1)(F); and Annual Report on Form
10-K of APCo for the fiscal year ended December 31, 1992,
File No. 1-3457, Exhibit 10(a)(1)(B)].
10(a)(2) -- Inter-Company Power Agreement, dated as of July 10, 1953,
among OVEC and the Sponsoring Companies, as amended
[Registration Statement No. 2-60015, Exhibit 5(c);
Registration Statement No. 2-67728, Exhibit 5(a)(3)(B); Annual
Report on Form 10-K of APCo for the fiscal year ended December
31, 1992, File No. 1-3457, Exhibit 10(a)(2)(B)].
10(a)(3) -- Power Agreement, dated July 10, 1953, between OVEC and
Indiana-Kentucky Electric Corporation, as amended
[Registration Statement No. 2-60015, Exhibit 5(e)].
10(a)(4) -- Inter-Company Power Agreement, dated as of July 10, 1953,
among OVEC and the Sponsoring Companies, as amended
[Registration Statement No. 2-60015, Exhibit 5(c);
Registration Statement No. 2-67728, Exhibit 5(a)(3)(B); Annual
Report on Form 10-K of APCo for the fiscal year ended December
31, 1992, File No. 1-3457, Exhibit 10(a)(2)(B)].
10(b) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, I&M, and OPCo and with AEPSC, as amended
[Registration Statement No. 2-52910, Exhibit 5(a);
Registration Statement No. 2-61009, Exhibit 5(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1990, File No. 1-3525, Exhibit 10(a)(3)].
10(c) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo and with AEPSC as agent, as amended
[Annual Report on Form 10-K of AEP for the fiscal year ended
December 31, 1985, File No. 1-3525, Exhibit 10(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1988, File No. 1-3525, Exhibit 10(b)(2)].
10(d) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 1, 1996, File No. 1-3525, Exhibit
10(l)].
10(e) -- Lease Agreements, dated as of December 1, 1989, between I&M
and Wilmington Trust Company, as amended [Registration
Statement No. 33-32753, Exhibits 28(a)(1)(C), 28(a)(2)(C),
28(a)(3)(C), 28(a)(4)(C), 28(a)(5)(C) and 28(a)(6)(C); Annual
Report on Form 10-K of I&M for the fiscal year ended December
31, 1993, File No. 1-3570, Exhibits 10(e)(1)(B), 10(e)(2)(B),
10(e)(3)(B), 10(e)(4)(B), 10(e)(5)(B) and 10(e)(6)(B)].
10(f)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, By and Among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(f)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
I&M dated December 15, 1999, File No. 1-3570, Exhibit 10].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the I&M 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of I&M [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21].
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
KPCo++
3(a) -- Restated Articles of Incorporation of KPCo [Annual Report
on Form 10-K of KPCo for the fiscal year ended December 31,
1991, File No. 1-6858, Exhibit 3(a)].
3(b) -- By-Laws of KPCo (amended as of June 15, 2000) [Annual
Report on Form 10-K of KPCo for the fiscal year ended December
31, 2000, File No. 1-6858, Exhibit 3(b)].
4(a) -- Indenture (for unsecured debt securities), dated as of
September 1, 1997, between KPCo and Bankers Trust Company, as
Trustee [Registration Statement No. 333-75785, Exhibits 4(a),
4(b), 4(c) and 4(d); Registration Statement No. 333-87216,
Exhibits 4(e) and 4(f); Annual Report on Form 10-K of KPCo for
the fiscal year ended December 31, 2002, File No. 1-6858,
Exhibits 4(c), 4(d) and 4(e)].
*4(b) -- Company Order and Officer's Certificate, dated June 13,
2003 establishing certain terms of the 5.625% Senior Notes,
Series D, due 2032.
10(a) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, I&M and OPCo and with AEPSC, as amended
[Registration Statement No. 2-52910, Exhibit 5(a);Registration
Statement No. 2-61009, Exhibit 5(b); and Annual Report on Form
10-K of AEP for the fiscal year ended December 31, 1990, File
No. 1-3525, Exhibit 10(a)(3)].
10(b) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo and with AEPSC as agent, as amended
[Annual Report on Form 10-K of AEP for the fiscal year ended
December 31, 1985, File No. 1-3525, Exhibit 10(b); and Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1988, File No. 1-3525, Exhibit 10(b)(2)].
10(c) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1996, File No. 1-3525, Exhibit
10(l)].
10(d)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, By and Among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(d)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
KPCo dated December 15, 1999, File No. 1-6858, Exhibit 10].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the KPCo 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
*23 -- Consent of Deloitte & Touche LLP
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
OPCo++
3(a) -- Amended Articles of Incorporation of OPCo, and amendments
thereto to December 31, 1993 [Registration Statement No.
33-50139, Exhibit 4(a); Annual Report on Form 10-K of OPCo for
the fiscal year ended December 31, 1993, File No. 1-6543,
Exhibit 3(b)].
3(b) -- Certificate of Amendment to Amended Articles of
Incorporation of OPCo, dated May 3, 1994 [Annual Report on
Form 10-K of OPCo for the fiscal year ended December 31, 1994,
File No. 1-6543, Exhibit 3(b)].
3(c) -- Certificate of Amendment to Amended Articles of
Incorporation of OPCo, dated March 6, 1997 [Annual Report on
Form 10-K of OPCo for the fiscal year ended December 31, 1996,
File No. 1-6543, Exhibit 3(c)].
3(d) -- Certificate of Amendment to Amended Articles of
Incorporation of OPCo, dated June 3, 2002 [Quarterly Report on
Form 10-Q of OPCo for the quarter ended June 30, 2002, File
No. 1-6543, Exhibit 3(d)].
3(e) -- Composite of the Amended Articles of Incorporation of OPCo
(amended as of June 3, 2002) [[Quarterly Report on Form 10-Q
of OPCo for the quarter ended June 30, 2002, File No. 1-6543,
Exhibit 3(e)].
3(f) -- Code of Regulations of OPCo [Annual Report on Form 10-K of
OPCo for the fiscal year ended December 31, 1990, File No.
1-6543, Exhibit 3(d)].
4(a) -- Mortgage and Deed of Trust, dated as of October 1, 1938,
between OPCo and Manufacturers Hanover Trust Company (now
Chemical Bank), as Trustee, as amended and supplemented
[Registration Statement No. 2-3828, Exhibit B-4;
Registration Statement No. 2-60721, Exhibits 2(c)(2), 2(c)(3),
2(c)(4), 2(c)(5), 2(c)(6), 2(c)(7), 2(c)(8), 2(c)(9),
2(c)(10), 2(c)(11), 2(c)(12), 2(c)(13), 2(c)(14), 2(c)(15),
2(c)(16), 2(c)(17), 2(c)(18), 2(c)(19), 2(c)(20), 2(c)(21),
2(c)(22), 2(c)(23), 2(c)(24), 2(c)(25), 2(c)(26), 2(c)(27),
2(c)(28), 2(c)(29), 2(c)(30), and 2(c)(31); Registration
Statement No. 2-83591, Exhibit 4(b); Registration Statement
No. 33-21208, Exhibits 4(a)(ii), 4(a)(iii) and 4(a)(iv);
Registration Statement No. 33-31069, Exhibit 4(a)(ii);
Registration Statement No. 33-44995, Exhibit 4(a)(ii);
Registration Statement No. 33-59006, Exhibits 4(a)(ii),
4(a)(iii) and 4(a)(iv); Registration Statement No. 33-50373,
Exhibits 4(a)(ii), 4(a)(iii) and 4(a)(iv); Annual Report on
Form 10-K of OPCo for the fiscal year ended December 31, 1993,
File No. 1-6543, Exhibit 4(b)].
4(b) -- Indenture (for unsecured debt securities), dated as of
September 1, 1997, between OPCo and Bankers Trust Company (now
Deutsche Bank Trust Company Americas), as Trustee
[Registration Statement No. 333-49595, Exhibits 4(a), 4(b) and
4(c); Registration Statement No. 333-106242, Exhibit 4(b),
4(c) and 4(d); Registration Statement No. 333-75783, Exhibits
4(b) and 4(c)].
*4(c) -- First Supplemental Indenture between OPCo and Deutsche Bank
Trust Company Americas, as Trustee, dated July 11, 2003,
establishing terms of 4.85% Senior Notes, Series H, due 2014.
*4(d) -- Second Supplemental Indenture between OPCo and Deutsche
Bank Trust Company Americas, as Trustee, dated July 11, 2003,
establishing terms of 6.375% Senior Notes, Series I, due 2033.
*4(e) -- Indenture (for unsecured debt securities), dated as of
February 1, 2003, between OPCo and Bank One, N.A., as Trustee
*4(f) -- First Supplemental Indenture, dated as of February 1, 2003,
between OPCo and Bank One, N.A., as Trustee, establishing the
terms of 5.50% Senior Notes, Series D, due 2013 and 5.50%
Senior Notes, Series F, due 2013.
*4(g) -- Second Supplemental Indenture, dated as of February 1,
2003, between OPCo and Bank One, N.A., as Trustee,
establishing the terms of 6.60% Senior Notes, Series E, due
2033 and 6.60% Senior Notes, Series G, due 2033.
10(a)(1) -- Power Agreement, dated October 15, 1952, between OVEC and
United States of America, acting by and through the United
States Atomic Energy Commission, and, subsequent to
January 18, 1975, the Administrator of the Energy Research and
Development Administration, as amended [Registration
Statement No. 2-60015, Exhibit 5(a); Registration Statement
No. 2-63234, Exhibit 5(a)(1)(B); Registration Statement No.
2-66301, Exhibit 5(a)(1)(C); Registration Statement No.
2-67728, Exhibit 5(a)(1)(D); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1989, File No.
1-3457, Exhibit 10(a)(1)(F); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1992, File No.
1-3457, Exhibit 10(a)(1)(B)].
10(a)(2) -- Inter-Company Power Agreement, dated July 10, 1953, among
OVEC and the Sponsoring Companies, as amended [Registration
Statement No. 2-60015, Exhibit 5(c); Registration Statement
No. 2-67728, Exhibit 5(a)(3)(B); Annual Report on Form 10-K of
APCo for the fiscal year ended December 31, 1992, File No.
1-3457, Exhibit 10(a)(2)(B)].
10(a)(3) -- Power Agreement, dated July 10, 1953, between OVEC and
Indiana-Kentucky Electric Corporation, as amended
[Registration Statement No. 2-60015, Exhibit 5(e)].
10(b) -- Interconnection Agreement, dated July 6, 1951, among APCo,
CSPCo, KPCo, I&M and OPCo and with AEPSC, as amended
[Registration Statement No. 2-52910, Exhibit 5(a);
Registration Statement No. 2-61009, Exhibit 5(b); Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1990, File 1-3525, Exhibit 10(a)(3)].
10(c) -- Transmission Agreement, dated April 1, 1984, among APCo,
CSPCo, I&M, KPCo, OPCo and with AEPSC as agent [Annual Report
on Form 10-K of AEP for the fiscal year ended December 31,
1985, File No. 1-3525, Exhibit 10(b); Annual Report on Form
10-K of AEP for the fiscal year ended December 31, 1988, File
No. 1-3525, Exhibit 10(b)(2)].
10(d) -- Modification No. 1 to the AEP System Interim Allowance
Agreement, dated July 28, 1994, among APCo, CSPCo, I&M, KPCo,
OPCo and AEPSC [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 1996, File No. 1-3525, Exhibit
10(l)].
10(e) -- Amendment No. 1, dated October 1, 1973, to Station
Agreement dated January 1, 1968, among OPCo, Buckeye and
Cardinal Operating Company, and amendments thereto [Annual
Report on Form 10-K of OPCo for the fiscal year ended December
31, 1993, File No. 1-6543, Exhibit 10(f)].
10(f) -- Lease Agreement dated January 20, 1995 between OPCo and JMG
Funding, Limited Partnership, and amendment thereto
(confidential treatment requested) [Annual Report on Form 10-K
of OPCo for the fiscal year ended December 31, 1994, File No.
1-6543, Exhibit 10(l)(2)].
10(g)(1) -- Agreement and Plan of Merger, dated as of December 21,
1997, by and among American Electric Power Company, Inc.,
Augusta Acquisition Corporation and Central and South West
Corporation [Annual Report on Form 10-K of AEP for the fiscal
year ended December 31, 1997, File No. 1-3525, Exhibit 10(f)].
10(g)(2) -- Amendment No. 1, dated as of December 31, 1999, to the
Agreement and Plan of Merger [Current Report on Form 8-K of
OPCo dated December 15, 1999, File No. 1-6543, Exhibit 10].
+10(h) -- AEP System Senior Officer Annual Incentive Compensation
Plan [Annual Report on Form 10-K of AEP for the fiscal year
ended December 31, 1996, File No. 1-3525, Exhibit 10(i)(1)].
+10(i)(1)(A -- AEP System Excess Benefit Plan, Amended and Restated as of
January 1, 2001 [Annual Report on Form 10-K of AEP for the
fiscal year ended December 31, 2000, File No. 1-3525, Exhibit
10(j)(1)(A)].
+10(i)(1)(B) -- First Amendment to AEP System Excess Benefit Plan, dated as
of March 5, 2003 [Annual Report on Form 10-K of OPCo for the
fiscal year ended December 31, 2002, File No. 1-6543; Exhibit
10(i)(1)(B)].
*+10(i)(2) -- AEP System Supplemental Retirement Savings Plan, Amended
and Restated as of January 1, 2003 (Non-Qualified).
+10(i)(3) -- Service Corporation Umbrella Trust for Executives [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1993, File No. 1-3525, Exhibit 10(g)(3)].
*+10(j)(1) -- Employment Agreement between AEP, AEPSC and Michael G.
Morris dated December 15, 2003.
+10(j)(2) -- Memorandum of agreement between Susan Tomasky and AEPSC
dated January 3, 2001 [Annual Report on Form 10-K of AEP for
the fiscal year ended December 31, 2000, File No. 1-3525,
Exhibit 10(s)].
+10(j)(3) -- Employment Agreement dated July 29, 1998 between AEPSC and
Robert P. Powers [Annual Report on Form 10-K of OPCo for the
fiscal year ended December 31, 2002, File No. 1-6543; Exhibit
10(j)(3)].
+10(k)(1) -- AEP System Survivor Benefit Plan, effective January 27,
1998 [Quarterly Report on Form 10-Q of AEP for the quarter
ended September 30, 1998, File No. 1-3525, Exhibit 10].
+10(k)(2) -- First Amendment to AEP System Survivor Benefit Plan, as
amended and restated effective January 31, 2000 [Annual Report
on Form 10-K of OPCo for the fiscal year ended December 31,
2002, File No. 1-6543; Exhibit 10(k)(2)].
+10(l) -- AEP Senior Executive Severance Plan for Merger with Central
and South West Corporation, effective March 1, 1999[Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 1998, File No. 1-3525, Exhibit 10(o)].
+10(m) -- AEP Change In Control Agreement [Annual Report on Form 10-K
of AEP for the fiscal year ended December 31, 2001, File No.
1-3525, Exhibit 10(o)].
*+10(n) -- AEP System 2000 Long-Term Incentive Plan, as amended December
10, 2003.
+10(o)(1) -- Central and South West System Special Executive Retirement
Plan as amended and restated effective July 1, 1997 [Annual
Report on Form 10-K of CSW for the fiscal year ended December
31, 1998, File No. 1-1443, Exhibit 18].
+10(o)(2) -- Certified CSW Board Resolution of April 18, 1991 [Annual
Report on Form 10-K of AEP for the fiscal year ended December
31, 2001, File No. 1-3525, Exhibit 10(r)(2)].
*+10(o)(3) -- Certified AEP Utilities, Inc. (formerly CSW) Board
Resolutions of July 16, 1996.
+10(o)(4) -- CSW 1992 Long-Term Incentive Plan [Proxy Statement of CSW,
March 13, 1992].
*+10(p)(1) -- AEP System Incentive Compensation Deferral Plan Amended and
Restated as of January 1, 2003.
+10(q) -- AEP System Nuclear Performance Long Term Incentive
Compensation Plan dated August 1, 1998 [Annual Report on Form
10-K of OPCo for the fiscal year ended December 31, 2002, File
No. 1-6543; Exhibit 10(q)].
+10(r) -- Nuclear Key Contributor Retention Plan dated May 1, 2000
[Annual Report on Form 10-K of OPCo for the fiscal year ended
December 31, 2002, File No. 1-6543; Exhibit 10(r)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the OPCo 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of OPCo [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21].
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
PSO++
3(a) -- Restated Certificate of Incorporation of PSO [Annual Report
on Form U5S of Central and South West Corporation for the
fiscal year ended December 31, 1996, File No. 1-1443, Exhibit
B-3.1].
3(b) -- By-Laws of PSO (amended as of June 28, 2000) [Annual Report
on Form 10-K of PSO for the fiscal year ended December 31,
2000, File No. 0-343, Exhibit 3(b)].
4(a) -- Indenture, dated July 1, 1945, between and Liberty Bank and
Trust Company of Tulsa, National Association, as Trustee, as
amended and supplemented [Registration Statement No. 2-60712,
Exhibit 5.03; Registration Statement No.2-64432, Exhibit 2.02;
Registration Statement No. 2-65871, Exhibit 2.02; Form U-1 No.
70-6822, Exhibit 2; Form U-1 No. 70-7234, Exhibit 3;
Registration Statement No. 33-48650, Exhibit 4(b);
Registration Statement No. 33-49143, Exhibit 4(c);
Registration Statement No. 33-49575, Exhibit 4(b); Annual
Report on Form 10-K of PSO for the fiscal year ended
December 31, 1993, File No. 0-343, Exhibit 4(b); Current
Report on Form 8-K of PSO dated March 4, 1996, No. 0-343,
Exhibit 4.01; Current Report on Form 8-K of PSO dated March 4,
1996, No. 0-343, Exhibit 4.02; Current Report on Form 8-K of
PSO dated March 4, 1996, No. 0-343, Exhibit 4.03].
4(b) -- PSO-obligated, mandatorily redeemable preferred securities
of subsidiary trust holding solely Junior Subordinated
Debentures of PSO:
(1) Indenture, dated as of May 1, 1997, between PSO and The
Bank of New York, as Trustee [Quarterly Report on Form
10-Q of PSO dated March 31, 1997, File No. 0-343,
Exhibits 4.6 and 4.7].
(2) Amended and Restated Trust Agreement of PSO Capital I,
dated as of May 1, 1997, among PSO, as Depositor, The
Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the
Administrative Trustee [Quarterly Report on Form 10-Q of
PSO dated March 31, 1997, File No. 0-343, Exhibit 4.8].
(3) Guarantee Agreement, dated as of May 1, 1997, delivered
by PSO for the benefit of the holders of PSO Capital I's
Preferred Securities [Quarterly Report on Form 10-Q of
PSO dated March 31, 1997, File No. 0-343, Exhibits 4.9].
(4) Agreement as to Expenses and Liabilities, dated as of May
1, 1997, between PSO and PSO Capital I [Quarterly Report
on Form 10-Q of PSO dated March 31, 1997, File No. 0-343,
Exhibits 4.10].
4(c) -- Indenture (for unsecured debt securities), dated as of
November 1, 2000, between PSO and The Bank of New York, as
Trustee [Registration Statement No. 333-100623, Exhibits 4(a)
and 4(b); [Annual Report on Form 10-K of PSO for the fiscal
year ended December 31, 2002, File No. 0-343; Exhibit 4(c)].
*4(d) -- Third Supplemental Indenture, dated as of September 15,
2003, between PSO and The Bank of New York, as Trustee,
establishing terms of the 4.85% Senior Notes, Series C, due
2010.
10(a) -- Restated and Amended Operating Agreement, dated as of
January 1, 1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual
Report on Form 10-K of PSO for the fiscal year ended December
31, 2002, File No. 0-343; Exhibit 10(a)].
10(b) -- Transmission Coordination Agreement, dated October 29,
1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual Report on
Form 10-K of PSO for the fiscal year ended December 31, 2002,
File No. 0-343; Exhibit 10(b)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the PSO 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
SWEPCo++
3(a) -- Restated Certificate of Incorporation, as amended through
May 6, 1997, including Certificate of Amendment of Restated
Certificate of Incorporation [Quarterly Report on Form 10-Q of
SWEPCo for the quarter ended March 31, 1997, File No. 1-3146,
Exhibit 3.4].
3(b) -- By-Laws of SWEPCo (amended as of April 27, 2000) [Quarterly
Report on Form 10-Q of SWEPCo for the quarter ended March 31,
2000, File No. 1-3146, Exhibit 3.3].
4(a) -- Indenture, dated February 1, 1940, between SWEPCo and
Continental Bank, National Association and M. J. Kruger, as
Trustees, as amended and supplemented [Registration Statement
No. 2-60712, Exhibit 5.04; Registration Statement No. 2-61943,
Exhibit 2.02; Registration Statement No.2-66033, Exhibit 2.02;
Registration Statement No. 2-71126, Exhibit 2.02; Registration
Statement No. 2-77165, Exhibit 2.02; Form U-1 No. 70-7121,
Exhibit 4; Form U-1 No. 70-7233, Exhibit 3; Form U-1 No.
70-7676, Exhibit 3; Form U-1 No. 70-7934, Exhibit 10;
Form U-1 No. 72-8041, Exhibit 10(b); Form U-1 No. 70-8041,
Exhibit 10(c); Form U-1 No. 70-8239, Exhibit 10(a)].
*4(b) -- SWEPCO-obligated, mandatorily redeemable preferred
securities of subsidiary trust holding solely Junior
Subordinated Debentures of SWEPCo:
(1) Subordinated Indenture, dated as of September 1, 2003,
between SWEPCo and The Bank of New York, as Trustee.
(2) Amended and Restated Trust Agreement of SWEPCo Capital
Trust I, dated as of September 1, 2003, among SWEPCo, as
Depositor, The Bank of New York, as Property Trustee, The
Bank of New York (Delaware), as Delaware Trustee, and the
Administrative Trustees.
(3) Guarantee Agreement, dated as of September 1, 2003,
delivered by SWEPCo for the benefit of the holders of
SWEPCo Capital Trust I's Preferred Securities.
(4) First Supplemental Indenture dated as of October 1, 2003,
providing for the issuance of Series B Junior
Subordinated Debentures between SWEPCo, as Issuer and The
Bank of New York, as Trustee
(5) Agreement as to Expenses and Liabilities, dated as of
October 1, 2003 between SWEPCo and SWEPCo Capital Trust I
(included in Item (4) above as exhibit 4(f)(i)(A).
4(c) -- Indenture (for unsecured debt securities), dated as of
February 4, 2000, between SWEPCo and The Bank of New York, as
Trustee [Registration Statement No. 333-87834, Exhibits 4(a)
and 4(b); Registration Statement No. 333-100632, Exhibit 4(b);
Registration Statement No. 333-108045 Exhibit 4(b)].
*4(d) -- Third Supplemental Indenture, between SWEPCo and The Bank
of New York, as Trustee, dated April 11, 2003, establishing
terms of 5.375% Senior Notes, Series C, due 2015.
10(a) -- Restated and Amended Operating Agreement, dated as of
January 1, 1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual
Report on Form 10-K of SWEPCo for the fiscal year ended
December 31, 2002, File No. 1-3146; Exhibit 10(a)].
10(b) -- Transmission Coordination Agreement, dated October 29,
1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual Report on
Form 10-K of SWEPCo for the fiscal year ended December 31,
2002, File No. 1-3146; Exhibit 10(b)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the SWEPCo 2003 Annual Report
(for the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of SWEPCo [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21]
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
TCC++
3(a) -- Restated Articles of Incorporation Without Amendment,
Articles of Correction to Restated Articles of Incorporation
Without Amendment, Articles of Amendment to Restated Articles
of Incorporation, Statements of Registered Office and/or
Agent, and Articles of Amendment to the Articles of
Incorporation [Quarterly Report on Form 10-Q of TCC for the
quarter ended March 31, 1997, File No. 0-346, Exhibit 3.1].
3(b) -- Articles of Amendment to Restated Articles of Incorporation
of TCC dated December 18, 2002 [Annual Report on Form 10-K of
TCC for the fiscal year ended December 31, 2002, File No.
0-346; Exhibit 3(b)].
3(c) -- By-Laws of TCC (amended as of April 19, 2000) [Annual
Report on Form 10-K of TCC for the fiscal year ended December
31, 2000, File No. 0-346, Exhibit 3(b)].
4(a) -- Indenture of Mortgage or Deed of Trust, dated November 1,
1943, between TCC and The First National Bank of Chicago and
R. D. Manella, as Trustees, as amended and supplemented
[Registration Statement No. 2-60712, Exhibit 5.01;
Registration Statement No. 2-62271, Exhibit 2.02;
Form U-1 No. 70-7003, Exhibit 17; Registration Statement
No. 2-98944, Exhibit 4 (b); Form U-1 No. 70-7236, Exhibit 4;
Form U-1 No. 70-7249, Exhibit 4; Form U-1 No. 70-7520,
Exhibit 2; Form U-1 No. 70-7721, Exhibit 3; Form U-1
No. 70-7725, Exhibit 10; Form U-1 No. 70-8053, Exhibit 10
(a); Form U-1 No. 70-8053, Exhibit 10 (b); Form U-1
No. 70-8053, Exhibit 10 (c); Form U-1 No. 70-8053, Exhibit 10
(d); Form U-1 No. 70-8053, Exhibit 10 (e); Form U-1
No. 70-8053, Exhibit 10 (f)].
4(b) -- TCC-obligated, mandatorily redeemable preferred securities
of subsidiary trust holding solely Junior Subordinated
Debentures of TCC:
(1) Indenture, dated as of May 1, 1997, between TCC and the
Bank of New York, as Trustee [Quarterly Report on Form
10-Q of TCC dated March 31, 1997, File No. 0-346,
Exhibits 4.1 and 4.2].
(2) Amended and Restated Trust Agreement of TCC Capital I,
dated as of May 1, 1997, among TCC, as Depositor, The
Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the
Administrative Trustee [Quarterly Report on Form 10-Q of
TCC dated March 31, 1997, File No. 0-346, Exhibit 4.3].
(3) Guarantee Agreement, dated as of May 1, 1997, delivered
by TCC for the benefit of the holders of TCC Capital I's
Preferred Securities [Quarterly Report on Form 10-Q of
TCC dated March 31, 1997, File No. 0-346, Exhibit 4.4].
(4) Agreement as to Expenses and Liabilities dated as of May
1, 1997, between TCC and TCC Capital I [Quarterly Report
on Form 10-Q of TCC dated March 31, 1997, File No. 0-346,
Exhibit 4.5].
4(c) -- Indenture (for unsecured debt securities), dated as of
November 15, 1999, between TCC and The Bank of New York, as
Trustee, as amended and supplemented [Annual Report on Form
10-K of TCC for the fiscal year ended December 31, 2000, File
No. 0-346, Exhibits 4(c), 4(d) and 4(e)].
*4(d) -- Indenture (for unsecured debt securities), dated as of
February 1, 2003, between TCC and Bank One, N.A., as Trustee
*4(e) -- First Supplemental Indenture, dated as of February 1, 2003,
between TCC and Bank One, N.A., as Trustee, establishing the
terms of 5.50% Senior Notes, Series A, due 2013 and 5.50%
Senior Notes, Series D, due 2013.
*4(f) -- Second Supplemental Indenture, dated as of February 1,
2003, between TCC and Bank One, N.A., as Trustee, establishing
the terms of 6.65% Senior Notes, Series B, due 2033 and 6.65%
Senior Notes, Series E, due 2033.
*4(g) -- Third Supplemental Indenture, dated as of February 1, 2003,
between TCC and Bank One, N.A., as Trustee, establishing the
terms of 3.00% Senior Notes, Series C, due 2005 and 3.00%
Senior Notes, Series F, due 2005.
*4(h) -- Fourth Supplemental Indenture, dated as of February 1,
2003, between TCC and Bank One, N.A., as Trustee, establishing
the terms of Floating Rate Notes, Series A, due 2005 and
Floating Rate Notes, Series B, due 2005.
10(a) -- Restated and Amended Operating Agreement, dated as of
January 1, 1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual
Report on Form 10-K of TCC for the fiscal year ended December
31, 2002, File No. 0-346; Exhibit 10(a)].
10(b) -- Transmission Coordination Agreement, dated October 29,
1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual Report on
Form 10-K of TCC for the fiscal year ended December 31, 2002,
File No. 0-346; Exhibit 10(b)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the TCC 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
21 -- List of subsidiaries of TCC [Annual Report on Form 10-K of
AEP for the fiscal year ended December 31, 2003, File No.
1-3525, Exhibit 21]
*23 -- Consent of Deloitte & Touche LLP.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
TNC++
3(a) -- Restated Articles of Incorporation, as amended, and
Articles of Amendment to the Articles of Incorporation [Annual
Report on Form 10-K of TNC for the fiscal year ended December
31, 1996, File No. 0-340, Exhibit 3.5].
3(b) -- Articles of Amendment to Restated Articles of Incorporation
of TNC dated December 17, 2002 [Annual Report on Form 10-K of
TNC for the fiscal year ended December 31, 2002, File No.
0-340; Exhibit 3(b)].
3(c) -- By-Laws of TNC (amended as of May 1, 2000) [Quarterly
Report on Form 10-Q of TNC for the quarter ended March 31,
2000, File No. 0-340, Exhibit 3.4].
4(a) -- Indenture, dated August 1, 1943, between TNC and Harris Trust
and Savings Bank and J. Bartolini, as Trustees, as amended and
supplemented [Registration Statement No. 2-60712, Exhibit
5.05; Registration Statement No. 2-63931, Exhibit 2.02;
Registration Statement No. 2-74408, Exhibit 4.02; Form U-1 No.
70-6820, Exhibit 12; Form U-1 No. 70-6925, Exhibit 13;
Registration Statement No. 2-98843, Exhibit 4(b); Form U-1
No. 70-7237, Exhibit 4; Form U-1 No. 70-7719, Exhibit 3;
Form U-1 No. 70-7936, Exhibit 10; Form U-1 No. 70-8057,
Exhibit 10; Form U-1 No. 70-8265, Exhibit 10; Form U-1
No. 70-8057, Exhibit 10(b); Form U-1 No. 70-8057,
Exhibit 10(c)].
*4(b) -- Indenture (for unsecured debt securities), dated as of
February 1, 2003, between TNC and Bank One, N.A., as Trustee
*4(c) -- First Supplemental Indenture, dated as of February 1, 2003,
between TNC and Bank One, N.A., as Trustee, establishing the
terms of 5.50% Senior Notes, Series A, due 2013 and 5.50%
Senior Notes, Series D, due 2013.
10(a) -- Restated and Amended Operating Agreement, dated as of
January 1, 1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual
Report on Form 10-K of TNC for the fiscal year ended December
31, 2002, File No. 0-340; Exhibit 10(a)].
10(b) -- Transmission Coordination Agreement, dated October 29,
1998, among PSO, TCC, TNC, SWEPCo and AEPSC [Annual Report on
Form 10-K of TNC for the fiscal year ended December 31, 2002,
File No. 0-340; Exhibit 10(b)].
*12 -- Statement re: Computation of Ratios.
*13 -- Copy of those portions of the TNC 2003 Annual Report (for
the fiscal year ended December 31, 2003) which are
incorporated by reference in this filing.
*24 -- Power of Attorney.
*31(a) -- Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*31(b) -- Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
*32(a) -- Certification of Chief Executive Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
*32(b) -- Certification of Chief Financial Officer Pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States
Code.
---------------
++ Certain instruments defining the rights of holders of long-term debt of
the registrants included in the financial statements of registrants filed
herewith have been omitted because the total amount of securities authorized
thereunder does not exceed 10% of the total assets of registrants. The
registrants hereby agree to furnish a copy of any such omitted instrument to the
SEC upon request.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>4
<FILENAME>x3d.txt
<DESCRIPTION>(D) BY-LAWS AS OF 12/15/03
<TEXT>
EXHIBIT 3(d)
AMERICAN ELECTRIC POWER COMPANY, INC.
(Formerly American Gas & Electric Company)
BY-LAWS
As Amended December 15, 2003
AMERICAN ELECTRIC POWER COMPANY, INC.
(Formerly American Gas and Electric Company)
BY-LAWS
Section 1. The annual meeting of the stockholders of the Company shall
be held on the fourth Wednesday of April in each year, or on such other date as
determined by the Board of Directors, at an hour and place within or without the
State of New York designated by the Board of Directors. (As amended January 28,
1998.)
Section 2. Special meetings of the stockholders of the Company may be
held upon call of the Board of Directors or of the Executive Committee, or of
stockholders holding one-fourth of the capital stock, at such time and at such
place within or without the State of New York as may be stated in the call and
notice. (As amended July 26, 1989.)
Section 3. Notice of time and place of every meeting of stockholders
shall be mailed at least ten days previous thereto to each stockholder of record
who shall have furnished a written address to the Secretary of the Company for
the purpose. Such further notice shall be given as may be required by law. But
meetings may be held without notice if all stockholders are present, or if
notice is waived by those not present.
Section 4. Except as otherwise provided by law, the holders of a
majority of the outstanding capital stock of the Company entitled to vote at any
meeting of the stockholders of the Company must be present in person or by proxy
at such meeting of the stockholders of the Company to constitute a quorum. If,
however, such majority shall not be represented at any meeting of the
stockholders of the Company regularly called, the holders of a majority of the
shares present or represented and entitled to vote thereat shall have power to
adjourn such meeting to another time without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to vote
at such meeting shall be represented. (As amended May 20, 1952.)
Section 5. As soon as may be after their election in each year, the
Board of Directors or the Executive Committee shall appoint three inspectors of
stockholders' votes and elections to serve until the final adjournment of the
next annual stockholders' meeting. If they fail to make such appointment, or if
their appointees, or any of them, fail to appear at any meeting of stockholders,
the Chairman of the meeting may appoint inspectors, or an inspector, to act at
that meeting.
Section 6. Meetings of the stockholders shall be presided over by the
Chairman of the Board, or if he is not present, by the President, or, if neither
the Chairman of the Board nor the President is present, by a Vice President, and
in his absence, by a Chairman to be elected at the meeting. The Secretary of the
Company shall act as Secretary of such meetings, if present. (As amended January
23, 1979.)
Section 7. The Board of Directors shall consist of such number of
directors, not less than nine (9) nor more than seventeen (17), as shall be
determined from time to time as herein provided. Directors shall be elected at
each annual meeting of stockholders and each director so elected shall hold
office until the next annual meeting of stockholders and until his successor is
elected and qualified. The number of directors to be elected at any annual
meeting of stockholders shall, except as otherwise provided herein, be the
number fixed in the latest resolution of the Board of Directors adopted pursuant
to the authority contained in the next succeeding sentence and not subsequently
rescinded. The Board of Directors shall have power from time to time and at any
time when the stockholders are not assembled as such in an annual or special
meeting, by resolution adopted by a majority of the directors then in office, or
such greater number required by law, to fix, within the limits prescribed by
this Section 7, the number of directors of the Company. If the number of
directors is increased, the additional directors may, to the extent permitted by
law, be elected by a majority of the directors in office at the time of the
increase, or, if not so elected prior to the next annual meeting of
stockholders, such additional directors shall be elected at such annual meeting.
If the number of directors is decreased, then to the extent that the decrease
does not exceed the number of vacancies in the Board then existing, such
resolution may provide that it shall become effective forthwith, and to the
extent that the decrease exceeds such number of vacancies such resolution shall
provide that it shall not become effective until the next election of directors
by the stockholders. If the Board of Directors shall fail to adopt a resolution
which fixes initially the number of directors, the number of directors shall be
twelve (12). If, after the number of directors shall have been fixed by such
resolution, such resolution shall cease to be in effect other than by being
superseded by another such resolution, or it shall become necessary that the
number of directors be fixed by these By-Laws, the number of directors shall be
that number specified in the latest of such resolutions, whether or not such
resolution continues in effect. (As amended April 23, 1997.)
Section 8. Vacancies in the Board of Directors may be filled by the
Board at any meeting.
Section 9. Meetings of the Board of Directors shall be held at times
fixed by resolution of the Board, or upon the call of the Executive Committee,
the Chairman of the Board, the President or the Presiding Director and the
Secretary or officer performing his duties shall give reasonable notice of all
meetings of directors; provided, that a meeting may be held without notice
immediately after the annual election at the same place, and notice need not be
given of regular meetings held at times fixed by resolution of the Board.
Meetings may be held at any time without notice if all the directors are
present, or if those not present waive notice either before or after the
meeting. The number of directors necessary to constitute a quorum for the
transaction of business shall be any number, which may be less than a majority
of the Board but not less than one-third of its number, duly assembled at a
meeting of such directors. Any one or more members of the Board or of any
committee thereof may participate in a meeting of the Board or such committee by
means of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means constitutes presence in person at a meeting. (As
amended December 10, 2003.)
Section 10. The Board of Directors, by resolution adopted by a majority
of the entire Board, may designate among its members an Executive Committee and
one or more other committees, each consisting of three (3) or more directors,
and each of which, to the extent provided in such resolution, shall have all the
authority of the Board. However, no such committee shall have authority as to
any of the following matters:
(a) The submission to shareholders of any action as to which
shareholders' authorization is required by law;
(b) The filling of vacancies in the Board of Directors or in
any committee;
(c) The fixing of compensation of any director for serving on
the Board or on any committee;
(d) The amendment or repeal of these By-Laws or the adoption
of new By-Laws; or
(e) The amendment or repeal of any resolution of the Board
which by its terms shall not be so amendable or repealable.
The Board of Directors shall have the power at any time to increase or decrease
the number of members of any committee (provided that no such decrease shall
reduce the number of members to less than three), to fill vacancies on it, to
remove any member of it, and to change its functions or terminate its existence.
Each committee may make such rules for the conduct of its business as it may
deem necessary. A majority of the members of a committee shall constitute a
quorum.
The Board of Directors shall also have the power to designate or
appoint at any time and from time to time one or more individuals who have
acquired as a former director or officer of the Company substantial experience
with the Company's affairs as an Honorary Director, such individual or
individuals to meet with the Board of Directors, or certain of the directors, at
the invitation of the Chairman of the Board, from time to time for the purpose
of rendering advice to the Board of Directors or such directors with respect to
the Company's affairs for such compensation as shall be payable to directors of
the Company who are not serving, at the time in question, as officers or
employees of the Company or of American Electric Power Service Corporation;
provided, however, that under no circumstances shall such individual or
individuals be authorized or empowered to participate in the management or
direction of the affairs of the Company or to perform the functions of a
director or officer of the Company (as each such term is defined by the
provisions of Rule 70 promulgated by the Securities and Exchange Commission
under the provisions of Section 17(c) of the Public Utility Holding Company Act
of 1935, as such definition shall be in effect at any time in question) or any
similar function. (As amended April 26, 1978.)
Section 11. The Board of Directors, as soon as may be after the
election each year, shall appoint one of their number Chairman of the Board and
one of their number President of the Company, and shall appoint one or more Vice
Presidents, a Secretary and a Treasurer, and from time to time shall appoint
such other officers as they deem proper. The same person may be appointed to
more than one office. (As amended January 23, 1979.)
Section 12. The term of office of all officers shall be one year, or
until their respective successors are elected but any officer may be removed
from office at any time by the Board of Directors, unless otherwise agreed by
agreement in writing duly authorized by the Board of Directors. (As amended
December 15, 2003.)
Section 13. The officers of the Company shall have such powers and
duties as generally pertain to their offices, respectively, as well as such
powers and duties as from time to time shall be conferred by the Board of
Directors or the Executive Committee.
Section 14. The stock of the Company shall be transferable or
assignable only on the books of the Company by the holders, in person or by
attorney, on the surrender of the certificate therefor. The Board of Directors
may appoint such Transfer Agents and Registrars of stock as to them may seem
expedient.
Section 15. To the fullest extent permitted by law, the Company shall
indemnify any person made, or threatened to be made, a party to any action or
proceeding (formal or informal), whether civil, criminal, administrative or
investigative and whether by or in the right of the Company or otherwise, by
reason of the fact that such person, such person's testator or intestate, is or
was a director, officer or employee of the Company, or of any subsidiary or
affiliate of the Company, or served any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise in any capacity at the
request of the Company, against all loss and expense including, without limiting
the generality of the foregoing, judgments, fines (including excise taxes),
amounts paid in settlement and attorneys' fees and disbursements actually and
necessarily incurred as a result of such action or proceeding, or any appeal
therefrom, and all legal fees and expenses incurred in successfully asserting a
claim for indemnification pursuant to this Section 15; provided, however, that
no indemnification may be made to or on behalf of any director, officer or
employee if a judgment or other final adjudication adverse to the director,
officer or employee establishes that such person's acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated, or that such person personally gained in
fact a financial profit or other advantage to which such person was not legally
entitled.
In any case in which a director, officer or employee of the Company (or
a representative of the estate of such director, officer or employee) requests
indemnification, upon such person's request the Board of Directors shall meet
within sixty days thereof to determine whether such person is eligible for
indemnification in accordance with the standard set forth above. Such a person
claiming indemnification shall be entitled to indemnification upon a
determination that no judgment or other final adjudication adverse to such
person has established that such person's acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that such person personally gained in fact a
financial profit or other advantage to which such person was not legally
entitled. Such determination shall be made:
(a) by the Board of Directors acting by a quorum consisting of
directors who are not parties to the action or proceeding in respect of
which indemnification is sought; or
(b) if such quorum is unobtainable or if directed by such
quorum, then by either (i) the Board of Directors upon the opinion in
writing of independent legal counsel that indemnification is proper in
the circumstances because such person is eligible for indemnification
in accordance with the standard set forth above, or (ii) by the
stockholders upon a finding that such person is eligible for
indemnification in accordance with the standard set forth above.
Notwithstanding the foregoing, a determination of eligibility for
indemnification may be made in any manner permitted by law.
To the fullest extent permitted by law, the Company shall promptly
advance to any person made, or threatened to be made, a party to any action or
proceeding (formal or informal), whether civil, criminal, administrative or
investigative and whether by or in the right of the Company or otherwise, by
reason of the fact that such person, such person's testator or intestate, is or
was a director, officer or employee of the Company, or of any subsidiary or
affiliate of the Company, or served any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise in any capacity
at the request of the Company, expenses incurred in defending such actions or
proceedings, upon request of such person and receipt of an undertaking by or on
behalf of such director, officer or employee to repay amounts advanced to the
extent that it is ultimately determined that such person was not eligible for
indemnification in accordance with the standard set forth above.
The foregoing provisions of this Section 15 shall be deemed to be a
contract between the Company and each director, officer or employee of the
Company, or its subsidiaries or affiliates, and any modification or repeal of
this Section 15 or such provisions of the New York Business Corporation Law
shall not diminish any rights or obligations existing prior to such modification
or repeal with respect to any action or proceeding theretofore or thereafter
brought; provided, however, that the right of indemnification provided in this
Section 15 shall not be deemed exclusive of any other rights to which any
director, officer or employee of the Company may now be or hereafter become
entitled apart from this Section 15, under any applicable law including the New
York Business Corporation Law. Irrespective of the provisions of this Section
15, the Board of Directors may, at any time or from time to time, approve
indemnification of directors, officers, employees or agents to the full extent
permitted by the New York Business Corporation Law at the time in effect,
whether on account of past or future actions or transactions. Notwithstanding
the foregoing, the Company shall enter into such additional contracts providing
for indemnification and advancement of expenses with directors, officers or
employees of the Company or its subsidiaries or affiliates as the Board of
Directors shall authorize, provided that the terms of any such contract shall be
consistent with the provisions of the New York Business Corporation Law.
As used in this Section 15, the term "employee" shall include, without
limitation, any employee, including any professionally licensed employee, of the
Company. Such term shall also include, without limitation, any employee,
including any professionally licensed employee, of a subsidiary or affiliate of
the Company who is acting on behalf of the Company.
The indemnification provided by this Section 15 shall be limited with
respect to directors, officers and controlling persons to the extent provided in
any undertaking entered into by the Company or its subsidiaries or affiliates,
as required by the Securities and Exchange Commission pursuant to any rule or
regulation of the Securities and Exchange Commission now or hereafter in effect.
If any action with respect to indemnification of directors or officers
is taken by way of amendment to these By-Laws, resolution of the Board of
Directors, or by agreement, then the Company shall give such notice to the
stockholders as is required by law.
The Company may purchase and maintain insurance on behalf of any person
described in this Section 15 against any liability which may be asserted against
such person whether or not the Company would have the power to indemnify such
person against such liability under the provisions of this Section 15 or
otherwise.
If any provision of this Section 15 shall be found to be invalid or
limited in application by reason of any law, regulation or proceeding, it shall
not affect any other provision or the validity of the remaining provisions
hereof.
The provisions of this Section 15 shall be applicable to claims,
actions, suits or proceedings made, commenced or pending after the adoption
hereof, whether arising from acts or omissions to act occurring before or after
the adoption hereof. (As amended October 29, 1986.)
Section 16. These By-Laws may be amended or added to at any meeting of
the Board of Directors by affirmative vote of a majority of all of the
directors, if notice of the proposed change has been delivered or mailed to the
directors five days before the meeting, or if all the directors are present, or
if all not present assent in writing to such change; provided, however, that the
provisions of Section 7 relating to the number of directors constituting the
Board of Directors may be amended only by the affirmative vote, in person or by
proxy, of the holders of a majority of the outstanding shares of capital stock
entitled to vote at any meeting of the stockholders of the Company; and provided
further that the provisions of Section 7 other than those relating to the number
of directors constituting the Board of Directors, and the provisions of this
Section 16 may be amended or added to only by the affirmative vote, in person or
by proxy, of the holders of two-thirds of the outstanding shares of capital
stock entitled to vote at any meeting of the stockholders of the Company; and
provided further, in the event of any such amendment or addition pursuant to
vote by the stockholders of the Company, that such amendment or addition, or a
summary thereof, shall have been set forth or referred to in the notice of such
meeting. (As renumbered and amended October 29, 1986.)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>x10k1.txt
<DESCRIPTION>(K)(1) DEFERRED COMP/STOCK PLAN AMENDED 12/10/03
<TEXT>
EXHIBIT 10(k)(1)
American Electric Power Company, Inc.
Deferred Compensation and Stock Plan
For Non-Employee Directors
(As Amended December 10, 2003)
Article 1
Purpose
The purposes of this American Electric Power Company, Inc. Deferred Compensation
and Stock Plan For Non-Employee Directors (the "Plan") are to enable the Company
to attract and retain qualified persons to serve as Non-Employee Directors, to
provide Non-Employee Directors with an opportunity to defer some or all of their
Retainer as a means of saving for retirement or other purposes, to solidify the
common interests of its Non-Employee Directors and shareholders by enhancing the
equity interest of Non-Employee Directors in the Company, and to encourage the
highest level of Non-Employee Director performance by providing such
Non-Employee Directors with a proprietary interest in the Company's performance
and progress by permitting Non-Employee Directors to receive all or a portion of
their Retainer in Common Stock and/or to defer all or a portion of their
Retainer in Stock Units.
Article 2
Effective Date
The Plan shall be effective as of January 1, 1997.
Article 3
Definitions
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below:
3.1 "Account" means, with respect to each Participant, the Participant's
separate individual account established and maintained for the
exclusive purpose of accounting for the Participant's deferred Retainer
which is accrued in terms of Stock Units.
3.2 "Beneficiary" means, with respect to each Participant, the recipient or
recipients designated by the Participant who are, upon the
Participant's death, entitled in accordance with the Plan's terms to
receive the benefits to be paid with respect to the Participant.
3.3 "Board" means the Board of Directors of the Company.
3.4 "Committee" means the Committee on Directors and Corporate Governance
of the Board.
3.5 "Common Stock" means the common stock, $6.50 par value, of the Company.
3.6 "Company" means American Electric Power Company, Inc., a New York
corporation, and any successor thereto.
3.7 "Director" means an individual who is a member of the Board.
3.8 "Market Value" means the closing price of the Common Stock, as
published in The Wall Street Journal report of the New York Stock
Exchange - Composite Transactions on the date in question or, if the
Common Stock 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.
3.9 "Non-Employee Director" means any person who serves on the Board and
who is not an officer of the Company or employee of its Subsidiaries.
3.10 "Participant" means any Non-Employee Director who has made an election
to defer payment of all or a portion of such person's Retainer in
Stock Units.
3.11 "Retainer" means the designated annual cash retainer, currently paid
quarterly, for Non-Employee Directors established from time to time by
the Board as annual compensation for services rendered, exclusive of
compensation for service as a member of any committee designated by the
Board or in connection with any meeting of the Board or special
assignment, and exclusive of reimbursements for expenses incurred in
performance of service as a Director.
3.12 "Stock Unit" means a measure of value, expressed as a share of Common
Stock, credited to a Participant under this Plan. No certificates shall
be issued with respect to such Stock Units, but the Company shall
maintain a bookkeeping Account in the name of the Participant to which
the Stock Units shall relate.
3.13 "Subsidiary" means any corporation in which the Company owns directly
or indirectly through its Subsidiaries, at least 50 percent of the
total combined voting power of all classes of stock, or any other
entity (including, but not limited to, partnerships and joint ventures)
in which the Company owns at least 50 percent of the combined equity
thereof.
3.14 "Termination" means retirement from the Board or termination of
services as a Director for any other
reason.
Article 4
Election to Defer Retainer in Stock Units
4.1 Election
On or before December 31 of any year, for calendar years subsequent to 1997, a
Non-Employee Director may elect, by filing with the Company an election, to
defer receipt of all or a specified portion of the Director's Retainer in Stock
Units until the Director's Termination or for a period that results in payment
commencing not later than five years thereafter as elected by the Participant.
The election to defer payment beyond the Participant's Termination must be made
at least one year prior to such Termination.
Notwithstanding the foregoing, a Non-Employee Director may choose to participate
in the Plan beginning with the Retainer payable on June 30, 1997, by filing an
election to so participate on or before March 31, 1997. A Non-Employee Director
elected to fill a vacancy on the Company's Board and who was not a Director on
the preceding December 31, or whose term of office did not begin until after
that date, may file an election to defer, for all or a specified portion of the
Director's Retainer, commencing not less than three months after the date of the
election.
4.2 Revocation of Election
An effective election pursuant to Section 4.1 may not be revoked or modified
(except as otherwise stated herein) with respect to the Retainer payable for a
calendar year or portion of a calendar year for which such election is
effective. An effective election may be terminated or modified for any
subsequent calendar year by the filing of an election, on or before December 31
of the preceding calendar year for which such modification or termination is to
be effective.
4.3 Deferred Retainer Election
When a Participant elects pursuant to Section 4.1 to defer all or a portion of
the Participant's Retainer in Stock Units, the number of whole and fractional
Stock Units, computed to three decimal places, to be credited to the
Participant's Account, on the date the deferred Retainer would otherwise have
been payable to the Participant, shall be equal to the dollar amount of the
deferred Retainer which otherwise would have been payable to the Participant
divided by the Market Value on such date.
Article 5
Dividends and Adjustments
5.1 Reinvestment of Dividends
On each dividend payment date with respect to the Common Stock, the Account of a
Participant, with Stock Units held pursuant to Article 4, shall be credited with
an additional number of whole and fractional Stock Units, computed to three
decimal places, equal to the product of the dividend per share then payable,
multiplied by the number of Stock Units then credited to such Account, divided
by the Market Value on the dividend payment date.
5.2 Adjustments
The number of Stock Units credited to a Participant's Account pursuant to
Article 4 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 6
Payment of Stock Units
6.1 Manner of Payment Upon Termination
In accordance with the Participant's election, filed with the Company, all Stock
Units held in a Participant's Account shall be paid to the Participant either as
(a) a lump sum distribution within 10 days after the Participant's deferred
distribution date, or (b) up to 10 annual installments commencing within 10 days
after the Participant's deferred distribution date. This election shall be made
at the same time the Participant makes a deferral election as provided in
Section 4.1.
6.2 Manner of Payment Upon Death
Notwithstanding the Participant's election, if a Participant dies while Stock
Units are held in the Participant's Account, such Stock Units will be paid in a
lump sum in cash within 90 days from the date of the Participant's death to the
Beneficiary or the Participant's estate, as the case may be. Upon application by
the Beneficiary or the legal representative for the Participant's estate, the
lump sum payment may be deferred beyond 90 days for good cause if the Committee
consents to such deferral.
6.3 Determination
Any cash payments of Stock Units shall be calculated on the basis of the average
of the Market Value of the Common Stock for the last 20 trading days prior to
the Participant's Termination, deferred distribution date, respective
installment payment dates or the date of the Participant's death, as the case
may be.
Article 7
Beneficiary Designation
Each Participant shall be entitled to designate a Beneficiary or Beneficiaries
(which may be an entity other than a natural person) who, following the
Participant's death, will be entitled to receive any payments to be made under
Section 6.2. At any time, and from time to time, any designation may be changed
or cancelled by the Participant without the consent of any Beneficiary. Any
designation, change, or cancellation must be by written notice filed with the
Company and shall not be effective until received by the Company. Payment shall
be made in accordance with the last unrevoked written designation of Beneficiary
that has been signed by the Participant and delivered by the Participant to the
Company prior to the Participant's death. If the Participant designates more
than one Beneficiary, any payments under Section 6.2 to the Beneficiaries shall
be made in equal shares unless the Participant has designated otherwise, in
which case the payments shall be made in the proportions designated by the
Participant. If no Beneficiary has been named by the Participant or if all
Beneficiaries predecease the Participant, payment shall be made to the
Participant's estate.
Article 8
Transferability Restrictions
The Plan shall not in any manner be liable for, or subject to, the debts and
liabilities of any Participant or Beneficiary. No payee may assign any payment
due such party under the Plan. No benefits at any time payable under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, attachment, garnishment, levy, execution, or other legal or
equitable process, or encumbrance of any kind.
Article 9
Funding Policy
The Company's obligations under the Plan shall be totally unfunded so that the
Company or any Subsidiary is under merely a contractual duty to make payments
when due under the Plan. The promise to pay shall not be represented by notes
and shall not be secured in any way.
Article 10
Change in Control
Notwithstanding any provision of this Plan to the contrary, if a "Change in
Control" (as defined below) of the Company occurs, Stock Units held in a
Participant's Account will be paid in a lump sum in cash, to the Participant,
not later than 15 days after the date of the Change in Control. For this
purpose, the balance in the Account shall be determined by the higher of (a) the
average of the Market Value of the Common Stock for the last 20 trading days
prior to such Change in Control or (b) if the Change in Control of the Company
occurs as a result of a tender or exchange offer or consummation of a corporate
transaction, then the highest price paid per share of Common Stock pursuant
thereto. Any consideration other than cash forming a part or all of the
consideration for the Common Stock to be paid pursuant to the applicable
transaction shall be valued at the valuation price thereon determined by the
Board.
In addition, the Company shall reimburse a Participant for the legal fees and
expenses incurred if the Participant is required to seek to obtain or enforce
any right to distribution. In the event that it is determined that such
Participant is properly entitled to a cash distribution hereunder, such
Participant shall also be entitled to interest thereon at the prime rate of
interest as published in The Wall Street Journal plus two percent from the date
such distribution should have been made to and including the date it is made.
Notwithstanding any provisions of this Plan to the contrary, the provisions of
this Article may not be amended by an amendment effected within three years
following a Change in Control.
A "Change in Control" of the Company shall be deemed to have occurred if (a) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act")), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 25 percent of the then
outstanding voting stock of the Company; (b) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board, together with any new Directors whose election or nomination for
election was approved by a vote of at least two-thirds of the Directors then
still in office who were either Directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board; or (c) the Company's
shareholders approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 75 percent of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(d) the shareholders of the Company approve a plan of complete liquidation of
the Company, or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
as a result of any event described in (a) or (c) above, if Directors who were a
majority of the members of the Board prior to such event and who continue to
serve as Directors after such event determine that the event shall not
constitute a Change in Control.
Article 11
Administration
The Plan shall be administered by the Committee. The Committee shall have
authority to interpret the Plan, and to prescribe, amend and rescind rules and
regulations relating to the administration of the Plan, and all such
interpretations, rules and regulations shall be conclusive and binding on all
Participants. The Committee may employ agents, attorneys, accountants, or other
persons (who also may be employees of a Subsidiary) 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.
Article 12
Amendment and Termination
The Company, by resolution duly adopted by the Board, shall have the right,
authority and power to alter, amend, modify, revoke, or terminate the Plan;
except as provided in Article 10; and provided further, that no amendment or
termination of the Plan shall adversely affect the rights of any Participant
with respect to any Stock Units held in such Participant's Account, unless the
Participant shall consent thereto in writing.
Article 13
Miscellaneous
13.1 No Right to Continue as a Director
Nothing in this Plan shall be construed as conferring upon a Participant any
right to continue as a member of the Board.
13.2 No Interest as a Shareholder
Stock Units do not give a Participant any rights whatsoever with respect to
shares of Common Stock.
13.3 No Right to Corporate Assets
Nothing in this Plan shall be construed as giving the Participant, the
Participant's designated Beneficiaries or any other person any equity or
interest of any kind in the assets of the Company or any Subsidiary or creating
a trust of any kind or a fiduciary relationship of any kind between the Company
or any Subsidiary and any person. As to any claim for payments due under the
provisions of the Plan, a Participant, Beneficiary and any other persons having
a claim for payments shall be unsecured creditors of the Company or any
Subsidiary.
13.4 Payment to Legal Representative for Participant
In the event the Committee shall find that a Participant is unable to care for
his or her affairs because of illness or accident, the Committee may direct that
any payment due the Participant be paid to the Participant's duly appointed
legal representative, and any such payment so made shall be a complete discharge
of the liabilities of the Plan.
13.5 No Limit on Further Corporate Action
Nothing contained in the Plan shall be construed so as to prevent the Company or
any Subsidiary from taking any corporate action which is deemed by the Company
or any Subsidiary to be appropriate or in its best interest.
13.6 Governing Law
The Plan shall be construed and administered according to the laws of the State
of New York to the extent that those laws are not preempted by the laws of the
United States of America.
13.7 Headings
The headings of articles, sections, subsections, paragraphs or other parts of
the Plan are for convenience of reference only and do not define, limit,
construe, or otherwise affect its contents.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>x10k2.txt
<DESCRIPTION>(K)(2) STOCK UNIT ACCUM PLAN AMENDED 12/10/03
<TEXT>
EXHIBIT 10(k)(2)
American Electric Power Company, Inc.
Stock Unit Accumulation Plan
For Non-Employee Directors
(As Amended December 10, 2003)
Article 1
Purpose
The purposes of this American Electric Power Company, Inc. Stock Unit
Accumulation Plan For Non-Employee Directors (the "Plan") are to enable the
Company to attract and retain qualified persons to serve as Non-Employee
Directors, to solidify the common interests of its Non-Employee Directors and
shareholders by enhancing the equity interest of Non-Employee Directors in the
Company, and to encourage the highest level of Non-Employee Director performance
by providing such Non-Employee Directors with a proprietary interest in the
Company's performance and progress by paying a portion of the compensation of
the Non-Employee Directors in deferred Stock Units.
Article 2
Effective Date
The Plan shall be effective as of January 1, 1997.
Article 3
Definitions
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below:
3.1 "Account" means, with respect to each Participant, the Participant's
separate individual account established and maintained for the
exclusive purpose of accounting for the Participant's award of Stock
Units.
3.2 "Beneficiary" means, with respect to each Participant, the recipient or
recipients designated by the Participant who are, upon the
Participant's death, entitled in accordance with the Plan's terms to
receive the benefits to be paid with respect to the Participant.
3.3 "Board" means the Board of Directors of the Company.
3.4 "Cash Retainer" means the designated annual cash retainer (currently
$60,000), paid quarterly, for Non-Employee Directors established from
time to time by the Board as annual compensation for services rendered,
exclusive of compensation for service as a member of any committee
designated by the Board or in connection with any meeting of the Board
or special assignment, and exclusive of reimbursements for expenses
incurred in performance of service as a Director.
3.5 "Committee" means the Committee on Directors and Corporate Governance
of the Board.
3.6 "Common Stock" means the common stock, $6.50 par value, of the Company.
3.7 "Company" means American Electric Power Company, Inc., a New York
corporation, and any successor thereto.
3.8 "Director" means an individual who is a member of the Board.
3.9 "Market Value" means the closing price of the Common Stock, as
published in The Wall Street Journal report of the New York Stock
Exchange - Composite Transactions on the date in question or, if the
Common Stock 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.
3.10 "Non-Employee Director" means any person who serves on the Board and
who is not an officer of the Company or employee of its Subsidiaries.
3.11 "Participant" means any Non-Employee Director who has received an
award of Stock Units.
3.12 "Retainer" means Cash Retainer and Stock Retainer.
3.13 "Stock Retainer" means the designated annual stock retainer (currently
$60,000), payable quarterly, for Non-Employee Directors established
from time to time by the Board as annual stock compensation for
services rendered.
3.14 "Stock Unit" means a measure of value, expressed as a share of Common
Stock, credited to a Participant under this Plan. No certificates shall
be issued with respect to such Stock Units, but the Company shall
maintain a bookkeeping Account in the name of the Participant to which
the Stock Units shall relate.
3.15 "Subsidiary" means any corporation in which the Company owns directly
or indirectly through its Subsidiaries, at least 50 percent of the
total combined voting power of all classes of stock, or any other
entity (including, but not limited to, partnerships and joint ventures)
in which the Company owns at least 50 percent of the combined equity
thereof.
3.16 "Termination" means retirement from the Board or termination of
service as a Director for any other reason.
Article 4
Stock Unit Awards
4.1 Annual Awards
The Stock Retainer shall be payable quarterly and shall equal the dollar amount
of the Stock Retainer payable to the Participant divided by the Market Value on
such date. The number of whole and fractional Stock Units will be computed to
three decimal places.
4.2 Retirement Program Termination Awards
On and as of December 31, 1996, each Non-Employee Director serving as such on
such date who makes or has made an irrevocable election by January 31, 1997 to
waive participation in, and any and all benefits under, the Company's Retirement
Plan for Directors, shall have credited to the Account of such Participant, as
of January 1, 1997, the number of vested and nonforfeitable Stock Units as
follows: R. M. Duncan 3,000; R. W. Fri 600; A. G. Hansen 3,000; L. A. Hudson,
Jr. 3,000; A. E. Peyton 3,000; D. G. Smith 900; L. G. Stuntz 1,200; M. Tanenbaum
2,400; and A. H. Zwinger 3,000.
Article 5
Dividends and Adjustments
5.1 Reinvestment of Dividends
On each dividend payment date with respect to the Common Stock, the Account of a
Participant, with Stock Units held pursuant to Article 4, shall be credited with
an additional number of whole and fractional Stock Units, computed to three
decimal places, equal to the product of the dividend per share then payable,
multiplied by the number of Stock Units then credited to such Account, divided
by the Market Value on the dividend payment date.
5.2 Adjustments
The number of Stock Units credited to a Participant's Account pursuant to
Article 4 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 6
Payment of Stock Units
6.1 Manner of Payment Upon Termination
Stock Units held in a Participant's Account shall be paid to the Participant in
a lump sum in cash within 10 days after the Participant's Termination unless the
Participant has filed an election with the Company to defer such payment as
provided in the following sentence. The Participant may elect (a) to defer the
lump sum payment for one or more years up to a maximum of five years following
Termination or (b) to receive payment of the Stock Units in up to 10 annual
installments commencing within 10 days after Termination or the deferred payment
date elected by the Participant pursuant to part (a) of this sentence. The
election to defer payment beyond the Participant's Termination must be made at
least one year prior to such Termination.
6.2 Manner of Payment Upon Death
Notwithstanding the Participant's election, if a Participant dies while Stock
Units are held in the Participant's Account, such Stock Units, whether vested or
unvested and forfeitable, will be paid in a lump sum in cash within 90 days from
the date of the Participant's death to the Beneficiary or the Participant's
estate, as the case may be. Upon application of the Beneficiary or the legal
representative of the Participant's estate, the lump sum payment may be deferred
beyond 90 days for good cause if the Committee consents to such deferral.
6.3 Determination
Any cash payments of Stock Units shall be calculated on the basis of the average
of the Market Value of the Common Stock for the last 20 trading days prior to
the Participant's Termination, deferred distribution date, respective
installment payment dates or the date of the Participant's death, as the case
may be.
Article 7
Beneficiary Designation
Each Participant shall be entitled to designate a Beneficiary or Beneficiaries
(which may be an entity other than a natural person) who, following the
Participant's death, will be entitled to receive any payments to be made under
Section 6.2. At any time, and from time to time, any designation may be changed
or cancelled by the Participant without the consent of any Beneficiary. Any
designation, change, or cancellation must be by written notice filed with the
Company and shall not be effective until received by the Company. Payment shall
be made in accordance with the last unrevoked written designation of Beneficiary
that has been signed by the Participant and delivered by the Participant to the
Company prior to the Participant's death. If the Participant designates more
than one Beneficiary, any payments under Section 6.2 to the Beneficiaries shall
be made in equal shares unless the Participant has designated otherwise, in
which case the payments shall be made in the proportions designated by the
Participant. If no Beneficiary has been named by the Participant or if all
Beneficiaries predecease the Participant, payment shall be made to the
Participant's estate.
Article 8
Transferability Restrictions
The Plan shall not in any manner be liable for, or subject to, the debts and
liabilities of any Participant or Beneficiary. No payee may assign any payment
due such party under the Plan. No benefits at any time payable under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, attachment, garnishment, levy, execution, or other legal or
equitable process, or encumbrance of any kind.
Article 9
Funding Policy
The Company's obligations under the Plan shall be totally unfunded so that the
Company or any Subsidiary is under merely a contractual duty to make payments
when due under the Plan. The promise to pay shall not be represented by notes
and shall not be secured in any way.
Article 10
Change in Control
Notwithstanding any provision of this Plan to the contrary, if a "Change in
Control" (as defined below) of the Company occurs, Stock Units held in a
Participant's Account, whether vested or unvested and forfeitable, will be paid
in a lump sum in cash to the Participant not later than 15 days after the date
of the Change in Control. For this purpose, the balance in the Account shall be
determined by the higher of (a) the average of the Market Value of the Common
Stock for the last 20 trading days prior to such Change in Control or (b) if the
Change in Control of the Company occurs as a result of a tender or exchange
offer or consummation of a corporate transaction, then the highest price paid
per share of Common Stock pursuant thereto. Any consideration other than cash
forming a part or all of the consideration for the Common Stock to be paid
pursuant to the applicable transaction shall be valued at the valuation price
thereon determined by the Board.
In addition, the Company shall reimburse a Participant for the legal fees and
expenses incurred if the Participant is required to seek to obtain or enforce
any right to distribution. In the event that it is determined that such
Participant is properly entitled to a cash distribution hereunder, such
Participant shall also be entitled to interest thereon at the prime rate of
interest as published in The Wall Street Journal plus two percent from the date
such distribution should have been made to and including the date it is made.
Notwithstanding any provisions of this Plan to the contrary, the provisions of
this Article may not be amended by an amendment effected within three years
following a Change in Control.
A "Change in Control" of the Company shall be deemed to have occurred if (a) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act")), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 25 percent of the then
outstanding voting stock of the Company; (b) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board, together with any new Directors whose election or nomination for
election was approved by a vote of at least two-thirds of the Directors then
still in office who were either Directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board; or (c) the Company's
shareholders approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 75 percent of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(d) the shareholders of the Company approve a plan of complete liquidation of
the Company, or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
as a result of any event described in (a) or (c) above, if Directors who were a
majority of the members of the Board prior to such event and who continue to
serve as Directors after such event determine that the event shall not
constitute a Change in Control.
Article 11
Administration
The Plan shall be administered by the Committee. The Committee shall have
authority to interpret the Plan, and to prescribe, amend and rescind rules and
regulations relating to the administration of the Plan, and all such
interpretations, rules and regulations shall be conclusive and binding on all
Participants. The Committee may employ agents, attorneys, accountants, or other
persons (who also may be employees of a Subsidiary) 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.
Article 12
Amendment and Termination
The Company, by resolution duly adopted by the Board, shall have the right,
authority and power to alter, amend, modify, revoke, or terminate the Plan;
except as provided in Article 10; and provided further, that no amendment or
termination of the Plan shall adversely affect the rights of any Participant
with respect to any Stock Units held in such Participant's Account, unless the
Participant shall consent thereto in writing.
Article 13
Miscellaneous
13.1 No Right to Continue as a Director
Nothing in this Plan shall be construed as conferring upon a Participant any
right to continue as a member of the Board.
13.2 No Interest as a Shareholder
Stock Units do not give a Participant any rights whatsoever with respect to
shares of Common Stock.
13.3 No Right to Corporate Assets
Nothing in this Plan shall be construed as giving the Participant, the
Participant's designated Beneficiaries or any other person any equity or
interest of any kind in the assets of the Company or any Subsidiary or creating
a trust of any kind or a fiduciary relationship of any kind between the Company
or any Subsidiary and any person. As to any claim for payments due under the
provisions of the Plan, a Participant, Beneficiary and any other persons having
a claim for payments shall be unsecured creditors of the Company or any
Subsidiary.
13.4 Payment to Legal Representative for Participant
In the event the Committee shall find that a Participant is unable to care for
his or her affairs because of illness or accident, the Committee may direct that
any payment due the Participant be paid to the Participant's duly appointed
legal representative, and any such payment so made shall be a complete discharge
of the liabilities of the Plan.
13.5 No Limit on Further Corporate Action
Nothing contained in the Plan shall be construed so as to prevent the Company or
any Subsidiary from taking any corporate action which is deemed by the Company
or any Subsidiary to be appropriate or in its best interest.
13.6 Governing Law
The Plan shall be construed and administered according to the laws of the State
of New York to the extent that those laws are not preempted by the laws of the
United States of America.
13.7 Headings
The headings of articles, sections, subsections, paragraphs or other parts of
the Plan are for convenience of reference only and do not define, limit,
construe, or otherwise affect its contents.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>x10l2.txt
<DESCRIPTION>(L)(2) AEP SUPPLEMENTAL RETIREMENT SAVINGS PLAN
<TEXT>
EXHIBIT 10(l)(2)
AMERICAN ELECTRIC POWER SYSTEM
SUPPLEMENTAL RETIREMENT SAVINGS PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 2003
ARTICLE I
Purposes and Effective Date
1.1 The American Electric Power System Supplemental Retirement Savings
Plan is established to provide to eligible employees a tax-deferred savings
opportunity otherwise not available to them under the terms of the American
Electric Power System Retirement Savings Plan because of contribution
restrictions imposed by the Internal Revenue Code.
1.2 The original effective date of the American Electric Power System
Supplemental Retirement Savings Plan is January 1, 1994 and the effective date
of this Amended and Restated American Electric Power System Supplemental
Retirement Savings Plan is January 1, 2003, except as otherwise specified
herein.
ARTICLE II
DEFINITIONS
2.1 "Account" means the separate memo account established and
maintained by the Company or the recordkeeper employed by the Company to record
Contributions allocated to a Participant's Account and to record any related
Investment Income on the Fund or Funds selected by the Participant.
2.2 "Applicable Federal Rate" means 120% of the applicable federal
long-term rate, with monthly compounding (as prescribed under Section 1274(d) of
the Code), published for the December immediately prior to the Plan Year.
2.3 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.4 "Committee" means the Employee Benefits Trust Committee as
established by the Board of Directors of American Electric Power Service
Corporation.
2.5 "Compensation" means the sum of a Participant's regular base salary
or wage including any salary or wage reductions made pursuant to sections 125
and 402(e)(3) of the Code and contributions to this Plan and incentive
compensation paid pursuant to the terms of annual incentive compensation plans
up to a maximum of one million dollars ($1,000,000), provided that Compensation
shall not include non-annual bonuses (such as but not limited to project bonuses
and sign-on bonuses), severance pay, relocation payments, or any other form of
additional compensation that is not considered to be part of base salary, base
wage or annual incentive compensation. For this purpose, safety focus payouts
shall be considered paid pursuant to the terms of an annual incentive plan,
although such payouts may be determined and paid on a quarterly basis.
2.6 "Company" means the American Electric Power Service Corporation and
its subsidiaries and affiliates.
2.7 "Company Contributions" means the matching contributions made by
the Company pursuant to section 3.2.
2.8 "Contributions" means, as the context may require, Participant
Contributions and Company Contributions.
2.9 "Corporation" means the American Electric Power Company, Inc., a
New York corporation.
2.10 "Eligible Employee" means, for periods beginning on or after June
1, 2001, an employee of the Company who, as of the first day of November that
immediately precedes the applicable Plan Year, either (a) has base salary or
base wage, including salary or wage reductions made pursuant to section 125 and
402(e)(3) of the Code, equals or exceeds $100,000, or (b) is employed at a
salary grade 26 or higher. To determine an Eligible Employee for periods prior
to June 1, 2001, refer to provisions of the Plan as in effect prior to June 1,
2001.
2.11 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
2.12 "Fund" means the investment options made available to participants
in the Savings Plan, as revised from time to time, and the Interest Bearing
Account.
2.13 "Investment Income" means with respect to Participant
Contributions and Company Contributions the earnings, gains and losses that
would be attributable to the investment of such Contributions in a Fund or
Funds.
2.14 "Interest Bearing Account" means an investment option to be made
available to Participants in this Plan in which the Contributions attributed to
this option are credited with interest at the Applicable Federal Rate.
2.15 "Pay Reduction Agreement" means an agreement between the Company
and the Participant in which the Participant irrevocably elects to reduce his or
her Compensation for the Plan Year and the Company agrees to treat the amount of
the Compensation reduction as a Participant Contribution to this Plan.
2.16 "Participant Contributions" means contributions made by the
Participant pursuant to an executed Pay Reduction Agreement subject to the
Participant Contribution limits contained in section 3.1.
2.17 "Plan" means this American Electric Power System Supplemental
Retirement Savings Plan, as in effect from time to time.
2.18 "Plan Year" means the twelve-month period commencing each January
1 and ending December 31.
2.19 "Savings Plan" means the American Electric Power System Retirement
Savings Plan, a plan intended to be qualified under section 401(a) of the Code,
as in effect from time to time.
ARTICLE III
CONTRIBUTIONS
3.1 A Participant may elect to make Participant Contributions by timely
submitting an executed Pay Reduction Agreement and such other forms as may be
required by the Committee. All Participant Contributions (i) shall be made by
payroll deductions from Compensation payable to the Participant during the Plan
Year, and (ii) shall commence with the first pay date that falls within the Plan
Year to which the Pay Reduction Agreement applies. Participant Contributions are
to be made in multiples of one (1) whole percentage of Compensation, not to
exceed 20 percent of Compensation for any pay date. The maximum Participant
Contribution for any pay date shall not exceed the difference between (a) twenty
percent (20%) of the Participant's Compensation for the pay date, and (b) the
aggregate amount of the Participant's Before-Tax and After-Tax contributions to
the Savings Plan for the same pay date.
3.2 Subject to the limitation contained in section 3.3, the Company
shall credit to the Plan on behalf of each Participant an amount equal to 75% of
the amount contributed to the Plan by the Participant, not in excess of 6% of a
Participant's Compensation as of each pay date.
3.3 The amount of Company Contributions credited to the Plan on behalf
of a Participant in combination with the contributions made by the Company to
the Savings Plan on behalf of the Participant as of each pay date during a Plan
Year, shall, in the aggregate be equal to the lesser of (a) 75% of the
Participant Contributions made by the Participant to this Plan and the Savings
Plan as of that pay date, or (b) 4.5% of the Participant's Compensation paid as
of that pay date. If the aggregate contributions exceed the lesser limitation
described in the preceding sentence, the Company Contributions credited to the
Participant's Account under this Plan shall be reduced until the aggregate
Company Contributions made under both the Savings Plan and this Plan do not
exceed the limitation.
3.4 An employee who is an Eligible Employee as of the beginning of the
enrollment period for a particular Plan Year may participate in the Plan for
that Plan Year, provided that he timely submits a Pay Reduction Agreement for
that Plan Year. Any Eligible Employee who timely submits a Pay Reduction
Agreement for a Plan Year shall become a Participant on the first day of that
Plan Year.
3.5 Notwithstanding the provisions of Section 3.4, employees who first
became Eligible Employees as of June 1, 2001 shall have a special enrollment
period (referred to herein as a "2001 Enrollee"). Any 2001 Enrollee who timely
submits a Pay Reduction Agreement during the special enrollment period shall
eligible to participate in the Plan for the 2001 Plan Year effective for
Compensation paid on or after June 29, 2001.
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
4.1 Participant Contributions and Company Contributions shall be
credited with earnings as if invested in the Funds selected by the Participant.
To the extent the Participant fails to select Funds for the investment of
Contributions under the Plan, the Participant shall be deemed to have selected
the Interest Bearing Account. The Participant may change the selected Funds by
providing notification in accordance with the Plan's procedures. Any change in
the Funds selected by the Participant shall be implemented in accordance with
the Plan's procedures.
4.2 A Participant may elect to transfer all or a portion of the amounts
credited to his Account from any Fund or Funds to any other Fund or Funds by
providing notification in accordance with the Plan's procedures. Such transfers
between Funds may be made in any whole percentage or dollar amounts and shall be
implemented in accordance with the Plan's procedures.
4.3 The amount credited to each Participant's Account shall be
determined daily based upon the fair market value of the Fund or Funds to which
that Account is allocated. The fair market value calculation for a Participant's
Account shall be made after all Contributions, withdrawals, distributions,
Investment Income and transfers for the day are recorded. A Participant's
Account, as adjusted from time to time, shall continue to be credited with
Investment Income until the balance of the Account is zero and no additional
Contributions are anticipated from such Participant by the Committee.
4.4 The Plan is an unfunded non-qualified deferred compensation plan
and therefore the Contributions credited to a Participant's Account and the
investment of those Contributions in the Fund or Funds selected by the
Participant are memo accounts that represent general, unsecured liabilities of
the Company payable exclusively out of the general assets of the Company.
ARTICLE V
ELECTION, DISTRIBUTIONS AND BENEFICIARIES
5.1 In order for an election to make Participant Contributions to be
effective for any given Plan Year, the Participant must submit an executed
irrevocable Pay Reduction Agreement during the applicable enrollment period
preceding the period as to which the election is to take effect. Except to the
extent specifically provided otherwise in Section 3.5, each Pay Reduction
Agreement shall apply to (and only to) the Plan Year next following the
applicable annual enrollment period and shall remain in force only as to that
Plan Year. No election shall be effective to defer any Compensation that would
otherwise be paid to the Participant before the period for which the Pay
Reduction Agreement is effective. The Pay Reduction Agreement shall be in such
form as may reasonably be required by the Committee and shall be executed at the
time and in the manner prescribed by the Committee.
5.2 (a) No earlier than a Participant's termination of employment for
any reason other than death, all amounts that are credited to the Participant's
Account shall be distributed to the Participant in one of the following optional
forms as selected by the Participant:
(1) a single lump-sum payment, or
(2) in approximately equal annual or semi-annual installment payments over
not less than two nor more than ten years.
(b) Payment in the form of distribution selected by the
Participant pursuant to section 5.2(a) shall commence within 60 days after the
date elected by the Participant on an effective distribution election form. Such
commencement date shall be either (1) the date of the Participant's termination
of employment or (2) the first, second, third, fourth or fifth anniversary of
the Participant's termination of employment, as selected by the Participant.
(c) Each Participant shall select the form of distribution [as
set forth in section 5.2(a)] and benefit commencement date [as set forth in
section 5.2(b)] when the Participant first elects to participate in the Plan.
The Participant may amend his or her distribution election at any time prior to
the ninetieth (90th) day preceding the Participant's termination of employment
by submitting a distribution election form in accordance with the Plan's
procedures; provided that a modification to the Participant's distribution
election submitted after such 90th day will be effective if submitted no later
than the first to occur of (i) December 13, 2002, or (ii) the beginning of the
one year period preceding the date when the Participant's distributions would
commence if the modification would not be given effect. If the Participant has
not submitted an effective distribution election at the time of his termination
of employment, his distribution shall be in the form of a single lump sum
payment made within 60 days after the Participant's termination of employment.
5.3 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.
5.4 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 VI
TAXES AND TAX TREATMENT
6.1 Each Participant agrees that as a condition of participation in the
Plan, the Company may withhold from any distribution hereunder all amounts
determined by the Company as required by law or otherwise as determined by the
Company to be then due and payable by the Participant or his beneficiary to the
Company.
6.2 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; and (4) the
provisions of Parts 2, 3, and 4 of Subtitle B of Title I of ERISA shall not be
applicable. 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.
ARTICLE VII
ADMINISTRATION
7.1 The Committee shall have full discretionary power and authority (i)
to administer and interpret the terms and conditions of the Plan; (ii) to
establish reasonable procedures with which Participants must comply to exercise
any right or privilege established hereunder; and (iii) to be permitted to
delegate its responsibilities or duties hereunder to any person or entity. 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.
7.2 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.
7.3 The Company shall maintain, or cause to be maintained, records
showing the individual balances of each Participant's Account. Statements
setting forth the value of the amount credited to the Participant's Account as
of a particular date shall be made available to each Participant no less often
than quarterly.
ARTICLE VIII
AMENDMENT OR TERMINATION
8.1 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 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.
ARTICLE IX
MISCELLANEOUS
9.1 Nothing in the Plan shall (i) interfere with or limit in any way
the right of the Company to terminate any Participant's employment at any time;
nor (ii) confer upon a Participant any right to continue in the employ of the
Company.
9.2 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.
9.3 The Plan shall be construed and administered according to the
applicable provisions of ERISA and the laws of the State of Ohio.
ARTICLE X
CLAIMS PROCEDURE
Section 10.1 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
Company's Director - Compensation and Executive Benefits,
specifying the basis for the claim. The Director -
Compensation and Executive Benefits 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 Director - Compensation and
Executive Benefits 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 Director - Compensation and Executive Benefits renders
an adverse benefit determination under Section 10.1(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
10.2, 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.
Section 10.2 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 Plan 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.
American Electric Power Service Corporation has caused this Amended and
Restated American Electric Power System Supplemental Retirement Savings Plan to
be signed as of this 17th day of January, 2003.
American Electric Power Service Corporation
By: /s/ Melinda S. Ackerman
Melinda S. Ackerman, Senior Vice President,
Human Resources
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>8
<FILENAME>x10m1.txt
<DESCRIPTION>(M)(1) EMPLOYMENT AGREEMENT OF MICHAEL G. MORRIS
<TEXT>
EXHIBIT 10(m)(1)
EMPLOYMENT AGREEMENT
This AGREEMENT is made as of this December 15, 2003, by and among
AMERICAN ELECTRIC POWER COMPANY, INC., a New York corporation ("AEP"), and
AMERICAN ELECTRIC POWER SERVICE CORPORATION, a New York corporation and a
wholly-owned subsidiary of AEP ("Service Corporation") (AEP and Service
Corporation hereinafter referred to collectively as the "Companies"), and
Michael G. Morris ("Executive").
RECITALS
In order to induce Executive to serve as the President and Chief
Executive Officer of AEP and Service Corporation, as well as Chief Executive
Officer of other major subsidiaries of AEP, the Companies desire to provide
Executive with compensation and other benefits on the terms and conditions set
forth in this Agreement.
Executive is willing to accept such employment and perform services
for the Companies, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Positions and Reporting. Subject to the terms and conditions of this
Agreement, effective as of the Commencement Date (as defined in Section 2
below), the Companies agree to engage Executive during the term hereof as
President and Chief Executive Officer of each of AEP and Service Corporation, as
well as such major subsidiaries of AEP as the board of directors of AEP (the
"Board") shall designate. In such capacities, Executive shall have the customary
powers, responsibilities and authorities of such offices for corporations of the
size, type and nature of the Companies (and such major subsidiaries of AEP, as
applicable), as they exist from time to time. During the term of this Agreement,
Executive, in carrying out his duties under this Agreement, shall report
directly to the Board.
1.2 Boards of Directors. AEP shall, during the term of this Agreement, cause the
election and retention of Executive as a member of the board of directors of
each subsidiary of AEP as selected by the Board. Executive agrees to serve, if
elected, as Chairman of the Board (and on any committees of the Board), in
addition to serving on the board of directors (and any committees thereof) of
each subsidiary of AEP.
1.3 Executive Agreements and Representations.
(a) Subject to the terms and conditions of this Agreement, effective as of the
Commencement Date, Executive hereby agrees to be employed as President and Chief
Executive Officer of each of AEP and Service Corporation and agrees to devote
his full working time and efforts, to the best of his ability, experience and
talent, to the performance of services, duties and responsibilities in
connection therewith. Executive shall perform such duties and exercise such
powers commensurate with his positions and shall accept such other positions or
titles of other corporations affiliated with the Companies (including, without
limitation, Chief Executive Officer of other subsidiaries of AEP), in each
instance as the Board shall from time to time delegate to him on such terms and
conditions and subject to such restrictions as may reasonably from time to time
be imposed.
(b) Executive hereby represents that the execution and delivery of this
Agreement by Executive and the performance by Executive of Executive's duties
hereunder do not constitute a breach of, or otherwise contravene, the terms of
any employment agreement or other noncompetition agreement or policy (including
any agreement with Executive's prior employment, Northeast Utilities ("Prior
Employer")) to which Executive is a party or otherwise bound. Executive also
hereby represents that in no event shall any of the Companies or their
subsidiaries become subject to any liability that may arise in connection with
that certain litigation between Con Edison and the Prior Employer that is
ongoing as of the date hereof, and further agrees to indemnify and hold harmless
the Companies and their subsidiaries from any liability that they may incur with
respect thereto.
1.4 Other Boards and Activities. Notwithstanding anything set forth in this
Agreement, during the term of this Agreement, subject to the prior express
written consent of the Directors and Corporate Governance Committee of the
Board, Executive shall be permitted to serve on the boards of directors (or
advisory committees) of a reasonable number of other corporations or entities
and of a reasonable number of trade associations and/or charitable
organizations. During the term of this Agreement, Executive shall also otherwise
be permitted to engage in a reasonable number of charitable activities and
community affairs and manage his personal investments and affairs, provided that
such activities set forth in this Section 1.4 do not conflict or materially
interfere with the effective discharge of his duties and responsibilities under
this Agreement.
2. Term of Employment. The term of this Agreement shall begin on January 1, 2004
(the "Commencement Date"), and shall extend until the third anniversary of the
Commencement Date, with automatic one-year renewals commencing on such third
anniversary and on each anniversary thereafter, unless and until either party
hereto notifies the other at least six (6) months before the scheduled renewal
date that the term of this Agreement is not to be renewed. Notwithstanding the
foregoing, the term of this Agreement (and Executive's employment hereunder) may
be earlier terminated by either party in accordance with the provisions of
Section 4 of this Agreement.
3. Compensation; Benefits.
3.1 Base Salary. During the term of this Agreement, Service Corporation shall
pay Executive a base salary ("Base Salary") at the rate of $1,115,000 per annum,
payable in accordance with the ordinary payroll practices of the Companies.
After December 31, 2004, Executive's rate of Base Salary shall be reviewed
annually by the Human Resources Committee of the Board and, if increased, such
increased amount shall constitute Executive's Base Salary.
3.2 Compensation Plans and Programs.
(a) Annual Bonus. During the term of this Agreement, Executive shall
be eligible to earn an annual bonus (the "Annual Bonus") in respect of each
calendar year of AEP occurring during the term of employment pursuant to the
Senior Officer Annual Incentive Compensation Plan or such other annual incentive
program maintained by the Companies from time to time in which other senior
executives of the Companies participate, on terms comparable to those applicable
to such other senior executives (the "Annual Bonus Plan"). During the term of
the Agreement, under the Annual Bonus Plan, the amount of Executive's Annual
Bonus shall be based upon a percentage of Executive's Base Salary (or such other
metric as the Board may establish pursuant to the Annual Bonus Plan); provided
that the target Annual Bonus percentage under the Annual Bonus Plan for each
calendar year occurring during the term of the Agreement shall be equal to at
least one hundred percent (100%) of the amount of Base Salary Executive actually
earned in the calendar year in respect of which the Annual Bonus, if any, is
payable (the "Target Bonus"). Any Annual Bonus shall only be payable upon the
achievement by the Companies as a whole of certain performance goals to be
established in respect of each calendar year by the Board; provided, however,
that Executive shall receive an Annual Bonus in respect of the first calendar
year occurring during the term of the Agreement that shall in no event be less
than the Target Bonus. Notwithstanding any of the foregoing, and subject to the
provisions of Section 4 of this Agreement, in the event that the term of this
Agreement is scheduled to terminate prior to the end of any given calendar year
of the Companies, Executive shall only be eligible to earn a pro rata portion of
his Annual Bonus in respect of such calendar year, based on the number of days
during such calendar year in which Executive is employed hereunder.
(b) Deferred Compensation Plan. During the term of this Agreement, Executive
shall be eligible to participate in any deferred compensation plan or program
maintained by the Companies from time to time in which other senior executives
of the Companies participate, on terms comparable to those applicable to such
other senior executives.
3.3 Benefit Plans and Perquisites.
(a) Generally. The Companies shall provide Executive, during the term of his
employment hereunder, with coverage under all employee benefit programs, plans
and practices (commensurate with his positions in the Companies and to the
extent permitted under any employee benefit plan) in accordance with the terms
thereof, which the Companies make available to its senior executives and other
employees including, without limitation, retiree medical insurance program as in
effect as of the date of Executive's retirement from employment hereunder;
provided, however, that at the Companies' discretion, Service Corporation may
pay Executive an amount in cash sufficient, in the good faith determination of
the Companies, for Executive to purchase a retiree medical insurance policy for
Executive (and his eligible dependents) that provides retiree medical insurance
benefits that are equivalent to such benefits as provided under the Companies'
retiree medical insurance program to their senior executives as in effect at
such time.
(b) Perquisites. Executive shall be entitled to the perquisites and other fringe
benefits generally made available to senior executives of the Companies,
commensurate with his position with the Companies, including, without
limitation: (1) use of memberships sponsored by the Companies for their senior
executives at local country clubs and/or local luncheon clubs; (2) use of any
aircraft owned or leased by the Companies for transportation of their
executives, for both business and personal use, in accordance with the
Companies' policies in effect from time to time for senior executives; (3)
gross-up payments to cover applicable federal, state and local income taxes on
such portion of any imputed income associated with Executive's personal use of
aircraft owned or leased by the Companies and in accordance with such
calculation methodology as may be determined from time to time by the Human
Resources Committee of the Board; and (4) participation in the Companies'
financial counseling program as in effect for senior executives from time to
time.
(c) Life Insurance. During the term of this Agreement, Service Corporation will
use its reasonable best efforts to purchase and maintain, for the benefit of
Executive and his designated beneficiaries, a universal life insurance policy
that provides at least a $3,000,000 death benefit.
(d) Credit for Service; Pension Benefit. The Companies and Executive hereby
agree that the opening balance of Executive's cash balance account under the AEP
Excess Benefit Plan shall be $2,100,000, in which account Executive shall become
vested, subject to his continued employment hereunder, in increments of twenty
percent (20%) on each of the first five anniversaries of the Commencement Date.
In recognition of his prior experience, the Companies and Executive also agree
that Executive's cash balance account under the AEP Excess Benefit Plan shall,
effective as of the Commencement Date, be credited with an amount such that the
total credit under the AEP Retirement Plan and the AEP excess Benefit Plan shall
be the maximum rate permitted under such plans as amended from time to time
(currently 8.5%) on all eligible earnings thereunder (which eligible earnings
may not exceed $1,000,000 annually). Subject to the foregoing in this Section
3.3(d), all other provisions of the AEP Retirement Plan and AEP Excess Benefit
Plan as in effect from time to time shall apply to Executive's participation
therein.
(e) Vacation. During the term of this Agreement, Executive shall be entitled to
five weeks of paid vacation (and such paid holidays as provided to senior
executives of the Companies under the applicable vacation policy in effect from
time to time), to be taken at such time(s) as Executive and the Board reasonably
agrees is appropriate.
(f) Reimbursement of Business Expenses. Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities under this
Agreement, including reimbursement for any reasonable automobile expenses
(including mileage) incurred in connection with travel (other than for any
commute between Executive's principal office location and primary residence) by
Executive in performance of his duties. Service Corporation shall promptly
reimburse Executive for all reasonable business expenses incurred in connection
with the performance of his duties hereunder, subject to Executive's provision
of reasonable documentation of such expenses in accordance with the Companies'
business expense reimbursement policy for senior executives.
(g) Payment of Relocation Expenses. To assist Executive in relocating from his
principal residence (as of the date hereof) to Columbus, Ohio, Executive shall
participate in the Relocation Expense Policy for Newly Hired Exempt Employees (a
copy of which is attached as Exhibit A hereto).
3.4 Long-Term Incentive Awards. During the term of this Agreement, AEP shall
provide Executive with the opportunity to participate in the American Electric
Power System 2000 Long-Term Incentive Plan, as amended from time to time (the
"LTIP"), under which AEP shall grant to Executive the following equity-based
compensation awards, which shall, as of the Commencement Date, have an aggregate
target value equal to 360% of Executive's Base Salary: (a) Stock Options. On the
Commencement Date, AEP shall grant to Executive options to purchase not less
than 149,000 shares of common stock of AEP ("AEP Stock") pursuant to the LTIP
(the "Options"). Subject to Executive's continued employment hereunder, the
Options shall vest as to one-third of the shares subject to the Options on the
January 1 following each of the first three anniversaries of the grant date of
the Options, and otherwise shall be granted on such terms and pursuant to such
award agreements as provided to senior executives of the Companies generally
under the LTIP.
(b) Performance Shares. On the Commencement Date, Executive will be
awarded 119,000 performance share units pursuant to the LTIP. The actual number
of performance share units that may be earned will be subject to the
satisfaction of the performance metrics to be established by the Human Resources
Committee of the Board. Executive shall vest in any such earned performance
share units, subject to the Executive's continued employment, on December 31,
2006 and otherwise shall be granted such units on such terms and pursuant to
such award agreements as provided to senior executives of the Companies
generally for AEP performance share units. As a performance share unit
participant, Executive will be subject to a stock ownership requirement
determined and periodically adjusted by the Human Resources Committee of the
Board.
3.5 Payments and Provisions in Respect of Employment.
(a) Bonus Restricted Stock. On the Commencement Date, AEP shall
grant to Executive 100,000 shares of AEP Stock ("Bonus Stock") pursuant to the
LTIP. Subject to Executive's continued employment hereunder, fifty percent (50%)
of the Bonus Stock shall vest on January 1, 2005 and the remaining fifty percent
(50%) of the Bonus Stock shall vest on January 1, 2006 and otherwise the Bonus
Stock shall be granted on such terms and pursuant to such award agreement as
provided to senior executives of the Companies generally under the LTIP.
(b) Replacement of Long-Term Incentive Awards. In consideration for Executive's
forfeiture of certain long-term incentive compensation awards, on the
Commencement Date, AEP shall grant to Executive 200,000 shares of AEP Stock
("Restricted Stock") pursuant to the LTIP. Subject to Executive's continued
employment hereunder, the Restricted Stock shall vest as to one-third of the
shares on each of November 30, 2009, November 30, 2010 and November 30, 2011,
and otherwise the Restricted Stock shall be granted on such terms and pursuant
to such award agreement as provided to senior executives of the Companies
generally under the LTIP.
4. Termination of Employment.
4.1 Termination Not for Cause. Either of the Companies may terminate Executive's
employment hereunder at any time other than for Cause (as defined in Section 4.4
hereof).
(a) If Executive's employment hereunder is terminated by the Companies other
than for Cause (as defined in Section 4.4 hereof) (and other than as a result of
Executive's death or Permanent Disability (as defined in Section 4.2 hereof))
during the term of this Agreement, Executive shall receive from Service
Corporation the following:
(1) all "Accrued Benefits", which term is defined as the following: (x) any
accrued but unpaid Base Salary through the date of termination, payable in
a lump sum promptly after such termination of employment; (y) any earned
but unpaid Annual Bonus in respect of any previously completed calendar
year of the Companies, payable in a lump sum promptly after such
termination of employment; and (z) such payments under applicable plans,
policies and programs, including but not limited to those referred to in
Section 3.3 hereof, to which he is entitled upon such termination of
employment pursuant to the terms of such plans, policies or programs; and
(2) continued payment of Base Salary, at the rate in effect immediately prior
to the date of Executive's termination of employment, for the two year
period immediately following the date of such termination of employment,
paid in substantially equal installments in accordance with the ordinary
payroll practices of the Companies; and
(3) subject to Executive's election to receive group health coverage from
Service Corporation under the Consolidated Omnibus Reconciliation Act of
1985, as amended, continued participation, at the same level of expense
paid by Executive prior to such termination, in all medical, dental, vision
and hospitalization insurance programs (collectively, the "Welfare Plans")
in which Executive (and his eligible dependents) were participating on the
date of his termination until the earlier of: (x) the first anniversary of
the date of termination of Executive's employment or (y) the date, or
dates, Executive becomes eligible for coverage and benefits under similar
plans and programs of a subsequent employer. Executive shall promptly
advise the Companies of any such subsequent employment and the benefits he
receives in connection therewith.
(b) Effect of Change in Control. Notwithstanding the foregoing, upon a
termination of Executive's employment that would entitle Executive to receive
payments and benefits under that certain Service Corporation Change in Control
Agreement for the Office of the Chairman that Service Corporation and Executive
agree to enter into on the date hereof, which agreement shall be substantially
in the form attached hereto as Exhibit B (the "Change in Control Agreement"),
Executive shall be entitled to the payments and benefits provided under the
Change in Control Agreement in lieu of the payments and benefits otherwise
provided under Section 4.1(a) to the extent applicable.
4.2 Permanent Disability. If Executive becomes totally and permanently disabled
(as defined in any long-term disability benefit plan of the Companies applicable
to senior executive officers as in effect on the date thereof) ("Permanent
Disability"), the Companies or Executive may cause Executive to be removed from
the positions held hereunder upon written notice thereof, and Executive shall
receive or commence receiving as soon as practicable: (a) amounts payable
pursuant to the terms of any disability insurance policy or similar arrangement
which the Companies maintain during the term hereof; and (b) the Accrued
Benefits, if any. In the event of a judicial determination of Executive's
incompetence, reference in this Agreement to Executive shall be deemed, where
appropriate, to refer to his legal representative.
4.3 Death. In the event of Executive's death during the term of this Agreement
hereunder, Executive's estate or designated beneficiaries shall receive or
commence receiving, as soon as practicable (a) any death benefits provided under
the employee benefit programs, plans and practices, including those referred to
in Section 3.3 hereof, in accordance with their terms and (b) any other Accrued
Benefits. In the event of Executive's death, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative, as applicable.
4.4 Discharge for Cause; Voluntary Termination by Executive. During the term of
this Agreement, (i) either of the Companies shall have the right to terminate
the employment of Executive hereunder for Cause (as defined in and in accordance
with Section 4.4(b) below) at any time and [(ii) Executive shall have the right
to terminate his employment hereunder, other than as a result of Executive's
Permanent Disability or death, at any time following at least sixty (60) days
advance written notice to the Companies of such termination.
(a) Effect of Termination. During the term of this Agreement, in the event that
Executive's employment is terminated hereunder by the Companies for Cause, or by
Executive other than as a result of Executive's Permanent Disability or death,
Executive shall only be entitled to receive any amounts to which he has a
nonforfeitable right under any employee benefit programs or plans referred to in
3.3 hereof, in accordance with their terms, and any other Accrued Benefits.
After the termination of Executive's employment under this Section 4.4(a), the
obligations of the Companies under this Agreement to make any further payments,
or provide any benefits specified herein, to Executive shall thereupon cease and
terminate.
(b) Definition of Cause. As used herein, the term "Cause" shall be limited to
(1) willful malfeasance or willful misconduct by Executive in connection with
his employment, (2) continuing refusal by Executive to perform his duties
hereunder or any direction of the Board, after notice and a reasonable
opportunity to perform such duties or direction was given to Executive by the
Board, (3) any breach of the provisions of Section 7 of this Agreement by
Executive or any other material breach of this Agreement by Executive or (4) the
commission by Executive of any misdemeanor involving moral turpitude or a
felony. Termination of Executive pursuant to this Section 4.4 shall be made by
delivery to Executive of a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the directors at a meeting of the Board
called and held for the purpose (after 30 days prior written notice to Executive
and reasonable opportunity for Executive to be heard before the Board prior to
such vote), finding that in the good faith business judgment of such Board,
Executive was guilty of conduct sat forth in any of clauses (1) through (4)
above and specifying the particulars thereof.
5. Mitigation of Damages; Offset. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder. Notwithstanding the foregoing, any payments received by Executive
from other employment after any termination of Executive's employment hereunder
shall reduce any payments to which he would otherwise be entitled from the
Companies hereunder.
6. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Companies:
c/o American Electric Power Company, Inc.
1 Riverside Plaza
Columbus, Ohio 43215
(attn: General Counsel)
To Executive:
Mr. Michael G. Morris c/o American Electric Power Company,
Inc. 1 Riverside Plaza
Columbus, Ohio 43215
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after the
actual date of mailing shall constitute the time at which notice was given.
7. Nondisclosure of Confidential Information.
7.1 Nondisclosure of Confidential Information. Executive shall not, at any time
during the term of this Agreement or thereafter, without the prior written
consent of the Companies, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any Confidential
Information (as defined below) pertaining to the business of the Companies or
any of their affiliates, except (a) while employed by the Companies, in the
business of and for the benefit of the Companies, or (b) when required to do so
by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Companies, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information. Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws. For purposes of this
Section 7, "Confidential Information" shall mean non-public information
concerning the finances, strategic business plans, product development (or other
proprietary product data), marketing plans and other non-public, proprietary and
confidential information of the Companies, their affiliates or their customers.
7.2 Restrictive Covenants. The Executive acknowledges and recognizes the highly
competitive nature of the businesses of the Companies and their affiliates and
accordingly agrees as follows:
(a) Covenant Not to Compete. During the Term of Employment and the Restricted
Period (as defined below), Executive will not directly or indirectly:
(1) engage in any business that is a Competing Business (as defined
below);
(2) enter the employ of, or render any services to, any person or entity
(or any division of any person or entity) which is a Competing
Business;
(3) acquire a financial interest in, or otherwise become actively involved
with or in, any Competing Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent,
trustee or consultant; or
(4) interfere with, or attempt to interfere with, business relationships
(whether formed before, on or after the date of this Agreement)
between the Companies and any of its affiliates and their respective
material customers, clients or suppliers.
(b) Permitted Activities. Notwithstanding anything to the contrary in this
Agreement, during the term of this Agreement and thereafter, Executive may: (x)
directly or indirectly own, solely as an investment, securities of any person
engaged in a Competing Business which are publicly traded on a national or
regional stock exchange or on the over-the-counter market if Executive (1) is
not a controlling person of, or a member of a group which controls, such person
and (2) does not, directly or indirectly, own one percent (1%) or more of any
class of securities of such person (excluding any interest Executive owns
through a mutual fund, private equity fund or other pooled account).
(c) Covenant Not to Solicit Employees. During the term of this Agreement and the
Restricted Period, Executive will not, whether on Executive's own behalf or on
behalf of or in conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly hire any executive or employee
who was employed by either of the Companies (or any of their major subsidiaries)
as of the date of Executive's termination of employment with the Companies or
who left the employment of the Companies coincident with, or within twelve (12)
months prior to or after, the termination of Executive's employment with the
Companies (provided that nothing herein shall prevent Executive from the general
advertising for employees or from serving as a reference for an employee of the
Companies).
(d) Definitions. For purpose of this Section 7, (1) the term "Competing
Business" shall mean any business in a geographic area in which the Companies or
any of their major subsidiaries engage, in any such case at the relevant time
during the term of employment or on the date of any termination of Executive's
employment hereunder, as applicable, and (2) the term "Restricted Period" shall
mean the period beginning on the date on which Executive's employment hereunder
terminates, for any reason, through the second anniversary of such date.
7.3 Reasonableness of Covenants; Remedies.
(a) Reasonableness of Covenants. Executive and the Companies agree that the
foregoing nondisclosure and other restrictive covenants are reasonable covenants
under the circumstances, and further agree that if in the opinion of any court
of competent jurisdiction any such restraints are not reasonable in any respect,
such court shall have the right, power and authority to excise or modify such
provision or provisions of these covenants as to the court shall appear
reasonable and to enforce the remainder of the covenants as so amended.
(b) Remedies. Executive agrees that any breach of the covenants contained in
this Section 7 would irreparably injure the Companies. Accordingly, Executive
agrees that (1) Service Corporation may cease any payments being made under
Section 4 of this Agreement and/or (2) either of the Companies may, in addition
to pursuing any other remedies it may have in law or in equity, obtain an
injunction against Executive from any court having jurisdiction over the matter
restraining any further violation of this Agreement by Executive.
8. Withholding Taxes. The Companies may withhold from any amounts payable under
this Agreement to Executive such Federal, state, local and other taxes as may be
required to be withheld pursuant to any applicable law or regulations.
9. Governing Law; Resolution of Disputes.
9.1 Governing Law. This Agreement shall be construed, interpreted and governed
in accordance with the laws of the State of Ohio, without reference to rules
relating to conflicts of law.
9.2 Resolution of Disputes. Subject to the provisions of Section 7.3, any
disputes arising under or in connection with this Agreement shall be resolved by
binding arbitration, to be held in Columbus, Ohio, in accordance with the rules
and procedures of the American Arbitration Association. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Each party to this Agreement shall bear his or its own costs of the
arbitration.
10. Entire Agreement; Amendments.
10.1 Entire Agreement and Effect on Prior Agreements. This Agreement contains
the entire understanding between the parties hereto and supersedes in all
respects any prior or other agreement or understanding between the Companies or
any affiliate of the Companies and Executive.
10.2 Amendments and Waivers. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by Executive and an
authorized officer of either of the Companies. No waiver by any party hereto of
any breach by another party of any condition or provision contained in this
Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by Executive or an
authorized officer of either of the Companies, as the case may be.
11. Severability; Survivorship.
11.1 Severability. In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by law
so as to achieve the purposes of this Agreement.
12. Survivorship. Except as otherwise expressly set forth in this Agreement, the
respective rights and obligations of the parties hereunder shall survive any
termination of Executive's employment. Upon the expiration of the term of the
Agreement, the respective rights and obligations of the parties shall survive
such expiration to the extent necessary to carry out the intentions of the
parties as embodied in the rights (such as vested rights) and obligations of the
parties under this Agreement.
13. Assignment. This contract shall be binding upon and inure to the benefit of
the heirs and representatives of Executive and the assigns and successors of the
Companies, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by either of the
Companies, except that either of the Companies may assign this Agreement to any
successor (whether by merger, purchase or otherwise) to all or substantially all
of the stock, assets or businesses of the Companies, if such successor expressly
agrees to assume the obligations of the Companies hereunder.
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
AMERICAN ELECTRIC POWER COMPANY INC.
By /s/ John P. DesBarres
Name: John P. DesBarres
Title: Chairman, Human Resources
Committee of American Electric
Power Company
AMERICAN ELECTRIC POWER SERVICE CORPORATION
By /s/ John P. DesBarres
Name: John P. DesBarres
Title: Chairman, Human Resources
Committee of American Electric
Power Company
EXECUTIVE
/s/ Michael G. Morris
Michael G. Morris
<PAGE>
EXHIBIT A
AMERICAN ELECTRIC POWER
RELOCATION
EXPENSE POLICY
GUIDELINES
FOR
**EXEMPT EMPLOYEES**
and
**NON-EXEMPT SUPERVISORS**
and
**NEWLY HIRED EXEMPT EMPLOYEES**
SALARY GRADES 26 AND ABOVE
EFFECTIVE MAY 1, 2002
(Revised March 1, 2003)
<PAGE>
AMERICAN ELECTRIC POWER
RELOCATION EXPENSE POLICY GUIDELINES
FOR EXEMPT EMPLOYEES & NON-EXEMPT SUPERVISORS
AND NEWLY HIRED EXEMPT EMPLOYEES -SALARY GRADES 26 AND ABOVE
Effective May 1, 2002 (Revised March 1, 2003)
THIS RELOCATION POLICY AND OTHER USEFUL INFORMATION ON YOUR RELOCATION IS
AVAILABLE ON-LINE AT WWW.SIRVARELOCATION.COM. THIS IS THE WEBSITE OF SIRVA
Relocation (SIRVA), AEP'S RELOCATION VENDOR. YOU WILL BE EMAILED A USER LOGIN ID
AND PASSWORD AT THE ONSET OF YOUR RELOCATION. PLEASE VISIT THIS SITE FOR ANSWERS
TO YOUR QUESTIONS AND OTHER HELPFUL MOVING TIPS.
PLEASE DO NOT CONTACT ANY REAL ESTATE AGENTS OR SIGN ANY LISTING AGREEMENTS,
CONTRACTS OR OTHER DOCUMENTS PRIOR TO SPEAKING WITH YOUR DESIGNATED SIRVA
RELOCATION COUNSELOR.
<PAGE>
TABLE OF CONTENTS
ARTICLE I. ELIGIBILITY
A. Current Employees (Exempt Employees & Non-Exempt Supervisors)
B. Newly Hired Exempt Employees in Salary Grades 26 & Above
ARTICLE II. MARKETING AND DISPOSAL OF PRESENT RESIDENCE
A. Home Defined
B. Home Sale Assistance
1. Marketing Assistance Program
2. Marketing Assistance Program Bonus
3. Safety-Net
4. Guaranteed Purchase Offer
5. Vacate Date
6. Negative Equity
7. Cost of the Home Sale Program
8. Selling Home Outside the Home Sale Assistance Program
C. Loss on Sale Protection
D. Lease Agreements
E. Land Contracts
F. Mobile Homes
ARTICLE III. NEW RESIDENCE
A. Lump Sum Payment - House Hunting/Temporary Living/Return Trips
B. Final Move Expenses
C. Miscellaneous Expense Allowance (Current AEP Employees Only)
D. Duplicate Housing Expenses
E. Equity Loan
F. Movement of Household Goods
ARTICLE IV. MORTGAGE ASSISTANCE
A. Point Reimbursement Payments
B. Mortgage Companies
ARTICLE V. TAXABILITY OF REIMBURSED EXPENSES
A. IRS 50-Mile Test
B. Tax Allowance/Gross Up
ARTICLE VI. ADMINISTRATION OF POLICY
ATTACHMENT I - EQUITY LOAN AGREEMENT and PROMISSORY NOTE
ATTACHMENT II - RELOCATION SERVICES EMPLOYMENT CONTRACT
(Newly Hired Exempt Employees Only)
<PAGE>
The AEP relocation policy provides for reimbursement of certain, designated
expenses which are directly related to the domestic relocation of an eligible
employee who is requested by the Company to relocate to a new work location. The
policy is designed to help relieve employees of the financial and physical
burdens which normally accompany a relocation. Through close adherence to the
policy, efficiency and consistency of all employee relocations can be assured.
ARTICLE I. ELIGIBILITY
A. Current Employees
Regular, full time exempt employees and non-exempt supervisors are
eligible for full coverage and all benefits under the relocation policy.
Employees are eligible for benefits under this policy provided:
1. The relocation is considered permanent or indefinite (i.e., there is
no predetermined intention to return or transfer the employee back
to the previous location or to another location within a one-year
period), and
2. The Company requests the employee to relocate.
B. Newly Hired Exempt Employees in Salary Grades 26 and Above
Newly hired exempt employees in salary grades 26 and above are eligible
for full coverage and all benefits under the relocation policy except the
Miscellaneous Expense Allowance. The new employee will be required to
enter into a RELOCATION SERVICES - EMPLOYMENT CONTRACT (Attachment II)
with the Company whereby he/she agrees that upon voluntary termination
from the Company within one year of employment he/she will upon request
from the Company be required to reimburse the Company for all payments
made to him/her or in his/her behalf except those made pursuant to article
III, sections A and E.
ARTICLE II. MARKETING AND DISPOSAL OF PRESENT RESIDENCE
The Company has contracted with SIRVA Relocation (SIRVA) an international
relocation services firm, to assist relocating employees in finding potential
buyers for their homes. If these efforts prove unsuccessful, SIRVA will also
offer to purchase the homes of employees, subject to the property meeting
SIRVA's minimum requirements, as described on page 6. In addition, SIRVA will
assist the employee in locating a home for purchase at the new work location
area (Destination Services). SIRVA will also provide assistance in the movement
of the household goods through its Moving Services unit (see Article III-E).
The home marketing and disposal benefit assists a transferring employee in
finding a suitable buyer who is willing to pay at or near the most
probable sales price for the home, and disposing of his/her home in the
most efficient possible manner. An eligible employee has the option of:
(1) selling the home under the Home Sale Assistance Program as described
in Section B below; or (2) attempting to sell the home on his/her own
outside the Home Sale Assistance Program.
In order to maximize your relocation benefits do not contact any real
estate agents prior to your initial contact with your individual
Relocation Counselor at SIRVA Relocation (SIRVA). SIRVA will provide you
with a list of qualified agents who specialize in relocation moves in your
area. From this list, you may choose the agent with whom you would like to
list the property. If you choose an agent that is not on SIRVA's approved
list, the agent must be qualified in advance and agree to pay a referral
fee to SIRVA.
A. Home Defined
Home shall mean improved real estate:
1. which is, at the issuance by the Company of the SIRVA relocation
assistance authorization, employee-owned and occupied primary,
single-family residence, townhouse; two-family (duplex) provided the
employee resides in one unit, or condominium unit provided said unit
meets FNMA (Fannie Mae) / FHLMC (Freddie Mac) approval. Excluded are:
any income producing properties; resort properties; mobile homes not
permanently affixed to the property (See Article II, Section F);
cooperative units; farms; homes with acreage that does not conform to
the immediate area; properties on which clear title cannot be
delivered; properties which do not qualify for conventional mortgage
financing; properties that have black mold; properties that have an
unresolved EIFS exterior finishing problem; properties in which
inspections conducted disclose defects which rendered the property
unmarketable and/or the employee does not repair to the satisfaction
of Supplier.
2. which shall include only the items of personal property set forth in
the Contract of Sale;
3. with respect to which all mortgages can be prepaid. If a prepayment
penalty is required, it must not exceed the greater of:
o one percent (1%) of the original loan, or
o six months interest on the principal balance prepaid
4. with respect to which insurance is available at standard rates for
normal hazards of fire and extended coverage;
5. with respect to which all leases can be terminated by SIRVA with no
more than a (60) sixty-day notice to the lessor;
6. which is not situated on or near and does not contain any hazardous or
toxic materials or gases, including but not limited to black mold,
asbestos, lead paint, radon gas, urea formaldehyde foal insulation
(UFFI), or an unresolved exterior insulating and finishing system
problem (EIFS);
7. which contains acreage (lot size) within the norm and specific zoning
limits for that particular locale or neighborhood. If there is excess
acreage, SIRVA will not purchase more than is considered to be
necessary to make the residence salable;
8. in which the employee has clear and marketable title;
9. which has all the normal characteristics of a home such as potable
running water, sewage or septic system, electricity, etc., and
10. which has been repaired by the employee or where repairs are necessary
as a result of inspections or appraisals.
B. Home Sale Assistance
An eligible employee who owns a home at the former location, which meets
the above definition, may elect to sell the home through the Home Sale
Assistance Program offered by SIRVA. SIRVA will be authorized to contact
the employee by the Company at the onset of the move to start the Home
Sale Program as well as other relocation benefits.
1. Marketing Assistance Program
All qualified relocating employees are eligible to participate in the
Marketing Assistance Program offered by SIRVA. The Marketing Assistance
Program is designed specifically to assist employees in finding potential
buyers for their homes. Employees are required to market their home for a
ninety (90) day marketing period before they may accept the Guaranteed
Purchase Offer described below.
SIRVA's assistance includes the selection of relocation specific Realtors,
assistance in effectively pricing the employee's home for sale, the
development of an effective marketing plan and the tax-efficient purchase
of the employee's home by SIRVA, at acceptable price, terms and conditions
to the employee. With SIRVA's help:
-- The employee should sell their home quickly at the highest attainable
market price (The best opportunity to maximize the asking price of a
home is during the first 30 days of listing, when market excitement
about the home is highest and buyer traffic is at its greatest.)
-- The employee will not incur any costs of sale such as commissions
and/or statutory closing costs. These costs will be incurred by SIRVA.
-- The employee is not required to attend the ultimate closing on their
old home.
-- The employee is protected from contracts or buyers that "fall-through"
once SIRVA has committed to buy the home. If the ultimate market buyer
fails to close on the purchase of the employee's home, SIRVA is solely
responsible for the disposal of the property.
IMPORTANT: In order to preserve their relocation benefits, employees
should not make any agreement or sign any document or accept any money
before speaking with their Relocation Counselor at SIRVA to discuss the
home sale process.
To be eligible for the benefits described above, the employee must fully
comply with the guidelines set forth below:
-- The employee agrees to execute the SIRVA Option Agreement, which
details the terms and conditions under which SIRVA will purchase their
home.
-- The employee agrees to work with SIRVA recommended real estate agents
for home listing and at the employee's option, for home finding in the
new location.
-- The employee agrees to allow SIRVA to market the home at a price no
greater than 105% of the most probable selling price as indicated by
the average of at least two Broker Price Opinions (BPO's) rendered by
two independent realty agents approved by SIRVA.
-- The employee agrees to cooperate with their chosen listing agent in
showing the property to prospective buyers and with any inspectors
authorized by SIRVA and/or a prospective buyer.
Additionally, an employee's property must qualify for the home sale
program. The employee must also disclose any known defects to the property
that may affect its marketability. The SIRVA Relocation Counselor will
help evaluate a property's eligibility, provide more detail, and answer
all questions that may arise.
Once the employee executes the Option Agreement and agrees to a suitable
list price for their home, SIRVA will handle all the administrative
details of marketing the home during the 90 day marketing period. The
SIRVA Relocation Counselor will discuss with the employee all market
offers and will negotiate the highest attainable price for the home, which
will represent the fair market value at which SIRVA will exercise its
option to purchase the employee's home. Once the employee agrees to the
fair market value, the employee will enter into a binding contract with
SIRVA and a date at which the employee will receive the proceeds of the
sale will be established.
The employee's equity will be computed and expenses prorated as of the
date SIRVA accepts the contract of sale or vacating date, whichever is
later. SIRVA will then complete the sale with the buyer. The homesale
process is considered final once it is determined that the buyer has been
financially qualified to purchase the employee's home, inspections by the
buyer have been completed and addressed, and all contracts have been
approved by SIRVA, regardless of whether SIRVA is able to complete the
sale to the buyer.
2. Marketing Assistance Program Bonus
Employees in the Marketing Assistance Program will receive a bonus of the
greater of two percent (2%) of the selling price, or $1,000, if the
outside offer is determined to be acceptable by SIRVA. Employees who do
not use the Marketing Assistance Program are not eligible for this
benefit.
The 2% Bonus payment will be made to the employee by The Company when the
homesale process between the employee and SIRVA is considered final, and
will not be contingent on whether SIRVA is able to complete the sale with
the buyer. The payment will be considered ordinary income and will NOT be
grossed up for tax purposes.
3. Safety Net
In the possible event the employee is unable to find a buyer for his/her
home, the Company will also authorize SIRVA to prepare a back-up home
purchase offer as described in the Guaranteed Purchase Offer section
below.
4. Guaranteed Purchase Offer
After discussing the Marketing Assistance Program with the employee, a
SIRVA Relocation Counselor will provide a list of up to four (4)
qualified, licensed independent real estate appraisers from their
nationwide network to perform an ERC Relocation Appraisal on their home.
Upon receipt, the employee will need to select two (2) appraisers from the
list and notify their SIRVA counselor who will work with the employee to
arrange an appointment for the evaluation of their home. After the two
appraisers inspect the employee's home, they will prepare their
independent appraisal reports and determine an appraised value price for
the home. The appraisal process documents the price an educated and
knowledgeable buyer would pay for a home and the price at which an
educated and knowledgeable seller agrees to sell the home. Research,
comparable listings and sales, and a normal ninety-day (90) marketing
period are used in this determination.
The appraisals will be submitted to SIRVA for review. If the appraisal
values are found to be accurate by SIRVA, the two appraisals will be
averaged together and the resulting amount will become the employee's
"Guaranteed Purchase Offer." SIRVA will offer to purchase the employee's
home at this value after 90 days of mandatory home marketing, if the home
has not already sold. SIRVA will notify the employee by telephone of the
offer and confirm the offer in writing. The employee has sixty (60) days
from the 90th day of initial home listing to accept SIRVA's offer.
If the two appraisals are not within a 5% variance of each other, a third
appraisal will be ordered and the closest two shall be averaged to come up
with the employee's "Guaranteed Purchase Offer."
At day 60 of the home marketing time, reasonable and necessary
inspections, including but not limited to, a home inspection, structural,
roof, pest and radon inspections will also be obtained by SIRVA at this
time. The employee is solely responsible for rectifying or repairing any
adverse items that appear on any of the inspections obtained by SIRVA,
before SIRVA will be obligated to purchase the employee's home.
5. Vacate Date
The employee remains responsible for mortgage, taxes, insurance,
maintenance, utility payments and other homeowner expenses until either
the date the property is vacated or the date a new residence is purchased.
(See Article II.D - Duplicate Housing) The vacating date normally will not
be later than sixty (60) days from the date the employee accepts the offer
by SIRVA; however, in unusual cases, extensions may be granted with prior
approval from Human Resources.
6. Negative Equity
In those cases where there is a Negative Equity situation (i.e. employee
mortgage balance is greater than SIRVA's purchase offer/Guaranteed
Purchase Offer), the employee must pay the difference between the mortgage
balance and the Guaranteed Purchase Offer to SIRVA at the time of closing
and sale of the property to SIRVA, should he/she accept SIRVA's purchase
offer. Failure to make this payment to SIRVA will result in the withdrawal
of SIRVA's Guaranteed Purchase Offer. Please see Article II, Section C for
Loss on Sale Protection.
7. Cost of the Home Sale Program
The cost of the Home Sale Program will be paid by the Company.
8. Selling the Home Outside the Home Sale Assistance Program
An employee who otherwise qualified for the Home Sale Assistance Program
and elects to sell his/her home without the aid of SIRVA will be
reimbursed by the Company for the following closing expenses:
o Broker's commission
o Reasonable and customary seller closing costs and legal fees o
Transfer charges and transfer taxes
o Mortgage prepayment penalties as per Article II, Section B.3 (but
not points)
o Taxes other then those incurred due to gain on sale or pro-rated
property taxes
No Guaranteed Purchase Offer will be available to employees who elect to
sell their home outside the Home Sale Assistance Program.
C. Loss on Sale Protection (Grossed-Up)
Employees may occasionally find that real estate conditions force them to
sell their residence for less than it cost them. This feature is designed
to lessen the impact of such a financial loss. Under these circumstances,
the Company will pay the difference between the sales' price to an outside
buyer or the Guaranteed Price Offer (whichever is applicable), and the
original property purchase price (plus documented expenditures for labor
and material used in IRS eligible capital improvements). This payment is
limited to no more than 10% of the Guaranteed Purchase Price.
In order to be eligible for this benefit, the following conditions and
limitations apply:
o The employee must have owned and occupied their single-family home,
townhouse, or condominium located in the United States as their
primary place of residence on the date first notified of their
transfer.
o If the home is on large acreage or is partially an investment
property, loss on sale will be prorated on the basis of the percent of
total value the residence portion represents.
o If the employee shares ownership in the home with anyone other than a
spouse, they must own at least 50% or more of the residence to receive
any assistance. The assistance will be prorated based on their
percentage of ownership.
o Mobile, modular and certain manufactured homes are not eligible except
as noted in Article II, Section F.
o Capital improvements are limited to those deemed allowable by the
Internal Revenue Service (IRS).
o Charges for interest on loans, labor performed by the employee or
his/her family members are not eligible.
o Repairs are not eligible.
The Original purchase price documents plus all documentation for allowable
capital improvements must be presented by the employee to their SIRVA
Relocation Counselor. After the SIRVA review, a final review by AEP's tax
department will be made before authorization. Under no circumstances will
payment be made before the home is sold or acquired by SIRVA. This amount
will be grossed up for income taxes.
D. Lease Agreement
An eligible employee renting his/her primary residence at the time of
relocating who cannot cancel a lease arrangement without being assessed a
penalty, shall be reimbursed by the Company for up to a two-month lease
penalty and loss of deposit for canceling the lease. A copy of the lease
agreement, indicating the penalty, and a paid receipt are required for
reimbursement.
E. Land Contracts
For those eligible employees who have entered into a Land Contract
agreement, the Home Sale Assistance Program is not available unless the
employee is able to provide a clear title to the property or acceptable
termination procedures are included with the Land Contract agreement.
F. Mobile Homes
When a mobile or pre-manufactured home is on property owned by the
employee, is affixed to the property by being on a permanent concrete
footer and poured concrete blocks (wheels, axle, and tongue removed), has
all required utilities connected, meets FNMA/FHLMC financing criteria and
meets criteria for conventional mortgage financing (such as having a
perimeter block foundation), the Home Sale Assistance portion of the
Relocation Policy will apply. If a mobile or pre-manufactured home does
not meet the criteria described above, special arrangements may be made to
assist the employee with the sale of their home.
If a mobile or pre-manufactured home has not become affixed to property
owned by the employee as described above, the Company will pay for the
tear down, transportation and set up of the mobile home. In this type of
situation, the Company does not buy the mobile home, but will reimburse
the employee for sales commission and selling expenses if the employee
sells the mobile home. Under no circumstances, will the Company purchase
vacant land.
ARTICLE III. NEW RESIDENCE
The employee will receive professional assistance from SIRVA in locating homes
in the destination location that meet the employee's needs. The Relocation
Counselor will help the employee assess preferences, describe the assistance
available and arrange for a free mortgage financing pre-qualification and
consultation prior to the first home finding trip. The employee's Relocation
Counselor will arrange appointments with one or more SIRVA designated Realtors
to personally assist with area orientation and home shopping.
In an effort to improve the quality of real estate agent selection and control
costs, AEP is using a "Broker Registration" program with SIRVA. If the employee
wants to use an agent outside of SIRVA's recommendation, the employee must
register their agent choice with the SIRVA Relocation Counselor. All brokers
selected will be responsible for paying a referral fee to SIRVA.
A. The Lump Sum Payment (Grossed-Up)
The Company will provide a Lump Sum Payment to cover expenses related to
House Hunting, Return Trips Home and Temporary Living, (e.g. travel,
mileage, rental car, lodging, meals, telephone, parking, tolls,
babysitting, and other miscellaneous expenses). Payment of this Lump Sum
will generally be made within one month of the payroll transfer date to
the new work location. The amount of the payment will vary depending on
the distance from the employee's former home to the new work location as
follow:
Long Move (50 or more miles) $ 6,000 (less FICA taxes)
Short Move (less than 50 miles) $ 2,500 (less FICA taxes)
Note: For those transferees too far away to drive (normally 350 miles),
the reasonable cost of air-fare will be reimbursed in addition to the Lump
Sum Payment allowance, with prior approval.
The employee's FICA expense on this payment will be withheld providing the
employee does not exceed the FICA income base in the year of the move.
Employees are also eligible for up to 5 days off with pay for house
hunting trips and up to 3 days off with pay for the final move trip to the
new work location, as needed. Additional time off with pay may be
available at the discretion of the supervisor.
The SIRVA Relocation Counselor will explain all the details of the expense
reimbursement process for the following benefit areas including Selling
The Home Outside the Home Sale Assistance Program, Loss on Sale
Protection, Lease Break Assistance, The Lump Sum Payment, Final Move
Expenses, The Equity Loan, Home Purchase Expense (where applicable),
Duplicate Housing Expenses, Miscellaneous Expense Allowance and other
potential expenses.
B. Final Move Expenses
The employee will be reimbursed for transportation expenses related to
their final move to the new location. Mileage will be paid at the current
Company mileage rate. Expense coverage for the final move consists of
reasonable meals and lodging for the employee and their family for one day
prior to the departure to the new location, number of days en route (no
vacation or sight-seeing) and arrival day. The employee should submit ALL
receipts on the appropriate Relocation Expense form supplied by the
Company.
Note: Reimbursement for local mileage prior to departure day at the former
location and after arrival day at the new location is NOT reimbursable.
Meals and mileage reimbursement in excess of 12 cents per mile are
included in the employee's earnings for income tax purposes and will be
included in amounts reported as income on the employee's W-2 form. The
Company will gross-up these expenses.
Other travel expenses, including transportation and lodging are excluded
from taxable income and, therefore, will not be tax assisted.
C. Miscellaneous Expense Allowance (Current AEP Employees Only)
A payment to current AEP employees of an amount equal to 100% of one
month's salary (based on the salary at the new location), up to a maximum
of $5,000, will be made by the Company. This payment is intended to help
cover expenses the employee incurs in moving to the new location beyond
the expenses specifically covered in this policy. This payment will be
grossed-up for income taxes and the employee's FICA expense on this
payment will be withheld providing the employee will not exceed the FICA
income base in the year of the move.
D. Duplicate Housing Expenses
Homeowners - After an employee closes on his/her new residence, and if the
employee has not sold his/her former home and is still paying a mortgage
on his/her former home, the Company will reimburse the employee for the
interest portion of the monthly mortgage payments of the former home for a
period of up to sixty (60) calendar days from the date of closing on
his/her new home.
Whether or not the employee had a mortgage on his/her home, the Company
will also reimburse the employee for real estate taxes, property
insurance, utility expenses, and a reasonable amount for lawn care and/or
snow removal. This reimbursement for duplicate residence expenses is
available for a period up to sixty (60) calendar days from the date of
closing on his/her home at the new location.
Employee must be actively marketing former residence in order to be
eligible for duplicate housing expense reimbursement.
E. Equity Loan
Upon entering into a purchase contract on a new residence, the employee
can apply for an equity loan, interest free for 90 days, in an amount
equal to SIRVA's Guaranteed Purchase Offer less any remaining mortgage
balances, less four percent (4%) of the Guaranteed Purchase Offer held
back for contingencies. An equity loan is available for the sole purpose
of purchasing a home or initiating construction at the new location. This
loan is available whether the employee sells his/her home to SIRVA or
whether he/she tries to sell it himself/herself. If the employee
eventually sells the property to SIRVA, the loan amount is deducted from
the final equity due the employee from SIRVA. Any remaining balance of the
four percent (4%) holdback not used for contingencies (taxes, interest,
liens, etc.), is also paid to the employee when the property is sold.
The employee is required to sign the SIRVA Mortgage Equity Loan Agreement
and a Promissory Note to secure an equity loan. (See Attachment I)
The equity loan, which is secured by the Promissory Note, will require
repayment by the employee of the principal, as well as any costs incurred
by SIRVA in collecting the Promissory Note, should the employee default
(i.e., legal costs, collection, termination).
Executive Officers and Directors of American Electric Power Company, Inc.
(AEP) or any AEP subsidiary with publicly registered securities are not
eligible to participate in this program.
F. Movement of Household Goods
The Company has contracted with SIRVA to provide experienced, efficient
moving of all furniture and household effects to the residence at the new
work location. The employee will be contacted by SIRVA's Moving
Coordinator once authorization has been given by the Company. The Move
Coordinator will assign a designated relocation van line to personally
assist the employee with their move.
1. The services provided by the SIRVA designated van line are:
a. Shipment, packing and unpacking of all furniture and household
goods. (One extra pickup and delivery en route to the new
location will also be provided if needed.) Within one week of the
move-in date, the van line will return to pick up packing boxes,
if necessary. Shipment from temporary residence to permanent
residence would be considered as a local move and would require
management approval.
b. All insurance premiums to cover loss or damage to furniture and
household goods caused by fire, theft, collision, or water while
in transit and/or storage on a replacement value basis or less
based on the weight of the shipment. The limit of coverage is
$100k, without a declaration by the employee of greater value,
which will require an added premium.
c. Storage of furniture and household goods for up to sixty (60)
calendar days and delivery out of storage. Extensions of this
60-day limitation must be approved by Human Resources. Storage
means at the moving company's facility only and delivery out of
storage means one movement only.
d. Major appliance disconnection and reconnection. The van line will
transport items such as waterbeds, pool tables, satellite discs
and swing sets, but will not disassemble or reassemble these
items.
e. Shipping of personal vehicles (one car if move is over 500
miles), boats 14 feet and less (including trailer), motorcycles,
riding mowers/garden tractors and snowmobiles, with the number of
each within reason for the size of the family. A second personal
vehicle may be shipped if approved by management.
2. The van line is not authorized to ship:
a. Any animals (including house pets)
b. Trailers, campers or boats longer than 14 feet in length
c. Farm or heavy machinery
d. Furnishings from a second home
e. Firewood, building materials, paint, chemicals, toxic or
flammable materials.
ARTICLE IV. MORTGAGE ASSISTANCE
A. Point Reimbursement Payments
The Company will reimburse an employee for discount point(s) paid to
reduce the interest rate on a mortgage obtained at the new location as
follows:
If 30-year rates are: -REIMBURSE:
8.0% or lower 0 POINTS
8.01% - 9.0% 1 POINT
9.01% - 10.0% 2 POINTS
Over 10.01% 3 POINTS
The 30-year rate for a given month will be the Federal National Mortgage
Association (Fannie Mae) posted yield on 30-year mortgage commitments for
delivery within 30 days as indicated in the Wall Street Journal on the
first working day of each month. The 30-year rate and related point
reimbursement amount will be determined as of the date the employee locks
in a mortgage rate with the new lender.
B. Mortgage Companies
As part of the relocation program, AEP has contracted with SIRVA Mortgage
and Huntington National Bank, to provide mortgage programs to help
employees purchase homes in an efficient and economical manner. Although
AEP is contracted with SIRVA Mortgage and Huntington National Bank,
employee is under no obligation to use either lender. Employee may utilize
a lender of their choice and receive reimbursement of normal and customary
closing costs.
SIRVA Mortgage offers a variety of loan products from prominent national
lenders. SIRVA Mortgage will shop these lenders for you to find the best
rate, product and program for your budget.
A SIRVA Mortgage loan counselor will contact the employee to discuss loan
options and the various lenders within this program. SIRVA Mortgage can be
reached at 1-800-531-3837 or their website at www.sirva.com. Although the
employee is under no obligation to utilize SIRVA Mortgage, it should prove
more beneficial to the employee to do so.
SIRVA's No Closing Cost Loan Program - Non-recurring closing costs
normally paid by the employee are eliminated through a no-closing cost
loan program provided to the Company by SIRVA in conjunction with SIRVA
Mortgage. SIRVA's mortgage program eliminates the need for the employee to
turn in a HUD-1 Settlement Statement for reimbursement and saves the
company valuable tax gross-up dollars.
Under SIRVA's program, the employee will be responsible for non-recurring
costs such as prepaid interest, real estate taxes, and private mortgage
insurance (PMI).
o Purchase must occur within 12 months of the effective date of
relocation
o Purchase must be permanent residence of the associate and his family
o Does not apply to mobile homes or boats
Executive Officers and Directors of American Electric Power Company, Inc.
(AEP) or any AEP subsidiary with publicly registered securities are not
eligible to participate in this program.
Huntington National Bank's Loan Program - AEP has also contracted with
Huntington National Bank to provide alternative mortgage options.
Huntington's loan program will cover normal and customary closing costs
normally incurred by the employee. These costs are generally appraisal
fees, credit report fees, title search, buyer paid title costs, required
attorney's fees, statutory taxes/stamps and reasonable inspection costs.
Should the employee choose Huntington for their mortgage, Huntington will
advance to closing all of the reimbursable costs listed above. This
service eliminates the need for the employee to have or to seek extra
funds to have on hand in order to close. Nor will the employee need to
submit an expense request, as Huntington will directly bill the Company
for the appropriate costs. (This expense is taxable to the employee and
will be grossed-up for income tax liability. Employee will be notified of
their FICA tax liability for this expense.)
The employee can contact Huntington National Bank by calling
1-800-228-5576 or refer to their website at www.huntington.com
An employee utilizing a lender other than SIRVA Mortgage or Huntington
National Bank must provide a copy of their HUD-1 Settlement Statement in
order to be reimbursed the normal and customary closing costs. (This
expense is taxable to the employee and will be grossed-up for income tax
liability when check is issued, and FICA tax on this amount and the
gross-up will be withheld.)
Executive Officers and Directors of American Electric Power Company, Inc.
(AEP) or any AEP subsidiary with publicly registered securities are not
eligible to participate in this program.
ARTICLE V. TAXABILITY ON REIMBURSED EXPENSES
All reimbursements of moving expenses other than certain costs of moving
household goods and 30 days of household goods storage must be reported on the
employee's W-2 as other compensation at the end of the year in which such
reimbursements were received. The Company is required to withhold at statutory
rates for all federal/state/local taxes and FICA (Social Security) up to the
designated yearly base.
A. IRS 50-Mile Test
If a move meets the IRS 50-mile test, the payment for the transportation
of household goods is excluded from the employee's income. If the move
fails the IRS - 50 mile test, the payment for the transportation of
household goods and 30 days of storage are included in the employee's
income. To meet the IRS 50 - mile test, the employee's new work location
must be at least 50 miles farther from their former residence than was
their former work location. (It should be noted that the distance
calculation for the IRS 50 - mile test is different than the Company's
distance calculation used to determine the amount of the Lump Sum Payment
for the less than 50 mile transfer described in Article II. Section A.)
B. Tax Allowance/Gross-Up
The Company will pay to the appropriate taxing authorities on behalf of
the employee a tax allowance approximating the federal, state, and local
income taxes (there will be no tax allowance for any additional FICA
taxes) imposed as a result of the employee receiving from the Company the
following benefits: (1) the one-month salary allowance, (2) the lump sum
payment [which covers house hunting, return trips home and temporary
living, (3) the cost of settling any leases; (4) reimbursement of closing
expenses on the old residence if the employee sells the home without
SIRVA's assistance, (5) the payment for closing costs on the home
purchased at the new location if necessary, (6) the Loss on Sale
Protection payment, if any, and (7) certain duplicate housing expenses.
In the case of a move that fails the IRS - 50 mile Test, the tax allowance
will also cover cost of moving household goods and storage. The tax
allowance itself is additional gross income to the employee, so the
allowance will be "grossed up" to cover the additional tax resulting from
the tax allowance.
The tax allowance will be calculated on the basis of: (1) the employee's
annualized compensation from the Company less the amount the employee is
contributing through the Tax Deferral Option of the Savings Plan, (2) the
standard deduction and the portion of the moving expenses which qualify as
itemized deductions, and (3) the number of exemptions the employee is
entitled to claim on his/her federal income tax return (regardless of the
number claimed on his/her W-4 statement). In addition, only the Company's
W-2 source income will apply as the base for the Tax Assistance. No
outside income such as that from investments, rental properties or trusts
will be considered. Spousal income will also not be eligible for gross-up
unless the spouse also is employed by the Company.
<PAGE>
TAX SUMMARY
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Reimbursement Added to Taxable Tax Assistance (2)
W-2 Income
-------------------------------------------------------------------------
Home Sale Program No No No
--------------------------------------------------------------------------
MAP Home Sale Bonus Yes Yes No
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Lump Sum Payment Yes Yes Yes
--------------------------------------------------------------------------
Lease Break Penalty Yes Yes Yes
--------------------------------------------------------------------------
Closing Cost on Old Yes Yes Yes
Residence (outside
the Home Sale
Program)
--------------------------------------------------------------------------
Loss on Sale Yes Yes Yes
--------------------------------------------------------------------------
Household Goods (1) No No No
Shipment
and 30 days of
Storage
--------------------------------------------------------------------------
Storage over 30 Yes Yes Yes
Days
--------------------------------------------------------------------------
New Home Purchase Yes*/No Yes*/No Yes*/No
--------------------------------------------------------------------------
Duplicate Housing Yes Yes Yes
--------------------------------------------------------------------------
Tax Assistance (1) Yes Yes Yes
--------------------------------------------------------------------------
1. Tax gross-up on gross-up payments
2. FICA will be withheld up to the yearly base and will not be grossed-up
* If the employee does not utilize SIRVA's `No Closing Cost Loan'
Program *
<PAGE>
ARTICLE VI. ADMINISTRATION OF POLICY
A. After an employee has accepted a new position/job transfer, a relocation
authorization will be provided to SIRVA by AEP's Human Resources
Relocation Coordinator. Assuming the house is marketable, the offer
process will be continued. In addition, the employee will be requested to
inform SIRVA of the original purchase price of his/her home and the
outstanding balance of any existing mortgages on the property. If the
employee decides to not accept the transfer, the process will stop upon
notification to SIRVA.
B. In the case of inter-company transfers, the Business Unit into which the
employee is transferred will bear the cost of the relocation.
C. All expenses pertaining to the relocation shall be approved by the Human
Resources Department after review by SIRVA.
D. The Human Resources Department at the new location will offer the employee
such assistance and advice as shall be required.
E. Any exceptions to this policy or home disposal procedures require the
approval of the appropriate member of management. All requests for
exceptions are to be submitted to the Human Resources Department.
<PAGE>
ATTACHMENT I
SIRVA Relocation Equity Loan Agreement
and Promissory Note
Employee Name: File No:
Loan Amount $ Check Number: Date Issued:
SIRVA Approval:
Property Address:
$ Date:
For value received, the undersigned Makers hereby promise to pay to SIRVA
Relocation (hereinafter "SIRVA"), or its order, at its designated office, the
principal sum of _________ Dollars ($____) on or before the earliest to occur of
(a) the expiration of an offer by SIRVA to purchase the Maker's home; (b) the
closing of the sale of the Maker's home pursuant to contract of sales between
the Makers, as sellers, and a third party, as buyer, or the failure to
consummate such a sale at the scheduled place and time; (c) cancellation of the
Makers' relocation for any reason whatsoever, or (e) the effective date of
termination of the Relocation Management Agreement between SIRVA and the Makers'
employer of the Equity Loan Agreement Service contained herein, (f) SIRVA
determines that the Agreement and Promissory Note has remained outstanding for
an unreasonable period of time.
In the event that SIRVA purchases the Makers' home, the principal sum due shall
be deducted from the equity due the Makers' under the application contract, and
the deficit, if any, shall become immediately due and payable to SIRVA. In order
to secure repayment of the indebtedness, the Makers' hereby assign, transfer and
set over unto SIRVA all rights, title and interest in and to any agreement for
the sale of the Makers' home which the Makers have entered into or may in the
future enter into, and in and to all sums due or to become due thereunder or
which may be payable on account of the sale of the said Home. Any such sum
received by the Makers shall be held by them in trust as the property of SIRVA,
and shall be paid by the Makers to SIRVA on demand by SIRVA, up to the amount of
the Makers indebtedness to SIRVA under this agreement and promissory note.
Makers agree not to consummate a sale of their Home without advising SIRVA prior
thereto.
In consideration of SIRVA entering into this agreement and promissory note:
(a) The Makers represent that the loan will be used solely for the purpose of
purchasing a new principal residence in connection with a transfer to a new
principal place of employment and that neither the former for the new principal
residence is or will be located outside the United State or a United States
possession.
(b) The Makers represent that the Makers intend to sell their Home, and have
taken appropriate action, such as listing with brokers, or will do so within a
reasonable time. The Makers agree that the Makers will notify SIRVA in writing
when the Makers enter into an agreement to sell their Home, and again when title
passes.
(c) The Makers represent that the Makers have no intention of converting the
Makers' present or former principal residence to business or investment use.
(d) The Makers agree that any loss which the Makers sustain because of
nonfulfillment of any contract to sell and purchase their Home by either the
Makers, the buyer, or any other third party, is the Makers' responsibility, and
that in such event the Makers will be obligated to repay their indebtedness to
SIRVA.
(e) The Makers agree that the obligations and benefits under this agreement and
promissory note are personal to the Makers and may not be transferred, assigned
or otherwise disposed of to any person except their employer.
(f) The Makers agree that their Home will not be made subject to any further
indebtedness by the Makers' affirmative act subsequent to signing this agreement
and promissory note without prior written approval of SIRVA.
(g) The Makers hereby represent that the Makers intent to and will itemize their
deductions on their Federal Income Tax Returns.
The undersigned Makers hereby waive presentment and notice of dishonor and agree
that the obligations and benefits under this agreement and promissory note are
personal to them and may not be transferred, assigned, or otherwise disposed of
to any person except the Maker's employer.
This instrument shall be governed by the laws of the State of Ohio.
Maker: Date:
Social Security No.:
Maker: Date:
Social Security No.:
<PAGE>
Newly Hired Exempt Employee ATTACHMENT II
Salary Grade 26 and Above
RELOCATION SERVICES - EMPLOYMENT CONTRACT
THIS AGREEMENT, made and entered into this ___ day of __________ by and between
AMERICAN ELECTRIC POWER, a corporation (hereinafter called "Company") and
______________________ of _________________ hereinafter called "Employee").
WITNESSETH THAT
WHEREAS, Employee proposes to accept employment as an exempt employee of
the Company at ______________, and
WHEREAS, Employee, in order to accept such position, must move his place
of residence to ______________________________________, or its environs, and
WHEREAS, Company is willing to pay the moving and incidental expenses of
Employee providing Employee agrees to certain conditions,
NOW, THEREFORE, for and in consideration of the agreements hereinafter
contained, Company and Employee do hereby agree as follows:
1. Company will pay the moving and incidental expenses of Employee in
accordance with the Special Relocation Expense Policy - Newly-Hired
Exempt Employees SG 26 & Above.
2. Should Employee voluntarily terminate his/her employment with the
Company within one year from the date of his/her employment,
Employee, upon request of the Company, agrees to reimburse Company,
promptly upon such termination, for all payments made to Employee,
or in his/her behalf pursuant to the Special Relocation Expense
Policy - Newly-Hired Exempt Employees SG 26 & Above, EXCEPT those
made pursuant to Article III - Sections A (Lump Sum Payment for
house hunting, temporary living and final move) and E (payment for
movement of household goods).
IN WITNESS WHEREOF, the parties hereto have executed this agreement, the day and
year first above written.
AMERICAN ELECTRIC POWER
By Date
(Company Representative)
Date
(Employee)
<PAGE>
EXHIBIT B
AMERICAN ELECTRIC POWER SERVICE CORPORATION
CHANGE IN CONTROL AGREEMENT
FOR THE OFFICE OF THE CHAIRMAN
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.
Now Therefore, AEPSC hereby establishes the American Electric Power
Service Corporation Change In Control Agreement (the "Agreement").
ARTICLE I
DEFINITIONS
As used herein the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.
(a) "Anniversary Date" means January 1 of each Calendar Year.
(b) "Annual Compensation" means the sum of the Executive's Annual Salary
and the Executive's Target Annual Incentive.
(c) "Annual Salary" means the Executive's regular annual base salary
immediately prior to the Executive's termination of employment, including
compensation converted to other benefits under a flexible pay arrangement
maintained by AEPSC or deferred pursuant to a written plan or agreement with
AEPSC, but excluding allowances and compensation paid or payable under any of
AEPSC's long-term or short-term incentive plans or any similar payments.
(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 resulting 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 engaging by the Executive in illegal conduct or
gross misconduct which is materially and 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 (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 25 percent of the then outstanding voting stock of the Corporation; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board, together with any new directors (other than a
director nominated by a person (x) who has entered into an agreement with the
Corporation to effect a transaction described in this Article I (g)(i), (iii) or
(iv) hereof or (y) who publicly announces an intention to take or to consider
taking action (including, but not limited to, an actual or threatened proxy
contest) which if consummated would constitute a Change In Control) whose
election or nomination for election was approved by a vote of at least
two-thirds of the directors then still in office who were either directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason, except for death or disability, to
constitute at least a majority of the Board; or (iii) 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 50 percent 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 (iv) the shareholders of the
Corporation approve a plan of complete liquidation of the Corporation, or an
agreement for 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) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(i) "Commencement Date" means January 1, 2002, which shall be the
beginning date of the term of this Agreement.
(j) "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.
(k) "Executive" means an employee of AEPSC who is designated by AEPSC as
an employee entitled to benefits, if any, under the terms of this Agreement.
(l) "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, provided that the Executive shall have given
AEPSC written notice of the alleged adverse change and AEPSC shall have
failed to cure such change within thirty (30) days after its receipt of
such notice;
(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, provided that such failure was other than an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Corporation within eight days following notice from the
Executive;
(3) the reduction of the Executive's 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 therefore, 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;
(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 or a change, without the Executive's prior
approval, in the Executive's business travel obligation subsequent to the
Change In Control that requires the Executive to travel on a regular and
continuous basis in an amount that represents a significant increase, from
immediately prior to the Change In Control, in the portion of the
Executive's working time routinely devoted to business travel.
Any circumstance described in this Article I (l) 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. The Executive shall be deemed to have
terminated employment for Good Reason effective upon the effective date stated
in a written notice of such termination given by the Executive to AEPSC (which
notice shall not be given, in circumstances described in Article I (1), before
the end of the thirty (30) day period described therein, or in circumstances
described in Article I (l)(2), before the end of the eight day period described
therein), setting forth in reasonable detail the facts and circumstances claimed
to provide the basis for termination, provided that the effective date may not
precede, nor be more than sixty (60) days from, the date such notice is given.
The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstances constituting Good Reason
hereunder.
(m) "Retirement" shall mean an Executive's termination of employment after
attainment of age 55 with five or more years of service with AEPSC.
(n) "Target Annual Incentive" shall mean the award that the Executive
would have received under the Senior Officer Annual Incentive Compensation Plan
("SOIP") or the Management Incentive Compensation Plan ("MICP") for the year in
which the Executive's termination occurs, if one hundred percent (100%) of the
annual target award has been earned. Executives participating in annual
incentive compensation plans that do not have predefined target levels will be
treated as though they were participants in either the SOIP or MICP and will be
assigned the same annual target percent as their participating peers in a
comparable salary grade.
(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 Executive's Retirement, (iv) by AEPSC for Cause or (v) 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 by AEPSC without
Cause, or by the Executive for Good Reason based on events or circumstances that
occurred, (i) 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 (ii) 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 (o).
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 sixty (60) 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 prior to a Change In Control of
the Corporation. This Agreement shall also terminate if the Executive's position
is eliminated due to a downsizing, consolidation or restructuring of AEPSC other
than by reason of a Change In Control.
ARTICLE III
COMPENSATION UPON A CHANGE IN CONTROL FOLLOWED BY A TERMINATION
3.1 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, in each case
the extent not theretofore paid and in full satisfaction of the rights
of the Executive thereto;
(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 three times the Executive's Annual Compensation; and
(c) For purposes of the American Electric Power System Excess Benefit
Plan, or any successor thereto, provided that the Executive is a
participant thereunder, the Executive shall be credited with three (3)
additional years of service; provided that if the Executive is older
than age 62 as of the Executive's date of termination the additional
years of service shall be limited to the difference between the
Executive's age as of the date of termination and the date the
Executive would attain age 65, and assuming that the Executive's
compensation for the additional period of service would have been
equal to the Executive's compensation in effect as of the Executive's
date of termination.
3.2 The Executive shall be entitled to the continuing benefits as follows:
(a) For the three (3) year period following the Executive's date of
termination, the Executive and the Executive's family shall be
provided with medical and dental insurance benefits as if the
Executive's employment had not been terminated; provided, however,
that if the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement of benefits)
of the Executive for retiree medical and dental insurance benefits
under AEPSC's plans, practices, programs and policies, the Executive
shall be considered to have remained employed during the three (3)
year period and to have retired on the last day of the three (3) year
period;
(b) AEPSC shall, at its sole expense as incurred, provide the Executive
with outplacement services the scope and provider of which shall be
selected by the Executive at the Executive's sole discretion (but at a
cost to AEPSC of not more than $30,000) or, at the Executive's option,
the use of comparable and accessible office space, office supplies and
equipment and secretarial services for a period not to exceed one
year, which in the aggregate are of comparable cost to the Corporation
or AEPSC as the outplacement services;
(c) 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 (including without limitation
tax cost) to the Executive.
3.3 Notwithstanding the foregoing;
(a) The severance payments and benefits provided under Sections 3.1(b),
3.1(c) and 3.2 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 and
3.2 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, in the
event that any payment or distribution by AEPSC to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest or
penalties, are hereinafter collectively referred to as the "Excise Tax"), AEPSC
shall pay to the Executive an additional payment (a "Gross-up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, the Executive retains an amount of the
Gross-up Payment equal to the Excise Tax imposed upon the Payments. AEPSC and
the Executive shall make an initial determination as to whether a Gross-up
Payment is required and the amount of any such Gross-up Payment. Executive shall
notify AEPSC immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require AEPSC to make a Gross-up Payment (or a
Gross-up Payment in excess of that, if any, initially determined by AEPSC and
the Executive) within five days of the receipt of such claim. AEPSC shall notify
the Executive in writing at least five days prior to the due date of any
response required with respect to such claim, or such shorter time period
following AEPSC's receipt of the notice, if it plans to contest the claim. If
AEPSC decides to contest such claim, the Executive shall cooperate fully with
AEPSC in such action; provided, however, AEPSC shall bear and pay directly or
indirectly all costs and expenses (including additional interest and penalties)
incurred in connection with such action and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
AEPSC's action. If, as a result of AEPSC's action with respect to a claim, the
Executive receives a refund of any amount paid by AEPSC with respect to such
claim, the Executive shall promptly pay such refund to AEPSC. If AEPSC fails to
timely notify the Executive whether it will contest such claim or AEPSC
determines not to contest such claim, then AEPSC shall immediately pay to the
Executive the portion of such claim, if any, which it has not previously paid to
the Executive.
3.5 The obligations of AEPSC to pay the benefits described in Sections 3.1
and 3.2 shall 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.
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, except as specifically provided in
Section 3.2.
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 the business 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.
Section 5.2 No provision of this Agreement may be modified, waived or
discharged except in a 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
therefore 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 addition 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 th