AMENDMENT TO CERTAIN RESTRICTED STOCK UNIT AWARD AGREEMENTS ISSUED UNDER THE AMERICAN ELECTRIC POWER SYSTEM LONG-TERM INCENTIVE PLAN
AMENDMENT
TO
CERTAIN RESTRICTED STOCK UNIT AWARD AGREEMENTS
ISSUED
UNDER THE
AMERICAN
ELECTRIC POWER SYSTEM
LONG-TERM
INCENTIVE PLAN
This
Amendment is made to the restricted stock unit award agreements (each, an
“Agreement”) furnished to <Name> (referred to in
this Amendment as “you”), the undersigned, by American Electric Power Company,
Inc. (“AEP”) that bear the following grant dates for the indicated number of
restricted stock units:
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Grant
Date
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Number
of Stock Units Granted
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By
agreeing to this Amendment, AEP and you intend that any deferral of compensation
that is subject to the requirements of section 409A of the Internal Revenue Code
pursuant to each Agreement comply with such requirements. This
Amendment does not change the Vesting Dates listed in each Agreement, but
clarifies the accelerated vesting provisions of each Agreement and otherwise
amends and restates the remaining terms and provisions of each Agreement to read
as follows:
“Restricted
Stock Units
This
award agreement entitles you to the aggregate number of Restricted Stock Units
specified above ("RSUs") each of which, if and when it vests, will convert to a
single share of AEP's Common Stock, $6.50 par value. Upon vesting,
RSUs are converted to AEP Common Stock and delivered to you in accordance with
the other terms and provisions of this Agreement. RSUs have no voting
rights and are not entitled to receive any dividend declared on AEP Common
Stock. However, RSUs are entitled to additional RSUs (“Dividend
Equivalents”) of an equal value to dividends paid on AEP Common Stock, as
described below.
Dividend
Equivalents
Dividend
Equivalents on outstanding RSUs are applied as additional RSUs. The
number of additional RSUs awarded due to dividends is calculated as the value of
the dividend for a number of shares of AEP common stock equal to the number of
outstanding RSUs divided by the closing price of AEP Common Stock on the
dividend payment date.
No
additional RSUs will be awarded as Dividend Equivalents after conversion of the
related RSUs into Common Stock. See Conversion of Vested Stock
Units and Delivery of Shares, below.
Vesting of Restricted Stock
Units
Your RSUs
(other than Dividend Equivalents) shall vest, subject to your continuous AEP
employment through the vesting date, in accordance with the vesting schedule as
set forth in each Agreement, except as otherwise provided for in this
Amendment. See the sections of this Amendment entitled Accelerated Vesting
and Vesting of
Dividend Equivalents, below.
Accelerated Vesting of
Restricted Stock Units (other than Dividend Equivalents)
RSUs
(other than Dividend Equivalents) may vest earlier than the dates shown in the
Vesting Schedule, above, as follows:
Retirement: As of
your Retirement Eligibility Date, the RSUs, to the extent outstanding but not
vested, shall vest; provided, however, such vested units shall not convert to
AEP Common Stock nor be delivered until the applicable Retirement Payment
Date.
Severance: As of
your Severance Date, a fractional portion of your outstanding but non-vested
RSUs, shall vest. The portion of the
outstanding, non-vested RSUs that vest under this provision is determined as
follows:
The
number of complete calendar months between (i) the date your employment with AEP
terminates as the direct result of the Triggering Event and (ii) the Vesting
Date that immediately precedes such date your employment terminates (or if you
can and do incur such a termination of employment prior to any Vesting Date and
one year after the Grant Date, the Grant Date specified with respect to such
Agreement);
Divided
by
The
number of complete calendar months between (i) the Vesting Date that immediately
precedes the date your employment with AEP terminates as the direct result of
the Triggering Event (or if you can and do incur such a termination of
employment prior to any Vesting Date and at least one year after the Grant Date,
the Grant Date specified with respect to such Agreement); and (ii) the Vesting
Date that immediately follows the date your employment with AEP terminates as
the direct result of the Triggering Event;
Multiplied
by
The
number of currently outstanding, non-vested RSUs that would have vested had you
remained continuously employed by AEP through the Vesting Date immediately
following the date your employment with AEP terminates as the direct result of
the Triggering Event.
RSUs that
vest as a result of your severance shall be converted to AEP Common Stock and
delivered to you as of your Severance Date in accordance with the section of
this Amendment entitled Delivery of Shares of Common
Stock, below.
Death: Upon your
death prior to the termination of your employment with AEP, the RSUs, to the
extent outstanding but not vested, shall vest, be converted into AEP Common
Stock and delivered to your designated beneficiaries under the LTIP (or if you
have not effectively designated any beneficiary under the LTIP, to your estate)
as soon as administratively practicable following your death.
Change In
Control: Upon a Change in Control prior to the termination of
your employment with AEP, the RSUs, to the extent outstanding but not vested,
shall vest, be converted into AEP Common Stock and delivered as of the date of
the Change in Control in accordance with the section of this Amendment entitled
Delivery of Shares of
Common Stock, below. During the sixty (60) day period from and
after such Change in Control you shall have the right to exchange the AEP Common
Stock converted from such RSUs as the result of the Change In Control for cash
in an amount equal to the Change in Control Price Per Share multiplied by the
number of shares of AEP Common Stock as to which you are exercising such right
by giving notice to AEP within such sixty (60) day period. Such cash
payment shall be made within thirty (30) days of such notice and the release of
all rights with respect to such shares of AEP Common Stock, but no later than
the March 15 immediately following the calendar year of the Change in
Control.
Dividend
Equivalents vest separately from the underlying RSUs. See the section
of this Amendment entitled Vesting of Dividend
Equivalents, below.
Other
Terminations
Except as
described in the following sentence involving circumstances that may give rise
to a Severance Date for you, upon the termination of your employment with AEP
for any reason prior to your Retirement Eligibility Date, your Severance Date,
your death or a Change in Control, any non-vested RSUs and non-vested Dividend
Equivalents shall be forfeited, and you shall have no rights or interests in or
with respect to such non-vested RSUs. If your employment with AEP is
terminated under circumstances that may give rise to a Severance Date for you,
to the extent your non-vested RSUs and non-vested Dividend Equivalents do not
vest by reason of a Severance Date for you, they shall be forfeited as of the
date it becomes reasonably certain that such Severance Date shall not occur, but
no later than 45 days after the termination of your employment with
AEP.
Vesting of Dividend
Equivalents
Additional
RSUs awarded as Dividend Equivalents vest upon your continuous AEP employment
through the last Vesting Date specified in the Vesting Schedule in such
Agreement (the “Final Vesting Date”); provided, however, that:
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Dividend
Equivalents that are outstanding as of your Retirement Eligibility Date
shall vest as of your Retirement Eligibility Date, if such date is earlier
than the Final Vesting Date;
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Dividend
Equivalents credited after your Retirement Eligibility Date shall be
vested at the time they are
awarded;
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Dividend
Equivalents that are outstanding as of your Severance Date (to the extent
they relate to RSUs that either have previously vested or that vest as of
your Severance Date) shall vest as of your Severance Date if you incur a
Severance Date upon or following the involuntarily termination of your AEP
employment and prior to both your Retirement Eligibility Date and Final
Vesting Date;
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Dividend
Equivalents that are outstanding as of your death shall vest as of the
date of your death if you die while continuously employed by AEP, but
prior to both your Retirement Eligibility Date and Final Vesting Date;
and
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Dividend
Equivalents that are outstanding shall vest as of the date of a Change in
Control if the Change in Control occurs prior to the termination of your
employment with AEP.
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Definitions
In
addition to the terms defined elsewhere in this Agreement, the following shall
be defined terms when used in this Agreement:
“AEP” means American Electric
Power Company, Inc.; a New York Company; and its subsidiaries and
affiliates.
“Change in Control Price Per
Share” means (i) if the Change in Control is the result of a tender or
exchange offer for, merger of, or sale or disposition of all or substantially
all of the assets of, AEP, the consideration per share of Common Stock received
by the shareholders in connection with such transaction, or, if (i) is not
applicable, (ii) the highest Fair Market Value of a share of Common Stock during
the ninety (90) day period prior to and including the date of a Change in
Control. To the extent that the consideration paid in any such transaction
described in (i) above consists all or in part of securities or other non-cash
consideration, the value of such securities and other non-cash consideration
shall be the fair market value as determined by such reasonable methods or
procedures as shall be established by the Committee.
“Key Employee” means those
employees those employees specified in accordance with policies adopted by AEP
from time to time for purposes of complying with the requirements of Section
409A(a)(2)(B)(i) of the Internal Revenue Code. As of the date of this
Amendment, such policies specify that Key Employees for the period February 1
through the next following January 31 are those employees who, as of the
December 31 immediately preceding the February 1 beginning date either (a) held
the office of Vice President or higher with an AEP System company; or (b) were
employed by an AEP System company at exempt salary grade 34 or
higher.
"Retirement Eligibility Date"
means the date prior to your termination of employment with AEP that all of the
following conditions are satisfied: (i) You have attained age 55, (ii) you have
completed of at least five (5) years of service with AEP; and (iii) you have
remained continuously employed with AEP for one (1) year from the Grant Date
specified in such Agreement.
“Retirement Payment Date”
means the earlier of the applicable Vesting Date for such units or the date of
your termination of employment with AEP and all Subsidiaries; provided, however,
if you are a Key Employee as of the date of your termination of employment, the
date that is six (6) months after the date of your termination of employment
shall be substituted for the date of your termination of
employment.
“Severance Date” means the
date that all of the following conditions are satisfied: (i) you were
continuously employed with AEP for one (1) year from the Grant Date under such
Agreement, (ii) your employment with AEP is involuntarily terminated prior to
your Retirement Eligibility Date as the direct result of a Triggering Event,
(iii) on or before the date your employment with AEP is terminated, you do not
receive an offer of employment with the purchaser or successor employer; (iv) on
or before the date your employment with AEP is terminated, you do not receive an
offer of employment with AEP that is at the same or higher base pay (determined
without regard to overtime pay, bonuses, premium payments, incentive
compensation or any other form of additional compensation) and does not require
relocation of your primary residence; and (v) you are presented with and then
timely sign and return the Severance and Release of All Claims Agreement within 45
days after your employment with AEP is terminated. For purposes of
clause (ii), your employment will not be considered terminated as the direct
result of a Triggering Event if (A) your employment terminates following the
expiration of a specific term of employment previously identified between you
and AEP, regardless of the reason for not extending or renewing your employment,
or (B) you fail to remain employed with AEP up to and including the date
established by AEP for the termination of your employment pursuant to the
Triggering Event, or (C) AEP does not present you with a Severance and Release
of All Claims Agreement on or before
the date your employment with AEP is terminated. AEP retains sole
discretion over any determination of whether and when it will present you with a
Severance and Release of All Claims Agreement and the terms of any such
agreement.
“Severance and Release of All Claims
Agreement” means a Severance and Release of All Claims Agreement in a
form acceptable to AEP or its Subsidiary, whereby you agree to waive and release
AEP, all AEP System companies and all of their respective officers, directors,
employees, agents and representatives of and from any and all
claims.
“Triggering Event” means the
restructuring, consolidation, downsizing, closing, sale and/or divestiture of
AEP or part thereof under circumstances that are not a Change in
Control.
“Vesting Date” means each date
set forth in the Vesting Schedule of such Agreement.
Restricted Stock Units Are
Nontransferable
No RSUs
or Dividend Equivalents shall be sold, exchanged, pledged, transferred,
assigned, or otherwise encumbered, hypothecated or disposed of by you (or any
beneficiary) other than by testamentary disposition by you or by the laws of
descent and distribution.
Conversion of Vested Stock
Units and Delivery of Shares
Conversion to Common
Stock: Each RSU and Dividend Equivalent shall be converted
into a single share of AEP Common Stock upon vesting or, if you satisfy the
Retirement Eligibility Date conditions, your Retirement Payment
Date. Shares of AEP Common Stock shall be delivered in accordance
with the section of this Amendment entitled Delivery of Shares of Common
Stock. Fractional RSUs that constitute less than a single
share may be converted to cash at AEP’s option.
Delivery of Shares of Common
Stock: The shares of Common Stock resulting from the
conversion of your vested RSUs and Dividend Equivalents, shall be delivered to
you or to an account set up for your benefit with a broker/dealer designated by
the Company (the “Broker/Dealer Account”) within a reasonable time (generally 3
days) after such shares are converted as described in the section of this
Amendment entitled Conversion to Common
Stock, above. Such shares shall be delivered on or before
March 15 of the calendar year following the calendar year during which the RSUs
and Dividend Equivalents became vested; except that to the extent such shares
are to be delivered in connection with your Retirement Payment Date, such shares
shall be delivered within 60 days after your Retirement Payment
Date.
AEP
Common Stock and all LTIP participants remain subject to all applicable legal
and regulatory restrictions such as xxxxxxx xxxxxxx restrictions and black-out
periods.
Tax
Withholding
AEP shall
withhold any and all applicable income, employment and other taxes required to
be withheld in connection with the RSUs described in each
Agreement. AEP may reduce the number of vested RSUs credited to you
or the number of shares of Common Stock delivered to you to satisfy such tax
withholding obligation. The amount of such reduction shall be based
upon the Fair Market Value of AEP Common Stock as of the applicable Vesting Date
or Retirement Payment Date; provided, however, that any reduction to your vested
RSUs for applicable tax withholding shall not exceed such limits as may be
applicable to comply with the requirements of Code Section 409A.
LTIP Incorporated By
Reference
This
Amendment and each Agreement shall be subject in all respects to the terms and
provisions of the LTIP, all the terms and provisions of which are made a part of
and incorporated in each Agreement (as if they were expressly set forth
therein). In the event of any conflict between the terms of an
Agreement (as amended by this Amendment) and the terms of the LTIP, the terms of
the LTIP shall control. Any capitalized term not defined in this
Amendment or an Agreement shall have the same meaning as is ascribed thereto
under the LTIP.
No Special Employment
Rights
Nothing
contained in the LTIP or this Amendment or any Agreement shall be construed or
deemed by any person under any circumstances to bind the Company to continue
your employment for the Vesting Period or for any other period.
Termination
The RSUs
subject to this Amendment or any Agreement shall terminate and be of no force or
effect in accordance with the terms and provisions of the relevant sections of
this Amendment entitled Other Terminations,
above.
Notice
Any
Notice that may be required or permitted under this Amendment or any Agreement
shall be in writing, and shall be delivered in person or via fax transmission,
overnight courier service or certified mail, postage prepaid, properly addressed
as follows:
Notice to AEP: If
such notice is to AEP, to the attention of the Executive Compensation
Department, American Electric Power, 0 Xxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000, or
at such other address as AEP, by notice to you, may designate in writing from
time to time.
Notice to You: If
such notice is to you, at the address as shown on the records of AEP or at such
other address as you, by notice to AEP, may designate in writing from time to
time.”
IN
WITNESS WHEREOF, AEP has caused this Amendment to be executed by its duly
authorized officer as of October 17, 2008, and you have hereunto set your hand
as of the date set forth below your signature.
AMERICAN
ELECTRIC POWER COMPANY, INC.
By: /s/ Xxxxxxx X.
Xxxxxx
Xxxxxxx
X. Xxxxxx
Chairman,
President and Chief Executive Officer
______________________________________
<Name>
__________________________
Date
