SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 10, 2005
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AMERICAN ELECTRIC POWER COMPANY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
1-3525 13-4922640
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(Commission File Number) (IRS Employer Identification No.)
1 Riverside Plaza, Columbus, OH 43215
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(Address of Principal Executive Offices) (Zip Code)
614-716-1000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
On January 10, 2005, the Company entered into a new Change in Control
Agreement (Agreement) with each of its executive officers in substantially the
form of Exhibit 10.1 of this Current Report on Form 8-K. The Agreement provides
for a payment equal to 2.99 times the officer's annual base salary plus target
annual incentive if there is a change in control, all as more fully described in
the form of Agreement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN ELECTRIC POWER COMPANY, INC.
By: /s/ Thomas G. Berkemeyer
Name: Thomas G. Berkemeyer
Title: Assistant Secretary
January 10, 2005
EXHIBIT INDEX
Exhibit No. Description
10.1 Change in Control Agreement
Exhibit 10.1
AMERICAN ELECTRIC POWER SERVICE CORPORATION
CHANGE IN CONTROL AGREEMENT
Effective January 1, 2005
Whereas, American Electric Power Service Corporation, a New York
corporation, including any of its subsidiary companies, divisions,
organizations, or affiliated entities (collectively referred to as "AEPSC")
considers it essential to its best interests and the best interests of the
shareholders of the American Electric Power Company, Inc., a New York
corporation, (hereinafter referred to as "Corporation") to foster the continued
employment of key management personnel; and
Whereas, the uncertainty attendant to a Change In Control of the
Corporation may result in the departure or distraction of management personnel
to the detriment of AEPSC and the shareholders of the Corporation; and
Whereas, the Board of the Corporation has determined that steps should be
taken to reinforce and encourage the continued attention and dedication of
members of AEPSC's management to their assigned duties in the event of a Change
In Control of the Corporation; and
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 sign-on bonuses, allowances and compensation paid or
payable under any of AEPSC's long-term or short-term incentive plans or any
similar payments, and any salary lump sum amount paid in lieu of or in addition
to a base wage or salary increase.
(d) "Board" means the Board of Directors of American Electric Power
Company, Inc.
(e) "Calendar Year" means the twelve (12) month period commencing each
January 1 and ending each December 31.
(f) "Cause" shall mean
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with AEPSC (other than any such
failure as reasonably and consistently determined by the Board to
have resulted from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to
the Executive by the Board or an elected officer of AEPSC which
specifically identifies the manner in which the Board or the elected
officer believes that the Executive has not substantially performed
the Executive's duties, or
(ii) the willful conduct or omission by the Executive, which the
Board determines to be illegal or gross misconduct that is
demonstrably injurious to AEPSC or the Corporation; or a breach of
the Executive's fiduciary duty to AEPSC or the Corporation, as
determined by the Board.
For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of AEPSC or the
Corporation. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the advice of counsel for AEPSC
or the Corporation, shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of AEPSC or the
Corporation
(g) "Change In Control" of the Corporation shall be deemed to have
occurred if and as of such date that (i) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than AEPSC, any company owned, directly or indirectly,
by the shareholders of the Corporation in substantially the same proportions as
their ownership of stock of the Corporation or a trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 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 clauses (i), (iii) or (iv) of this Article I (g) 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) "CIC Multiple" means a factor of (i) two and ninety-nine
one-hundredths (2.99) with respect to the Chief Executive Officer of American
Electric Power Service Corporation and such other Executives who are nominated
for such factor by the Chief Executive Officer of American Electric Power
Service Corporation and approved by the Human Resources Committee of the Board
of the Corporation; or (ii) two (2.00) with respect to all other Executives.
(i) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(j) "Commencement Date" means January 1, 2005, which shall be the
beginning date of the term of this Agreement.
(k) "Disability" means the Executive's total and permanent disability as
defined in AEPSC's long-term disability plan covering the Executive immediately
prior to the Change In Control.
(l) "Executive" means an employee of AEPSC or the Corporation who is
designated by AEPSC and approved by the Human Resources Committee of the Board
of the Corporation as an employee entitled to benefits, if any, under the terms
of this Agreement.
(m) "Good Reason" means
(1) an adverse change in the Executive's status, duties or
responsibilities as an executive of AEPSC as in effect immediately prior
to the Change In Control, 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 fifteen (15) 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 therefor, the reduction of the
Executive's awards thereunder or failure to continue the Executive's
participation therein) that would substantially diminish the aggregate
projected value of the Executive's awards or benefits under AEPSC's
benefit plans or policies in which the Executive was participating at the
time of the Change In Control; provided, however, that the diminishment of
such awards or benefits that apply to other groups of employees of AEPSC
in addition to Executives covered by this or a similar agreement shall be
disregarded;
(5) a failure by AEPSC or the Corporation to obtain from any
successor the assent to this Agreement contemplated by Article IV hereof;
or
(6) the relocation, without the Executive's prior approval, of the
office at which the Executive is to perform services on behalf of AEPSC to
a location more than fifty (50) miles from its location immediately prior
to the Change In Control 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(m) shall constitute Good
Reason even if such circumstance would not constitute a breach by AEPSC of the
terms of an employment agreement between AEPSC and the Executive in effect on
the date of the Change In Control. 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(m)(1), before
the end of the thirty (30) day period described therein, or in circumstances
described in Article I(m)(2), before the end of the fifteen (15) 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.
(n) "Qualifying Termination" shall mean following a Change In Control and
during the term of this Agreement the Executive's employment is terminated for
any reason excluding (i) the Executive's death, (ii) the Executive's Disability,
(iii) the exhaustion of the Executive's benefits under the terms of an
applicable AEPSC sick pay plan or long-term disability plan (other than by
reason of the amendment or termination of such a plan), (iv) the Executive's
Retirement, (v) by AEPSC for Cause or (vi) by the Executive without Good Reason.
In addition, a Qualifying Termination shall be deemed to have occurred if, prior
to a Change In Control, the Executive's employment was terminated during the
term of this Agreement by AEPSC without Cause, or by the Executive for Good
Reason based on events or circumstances that occurred, (x) at the request of a
person who has entered into an agreement with AEPSC or the Corporation, the
consummation of which would constitute a Change In Control or (y) otherwise in
connection with, as a result of or in anticipation of a Change In Control. The
mere act of approving a Change In Control agreement shall not in and of itself
be deemed to constitute an event or circumstance in anticipation of a Change In
Control for purposes of this Article I(n).
(o) "Retirement" shall mean an Executive's voluntary termination of
employment after attainment of age 55 with five or more years of service with
AEPSC without Good Reason.
(p) "Target Annual Incentive" shall mean the award that the Executive
would have received under the Senior Officer Annual Incentive Compensation Plan
or such other annual incentive compensation plan applicable to such Executive
for the year in which the Executive's termination occurs, if one hundred percent
(100%) of the annual target award has been earned. Executives not participating
in an annual incentive compensation plan that has predefined target levels will
be treated as though they were participants in an annual incentive plan with
such targets and will be assigned the same annual target percent as their
participating peers in a comparable salary grade.
ARTICLE II
TERM OF AGREEMENT
2.1 The initial term of this Agreement shall be for the period beginning
on the Commencement Date and ending on the December 31 immediately following the
Commencement Date. The term of this Agreement shall automatically be extended
for an additional Calendar Year on the first Anniversary Date immediately
following the initial term of this Agreement without further action by AEPSC,
and shall be automatically extended for an additional Calendar Year on each
succeeding Anniversary Date, unless AEPSC shall have served notice upon the
Executive at least thirty (30) days prior to such Anniversary Date of AEPSC's
intention that this Agreement shall not be extended, provided, however, that if
a Change In Control of the Corporation shall occur during the term of this
Agreement, this Agreement shall terminate two years after the date the Change In
Control is completed.
2.2 If an employee is designated as an Executive after the Commencement
Date or after an Anniversary Date, the initial term of this Agreement shall be
for the period beginning on the date the employee is designated as an Executive
and ending on the December 31 immediately following.
2.3 Notwithstanding Section 2.1, the term of this Agreement shall end upon
any termination of the Executive's employment other than a Qualifying
Termination in connection with a Change In Control of the Corporation. For
example, this Agreement shall terminate if the Executive's position is
eliminated and the Executive's employment is terminated, other than in
connection with a Change In Control of the Corporation, (i) due to a downsizing,
consolidation or restructuring of AEPSC or of any other subsidiary of the
Corporation or (ii) due to the sale, disposition or divestiture of all or a
portion of AEPSC or of any other subsidiary of the Corporation.
ARTICLE III
COMPENSATION UPON A QUALIFYING TERMINATION IN CONNECTION WITH A CHANGE IN
CONTROL
3.1 Except as otherwise provided in Section 3.3, upon a Qualifying
Termination, the Executive shall be under no further obligation to perform
services for AEPSC and shall be entitled to receive the following payments and
benefits:
(a) As soon as practicable following the Executive's date of
termination, AEPSC shall make a lump sum cash payment to the
Executive in an amount equal to the sum of (1) the Executive's
Annual Salary through the date of termination to the extent not
theretofore paid, (2) the product of (x) the current plan year's
Target Annual Incentive and (y) a fraction, the numerator of which
is the number of days in such calendar year through the date of
termination, and the denominator of which is 365, except that
annual incentive plans which do not have predetermined annual
target awards for participants shall have their pro-rated incentive
compensation award for the current plan year paid as soon as
practicable, and (3) any accrued vacation pay that otherwise would
be available upon the Executive's termination of employment with
AEPSC, in each case to the extent not theretofore paid and in full
satisfaction of the rights of the Executive thereto; and
(b) Within sixty (60) days of the Executive's return of the signed
release form, AEPSC shall make a lump sum cash payment to the
Executive in an amount equal to the CIC Multiple times the
Executive's Annual Compensation.
3.2 The Executive shall be entitled to such outplacement services and
other non-cash severance or separation benefits as may then be available under
the terms of a plan or agreement to groups of employees of AEPSC in addition to
Executives who are covered under the terms of this or a similar agreement. See
also section 3.3(b). To the extent any benefits described in this Article III,
Section 3.2 cannot be provided pursuant to the appropriate plan or program
maintained by AEPSC, AEPSC shall provide such benefits outside such plan or
program at no additional cost to the Executive.
3.3 Notwithstanding the foregoing;
(a) The severance payments and benefits provided under Sections 3.1(b),
3.2 and, if applicable, 3.4 hereof shall be conditioned upon the
Executive executing a release at the time the Executive's
employment is terminated, in the form established by the
Corporation or by AEPSC, releasing the Corporation, AEPSC and their
shareholders, partners, officers, directors, employees and agents
from any and all claims and from any and all causes of action of
kind or character, including but not limited to all claims or
causes of action arising out of Executive's employment with the
Corporation or AEPSC or the termination of such employment.
(b) The severance payments and benefits provided under Sections 3.1,
3.2 and, if applicable, 3.4 hereof shall be subject to, and
conditioned upon, the waiver of any other cash severance payment or
other benefits provided by AEPSC pursuant to any other severance
agreement between AEPSC and the Executive. No amount shall be
payable under this Agreement to, or on behalf of the Executive, if
the Executive elects benefits under any other cash severance plan
or program, or any other special pay arrangement with respect to
the termination of the Executive's employment.
(c) The Executive agrees that at all times following termination, the
Executive will not, without the prior written consent of AEPSC or
the Corporation, disclose to any person, firm or corporation any
"confidential information," of AEPSC or the Corporation which is now
known to the Executive or which hereafter may become known to the
Executive as a result of the Executive's employment or association
with AEPSC or the Corporation, unless such disclosure is required
under the terms of a valid and effective subpoena or order issued
by a court or governmental body; provided, however, that the
foregoing shall not apply to confidential information which becomes
publicly disseminated by means other than a breach of this
provision. It is recognized that damages in the event of breach of
this Section 3.3(c) by the Executive would be difficult, if not
impossible, to ascertain, and it is therefore agreed that AEPSC and
the Corporation, in addition to and without limiting any other
remedy or right that AEPSC or the Corporation may have, shall have
the right to an injunction or other equitable relief in any court
of competent jurisdiction, enjoining any such breach, and the
Executive hereby waives any and all defenses the Executive may have
on the ground of lack of jurisdiction or competence of the court to
grant such an injunction or other equitable relief. The existence
of this right shall not preclude AEPSC or the Corporation from
pursuing any other rights or remedies at law or in equity which
AEPSC or the Corporation may have.
"Confidential information" shall mean any confidential, propriety
and or trade secret information, including, but not limited to,
concepts, ideas, information and materials relating to AEPSC or the
Corporation, client records, client lists, economic and financial
analysis, financial data, customer contracts, marketing plans,
notes, memoranda, lists, books, correspondence, manuals, reports or
research, whether developed by AEPSC or the Corporation or developed
by the Executive acting alone or jointly with AEPSC or the
Corporation while the Executive was employed by AEPSC.
3.4 Notwithstanding anything to the contrary in this Agreement, but
subject to the requirements of Section 3.3, in the event that any payment or
distribution by AEPSC to or for the benefit of 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 Internal Revenue Code of 1986, as amended (the "Code") (or
any successor provision thereto) by reason of being "contingent on a change in
ownership or control" of the Corporation, within the meaning of Section 280G of
the Code (or any successor provision thereto) or any interest or penalties with
respect to such excise tax (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.
(a) All determinations required to be made under this Section 3.4,
including whether an Excise Tax is payable by the Executive and the
amount of such Excise Tax, shall be made by a nationally recognized
tax preparation, financial counseling or public accounting firm
(the "Tax Firm") that is experienced in 280G calculations and that
was selected by AEPSC prior to the Change in Control. The Tax Firm
shall be directed by AEPSC to submit its preliminary determination
and detailed supporting calculations to both AEPSC and the
Executive within 15 calendar days after the date of the Executive's
termination of employment, if applicable, and any other such time
or times as may be requested by AEPSC or the Executive. If the Tax
Firm determines that any Excise Tax is payable by the Executive,
AEPSC shall make the Gross-Up Payment attributable thereto. If the
Tax Firm determines that no Excise Tax is payable by the Executive,
it shall, at the same time as it makes such determination, furnish
the Executive with an opinion that she has substantial authority
not to report any Excise Tax on her federal, state, local income or
other tax return. All fees and expenses of the Tax Firm shall be
paid by AEPSC in connection with the calculations required by this
section.
(b) The federal, state and local income or other tax returns filed by
the Executive (or any filing made by a consolidated tax group,
which includes AEPSC) shall be prepared and filed on a consistent
basis with the determination of the Tax Firm with respect to the
Excise Tax payable by the Executive. The Executive shall make
proper payment of the amount of any Excise Tax, and at the request
of AEPSC, provide to AEPSC true and correct copies (with any
amendments) of her federal income tax return as filed with the
Internal Revenue and such other documents reasonably requested by
AEPSC, evidencing such payment.
(c) Executive shall notify AEPSC immediately in writing of any claim by
the Internal Revenue Service that, if successful, would require
AEPSC to make a Gross-up Payment (or a Gross-up Payment in excess
of that, if any, initially determined under Section 3.4(a)) 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
the Executive receives a refund of any amount paid by AEPSC with
respect to such claim, the Executive shall promptly pay to AEPSC
(i) such refund and (ii) the amount of any Gross-up Payment
associated with such refund that is not included in the amount of
such refund (such as taxes other than federal taxes included in the
Gross-up Payment). If AEPSC fails to timely notify the 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 as well as the amount of any
Gross-up Payment (calculated pursuant to Section 3.4) associated
with such payment but that has not otherwise been paid to the
Executive.
3.5 The obligations of AEPSC to pay the benefits described in Sections
3.1, 3.2, and if applicable, 3.4, shall, subject to Section 3.3, be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
AEPSC may have against the Executive; provided, however, AEPSC shall comply with
and enforce obligations of AEPSC or the Executive under law determined by AEPSC
to be applicable, including any withholding in order to comply with a court
order. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, nor shall the amount of
any payment hereunder be reduced by any compensation earned by the Executive as
a result of employment by another employer.
3.6 Executive alone shall be liable for the payment of any and all tax
cost, incremental or otherwise, incurred by the Executive in connection with the
provision of any benefits described in this Agreement. No provision of this
Agreement shall be interpreted to provide for the gross-up or other mitigation
of any amount payable or benefit provided to the Executive under the terms of
this Agreement as a result of such taxes, except to the extent specifically set
forth in Section 3.4.
ARTICLE IV
SUCCESSOR TO CORPORATION
4.1 This Agreement shall bind any successor of AEPSC or the Corporation,
its assets or its businesses (whether direct or indirect, by purchase, merger,
consolidation or otherwise) in the same manner and to the same extent that AEPSC
or the Corporation would be obligated under this Agreement if no succession had
taken place.
4.2 In the case of any transaction in which a successor would not by the
foregoing provision or by operation of law be bound by this Agreement, AEPSC and
the Corporation shall require such successor expressly and unconditionally to
assume and agree to perform AEPSC's and the Corporation's obligations under this
Agreement, in the same manner and to the same extent that AEPSC and the
Corporation would be required to perform if no such succession had taken place.
The term "Corporation," as used in this Agreement, shall mean the Corporation as
hereinbefore defined and any successor or assignee to its business assets which
by reason hereof becomes bound by this Agreement.
ARTICLE V
MISCELLANEOUS
5.1 Any notices and all other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered or mailed,
by certified or registered mail, return receipt requested, postage prepaid
addressed to AEPSC at its principal office and to the Executive at the
Executive's residence or at such other addresses as AEPSC or the Executive shall
designate in writing.
5.2 Except to the extent otherwise provided in Article II (Term of
Agreement), no provision of this Agreement may be modified, waived or discharged
except in writing specifically referring to such provision and signed by either
AEPSC or the Executive against whom enforcement of such modification, waiver or
discharge is sought. No waiver by either AEPSC or the Executive of the breach of
any condition or provision of this Agreement shall be deemed a waiver of any
other condition or provision at the same or any other time.
5.3 The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio.
5.4 The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
5.5 This Agreement does not constitute a contract of employment or impose
on the Executive, AEPSC or the Corporation any obligation to retain the
Executive as an employee, to change the status of the Executive's employment, or
to change AEPSC's policies regarding the termination of employment.
5.6 If the Executive institutes any legal action in seeking to obtain or
enforce or is required to defend in any legal action the validity or
enforceability of, any right or benefit provided by this Agreement, AEPSC will
pay for all actual and reasonable legal fees and expenses incurred (as incurred)
by the Executive, regardless of the outcome of such action; provided, however,
that if such action instituted by the Executive is found by a court of competent
jurisdiction to be frivolous, the Executive shall not be entitled to legal fees
and expenses and shall be liable to AEPSC for amounts already paid for this
purpose.
5.7 If the Executive makes a written request alleging a right to receive
benefits under this Agreement or alleging a right to receive an adjustment in
benefits being paid under the Agreement, AEPSC shall treat it as a claim for
benefit. All claims for benefit under the Agreement shall be sent to the Human
Resources Department of AEPSC and must be received within 30 days after the
Executive's termination of employment. If AEPSC determines that the Executive
who has claimed a right to receive benefits, or different benefits, under the
Agreement is not entitled to receive all or any part of the benefits claimed, it
will inform the Executive in writing of its determination and the reasons
therefor in terms calculated to be understood by the Executive. The notice will
be sent within 90 days of the claim unless AEPSC determines additional time, not
exceeding 90 days, is needed. The notice shall make specific reference to the
pertinent Agreement provisions on which the denial is based, and describe any
additional material or information, if any, necessary for the Executive to
perfect the claim and the reason any such additional material or information is
necessary. Such notice shall, in addition, inform the Executive what procedure
the Executive should follow to take advantage of the review procedures set forth
below in the event the Executive desires to contest the denial of the claim. The
Executive may within 90 days thereafter submit in writing to AEPSC a notice that
the Executive contests the denial of the claim by AEPSC and desires a further
review. AEPSC shall within 60 days thereafter review the claim and authorize the
Executive to appear personally and review pertinent documents and submit issues
and comments relating to the claim to the persons responsible for making the
determination on behalf of AEPSC. AEPSC will render its final decision with
specific reasons therefor in writing and will transmit it to the Executive
within 60 days of the written request for review, unless AEPSC determines
additional time, not exceeding 60 days, is needed, and so notifies the
Executive. If AEPSC fails to respond to a claim filed in accordance with the
foregoing within 60 days or any such extended period, AEPSC shall be deemed to
have denied the claim.
AEPSC has caused this Change In Control Agreement to be signed on behalf
of all participating employers as of this ____ day of _______________, 2005.
American Electric Power Service Corporation
By ___________________________________________
Print Name ___________________________________
Title ________________________________________