EXHIBIT 10(p)
AMERICAN ELECTRIC POWER SYSTEM
INCENTIVE COMPENSATION DEFERRAL PLAN
(As Amended and Restated Effective January 1, 2003)
ARTICLE I
PURPOSE AND EFFECTIVE DATE
1.1 The American Electric Power System Incentive Compensation Deferral
Plan (the "Plan") was established by American Electric Power Service Corporation
and such subsidiaries and affiliates designated by the Company for participation
in the Plan ("AEP") to allow Eligible Employees to elect to defer receipt of all
or a portion of their Incentive Compensation until after their termination of
employment.
1.2 The effective date of the Plan, as amended and restated by this
document, is January 1, 2003.
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
Participant deferrals of Incentive Compensation and to record any related
Investment Income on the Fund or Funds selected by the Participant or Former
Participant.
2.2 "Base Compensation" means an employee's regular annual base salary
or wage rate determined without regard to any salary or wage reductions made
pursuant to sections 125 or 402(e)(3) of the Code or participant contributions
pursuant to a pay reduction agreement under the American Electric Power System
Supplemental Retirement Savings Plan, as amended.
2.3 "Code" means the Internal Revenue Code of 1986 as amended from time
to time.
2.4 "Committee" means employees of the Company holding the following
offices; Senior Vice President Human Resources, Executive Vice President -
Shared Services, and Executive Vice President - Policy, Finance and Strategic
Planning.
2.5 "Company" means American Electric Power Service Corporation.
2.6 "Eligible Employee" means any employee of AEP who (as of January 1
of the Plan Year either (i) to which annual incentive compensation relates, or
(ii) prior to the Plan Year in which long-term incentive compensation would
become payable if a deferral election under this Plan were not in effect) (a)
has Base Compensation of at least $100,000 or (b) is employed at exempt salary
grade 26 or higher.
2.7 "Former Participant" means a Participant whose employment with AEP
has terminated or a Participant who is no longer an Eligible Employee, but whose
Account has a balance greater than zero.
2.8 "Fund" means the investment options made available to participants
in the American Electric Power System Retirement Savings Plan, as revised from
time to time, except as the Committee may specify otherwise.
2.9 "Incentive Compensation" means incentive compensation payable
pursuant to the terms of annual and long-term incentive compensation plans
approved by the Committee for inclusion in the Plan, provided that such
incentive compensation shall be determined without regard to any salary or wage
reductions made pursuant to sections 125 or 402(e)(3) of the Code or participant
contributions pursuant to a pay reduction agreement under the American Electric
Power System Supplemental Retirement Savings Plan, as amended. Incentive
Compensation will not include Base Compensation, non-annual bonuses compensation
(such as but not limited to project bonuses and sign-on bonuses), severance pay,
or relocation payments.
2.10 "Investment Income" means, with respect to Incentive Compensation
deferred under this Plan, the earnings, gains and losses that would be
attributable to the investment of such deferrals in a Fund or Funds.
2.11 "Participant" means an Eligible Employee who elects to defer part
or all of his or her Incentive Compensation.
2.12 "Plan Year" means the twelve-month period commencing each January
1 and ending the following December 31.
2.13 "Retirement" means a Participant or Former Participant's
termination of employment from AEP and its subsidiaries and affiliates after
attaining age 55 and the completion of five years of service with AEP.
ARTICLE III
ADMINISTRATION
3.1 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, Former Participant and
beneficiaries 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.
3.2 The Committee may employ agents, attorneys, accountants, or other
persons and allocate or delegate to them powers, rights, and duties all as the
Committee may consider necessary or advisable to properly carry out the
administration of the Plan.
3.3 The Company shall maintain, or cause to be maintained, records
showing the individual balances in each Participant's Account. 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. The maintenance of the Account records and the distribution of
statements may be delegated to a recordkeeper by either the Company or the
Committee.
ARTICLE IV
PARTICIPATION
4.1 An Eligible Employee shall become a Participant by making a
deferral election on a form prescribed by the Company to defer part or all of
the Eligible Employee's Incentive Compensation attributable to the Plan Year (or
non-annual long-term incentive compensation pursuant to a plan during the Plan
Year in which the Eligible Employee has become a participant) indicated on the
election form, but which would not become payable to such Eligible Employee
until after the end of such Plan Year.
ARTICLE V
DEFERRALS
5.1 A Participant shall make a separate Incentive Compensation deferral
election for each Plan Year. If a deferral election for a Plan Year is not made
within the time period prescribed by the Company, no portion of the Eligible
Employee's Incentive Compensation for the Plan Year shall be deferred.
5.2 All deferred Incentive Compensation shall be paid in accordance
with the distribution option selected by the Participant in accordance with the
terms of Article VII.
ARTICLE VI
INVESTMENT OF DEFERRED AMOUNTS
6.1 All deferred Incentive Compensation shall be credited to the
Participant's Account. Amounts credited to the Participant's Account shall be
further 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 Managed Income Fund option. 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.
6.2 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.
6.3 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 deferrals, 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 the Committee anticipates no additional
contributions from such Participant.
6.4 The Plan is an unfunded non-qualified deferred compensation plan
and therefore the deferrals credited to a Participant's Account and the
investment of those deferrals in the Fund or Funds selected by the Participant
are memo accounts that represent general, unsecured liabilities of the
Participant's AEP employer payable exclusively out of the general assets of such
AEP employer.
ARTICLE VII
DISTRIBUTIONS
7.1 Upon a Participant's or Former Participant's termination of
employment with AEP and its subsidiaries and affiliates for any reason other
than Retirement, the Company shall cause the Participant or the Former
Participant to be paid the full amount credited to the Participant's or Former
Participant's Account. The payment shall be made no later the 90th day following
the Participant's or Former Participant's termination of employment.
7.2 (a) Upon a Participant's or Former Participant's termination of
employment due to Retirement, all amounts that are credited to the Participant's
Account shall be distributed to the Participant or Former Participant in one of
the following optional forms as selected by the Participant:
(1) A single lump-sum payment, or
(2) In annual installment payments over not less than two nor more than ten
years.
(b) Payment in the form of distribution selected by the Participant or
Former Participant pursuant to section 7.2(a) shall commence within 60 days
after the date elected by the Participant or Former Participant on an effective
distribution election form; provided that distributions commencing upon the
termination of a Participant's or Former Participant's employment shall begin no
later than the end of the calendar quarter following the end of the calendar
quarter of the Participant's or Former Participant's termination of employment.
Such date elected by the Participant or Former Participant shall be either (1)
the date of the Participant's Retirement (provided, however, if the Participant
was an executive officer of the Company at the time of his or her termination of
employment, the earliest commencement date shall be the January 1 of the year
following the executive officer's Retirement) or (2) the first, second, third,
fourth or fifth anniversary of the Participant's Retirement, as selected by the
Participant or Former Participant.
(c) Each Participant or Former Participant shall select the form of
distribution [as set forth in section 7.2(a)] and benefit commencement date [as
set forth in section 7.2(b)] when the Participant first elects to participate in
the Plan. The Participant or Former 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. 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.
Notwithstanding the preceding sentence, distributions to a Participant who is an
executive officer of the Company, but who has not submitted an effective
distribution election at the time of his termination of employment, shall
commence in January of the year following the Participant's or Former
Participant's Retirement.
7.3 If a Participant's or Former Participant's Account is $25,000 or
less on the date that the distribution of the Participant's Account is to
commence in accordance with section 7.2, the full value of the Account shall be
distributed as of such commencement date in a single, lump sum distribution
regardless of the form elected by such Participant or Former Participant
pursuant to section 7.2(a).
7.4 If an annual distribution is selected, the amount to be distributed
in any one-year shall be determined by dividing the Participant's or Former
Participant's Account by the number of years remaining in the elected
distribution period. The Participant or Former Participant electing annual
distributions shall have the right to direct changes in the investment of the
Account in a Fund or Funds in accordance with Article VI until the amount
credited to the Account is reduced to zero.
7.5 Notwithstanding any other provision of this Plan a Participant or
Former Participant shall be entitled to receive, upon a written request to the
Committee that is effective between April 1 and December 31 of any Plan Year, a
lump sum distribution from his or her Account of an amount equal to or greater
than 25% of the Participant's Account as of the date of the request. The date of
the request shall be the date the Committee or the Committee's representative
receives the request. The lump sum amount to be paid to the Participant shall be
subject to a 10% early withdrawal penalty, which penalty shall reduce the amount
to be distributed to the Participant or Former Participant. The Participant or
Former Participant shall forfeit the amount of the 10% withdrawal penalty. The
lump sum amount shall be paid within 60 days after the Committee receives the
withdrawal request. Any Participant or Former Participant who elects to receive
a benefit under this section shall not be eligible to have any Incentive
Compensation attributable to that Plan Year and the next succeeding two Plan
Years deferred into his or her Account pursuant to this Plan, and such
Participant shall not be entitled to request any additional withdrawals under
this section prior to the Participant's termination of employment.
ARTICLE VIII
BENEFICIARIES
8.1 Each Participant or Former Participant may designate a beneficiary
or beneficiaries who shall receive the balance of the Participant's Account if
the Participant dies prior to the complete distribution of the Participant's
Account. Any designation, or change or rescission of a beneficiary designation
shall be made by the Participant's completion, signature and submission to the
Committee of the appropriate beneficiary form prescribed by the Committee. A
beneficiary form shall take effect as of the date the form is signed provided
that the Committee receives it before taking any action or making any payment to
another beneficiary named in accordance with this Plan and any procedures
implemented by the Committee. If any payment is made or other action is taken
before a beneficiary form is received by the Committee, any changes made on a
form received thereafter will not be given any effect. If a Participant fails to
designate a beneficiary, or if all beneficiaries named by the Participant do not
survive the Participant, the Participant's Account will be paid to the
Participant's estate. Unless clearly specified otherwise in an applicable court
order presented to the Committee prior to the Participant's death, the
designation of a Participant's spouse as a beneficiary shall be considered
automatically revoked as to that spouse upon the legal termination of the
Participant's marriage to that spouse.
8.2 Distribution to a Participant's or Former Participant's beneficiary
shall be in the form of a single lump-sum payment within 60 days after the
Committee makes a final determination as to the beneficiary or beneficiaries
entitled to receive such distribution.
ARTICLE IX
CLAIMS PROCEDURE
Section 9.1 The following procedures shall apply with respect to claims
for benefits under the Plan.
(a) Any Participant or Former 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 9.1(a), the
notification to the claimant shall set forth, in a manner
calculated to be understood by the claimant:
(1) The specific reasons for the denial of the claim;
(2) Specific reference to the provisions of the Plan upon which
the denial of the claim was based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary,
and
(4) An explanation of the review procedure specified in Section
9.2, and the time limits applicable to such procedures,
including a statement of the claimant's right to bring a civil
action under section 502(a) of the Employee Retirement Income
Security Act of 1974, as amended, following an adverse benefit
determination on review.
Section 9.2 The following procedures shall apply with respect to the
review on appeal of an adverse determination on a claim for benefits under the
Plan.
(a) Within sixty days after the receipt by the claimant of an
adverse benefit determination, the claimant may appeal such
denial by filing with the Committee a written request for a
review of the claim. If such an appeal is filed within the
sixty day period, the Committee, or a duly appointed
representative of the Committee, shall conduct a full and fair
review of such claim that takes into account all comments,
documents, records and other information submitted by the
claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination. The claimant shall be entitled to submit
written comments, documents, records and other information
relating to the claim for benefits and shall be provided, upon
request and free of charge, reasonable access to, and copies
of all documents, records and other information relevant to
the claimant's claim for benefits. If the claimant requests a
hearing on the claim and the Committee concludes such a
hearing is advisable and schedules such a hearing, the
claimant shall have the opportunity to present the claimant's
case in person or by an authorized representative at such
hearing.
(b) The claimant shall be notified of the Committee's benefit
determination on review within sixty days after receipt of the
claimant's request for review, unless the Committee determines
that special circumstances require an extension of time for
processing the review. If the Committee determines that such
an extension is required, written notice of the extension
shall be furnished to the claimant within the initial
sixty-day period. Any such extension shall not exceed a period
of sixty days from the end of the initial period. The
extension notice shall indicate the special circumstances
requiring the extension and the date by which the Committee
expects to render the benefit determination.
(c) The Committee shall provide a claimant with written or
electronic notification of the Plan's benefit determination on
review. The determination of the Committee shall be final and
binding on all interested parties. Any adverse benefit
determination on review shall set forth, in a manner
calculated to be understood by the claimant:
(1) The specific reason(s) for the adverse determination;
(2) Reference to the specific provisions of the Plan on which the
determination was based;
(3) A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant to
the claimant's claim for benefits; and
(4) A statement of the claimant's right to bring an action under
Section 502(a) of ERISA.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Each Participant agrees that as a condition of participation in
the Plan, the Company may withhold applicable federal, state and local taxes,
Social Security taxes and Medicare taxes from any distribution hereunder to the
extent that such taxes are then payable.
10.2 In the event the Committee, in its sole discretion, shall find
that a Participant, Former Participant or beneficiary is unable to care for his
or her affairs because of illness or accident, the Committee may direct that any
payment due the Participant or the beneficiary be paid to the duly appointed
personal representative of the Participant or beneficiary, and any such payment
so made shall be a complete discharge of the liabilities of the Plan and the
Company with respect to such Participant or beneficiary.
10.3 The Company intends to continue the Plan indefinitely but reserves
the right, in its sole discretion, to modify the Plan from time to time, or to
terminate the Plan entirely or to direct the permanent discontinuance or
temporary suspension of deferral contributions under the Plan; provided that no
such modification, termination, discontinuance or suspension shall reduce the
benefits accrued for the benefit of any Participant, Former Participant or
beneficiary under the Plan as of the date of such modification, termination,
discontinuance or suspension.
10.4 Nothing in the Plan shall interfere with or limit in any way the
right of AEP to terminate any Participant's employment at any time, or confer
upon a Participant any right to continue in the employ of AEP.
10.5 The Plan shall be construed and administered according to the laws
of the State of Ohio.
American Electric Power Service Corporation has caused this amendment
and restatement of the American Electric Power System Incentive Compensation
Deferral Plan to be signed as of this 8th day of April, 2003.
American Electric Power Service
Corporation
By: /s/ Melinda S. Ackerman
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Melinda S. Ackerman, Senior Vice President,
Human Resources