Exhibit 10(f)(2)
AMERICAN ELECTRIC POWER COMPANY, INC.
STOCK UNIT ACCUMULATION PLAN
FOR NON-EMPLOYEE DIRECTORS
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 "Committee" means the Human Resources Committee 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
received an award of 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 service as a Director for any other reason.
ARTICLE 4
STOCK UNIT AWARDS
4.1 ANNUAL AWARDS
Each Non-Employee Director's Account shall be credited with 300
Stock Units as of the first day of the month in which the
Director becomes a member of the Board, and on the first day of
such month for each year thereafter, up to a maximum of 3,000
Stock Units for each Participant. In the event of a change in
the Retainer, the Committee may reconsider the amount of the
annual awards and may recommend to the Board changes in the
number of Stock Units to be awarded.
4.2 VESTING AND FORFEITURE
If a Participant's Termination occurs prior to the completion of
five years of service on the Board, the Participant shall forfeit
an amount of Stock Units equal to the product of all Stock Units
awarded pursuant to Section 4.1 and associated dividends credited
pursuant to Section 5.1, held in the Participant's Account,
multiplied by the difference of 60 minus the Participant's number
of months of service (with service for a partial month counted as
service for the entire month), divided by 60, computed to three
decimal places. If a Participant's Termination occurs after five
years of service, all such Stock Units shall be vested and
nonforfeitable.
4.3 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. Stock Units awarded pursuant to
this Section 4.3 will be included for purposes of determining the
application of the limitation on annual awards specified in
Section 4.1.
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.