File No. 70-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of company filing this statement and
addresses of principal executive offices)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
John B. Keane, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION
A. Requested Authorizations
The American Electric Power System 2000 Long-Term Incentive Plan (the
"2000 Plan") was approved by American Electric Power Company, Inc.'s ("AEP")
shareholders at the 2000 annual meeting. On February 22, 2005, the Board of
Directors of AEP will adopt the Amended and Restated American Electric Power
System 2000 Long-Term Incentive Plan (the "Plan"), and will recommend this
proposal to the shareholders for approval. AEP is a registered holding company
under the Public Utility Holding Company Act of 1935, as amended (the "1935
Act"). AEP hereby requests authority from the Securities and Exchange Commission
(the "Commission") (1) to solicit proxies with respect to the Plan from the
holders of its outstanding common stock, $6.50 par value per share (the "Common
Stock"), for action at the annual meeting of AEP's shareholders scheduled to be
held on April 26, 2005; and (2) to distribute securities under the Plan,
including up to 19,200,000 shares of Common Stock.
B. Annual Meeting of Shareholders
Approval of the Plan will require the affirmative vote of a majority of
the votes cast at the Annual Meeting. The proxy materials to be mailed to AEP's
shareholders in connection with the annual meeting will be filed herewith as
Exhibits A-2 and A-3.
C. Amended and Restated American Electric Power System 2000 Long-Term
Incentive Plan
The purpose of the Plan is to promote the interests of AEP and its
shareholders by strengthening AEP's ability to attract, motivate and retain
employees and directors, to align further the interests of AEP's management with
the shareholders, and to provide an additional incentive for employees and
directors to promote the financial success and growth of AEP. The aggregate
number of shares that will be reserved for issuance under the plan is 19,200,000
shares.
The Plan allows the grant of incentive awards to employees of the AEP
System and to nonemployee members of the Board of Directors. The Plan provides
for the grant of stock options, including incentive stock options and
nonqualified stock options, stock appreciation rights, restricted stock,
performance share awards, phantom stock, and dividend equivalents, as described
below.
The Plan is designed to allow for the grant of certain types of awards
that conform to the requirements for tax deductible "performance-based"
compensation under Section 162(m) of the Internal Revenue Code. Shareholder
approval of the Plan is requested in order to maximize the deductibility of the
payments under the Plan to AEP's chief executive officer and its four other most
highly compensated officers under the provisions of Section 162(m), and to
comply with the requirements of the regulations issued by the Internal Revenue
Service governing the deductibility of individual compensation amounts in excess
of $1,000,000.
The Human Resources Committee of the Board of Directors (the "Committee")
expects to consider approximately 500 employees for participation in the Plan.
The number of persons eligible to participate in the Plan and the number of
grantees may vary from year to year.
The following is a summary of certain principal features of the Plan,
which will be filed herewith as Exhibit B.
1. Reservation of Shares
AEP will reserve, subject to shareholder and Commission approval of the
Plan, 19,200,000 shares of Common Stock for issuance under the Plan. The shares
to be delivered under the Plan will be made available from authorized but
unissued shares and/or shares reacquired by AEP. If any shares of Common Stock
that are the subject of an award are not issued and cease to be issuable for any
reason, such shares will no longer be charged against such maximum share
limitation and may again be made subject to awards under the Plan. In the event
of certain corporate reorganizations, recapitalizations, or any similar
corporate transactions affecting AEP or the Common Stock, or stock splits, stock
dividends or other distribution with respect to the Common Stock, proportionate
adjustments may be made to the number of shares available for grant under the
Plan, the applicable maximum share limitations under the Plan, and the number of
shares and prices under outstanding awards at the time of the event.
AEP intends to file a registration statement with the Commission under the
Securities Act of 1933, as amended (the "1933 Act"), for the purpose of
registering the shares of Common Stock to be distributed on behalf of
participants in the Plan.
2. Administration
The Plan will be administered by the Committee. Subject to the limitations
set forth in the Plan, the Committee has the authority to determine the persons
to whom awards are granted, the types of awards to be granted, the time at which
awards will be granted, the number of shares, units or other rights subject to
each award, the exercise, base or purchase price of an award (if any), the time
or times at which the award will become vested, exercisable or payable, and the
duration of the award. The Committee may provide for the acceleration of the
vesting or exercise period of an award at any time prior to its termination or
upon the occurrence of specified events. With the consent of the affected
participant, the Committee has the authority to cancel and replace awards
previously granted with new awards for the same or a different number of shares
and for the same or different exercise or base price and may amend the terms of
any outstanding award, provided that the Committee shall not have the authority
to reduce the exercise or base price of an award by amendment or cancellation
and substitution of an existing award without approval of AEP's shareholders.
With respect to awards granted under the Plan to nonemployee members of the
Board of Directors, all rights, powers and authorities vested in the Committee
under the Plan shall instead be exercised by the Board.
3. Eligibility
All employees of AEP and its subsidiaries and all nonemployee members of
the Board of Directors are eligible to be granted awards under the Plan, as
selected from time to time by the Committee in its sole discretion.
4. Stock Options
The Plan authorizes the grant of nonqualified stock options and incentive
stock options. Nonqualified stock options may be granted to employees and
nonemployee directors. Incentive stock options may only be granted to employees.
The exercise price of an option may be determined by the Committee, provided
that the exercise price per share of an option may not be less than 100% of the
fair market value of a share of Common Stock on the date of grant. Stock options
may be granted for any term specified by the Committee and the Committee may
accelerate the exercisability of any option at any time. Under the Plan, the
exercise price of an option is payable by the participant in cash, or, at the
discretion of the Committee, in shares of Common Stock, or by any other method
approved of by the Committee. The terms of any Incentive Stock Option shall
comply with the provisions of the Internal Revenue Code. The maximum number of
shares of Common Stock that may be granted under stock options to any one
participant during any three calendar year period shall be limited to 2,000,000
shares. Nonqualified stock options granted under the Plan are intended to
qualify for exemption under Section 162(m) of the Internal Revenue Code.
5. Stock Appreciation Rights
The Plan authorizes the Committee to grant awards of stock appreciation
rights. A stock appreciation right entitles the holder, upon exercise, to
receive a payment based on the difference between the base price of the stock
appreciation right and the fair market value of a share of Common Stock on the
date of exercise, multiplied by the number of shares as to which such stock
appreciation right will have been exercised. A stock appreciation right may be
granted either in tandem with an option or without relationship to an option. A
stock appreciation right granted in tandem with an option will have a base price
per share equal to the per share exercise price of the option, will be
exercisable only at such time or times as the related option is exercisable and
will expire no later than the time when the related option expires. Exercise of
the option or the stock appreciation right as to a number of shares results in
the cancellation of the same number of shares under the tandem right. A stock
appreciation right granted without relationship to an option will be exercisable
as determined by the Committee. The base price assigned to a stock appreciation
right granted without relationship to an option shall not be less than 100% of
the fair market value of a share of Common Stock on the date of grant. The
maximum number of shares of Common Stock that may be subject to stock
appreciation rights granted to any one participant during any three calendar
year period shall be limited to 2,000,000 shares. Stock appreciation rights are
payable in cash, in restricted or unrestricted shares of Common Stock, or a
combination thereof, in the discretion of the Committee. Stock appreciation
rights granted under the Plan are intended to qualify for exemption under
Section 162(m) of the Internal Revenue Code.
6. Performance Awards
The Plan authorizes the Committee to grant performance awards, which are
units denominated on the date of grant either in shares of Common Stock
("performance shares") or in specified dollar amounts ("performance units").
Performance awards are payable upon the achievement of performance criteria
established by the Committee at the beginning of the performance period. At the
time of grant, the Committee establishes the number of units, the duration of
the performance period or periods, the applicable performance criteria, and, in
the case of performance units, the target unit value or range of unit values for
the performance awards. At the end of the performance period, the Committee
determines the payment to be made based on the extent to which the performance
goals have been achieved. Performance awards are payable in cash, restricted or
unrestricted shares of Common Stock, phantom stock or options, or a combination
thereof, in the discretion of the Committee.
The Committee may grant performance awards that are intended to qualify
for exemption under Section 162(m) of the Internal Revenue Code, as well as
performance awards that are not intended to so qualify. A Section 162(m)
qualified award may relate to AEP, any subsidiary or any business unit, may be
measured on an absolute or relative-to-peer-group basis, and must be based upon
the performance criteria set forth in the Plan.
The Committee may at any time prior to payment reduce the number of
performance awards earned by any participant for a performance period. The
maximum amount of compensation that may be payable in any one calendar year to
any one participant designated to receive a performance unit award intended to
qualify under Section 162(m) is $15,000,000. The maximum number of performance
share units that may be earned in any one calendar year by any one participant
intended to qualify under Section 162(m) is 400,000 units.
7. Restricted Stock
The Plan authorizes the Committee to make awards of restricted stock. An
award of restricted stock represents shares of Common Stock that are issued
subject to such restrictions on transfer and on incidents of ownership and such
forfeiture conditions as the Committee deems appropriate. The restrictions
imposed upon an award of restricted stock will lapse in accordance with the
vesting requirements specified by the Committee in the award agreement. Such
vesting requirements may be based on the continued employment of the participant
for a specified time period or on the attainment of specified business goals or
performance criteria established by the Committee. The Committee may, in
connection with an award of restricted stock, require the payment of a specified
purchase price. Subject to the transfer restrictions and forfeiture restrictions
relating to the restricted stock award, the participant will otherwise have the
rights of a shareholder of AEP, including all voting and dividend rights, during
the period of restriction unless the Committee determines otherwise at the time
of the grant.
The Committee may grant awards of restricted stock that are intended to
qualify for exemption under Section 162(m) of the Internal Revenue Code, as well
as awards that are not intended to so qualify. An award of restricted stock that
is intended to qualify for exemption under Section 162(m) shall have its vesting
requirements limited to the performance criteria mentioned above under the
heading Performance Awards. The maximum number of shares of Common Stock that
may be subject to awards of restricted stock intended to qualify under Section
162(m) granted to any one participant during any calendar year shall be limited
to 400,000 shares.
8. Phantom Stock
The Plan authorizes the Committee to grant awards of phantom stock. An
award of phantom stock gives the participant the right to receive payment at the
end of a fixed vesting period based on the value of a share of Common Stock at
the time of vesting. Phantom stock units are subject to such restrictions and
conditions to payment as the Committee determines are appropriate. An award of
phantom stock may be granted, at the discretion of the Committee, together with
an award of dividend equivalent rights for the same number of shares covered
thereby. Phantom stock awards are payable in cash, restricted or unrestricted
shares of Common Stock, options, or a combination thereof, in the discretion of
the Committee. The same conditions and limitations applicable to restricted
stock awards are also applicable to phantom stock awards that are intended to
qualify for exemption under Section 162(m).
9. Dividend Equivalents
The Plan authorizes the Committee to grant awards of dividend equivalents.
Dividend equivalent awards entitle the holder to a right to receive cash, shares
of Common Stock, or other property equal in value to dividends paid with respect
to a specified number of shares of Common Stock. Dividend equivalents may be
awarded on a free-standing basis or in connection with another award, and may be
paid currently or on a deferred basis. The Committee may provide at the date of
grant or thereafter that the dividend equivalent award shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional shares of Common Stock, or other investment vehicles as the Committee
may specify, provided that dividend equivalent awards (other than free-standing
dividend equivalent awards) shall be subject to all conditions and restrictions
of the underlying awards to which they relate.
10. Term and Amendment
The Plan has no fixed expiration date but no award may be granted after
April 26, 2015. The Committee will establish expiration and exercise dates on an
award-by-award basis. The Board may amend the Plan at any time, except that
shareholder approval is required for amendments that would either (i) increase
the number of shares of Common Stock reserved for issuance under the Plan or
(ii) allow the grant of options at an exercise price below fair market value or
allow the repricing of options.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses to be paid or incurred, directly and
indirectly, by AEP in connection with the proposed transaction are estimated to
be as follows, except as otherwise indicated:
Cost of printing notice of $ 75,000*
mailing and proxy statement,
proxy card, etc.
Transfer agent fees and expenses, 450,000*
postage reimbursement of brokers'
expenses, etc.
Estimated Commission filing fee 80,000
----------
relating to 1933 Act registration
TOTAL $605,000
========
Other expenses for legal, financial, accounting and clerical services will be
billed at cost by the American Electric Power Service Corporation. Such expenses
are estimated not to exceed $5,000.
In addition, in the event that AEP considers it desirable to do so, it may
employ professional proxy solicitors to assist in the solicitation of proxies
and pay their expenses and compensation for such assistance which, it is
estimated, will not exceed $92,000.
*Represents the total amount of expenses that AEP estimates it will incur in
connection with the solicitation of proxies for the 2005 annual meeting,
including solicitation of proxies and tabulation of votes with respect to the
proposal covered by this Application-Declaration. AEP does not have enough data
to make a reasonable estimate of the incremental costs associated with the
proposal covered by this Application-Declaration, but believes that such
incremental costs would not represent more than approximately 10% of the
estimated amounts indicated.
ITEM 3. APPLICABLE STATUTORY PROVISIONS
AEP considers that Sections 6(a), 7, 9(a), 10, 12(c) and 12(e) of the 1935
Act and Rules 23, 42, 54, 62 and 65 of the Commission thereunder may be
applicable to the proposed transaction.
Compliance with Rule 54
The proposed transaction is also subject to Rule 54. Rule 54 provides
that, in determining whether to approve the issue or sale of any securities for
purposes other than the acquisition of any "exempt wholesale generator" ("EWG")
or "foreign utility company" ("FUCO") or other transactions unrelated to EWGs or
FUCOs, the Commission shall not consider the effect of the capitalization or
earnings of subsidiaries of a registered holding company that are EWGs or FUCOs
if the requirements of Rule 53(a), (b) and (c) are satisfied. Under Rule 53(a),
the Commission shall not make certain specified findings under Sections 7 and 12
in connection with a proposal by a holding company to issue securities for the
purpose of acquiring the securities of or other interest in an EWG, or to
guarantee the securities of an EWG, if each of the conditions in paragraphs
(a)(1) through (a)(4) thereof are met, provided that none of the conditions
specified in paragraphs (b)(1) through (b)(3) of Rule 53 exists. Set forth below
is a discussion of the compliance with Rule 53 for AEP.
AEP consummated the merger with Central and South West Corporation, now
AEP Utilities, Inc. ("CSW"), on June 15, 2000 pursuant to an order dated June
14, 2000 (HCAR No. 35-27186), which further authorized AEP to invest up to 100%
of its consolidated retained earnings, with consolidated retained earnings to be
calculated on the basis of the combined consolidated retained earnings of AEP
and CSW (the "Rule 53(c) Order").
AEP currently meets all of the conditions of Rule 53(a). At September 30,
2004, AEP's "aggregate investment", as defined in Rule 53(a)(1), in EWGs and
FUCOs was approximately $332 million, or about 19.9% of AEP's "consolidated
retained earnings", also as defined in Rule 53(a)(1), for the four quarters
ended September 30, 2004 ($1.675 billion).
In addition, AEP has complied and will continue to comply with the
record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3)
on the use of operating company personnel to render services to EWGs and FUCOs,
and the requirements of Rule 53(a)(4) concerning the submission of copies of
certain filings under the Act to retail rate regulatory commissions. Further,
none of the circumstances described in Rule 53(b)(1) or (3) has occurred or is
continuing.
The circumstances described in Rule 53(b)(2) have occurred. As a result of
the recording of a loss with respect to impairment charges, AEP's consolidated
retained earnings declined for the period ending December 31, 2003. The average
consolidated retained earnings of AEP for the four quarterly periods ended
September 30, 2004 was $1.695 billion, or a decrease of approximately 24.8% from
the Company's average consolidated retained earnings for the four quarterly
periods ended September 30, 2003 of $2.226 billion. In addition, AEP's
"aggregate investment" in EWGs and FUCOs as of September 30, 2004 exceeded 2% of
the total capital invested in utility operations.
In the fourth quarter of 2003, AEP recorded pre-tax impairments of assets
(including goodwill) and investments totaling $1.4 billion that reflected
downturns in energy trading markets, projected long-term decreases in
electricity prices, and other factors. The impairments consisted of $650 million
related to asset impairments, $70 million related to investment value and other
impairment losses, and $711 million related to discontinued operations. Of the
discontinued operations, $577 million was attributable to the impairment of the
fixed-asset carrying value of AEP's two coal-fired generation plants in the
United Kingdom ("U.K. Generation"). AEP recorded a pre-tax impairment of $70
million on certain of its qualifying facilities, as defined under the Public
Utility Regulatory Policies Act of 1978, as amended ("QFs"), in the third
quarter of 2003.
Applicant respectfully submits that AEP meets the requirements of Rule
53(c). If the effect of the capitalization and earnings of EWGs and FUCOs in
which AEP has an ownership interest upon the AEP holding company system were
considered, there would be no basis for the Commission to withhold or deny
approval for the proposal made in this Application-Declaration. The action
requested in the instant filing would not, by itself, or even considered in
conjunction with the effect of the capitalization and earnings of AEP's EWGs and
FUCOs, have a material adverse effect on the financial integrity of the AEP
system, or an adverse impact on AEP's Utility Subsidiaries1, their customers, or
the ability of state commissions to protect such public utility customers. The
Rule 53(c) Order was predicated, in part, upon an assessment of AEP's overall
financial condition which took into account, among other factors, AEP's
consolidated capitalization ratio and the growth trend in AEP retained earnings.
As of December 31, 1999, the most recent period for which financial
statement information was evaluated in the 53(c) Order, AEP's consolidated
capitalization (including CSW on a pro forma basis) consisted of 37.3% common
and preferred equity, 61.3% debt and $335 million principal amount of certain
subsidiary obligated mandatorily redeemable preferred securities of subsidiary
trusts holding solely junior subordinated debentures of such subsidiaries
("Trust Preferred Securities") representing 1.4%.
As of September 30, 2004, AEP's consolidated capitalization consisted of
60.4% debt, 39.6% common and preferred equity (consisting of common stock
representing 39.0% and $133 million principal amount of preferred stock
representing 0.6%).
Since the date of the Rule 53(c) Order, there has been an increase in
AEP's consolidated equity capitalization ratio. In addition, the Utility
Subsidiaries, which will have a significant influence on the determination of
the AEP corporate rating, continue to show strong financial statistics as
measured by the rating agencies.
As of December 31, 1999, Standard and Poor's ("S&P") rating of secured
debt for AEP's Utility Subsidiaries was as follows: Appalachian Power Company,
A; Columbus Southern Power Company, A-; Indiana Michigan Power Company, A-;
Kentucky Power Company, A; Ohio Power Company, A-; AEP Texas Central Company
(formerly Central Power and Light Company), A; Public Service Company of
Oklahoma, AA-; Southwestern Electric Power Company, AA-; and AEP Texas North
Company, A. AEP did not have a long-term debt rating as of December 31, 1999.
As of September 30, 2004, S&P's rating of secured debt for AEP's Utility
Subsidiaries was as follows: Appalachian Power Company, BBB; Columbus Southern
Power Company, BBB; Indiana Michigan Power Company, BBB; Kentucky Power Company,
BBB, Ohio Power Company, BBB, AEP Texas Central Company (formerly Central Power
and Light Company), BBB; Public Service Company of Oklahoma, BBB; Southwestern
Electric Power Company, BBB; and AEP Texas North Company (formerly, West Texas
Utilities Company), BBB.
ITEM 4. REGULATORY APPROVALS
No state or Federal commission, other than the Securities and Exchange
Commission, has jurisdiction over the proposed transaction.
ITEM 5. PROCEDURE
In order to allow time for printing the proxy materials and approximately
40 days' time for the solicitation of proxies before April 26, 2005, the date
fixed for the annual meeting, it is requested, pursuant to Rule 62(d), that the
effective date of this Application-Declaration with respect to the solicitation
of proxies from the holders of shares of Common Stock be accelerated to not
later than March 1, 2005 and that the Commission's notice with respect to this
Application-Declaration include an order permitting the solicitation of proxies.
It is requested, pursuant to Rule 23(c), that the Commission's order
granting and permitting to become effective this Application-Declaration be
issued on or before April 24, 2005. AEP waives any recommended decision by a
hearing officer or by any other responsible officer of the Commission and waives
the 10-day waiting period between the issuance of the Commission's order and the
date it is to become effective, since it is desired that the Commission's order,
when issued, become effective forthwith. AEP consents to the Office of Public
Utility Regulation assisting in the preparation of the Commission's decision
and/or order in this matter, unless the Office opposes the matter covered by
this Application-Declaration.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
The following exhibits are filed as part of this statement:
(a) Exhibits:
A-1 Statements relating to proposal to be included in the 2005 Proxy (to
be filed by amendment).
A-2 Notice of 2005 Annual Meeting and Proxy Statement (to be filed by
amendment).
A-3 Form of proxy card (to be filed by amendment).
B Amended and Restated American Electric Power System 2000 Long-Term
Incentive Plan (to be filed by amendment).
C AEP Registration Statement on Form S-8 relating to the Amended and
Restated American Electric Power System Long-Term Incentive Plan (to
be filed by amendment).
D None.
E None.
F Opinion of Counsel.
G Financial Data Schedule (Incorporated by reference to Exhibit 27 of
the Quarterly Report on Form 10-Q for the quarter ended September
30, 2004).
H Proposed Form of Notice.
(b) Financial statements:
Financial statements of AEP are not filed herewith because they are not
believed to be relevant to the consideration of this Application-Declaration.
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this Application-Declaration
involves a "major federal action" nor do such matters "significantly affect the
quality of the human environment" as those terms are used in section 102(2)(C)
of the National Environmental Policy Act. The transaction that is the subject of
this Application-Declaration will not result in changes in the operation of AEP
that will have an impact on the environment. AEP is not aware of any federal
agency that has prepared or is preparing an environmental impact statement with
respect to the transaction that is the subject of this Application-Declaration.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement 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
February 4, 2005
Exhibit F
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
February 4, 2005
RE: American Electric Power Company, Inc.
Ladies and Gentlemen:
I am an attorney employed by American Electric Power Service Corporation, a
subsidiary of American Electric Power Company, Inc. ("AEP"), a registered
holding company, and have acted as counsel for AEP in connection with the filing
of an Application-Declaration on Form U-1 (the "Declaration"), filed under the
Public Utility Holding Company Act of 1935, as amended (the "Act"), by AEP. In
the Declaration, AEP requests authority under the Act to solicit proxies, to be
voted at the Annual Meeting of Shareholders of the Company to be held on April
26, 2005, with respect to a proposal (the "Proposal") to authorize approval of
the Amended and Restated American Electric Power System 2000 Long-Term Incentive
Plan ("Plan") and to distribute securities under the Plan, including up to
19,200,000 shares of AEP common stock, $6.40 par value per share (the "Common
Stock") (collectively, the "Proposed Transactions").
In this connection, I have examined the Certificate of Incorporation and By-Laws
of the Company and the Plan and have made such other investigations as I deemed
necessary. Based upon the foregoing, and having regard to legal considerations
which I deem relevant, I am of the opinion that, subject to the assumptions and
conditions set forth below:
1. The Company is a corporation validly organized and duly existing under
the laws of the State of New York; and
2. In the event that the Proposal is effected in accordance with the
Declaration, and subject to the Proposal having been duly approved by an
affirmative vote by holders of a majority of the outstanding shares of Common
Stock of the Company entitled to vote at the Annual Meeting, (a) all state laws
applicable to the proposed transaction will have been complied with; (b) the
consummation of the proposed transaction will not violate the legal rights of
the holders of any securities issued by the Company or any associate company
thereof; (c) shares of Common Stock issued and sold by the Company pursuant to
the Plan will be validly issued, full paid and nonassessable, and the holders
thereof will be entitled to the rights and privileges appertaining thereto set
forth in the Certificate of Incorporation; and (d) the Company will legally
acquire any shares of its Common Stock necessary for the operation of the Plan.
The opinions expressed above in respect of the matters described in the
Declaration are subject to the following assumptions or conditions:
a. The Proposed Transactions shall have been duly authorized and
approved to the extent required by state law by the Boards of Directors of
AEP.
b. The Securities and Exchange Commission shall have duly entered an
appropriate order or orders granting and permitting the Declaration to
become effective.
c. The Proposed Transactions shall be consummated in accordance with
any required approvals, authorizations, consents, certificates and orders
of any state commission or regulatory authority and all such required
approvals, authorizations, consents, certificates and orders shall have
been obtained and remain in effect.
I consent to this opinion being filed as an exhibit to the Declaration.
Very truly yours,
/s/ David C. House
David C. House
Counsel for American Electric Power Company, Inc.
Exhibit G
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No. /__________ ___, 2005
In the Matter of
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza
Columbus, OH 43215
(70- )
NOTICE OF PROPOSAL TO ISSUE AND SELL COMMON STOCK PURSUANT TO PROPOSED AMENDED
AND RESTATED AMERICAN ELECTRIC POWER SYSTEM 2000 LONG-TERM INCENTIVE PLAN; ORDER
AUTHORIZING PROXY SOLICITATION
American Electric Power Company, Inc. ("AEP"), a registered holding company, has
filed an application-declaration with this Commission pursuant to Sections 6(a),
7, 9(a), 10, 12(c) and 12(e) of the Public Utility Holding Company Act of 1935
(the "Act") and Rules 23, 42, 54, 62 and 65 under the Act.
AEP seeks authorization to distribute securities under the Amended and Restated
American Electric Power System 2000 Long-Term Incentive Plan (the"Plan"),
including up to 19,200,000 shares of AEP common stock, $6.50 par value per share
(the "Common Stock").
The Plan allows the grant of incentive awards to employees of the AEP System and
to nonemployee members of the Board of Directors. The Plan provides for the
grant of stock options, including incentive stock options and nonqualified stock
options, stock appreciation rights, restricted stock, performance share awards,
phantom stock, and dividend equivalents, as described below. The Human Resources
Committee expects to consider approximately 500 employees for participation in
the 2000 Plan. The number of persons eligible to participate in the Plan and the
number of grantees may vary from year to year.
The shares to be delivered under the Plan will be made available from authorized
but unissued shares and/or shares reacquired by AEP.
Approval of the amendments to the Plan will require the affirmative vote of
holders of a majority of the shares of Common Stock outstanding on the record
date for the annual meeting that will be fixed by the Board of Directors of AEP.
AEP intends to submit the proposal to its shareholders for their approval at the
annual meeting of shareholders to be held on April 26, 2005. In connection
therewith, AEP proposes to solicit proxies from the holders of its outstanding
Common Stock to be voted at the meeting. AEP further requests that the
effectiveness of its declaration with respect to the solicitation be accelerated
as provided in Rule 62.
It is stated that no other state commission and no federal commission, other
than this Commission, has jurisdiction over the proposed transaction.
The Application or Declaration and any amendments thereto are available for
public inspection through the Commission's Office of Public Reference.
Interested persons wishing to comment or request a hearing should submit their
views in writing by February ___, 2005, to the Secretary, Securities and
Exchange Commission, Washington, D.C. 20549, and serve a copy on the applicant
at the address specified above. Proof of service (by affidavit or, in the case
of an attorney at law, by certificate) should be filed with the request. Any
request for a hearing shall identify specifically the issues of fact or law that
are disputed. A person who so requests will be notified of any hearing, if
ordered, and will receive a copy of any notice or order issued in this matter.
After said date, the Application or Declaration, as filed or as it may be
amended, may be permitted to become effective.
It appearing to the Commission that AEP's declaration regarding the proposed
solicitation of proxies should be permitted to become effective forthwith
pursuant to Rule 62:
IT IS ORDERED, that the declaration regarding the proposed solicitation of
proxies be, and it hereby is, permitted to become effective forthwith pursuant
to Rule 62 and subject to the terms and conditions prescribed in Rule 24 under
the Act.
For the Commission, by the Office of Public Utility Regulation, pursuant to
delegated authority.
Jonathan G. Katz
Secretary
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1 Appalachian Power Company ("APCo"), Columbus Southern Power Company ("CSPCo"),
Indiana Michigan Power Company ("I&M"), Kentucky Power Company ("KPCo"), Ohio
Power Company ("OPCo"), AEP Texas Central Company ("TCC"), Public Service
Company of Oklahoma ("PSO"), Southwestern Electric Power Company ("SWEPCo") and
AEP Texas North Company (formerly West Texas Utilities Company) ("TNC"),
collectively, the "Utility Subsidiaries").