UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
AMERICAN ELECTRIC POWER COMPANY, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
Notice of 2001 Annual Meeting . Proxy Statement
American Electric Power
Company, Inc.
1 Riverside Plaza
Columbus, OH 43215
E. Linn Draper, Jr.
Chairman of the Board,
President and
Chief Executive Officer
[LOGO OF AMERICAN ELECTRIC POWER]
March 9, 2001
Dear Shareholder:
This year's annual meeting of shareholders will be held at the Bayfront Plaza
Convention Center, 1901 North Shoreline Boulevard, Corpus Christi, Texas, on
Wednesday, April 25, 2001 at 9:30 a.m.
Your Board of Directors and I cordially invite you to attend.
During the course of the meeting there will be the usual time for discussion of
the items on the agenda and for questions regarding AEP's affairs. Directors
and officers will be available to talk individually with shareholders before
and after the meeting.
Your vote is very important. Shareholders of record can vote in any one of the
following three ways:
. By Mail -- Fill in, sign and date your enclosed proxy card and return it
promptly in the enclosed postage-paid envelope.
. By Telephone -- Call the toll-free telephone number on your proxy card to
vote by phone.
. Via Internet -- Visit the web site on your proxy card to vote via the
Internet.
If your shares are held in the name of a bank, broker or other holder of rec-
ord, you will receive instructions from the holder of record that you must fol-
low in order for you to vote your shares.
If you plan to attend the meeting and are a shareholder of record, please mark
the "Annual Meeting" box on your proxy card or follow the prompts when you vote
if you are voting by telephone or Internet. An admission ticket is included
with the proxy card for each shareholder of record. However, if your shares are
not registered in your own name, please advise the shareholder of record (your
bank, broker, etc.) that you wish to attend. That firm must provide you with
evidence of your ownership on March 6 which will enable you to gain admittance
to the meeting.
Sincerely,
/s/ E. L. Draper, Jr.
NOTICE OF 2001 ANNUAL MEETING
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American Electric Power Company, Inc.
1 Riverside Plaza
Columbus, Ohio 43215
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TIME............... 9:30 a.m. on Wednesday, April 25, 2001.
PLACE.............. Bayfront Plaza Convention Center
1901 North Shoreline Boulevard
Corpus Christi, Texas
ITEMS OF BUSINESS.. (1) To elect 14 directors to hold office until the next
annual meeting and until their successors are duly
elected.
(2) To approve the firm of Deloitte & Touche llp as
independent auditors for the year 2001.
(3) To consider and act on such other matters as may
properly come before the meeting.
RECORD DATE........ Only shareholders of record at the close of business on
March 6, 2001 are entitled to notice of and to vote at the
meeting or any adjournment thereof.
ANNUAL REPORT...... Appendix A to this proxy statement has AEP's audited
financial statements and management's discussion and
analysis of results of operations and financial condition.
AEP's Summary Report to Shareholders contains Dr. Draper's
letter to shareholders, condensed financial statements, a
summary discussion of results of operations and financial
condition, and an independent auditors' report.
PROXY VOTING....... It is important that your shares be represented and voted
at the meeting. Please vote in one of these ways:
(1) MARK, SIGN, DATE AND PROMPTLY RETURN the enclosed
proxy card in the postage-paid envelope.
(2) USE THE TOLL-FREE TELEPHONE NUMBER shown on the proxy
card.
(3) VISIT THE WEB SITE noted on your proxy card to vote
via the Internet.
Any proxy may be revoked at any time prior to its exercise
at the meeting.
March 9, 2001 Susan Tomasky
Secretary
Proxy Statement
March 9, 2001
Proxy and Voting Information
This proxy statement and the accompanying proxy card are to be mailed to
shareholders, commencing on or about March 13, 2001, in connection with the
solicitation of proxies by the Board of Directors of American Electric Power
Company, Inc., 1 Riverside Plaza, Columbus, Ohio 43215, for the annual meeting
of shareholders to be held on April 25, 2001 in Corpus Christi, Texas.
Who Can Vote. Only the holders of shares of Common Stock at the close of
business on March 6, 2001 are entitled to vote at the meeting. Each such
holder has one vote for each share held on all matters to come before the
meeting. On that date, there were 322,083,001 shares of AEP Common Stock,
$6.50 par value, outstanding.
How You Can Vote. Shareholders of record can give proxies by (i) mailing
their signed proxy cards, (ii) calling a toll-free telephone number or (iii)
using the Internet. The telephone and Internet voting procedures are designed
to authenticate shareholders' identities, to allow shareholders to give their
voting instructions and to confirm that shareholders' instructions have been
properly recorded. Instructions for shareholders of record who wish to use the
telephone or Internet voting procedures are set forth on the enclosed proxy
card.
When proxies are returned, the shares represented thereby will be voted by
the persons named on the proxy card or by their substitutes in accordance with
shareholders' directions. The proxies of shareholders who are participants in
the Dividend Reinvestment and Stock Purchase Plan include both the shares reg-
istered in their names and the whole shares held in their Plan accounts on
March 6, 2001. Shareholders are urged to grant or withhold authority to vote
for the nominees for directors listed on the proxy card and to specify their
choice between approval or disapproval of, or abstention with respect to, the
other matter by marking the appropriate boxes on the proxy card. If a proxy
card is signed and returned without choices marked, it will be voted for the
nominees for directors listed on the card and as recommended by the Board of
Directors with respect to other matters.
Revocation of Proxies. A shareholder giving a proxy may revoke it at any
time before it is exercised at the meeting by giving notice of its revocation
to the Company, by executing another proxy dated after the proxy to be re-
voked, or by attending the meeting and voting in person.
How Votes are Counted. Under New York law, abstentions and broker non-votes
do not count in the determination of voting results and have no effect on the
vote. The determination by the shareholders of approval of the auditors is
based on votes "for" and "against" -- with abstentions and broker non-votes
not counted as "against" votes but counted in the determination of a quorum.
Unvoted shares are termed "non-votes" when a nominee holding shares for bene-
ficial owners may not have received instructions from the beneficial owner and
may not have exercised discretionary voting power on certain matters, but with
respect to other matters may have voted pursuant to discretionary authority or
beneficial owner instructions.
Your Vote is Confidential. It is AEP's policy that shareholders be provided
privacy in voting. All proxies, voting instructions and ballots, which iden-
tify shareholders, are held confidential, except as may be necessary to meet
any applicable legal requirements. We direct proxies to an independent third-
party tabulator, who receives, inspects, and tabulates them. Voted proxies and
ballots are not seen by nor reported to AEP except (i) in aggregate number or
to determine if (rather than how) a shareholder has voted, (ii) in cases where
shareholders write comments on their proxy cards, or (iii) in a contested
proxy solicitation.
Multiple Copies of Annual Report or Proxy Statement to Shareholders. Secu-
rities and Exchange Commission rules provide that more than one annual report
or proxy statement need not be sent to the same address, if the recipient
agrees. If more than one annual report or proxy statement is being sent to
your address, at your request, mailing of the duplicate copy to the account
you select will be discontinued. You may so indicate in the space provided on
the proxy card or follow the prompts when you vote if you are a shareholder of
record voting by telephone or Internet. If you wish to resume receiving sepa-
rate annual reports or proxy statements at the same address, you may call our
transfer agent, EquiServe--First Chicago Trust Division, at 800-328-6955 or
write to them at P.O. Box 2500, Jersey City, NJ 07303-2500. The change will be
effective 30 days after receipt. To receive a separate copy of the annual re-
port or proxy statement, contact AEP Shareholder Direct at 800-551-1AEP(1237).
1. Election of Directors
Fourteen directors are to be elected by a plurality of the votes cast at the
meeting to hold office until the next annual meeting and until their succes-
sors have been elected. AEP's By-Laws provide that the number of directors of
AEP shall be such number, not less than 9 nor more than 17, as shall be deter-
mined from time to time by resolution of AEP's Board of Directors.
On January 24, 2001, the Board of Directors adopted a resolution reducing
the number of directors by one, effective on the date of the annual meeting.
Dr. Morris Tanenbaum, a director, will be retiring from the Board and not
standing for reelection.
The 14 nominees named on pages 3-7 were selected by the Board of Directors
on the recommendation of the Committee on Directors and Corporate Governance
of the Board. The proxies named on the proxy card or their substitutes will
vote for the Board's nominees, unless instructed otherwise. Shareholders may
withhold authority to vote for any or all of such nominees on the proxy card.
All of the Board's nominees were elected by the shareholders at the 2000 an-
nual meeting, except for Messrs. Brooks, Howell, Powell and Shockley and Drs.
Carlton and Sandor. These six former Central and South West Corporation direc-
tors were named to the Board when the merger with CSW was consummated on June
15, 2000. It is not expected that any of the nominees will be unable to stand
for election or be unable to serve if elected. In the event that a vacancy
in the slate of nominees should occur before the meeting, the proxies may be
voted for another person nominated by the Board of Directors or the number of
directors may be reduced accordingly.
Cumulative Voting. Shareholders have the right to vote cumulatively for the
election of directors. This means that in the voting at the meeting each
shareholder, or his proxy, may multiply the number of his shares by the number
of directors to be elected and then cast the resulting total number of votes
for a single nominee, or distribute such votes on the ballot among any two or
more nominees as desired. The proxies designated by the Board of Directors
will not cumulate the votes of the shares they represent.
Biographical Information. The following brief biographies of the nominees
include their principal occupations, ages on the date of this statement, ac-
counts of their business experience and names of certain companies of which
they are directors. Data with respect to the number of shares of AEP's Common
Stock, options exercisable within 60 days and stock-based units beneficially
owned by each of them appears on page 23.
2
Nominees For Director
E. R. Brooks Received his B.S. (electrical en-
gineering) from Texas Tech Univer-
[PHOTO] sity in 1961. Chairman and chief
executive officer of Central and
Retired Chairman and Chief South West Corporation (February
Executive Officer, Central 1991-June 2000). Served as CSW's
and South West Corporation, president from February 1991 to
Granbury, Texas July 1997. A director of Hubbell,
Inc. A trustee of Baylor Health
Age 63 Care Center, Dallas, Texas, Har-
din-Simmons University, Abilene,
Texas, and Texas Tech University,
Lubbock, Texas.
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Donald M. Carlton Received his B.A. from the Univer-
sity of St. Thomas in Houston in
[PHOTO] 1958 and Ph.D. (organic chemistry)
from the University of Texas at
Retired President and Chief Austin in 1962. President and
Executive Officer, Radian chairman of Radian Corporation, an
International LLC, engineering and technology firm,
Austin, Texas from 1969 through December 1995.
Named president and chief execu-
Age 63 tive officer of Radian Interna-
tional LLC in January 1996 and re-
tired as of December 31, 1998. A
director of National Instruments
and Valero Energy Corporation and
trustee of Smith Barney Investment
Series Trust.
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John P. DesBarres Received an associate degree in
electrical engineering from
[PHOTO] Worcester Junior College in 1960
and completed the Harvard Business
Investor/Consultant, School Program for Management De-
Rancho Palos Verdes, velopment in 1975 and the Massa-
California chusetts Institute of Technology
Sloan School Senior Executive Pro-
Age 61 gram in 1984. Joined Sun Company
(petroleum and natural gas) in
Director since 1997 1963, holding various positions
until 1979, when he was elected
president of Sun Pipe Line Company
(1979-1988) (crude oil/products).
Chairman, president and chief ex-
ecutive officer of Sante Fe Pa-
cific Pipelines, Inc. (1988-1991)
(petroleum products pipeline).
President and chief executive of-
ficer (1991-1995) and chairman
(1992-1995) of Transco Energy Com-
pany (natural gas). A director of
Texas Eastern Products Pipeline
Company, which is the general
partner of TEPPCO Partners, L.P.
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3
Nominees For Director -- continued
E. Linn Draper, Jr. Received his B.A. and B.S. (chemi-
cal engineering) degrees from Rice
[PHOTO] University in 1964 and 1965, re-
spectively, and Ph.D. (nuclear en-
Chairman, President and gineering) in 1970 from Cornell
Chief Executive Officer University. Joined Gulf States
of AEP and AEP Service Utilities Company, an unaffiliated
Corporation; Chairman electric utility, in 1979. Chair-
and Chief Executive Of- man of the board, president and
ficer of other major AEP chief executive officer of Gulf
subsidiaries States (1987-1992). Elected presi-
dent of AEP and president and
Age 59 chief operating officer of AEP
Service Corporation in March 1992
Director since 1992 and chairman of the board and
chief executive officer of AEP and
all of its major subsidiaries in
April 1993. A director of BCP Man-
agement, Inc., which is the gen-
eral partner of Borden Chemicals
and Plastics L.P.
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Robert W. Fri Holds a B.A. from Rice University
and an M.B.A. from Harvard Busi-
[PHOTO] ness School. Associated with
McKinsey & Company, Inc., manage-
Director, National Museum ment consulting firm, from 1963 to
of Natural History 1971 and again from 1973 to 1975,
(Smithsonian Institution), being elected a principal in the
Washington, D.C. firm in 1968. From 1971 to 1973,
served as first Deputy Administra-
Age 65 tor of the Environmental Protec-
tion Agency, becoming Acting Ad-
Director since 1995 ministrator in 1973. Was first
Deputy and then Acting Administra-
tor of the Energy Research and De-
velopment Administration from 1975
to 1977. From 1978 to 1986 was
President of Energy Transition
Corporation. President and direc-
tor of Resources for the Future
(non-profit research organization)
from 1986 to 1995 and became se-
nior fellow emeritus in 1996. As-
sumed his present position with
the National Museum of Natural
History in 1996.
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4
Nominees For Director -- continued
William R. Howell Received his B.B.A. from the Uni-
versity of Oklahoma in 1958.
[PHOTO] Joined J.C. Penney Company (major
retailer) in 1958 and held various
Chairman Emeritus, managerial positions. Chairman of
J. C. Penney Company, Inc. the board of J. C. Penney Company
Dallas, Texas from 1983 to January 1997 and also
chief executive officer from 1983
Age 65 to January 1996. Chairman emeritus
of J. C. Penney Company (1997-
present). A director of Exxon Mo-
bil Corporation, Pfizer Inc.,
Bankers Trust, Halliburton Company
and Williams.
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Lester A. Hudson, Jr. Received a B.A. from Furman Uni-
versity in 1961, an M.B.A. from
[PHOTO] the University of South Carolina
in 1965 and Ph.D. (industrial man-
Professor of Business agement) from Clemson University
Strategy, Clemson University, in 1997. Joined Dan River Inc.
Greenville, South Carolina (textile fabric manufacturer) in
1970 and was elected president and
Age 61 chief operating officer in 1981
and chief executive officer in
Director since 1987 1987. Resigned from Dan River in
1990. Joined WundaWeve Carpets,
Inc. (carpet manufacturer) as
chairman, president and chief ex-
ecutive officer in 1990. Chairman
of WundaWeve in 1991. Vice chair-
man of WundaWeve (1993-1995).
Chairman, H&E Associates (invest-
ment firm), 1995-1998. Assumed his
present position with Clemson Uni-
versity in 1998. A director of
American National Bankshares Inc.
and Greenville Hospital System
Foundation and trustee of The
Sirrine Foundation and Furman Uni-
versity Advisory Council.
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Leonard J. Kujawa Received his B.B.A. in 1954 and
M.B.A. in 1955 from the University
[PHOTO] of Michigan. Joined Arthur Ander-
sen LLP (accounting and consulting
International Energy firm) in 1957 and became a partner
Consultant, Atlanta, in 1968, specializing in the elec-
Georgia tric and telecommunications indus-
tries. Worldwide Director Energy
Age 68 and Telecommunications (1985-
1995). Retired in 1995. Interna-
Director since 1997 tional energy consultant to his
former firm and other global com-
panies. A director of Schweitzer-
Mauduit International, Inc.
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5
Nominees For Director -- continued
James L. Powell Received his bachelor's degree
from Rice University in 1951. In-
[PHOTO] volved in ranching and investments
in Fort McKavett, Texas, since
Ranching and Investments, 1956. Member of University of
Fort McKavett, Texas Texas System Chancellor's Council,
Rice University Associates and
Age 71 Board of Visitors of University of
Texas M.D. Anderson Hospital. An
advisory director of First Na-
tional Bank, Mertzon, Texas.
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Richard L. Sandor Received his B.A. from City Uni-
versity of New York, Brooklyn Col-
[PHOTO] lege, and Ph.D. (economics) from
the University of Minnesota.
Chairman and Chief Chairman and chief executive offi-
Executive Officer, cer of Environmental Financial
Environmental Financial Products LLC (develops and trades
Products LLC, Chicago, in new environmental, financial
Illinois and commodity markets) since March
1993. Second vice chairman of the
Age 59 Chicago Board of Trade (1997-
1998). A director of Nextera En-
terprises, Inc.
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Thomas V. Shockley, III Received his B.S. (electrical en-
gineering) from Texas A&I Univer-
[PHOTO] sity in 1967 and M.S. (electrical
engineering) from the University
Vice Chairman of AEP and of Texas at Austin in 1969. Execu-
AEP Service Corporation; tive vice president (1990-1997)
Vice President of other and president and chief operating
major AEP subsidiaries officer (1997-2000) of Central and
South West Corporation. Elected
Age 55 vice chairman of the board of AEP
(July 2000) and of AEP Service
Corporation (June 2000) and vice
president of major AEP subsidiar-
ies (June 2000).
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Donald G. Smith Joined Roanoke Electric Steel Cor-
poration (steel manufacturer) in
[PHOTO] 1957. Held various positions with
Roanoke Electric Steel before be-
Chairman of the Board, ing named president and treasurer
President, Chief Executive in 1985, chief executive officer
Officer and Treasurer of in 1986 and chairman of the board
Roanoke Electric Steel in 1989.
Corporation, Roanoke,
Virginia
Age 65
Director since 1994
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6
Nominees For Director -- continued
Linda Gillespie Stuntz Holds an A.B. from Wittenberg Uni-
versity (1976) and J.D. from Har-
[PHOTO] vard Law School (1979). Private
practice of law (1979-1981). U.S.
Partner, Stuntz, Davis & House of Representatives, Commit-
Staffier, P.C., attorneys, tee on Energy and Commerce: Asso-
Washington, D.C. ciate Minority Counsel, Subcommit-
tee on Fossil and Synthetic Fuels
Age 46 (1981-1986) and Minority Counsel
and Staff Director (1986-1987).
Director since 1993 Private practice of law (1987-
1989). U.S. Department of Energy
(1989-1993): Acting Deputy Secre-
tary (January 1992-July 1992) and
Deputy Secretary (July 1992-Janu-
ary 1993). Returned to the private
practice of law in March 1993. A
director of Schlumberger Limited.
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Kathryn D. Sullivan Received her B.S. from the Univer-
sity of California and Ph.D. from
[PHOTO] Dalhousie University. NASA space
shuttle astronaut (1978-1993).
President and Chief Executive Chief Scientist at the National
Officer, COSI Columbus, Oceanic and Atmospheric Adminis-
Columbus, Ohio tration (1993-1996). Became presi-
dent and chief executive officer
Age 49 of Columbus' science museum COSI
(Center of Science & Industry) in
Director since 1997 1996. U.S. Naval Reserve Officer.
A director of McDermott Interna-
tional, Inc. and Abercrombie &
Fitch Co.
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Dr. Draper and Mr. Shockley are
directors of certain subsidiaries
of AEP with one or more classes of
publicly held preferred stock or
debt securities and other subsidi-
aries of AEP.
Related Transactions
Dr. Draper's son is a partner in
the law firm of Winston & Strawn
which AEP retained during 2000 for
matters primarily relating to the
restart of the Cook Nuclear Plant.
Dr. Draper's son has not been
involved with any AEP legal matters.
7
AEP's Board of Directors and Committees
Under New York law, AEP is managed under the direction of the Board of Direc-
tors. The Board establishes broad corporate policies and authorizes various
types of transactions, but it is not involved in day-to-day operational de-
tails. During 2000, the Board held eight regular and seven special meetings.
The Board has seven standing committees and the table below provides mem-
bership and meeting information for each of them. The functions of the commit-
tees are described in the paragraphs following the table.
BOARD COMMITTEES
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DIRECTOR Directors
and Corporate
Corporate Public Human Nuclear
Audit Governance Policy Executive Finance Resources Oversight
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Mr. Brooks X
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Dr. Carlton X (Chair) X X
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Mr. DesBarres X X X X (Chair)
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Dr. Draper X (Chair)
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Mr. Fri X X X (Chair) X
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Mr. Howell X X X
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Dr. Hudson X X (Chair) X X
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Mr. Kujawa X X X
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Mr. Powell X X
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Dr. Sandor X X X
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Mr. Shockley
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Mr. Smith X X X
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Ms. Stuntz X X X X (Chair) X
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Dr. Sullivan X X X
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Dr. Tanenbaum X X X X (Chair) X
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2000 Meetings 7 3 1 0 4 6 3
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During 2000, except for Mr. Howell, no incumbent director attended fewer
than 75% of the aggregate of the total number of meetings of the Board of Di-
rectors and the total number of meetings held by all committees on which he or
she served.
The Audit Committee oversees, and reports to the Board concerning, the gen-
eral policies and practices of AEP and its subsidiaries with respect to ac-
counting, financial reporting, and internal auditing and financial controls.
It also maintains a direct exchange of information between the Board and AEP's
independent accountants and reviews possible conflict of interest situations
involving directors.
The Board of Directors has adopted a written charter for the Audit Commit-
tee and it is attached as Exhibit A to this proxy statement.
The members of the Audit Committee are independent as defined by the rules
of the New York Stock Exchange.
8
The Committee on Directors and Corporate Governance is responsible for:
1. Recommending the size of the Board within the boundaries imposed by the By-
Laws.
2. Recommending selection criteria for nominees for election or appointment to
the Board.
3. Conducting independent searches for qualified nominees and screening the
qualifications of candidates recommended by others.
4. Recommending to the Board for its consideration one or more nominees for ap-
pointment to fill vacancies on the Board as they occur and the slate of nom-
inees for election at the annual meeting.
5. Reviewing and making recommendations to the Board with respect to the com-
pensation of directors and corporate governance.
The Committee on Directors and Corporate Governance will consider share-
holder recommendations of candidates to be nominated as directors of the Compa-
ny. All such recommendations must be in writing and addressed to the Secretary
of the Company. By accepting a shareholder recommendation for consideration,
the Committee on Directors and Corporate Governance does not undertake to adopt
or take any other action concerning the recommendation, or to give the propo-
nent its reasons for not doing so.
The Corporate Public Policy Committee is responsible for examining AEP's
policies on major public issues affecting the AEP System, including environmen-
tal, work force diversity, industry change and other matters, as well as estab-
lished System policies which affect the relationship of AEP and its subsidiar-
ies to their service areas and the general public; for reporting periodically
and on request to the Board and providing recommendations to the Board on such
policy matters; and for counseling AEP management on any such policy matters
presented to the Committee for consideration and study.
The Executive Committee is empowered to exercise all the authority of the
Board of Directors, subject to certain limitations prescribed in the By-Laws,
during the intervals between meetings of the Board. Meetings of the Executive
Committee are convened only in extraordinary circumstances.
The Finance Committee monitors and reports to the Board with respect to the
capital requirements and financing plans and programs of AEP and its subsidiar-
ies including, among other things, reviewing and making such recommendations as
it considers appropriate concerning the short and long-term financing plans and
programs of AEP and its subsidiaries and the implementation of the same.
The Human Resources Committee is responsible for:
1. Reviewing executive compensation policies and plans and, as appropriate,
recommending changes to the Board.
2. Reviewing salaries and other compensation and benefits paid by AEP and its
subsidiaries to Board members who are AEP officers or employees of any of
its subsidiaries, and for recommending to the Board for approval the amount
of salary and other compensation and benefits to be paid or accrued by AEP
and/or any of its subsidiaries during the ensuing year to each such person.
3. Reviewing and approving compensation and benefits for the AEP Service Corpo-
ration officers who hold the position of Senior Vice President or higher of-
fice.
4. Evaluating AEP's hiring, development, promotional and succession planning
practices for those management positions described in (2) and (3) above and
recommending changes as appropriate.
The Nuclear Oversight Committee is responsible for overseeing and reporting
to the Board with respect to the management and operation of AEP's nuclear gen-
eration.
9
Directors Compensation and Stock Ownership Guidelines
Annual Retainers and Meeting Fees. Directors who are officers of AEP or em-
ployees of any of its subsidiaries do not receive any compensation, other than
their regular salaries and the accident insurance coverage described below,
for attending meetings of AEP's Board of Directors. The other members of the
Board receive an annual retainer of $25,000 for their services, an additional
annual retainer of $3,500 for each Committee that they chair, a fee of $1,200
for each meeting of the Board and of any Committee that they attend (except a
meeting of the Executive Committee held on the same day as a Board meeting),
and a fee of $1,200 per day for any inspection trip or conference.
Deferred Compensation and Stock Plan. The Deferred Compensation and Stock
Plan for Non-Employee Directors permits non-employee directors to choose to
receive up to 100 percent of their annual Board retainer in shares of AEP Com-
mon Stock and/or units that are equivalent in value to shares of Common Stock
("Stock Units"), deferring receipt by the non-employee director until termina-
tion of service or for a period that results in payment commencing not later
than five years thereafter. AEP Common Stock is distributed and/or Stock Units
are credited to directors, as the case may be, when the retainer is payable,
and are based on the closing price of the Common Stock on the payment date.
Amounts equivalent to cash dividends on the Stock Units accrue as additional
Stock Units. Payment of Stock Units to a director from deferrals of the re-
tainer and dividend credits is made in cash or AEP Common Stock, or a combina-
tion of both, as elected by the director.
Stock Unit Accumulation Plan. The Stock Unit Accumulation Plan for Non-Em-
ployee Directors annually awards 750 Stock Units to each non-employee director
as of the first day of the month in which the non-employee director becomes a
member of the Board. Amounts equivalent to cash dividends on the Stock Units
accrue as additional Stock Units. Stock Units are paid to the director in cash
upon termination of service unless the director has elected to defer payment
for a period that results in payment commencing not later than five years
thereafter.
Insurance. AEP maintains a group 24-hour accident insurance policy to pro-
vide a $1,000,000 accidental death benefit for each director. The current pol-
icy, effective September 1, 2000 through September 1, 2001, has a premium of
$11,500 and AEP expects to renew this coverage. In addition, AEP pays each di-
rector (excluding officers of AEP or employees of any of its subsidiaries) an
amount to provide for the federal and state income taxes incurred in connec-
tion with the maintenance of this coverage ($440 for 2000).
Central and South West Corporation Programs. Mr. Powell, as a former CSW
director, is enrolled in a medical and dental program formerly offered by CSW
to its non-employee directors. AEP is continuing this program, pursuant to the
terms of the merger with CSW, for those CSW directors who had previously
elected to participate. Mr. Powell pays a portion of the cost of his coverage.
Upon Mr. Powell's termination of service with the Board, he will be eligible
to receive retiree medical and dental benefits coverage.
AEP is also continuing a memorial gift program for former CSW directors and
executive officers who had been previously participating in this program. The
six former CSW directors who are members of AEP's Board are participants. Un-
der this program, AEP makes donations in a director's name to up to three
charitable organizations in an aggregate amount of up to $500,000, payable by
AEP upon such person's death. AEP maintains corporate-owned life insurance
policies to fund the program. The annual premiums paid by AEP are based on
pooled risks and averaged $13,621 per participant for 2000.
Stock Ownership Guidelines. AEP's Board of Directors considers stock owner-
ship in AEP by management to be of great importance. Such ownership enhances
management's commitment to the future of AEP and further aligns management's
interests with those of AEP's shareholders. In keeping with this philosophy,
the Board has adopted minimum stock ownership guidelines for non-employee di-
rectors. The target for each non-employee director is 2,000 shares of AEP Com-
mon Stock and/or Stock Units, with such ownership to be acquired by the end of
the third year of service.
10
For further information as to the guidelines for AEP's executive officers, see
the Board Human Resources Committee Report on Executive Compensation below un-
der the caption Stock Ownership Guidelines.
Insurance
The directors and officers of AEP and its subsidiaries are insured, subject to
certain exclusions, against losses resulting from any claim or claims made
against them while acting in their capacities as directors and officers. The
American Electric Power System companies are also insured, subject to certain
exclusions and deductibles, to the extent that they have indemnified their di-
rectors and officers for any such losses. Such insurance is provided by Asso-
ciated Electric & Gas Insurance Services, Energy Insurance Mutual, Clarendon
National Insurance Company, CNA, Great American Insurance Company, Royal-Sun
Alliance, Zurich American Insurance Company, Zurich UK, and The Federal Insur-
ance Company, effective January 1, 2001 through December 31, 2001, and pays up
to an aggregate amount of $275,000,000 on any one claim and in any one policy
year. The total annual cost for the nine policies is $1,244,066.
Fiduciary liability insurance provides coverage for AEP System companies,
their directors and officers, and any employee deemed to be a fiduciary or
trustee, for breach of fiduciary responsibility, obligation, or duties as im-
posed under the Employee Retirement Income Security Act of 1974. This cover-
age, provided by Associated Electric & Gas Insurance Services, The Federal In-
surance Company, and Zurich American Insurance Company, was renewed, effective
July 1, 2000 through June 30, 2003, for a cost of $355,350. It provides
$100,000,000 of aggregate coverage with a $500,000 deductible for each loss.
2. Approval of Auditors
On the recommendation of the Audit Committee, the Board of Directors has ap-
pointed the accounting firm of Deloitte & Touche LLP as independent auditors
of AEP for the year 2001, subject to approval by the shareholders at the an-
nual meeting. Deloitte & Touche LLP is considered to be the firm best quali-
fied to perform this important function because of its ability and the famil-
iarity of its personnel with AEP's affairs. It and predecessor firms have been
AEP's auditors since 1911.
Representatives of Deloitte & Touche LLP will be present at the meeting and
will have an opportunity to make a statement if they desire to do so. They
also will be available to answer appropriate questions.
Aggregate fees billed to AEP and its consolidated subsidiaries for services
rendered by Deloitte & Touche LLP and its consulting affiliate for the year
ended December 31, 2000, were:
Audit Fees.......................................................... $2,958,000
Financial Information Systems Design and Implementation Fees........ -0-
All Other Fees...................................................... 6,178,000
----------
Total............................................................. $9,136,000
==========
The Audit Committee has considered whether the provision of services other
than audit services by Deloitte & Touche LLP and its consulting affiliate is
compatible with maintaining that firm's independence and the Committee be-
lieves that this provision of services is compatible with maintaining Deloitte
& Touche LLP's independence.
Vote Required. Approval of this proposal requires the affirmative vote of
holders of a majority of the shares present in person or by proxy at the meet-
ing.
Your Board of Directors recommends a vote FOR approval of Deloitte & Touche
LLP as independent auditors for 2001.
Audit Committee Report
The Audit Committee reviews AEP's financial reporting process on behalf of the
Board of Directors. Management has the primary responsibility for the finan-
cial statements and the reporting process, including the system of internal
controls.
In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that
AEP's consolidated financial statements were prepared in accordance with gen-
erally accepted accounting principles,
11
and the Committee has reviewed and discussed the consolidated financial state-
ments with management and the independent auditors. The Committee discussed
with the independent auditors matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication With Audit Committees).
In addition, the Committee has discussed with the independent auditors, the
auditor's independence from AEP and its management, including the matters in
the written disclosures required by the Independence Standards Board Standard
No. 1 (Independence Discussions With Audit Committees).
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in AEP's Annual Report on Form 10-K
for the year ended December 31, 2000, for filing with the Securities and Ex-
change Commission.
Audit Committee Members
Donald M. Carlton, Chair Lester A. Hudson, Jr.
John P. DesBarres Richard L. Sandor
Robert W. Fri Kathryn D. Sullivan
Other Business
The Board of Directors does not intend to present to the meeting any business
other than the election of directors and the approval of auditors.
If any other business not described herein should properly come before the
meeting for action by the shareholders, the persons named as proxies on the
enclosed card or their substitutes will vote the shares represented by them in
accordance with their best judgment. At the time this proxy statement was
printed, the Board of Directors was not aware of any other matters that might
be presented.
12
Executive Compensation
The following table shows for 2000, 1999 and 1998 the compensation earned by
the chief executive officer and the four other most highly compensated
executive officers (as defined by regulations of the Securities and Exchange
Commission) of AEP at December 31, 2000.
Summary Compensation Table
Annual Long-Term
Compensation Compensation
----------------- ------------------------
Awards Payouts
---------- -------------
Securities
Underlying All Other
Salary Bonus Options LTIP Compensation
Name and Principal Position Year ($) ($)(1) (#) Payouts($)(1) ($)(2)
--------------------------- ---- ------- --------- ---------- ------------- ------------
E. Linn Draper, Jr. -- 2000 850,000 485,775 700,000 -0- 106,699
Chairman of the board, 1999 820,000 208,280 -0- -0- 103,218
president and chief 1998 780,000 194,376 -0- 345,906 104,941
executive officer of the
Company and the Service
Corporation; chairman
and chief executive
officer of other
subsidiaries
Paul D. Addis -- 2000 500,000 6,500,000 -0- -0- 44,547
Executive vice
president -
wholesale/energy
services and director of
the Service Corporation;
president and director
of AEP Energy Services,
Inc. (3)
William J. Lhota -- 2000 415,000 173,927 200,000 -0- 62,394
Executive vice 1999 400,000 71,120 -0- -0- 55,690
president - energy 1998 380,000 82,859 -0- 134,266 56,493
delivery and director of
the Service Corporation;
president, chief
operating officer and
director of other
subsidiaries
Donald M. Clements, 2000 390,000 163,449 200,000 -0- 45,979
Jr. -- Executive vice 1999 375,000 66,675 -0- -0- 38,484
president - corporate 1998 350,000 76,317 -0- 60,047 39,040
development and director
of the Service
Corporation; president
and director of AEP
Resources, Inc.
Henry W. Fayne -- 2000 365,000 152,972 200,000 -0- 47,074
Executive vice 1999 315,000 56,007 -0- -0- 34,885
president - finance and 1998 290,000 63,234 -0- 61,555 34,124
analysis and director of
the Service Corporation;
vice president and chief
financial officer of the
Company; vice president
and director of other
subsidiaries
--------
(1) Amounts in the Bonus column reflect awards under the Senior Officer Annual
Incentive Compensation Plan and, in the case of Mr. Addis, the AEP Energy
Services Incentive Compensation Plan. Payments are made in the first
quarter of the succeeding fiscal year for performance in the year
indicated.
Amounts in the Long-Term Compensation -- Payouts column reflect performance
share unit targets earned under the AEP 2000 Long-Term Incentive Plan (and
predecessor Performance Share Incentive Plan) for three-year performance
periods.
See below under Long-Term Incentive Plans -- Awards in 2000 and page 21 for
additional information.
13
(2) Amounts in the All Other Compensation column include (i) AEP's matching
contributions under the AEP Retirement Savings Plan and the AEP Supplemen-
tal Savings Plan, a non-qualified plan designed to supplement the AEP Sav-
ings Plan, (ii) subsidiary companies director fees, (iii) vehicle allow-
ance, and (iv) split-dollar insurance. In August 2000, AEP discontinued
providing vehicles for its executive officers and began paying them a
monthly allowance. Split-dollar insurance represents the present value of
the interest projected to accrue for the employee's benefit on the current
year's insurance premium paid by AEP. Cumulative net life insurance premi-
ums paid are recovered by AEP at the later of retirement or 15 years. De-
tail of the 2000 amounts in the All Other Compensation column is shown be-
low.
Item Dr. Draper Mr. Addis Mr. Lhota Mr. Clements Mr. Fayne
---- ---------- --------- --------- ------------ ---------
Savings Plan Matching
Contributions.......... $ 3,187 $ 3,687 $ 5,100 $ 3,544 $ 5,100
Supplemental Savings
Plan Matching
Contributions.......... 22,313 11,313 7,350 8,156 5,850
Subsidiaries Directors
Fees................... 13,060 3,805 11,405 3,900 13,060
Vehicle Allowance....... 6,000 4,000 8,143 4,983 5,000
Split-Dollar Insurance.. 62,139 21,742 30,396 25,396 18,064
-------- ------- ------- ------- -------
Total All Other
Compensation........... $106,699 $44,547 $62,394 $45,979 $47,074
======== ======= ======= ======= =======
(3) No 1999 and 1998 compensation information is reported for Mr. Addis because
he was not an executive officer in these years.
Option Grants in 2000
Individual Grants
------------------------------------------------------
Percent of
Number of Total
Securities Options
Underlying Granted to Grant Date
Options Employees Exercise or Base Expiration Present
Name Granted (#)(1) in 2000 (2) Price ($/Sh) Date Value ($)(3)
---- -------------- ----------- ---------------- ---------- ------------
E. L.
Draper,
Jr........ 700,000 11.6 35.625 09-20-2010 4,119,675
W. J.
Lhota..... 200,000 3.3 35.625 09-20-2010 1,177,050
D. M.
Clements,
Jr........ 200,000 3.3 35.625 09-20-2010 1,177,050
H. W.
Fayne..... 200,000 3.3 35.625 09-20-2010 1,177,050
--------
(1) Options were granted on September 20, 2000, pursuant to the AEP 2000 Long-
Term Incentive Plan. All options granted on this date have an exercise
price equal to the closing price of AEP Common Stock on the New York Stock
Exchange Composite Transactions Tape on September 20, 2000. These options
will vest in equal increments, annually, over a three-year period beginning
on January 1, 2002. Options also fully vest upon termination due to retire-
ment after one year from the grant date or due to disability or death and
expire five years thereafter, or on their scheduled expiration date if ear-
lier. Options expire upon termination of employment for reasons other than
retirement, disability or death, unless the Human Resources Committee de-
termines that circumstances warrant continuation of the options for up to
five years. Options are nontransferable.
(2) A total of 6,046,000 options were granted in 2000.
(3) Value was calculated using the Black-Scholes option valuation model. The
actual value, if any, ultimately realized depends on the market value of
AEP's Common Stock at a future date. Significant assumptions are shown be-
low:
Stock Price Volatility 24.75% Dividend Yield 6.02%
Risk-Free Rate of Return 6.50% Option Term 10 years
14
Aggregated Option Exercises in 2000 and Year-End Option Values
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options at
Shares Value Options at 12-31-00 (#) 12-31-00 ($)(2)
Acquired on Realized ------------------------- -------------------------
Name Exercise (#)(1) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
E. L. Draper, Jr........ -- -- 0 700,000 0 7,612,500
W. J. Lhota............. -- -- 0 200,000 0 2,175,000
D. M. Clements, Jr...... -- -- 0 200,000 0 2,175,000
H. W. Fayne............. -- -- 0 200,000 0 2,175,000
--------
(1) None of these officers exercised options during 2000.
(2) Based on the difference between the closing price of AEP Common Stock on
the New York Stock Exchange Composite Transactions Tape on December 29,
2000 ($46.50) and the option exercise price. "In-the-money" means the mar-
ket price of the stock is greater than the exercise price of the option on
the date indicated.
Long-Term Incentive Plans -- Awards In 2000
Each of the awards set forth below establishes performance share unit tar-
gets, which represent units equivalent to shares of Common Stock, pursuant to
the Company's 2000 Long-Term Incentive Plan. Since it is not possible to pre-
dict future dividends and the price of AEP Common Stock, credits of performance
share units in amounts equal to the dividends that would have been paid if the
performance share unit targets were established in the form of shares of Common
Stock are not included in the table.
The ability to earn performance share unit targets is tied to achieving
specified levels of total shareholder return ("TSR") relative to the S&P Elec-
tric Utility Index. The Human Resources Committee may, at its discretion,
reduce the number of performance share unit targets otherwise earned. In accor-
dance with the performance goals established for the periods set forth below,
the threshold, target and maximum awards are equal to 20%, 100% and 200%, re-
spectively, of the performance share unit targets. No payment will be made for
performance below the threshold.
Payments of earned awards are deferred in the form of phantom stock units
(equivalent to shares of AEP Common Stock) until the officer has met the equiv-
alent stock ownership target discussed in the Human Resources Committee Report.
Once officers meet and maintain their respective targets, they may elect either
to continue to defer or to receive further earned awards in cash and/or Common
Stock.
Estimated Future Payouts of
Performance Share Units Under
Performance Non-Stock Price-Based Plan
Number of Period Until ---------------------------------
Performance Maturation Threshold Target Maximum
Name Share Units or Payout (#) (#) (#)
---- ----------- ------------ --------- ---------- ----------
E. L. Draper, Jr........ 19,988 2000-2002 3,998 19,988 39,976
P. D. Addis............. 3,135 2000-2002 627 3,135 6,270
W. J. Lhota............. 7,157 2000-2002 1,431 7,157 14,314
D. M. Clements, Jr...... 6,725 2000-2002 1,345 6,725 13,450
H. W. Fayne............. 6,294 2000-2002 1,259 6,294 12,588
Retirement Benefits
The American Electric Power System Retirement Plan provides pensions for all
employees of AEP System companies (except for employees covered by certain col-
lective bargaining agreements or by the Central and South West Corporation Cash
Balance Retirement Plan), including the executive officers of AEP. The Retire-
ment Plan is a noncontributory defined benefit plan.
The Retirement Plan was amended effective January 1, 2001. The amendment
provides
15
that the final average pay benefit accrual formula currently in effect termi-
nates on December 31, 2010 and, effective January 1, 2001, a cash balance ac-
crual formula is added to the Retirement Plan. Employees participating in the
Retirement Plan on December 31, 2000 accrue retirement benefits under both
formulas and employees hired after December 31, 2000 accrue retirement bene-
fits solely under the cash balance formula. Employees accruing benefits under
both formulas may choose either the final average pay formula or the cash bal-
ance formula for their accrued benefit at the time employment is terminated.
The accrued benefit earned by an employee under the final average pay formula
as of December 31, 2010, the date the final average pay formula will be dis-
continued, is the minimum benefit an employee can receive from the Retirement
Plan after that time.
The following table shows the approximate annual annuities that would be
payable to employees in certain higher salary classifications under the final
average pay formula, assuming retirement at age 65 after various periods of
service.
Pension Plan Table
Years of Accredited Service
Highest Average -------------------------------------------------------
Annual Earnings 15 20 25 30 35 40
--------------- -------- -------- -------- -------- -------- ----------
$ 400,000 $ 93,345 $124,460 $155,575 $186,690 $217,805 $ 244,465
500,000 117,345 156,460 195,575 234,690 273,805 307,130
600,000 141,345 188,460 235,575 282,690 329,805 369,795
700,000 165,345 220,460 275,575 330,690 385,805 432,460
900,000 213,345 284,460 355,575 426,690 497,805 557,790
1,200,000 285,345 380,460 475,575 570,690 665,805 745,785
1,700,000 405,345 540,460 675,575 810,690 945,805 1,059,110
The amounts shown in the table are the straight life annuities payable un-
der the Retirement Plan final average pay formula without reduction for the
joint and survivor annuity. Retirement benefits listed in the table are not
subject to any deduction for Social Security or other offset amounts. The re-
tirement annuity is reduced 3% per year in the case of retirement between ages
55 and 62. If an employee retires after age 62, there is no reduction in the
retirement annuity.
Compensation upon which retirement benefits under the final average pay
formula are based, for the executive officers named in the Summary Compensa-
tion Table above (except for Mr. Addis), consists of the average of the 36
consecutive months of the officer's highest aggregate salary and Senior Offi-
cer Annual Incentive Compensation Plan awards, shown in the Salary and Bonus
columns, respectively, of the Summary Compensation Table, out of the officer's
most recent 10 years of service. In the case of Mr. Addis, compensation upon
which his retirement benefits are based consists of salary and annual AEP En-
ergy Services Incentive Compensation Plan awards up to a maximum of 30% of
salary.
Under the cash balance formula each employee has an account to which dollar
amount credits are allocated annually based on a percentage of the employee's
compensation. Compensation for the cash balance formula includes annual salary
and annual incentive compensation plan awards up to a maximum total compensa-
tion of $1,000,000. The applicable percentage is determined by age and years
of service with AEP as of December 31 of each year (or as of the employee's
termination date, if earlier). The following table shows the percentage used
to determine dollar amount credits at the age and years of service indicated:
Sum of Age
Plus
Years of Applicable
Service Percentage
---------- ----------
<30 3.0%
30-39 3.5%
40-49 4.5%
50-59 5.5%
60-69 7.0%
70 or more 8.5%
16
To transition from the final average pay formula to the cash balance formu-
la, the employee's account under the cash balance formula was credited with an
opening balance using a number of factors.
The estimated annual annuities at age 65 under the cash balance formula
payable to the executive officers named in the Summary Compensation Table are:
Annual
Name Benefit
---- --------
E. L. Draper, Jr. ..................................................... $945,000
P. D. Addis............................................................ 438,000
W. J. Lhota............................................................ 469,000
D. M. Clements, Jr. ................................................... 351,000
H. W. Fayne............................................................ 329,000
These amounts are based on the following assumptions:
. Salary amounts shown in the Salary column for calendar year 2000 are used
with no subsequent adjustments in future years plus annual incentive
awards at the 2000 target level.
. Conversion of the lump-sum cash balance to a single life annuity at age
65, based on an interest rate of 5.78% and the 1983 Group Annuity Mortal-
ity Table.
AEP maintains a supplemental retirement plan which provides for the payment
of:
. Retirement benefits that are not payable due to limitations imposed by
Federal tax law on benefits paid by qualified plans.
. Supplemental retirement benefits provided by individual agreements with
certain AEP employees.
The supplemental retirement plan was amended to provide for supplemental
benefits under both the final average pay formula and the cash balance formu-
la. Retirement Plan benefits shown above include all supplemental retirement
benefits.
Dr. Draper and Messrs. Addis and Clements have individual agreements with
AEP which provide them with supplemental retirement benefits that credit them
with years of service in addition to their years of service with AEP as fol-
lows: Dr. Draper, 24 years; Mr. Clements, 15 years; and Mr. Addis, 18.5 years.
The agreements each provide that these supplemental retirement benefits are
reduced by pension entitlements from plans sponsored by prior employers.
As of December 31, 2000, for the executive officers named in the Summary
Compensation Table, the number of years of service applicable for retirement
benefit calculation purposes under either the final average pay formula or the
cash balance formula were as follows: Dr. Draper, 32 years; Mr. Addis, 21.5
years; Mr. Lhota, 35 years; Mr. Clements, 21 years; and Mr. Fayne, 25 years.
The years of service for Dr. Draper and Messrs. Addis and Clements include
years of service provided by their respective agreements with AEP described in
the preceding paragraph.
Six AEP System employees (including Messrs. Lhota and Fayne) whose pensions
may be adversely affected by amendments to the Retirement Plan made as a re-
sult of the Tax Reform Act of 1986 are eligible for certain supplemental re-
tirement benefits. Such payments, if any, will be equal to any reduction oc-
curring because of such amendments. Assuming retirement in 2001 of the
executive officers named in the Summary Compensation Table, none of them would
receive any supplemental benefits.
AEP made available a voluntary deferred-compensation program in 1986, which
permitted certain members of AEP System management to defer receipt of a por-
tion of their salaries. Under this program, a participant was able to defer up
to 10% annually over a four-year period of his or her salary, and receive sup-
plemental retirement or survivor benefit payments over a 15-year period. The
amount of supplemental retirement payments received is dependent upon the
amount deferred, age at the time the deferral election was made, and number of
years until the participant retires. The following table sets forth, for the
executive officers named in the Summary Compensation Table, the amounts of an-
nual deferrals and, assuming retirement at age 65, annual supplemental retire-
ment payments under the 1986 program.
1986 Program
--------------------------------
Annual Amount of
Supplemental
Annual Amount Retirement
Deferred Payment
Name (4-Year Period) (15-Year Period)
---- --------------- ----------------
H. W. Fayne.................................... $9,000 $95,400
17
Severance Plan and Change-In-Control Agreements
Severance Plan. In connection with the merger with Central and South West
Corporation, AEP's Board of Directors adopted a severance plan on February 24,
1999, effective March 1, 1999, that includes Messrs. Addis, Lhota, Clements
and Fayne. The severance plan provides for payments and other benefits if, at
any time before June 15, 2002 (the second anniversary of the merger consumma-
tion date), the officer's employment is terminated (i) by AEP without "cause"
or (ii) by the officer because of a detrimental change in responsibilities or
a reduction in salary or benefits. Under the severance plan, the officer will
receive:
. A lump sum payment equal to three times the officer's annual base salary
plus target annual incentive under the Senior Officer Annual Incentive
Compensation Plan.
. Maintenance for a period of three additional years of all medical and
dental insurance benefits substantially similar to those benefits to
which the officer was entitled immediately prior to termination, reduced
to the extent comparable benefits are otherwise received.
. Outplacement services not to exceed a cost of $30,000 or use of an office
and secretarial services for up to one year.
AEP's obligation for the payments and benefits under the severance plan is
subject to the waiver by the officer of any other severance benefits that may
be provided by AEP. In addition, the officer agrees to refrain from the dis-
closure of confidential information relating to AEP.
Change-in-Control Agreements. AEP has change-in-control agreements with Dr.
Draper and Messrs. Addis, Lhota, Clements and Fayne. If there is a "change-in-
control" of AEP and the employee's employment is terminated by AEP or by the
employee for reasons substantially similar to those in the severance plan,
these agreements provide for substantially the same payments and benefits as
the severance plan with the following additions:
. Three years of service credited for purposes of determining non-qualified
retirement benefits.
. Transfer to the employee of title to AEP's automobile then assigned to
the employee.
. Payment, if required, to make the employee whole for any excise tax im-
posed by Section 4999 of the Internal Revenue Code.
"Change-in-control" means:
. The acquisition by any person of the beneficial ownership of securities
representing 25% or more of AEP's voting stock.
. A change in the composition of a majority of the Board of Directors under
certain circumstances within any two-year period.
. Approval by the shareholders of the liquidation of AEP, disposition of
all or substantially all of the assets of AEP or, under certain circum-
stances, a merger of AEP with another corporation.
18
Board Human Resources Committee Report
on Executive Compensation
The Human Resources Committee of the Board of Directors regularly reviews
executive compensation policies and practices and evaluates the performance of
management in the context of the Company's performance. None of the members of
the Committee is or has been an officer or employee of any AEP System company
or receives remuneration from any AEP System company in any capacity other
than as a director. See page 9.
The Human Resources Committee recognizes that the executive officers are
charged with managing a $55 billion, multi-state electric utility with inter-
national investments during challenging times and with addressing many diffi-
cult and complex issues.
AEP's executive compensation program is designed to maximize shareholder
value, to support the implementation of the Company's business strategy and to
improve both corporate and personal performance. The Committee's compensation
policies supporting this program are:
. To pay in a manner that motivates both short and long term performance,
focuses on meeting specified corporate goals and promotes the long term
interests of shareholders.
. To place a significant amount of compensation for senior executives at
risk, in the form of variable incentive compensation instead of fixed or
base pay with much of this risk similar to the risk experienced by other
AEP shareholders.
. To establish compensation opportunities that enhance the Company's abil-
ity to attract, retain, reward, motivate and encourage the development
of exceptionally knowledgeable, highly qualified and experienced execu-
tives.
. To target compensation levels that are reflective of current market
practices in order to maintain a stable, successful management team.
In carrying out its responsibilities, the Committee utilizes a nationally
recognized independent compensation consultant to obtain information and provide
recommendations relating to changing industry compensation practices and
programs.
The Committee also considers management's initiatives in response to the
impact of increased competition and other significant changes in the rapid re-
structuring of the electric utility industry. It is the Committee's opinion
that, in this constantly changing environment, Dr. Draper and the senior man-
agement team continue to develop and implement strategies effectively to posi-
tion the Company for the future. This includes the Company's development of
unregulated business activities, proposals and actions taken in connection
with the industry's transition to competition, establishment of an interna-
tional energy trading organization and the merger with Central and South West
Corporation. The success of these efforts and their benefits to the Company
cannot be precisely measured in advance, but the Committee is convinced they
are vital to the Company's long-term success.
Stock Ownership Guidelines. The Board of Directors, upon the Committee's
recommendation, underscored the importance of aligning executive and share-
holder interests by adopting in December 1994 stock ownership guidelines for
senior management participants receiving performance share awards. The Commit-
tee and senior management believe that linking a significant portion of an ex-
ecutive's current and potential future net worth to the Company's success, as
reflected in the stock price and dividends paid, gives the executive a stake
similar to that of the Company's owners and further encourages long term man-
agement for the benefit of those owners.
Under the guidelines, the target ownership of AEP Common Stock is directly
related to the officer's corporate position with the greatest ownership target
for the chief executive officer. The targets for the CEO and the other four
officers named in the Summary Compensation Table are 45,000 shares and 15,000
shares, respectively. Each officer is expected to achieve the ownership target
within a five-year period.
19
Common Stock equivalents earned through the Senior Officer Annual Incentive
Compensation Plan, AEP Energy Services Incentive Compensation Plan and AEP 2000
Long-Term Incentive Compensation Plan, described below, are included in deter-
mining compliance with the ownership targets. As of January 1, 2001, Dr. Draper
and all of the other officers named in the Summary Compensation Table have met
their ownership requirements within the specified time period. See the table on
page 23 for actual ownership amounts.
Components of Executive Compensation
Base Salary. When reviewing base salaries, the Committee considers pay prac-
tices used by other electric utilities and industry in general. In addition,
the Committee considers the respective positions held by the executive offi-
cers, their levels of responsibility, performance and experience, and the rela-
tionship of their base salaries to the base salaries of other AEP managers and
employees.
For compensation comparison purposes, the Human Resources Committee uses
certain comparably sized and complex electric utility companies in the S&P
Electric Utility Index, which is the peer group used in the Comparison of Five
Year Cumulative Total Return graph in this proxy statement. The size and com-
plexity of AEP places it above the median of its comparative group. However,
because our policy is to place more emphasis on incentive compensation, we tar-
get executive officer base salaries somewhat below the level of our position in
the comparative group. Base salary levels in 2000 for the CEO and next four
most highly compensated executive officers of AEP named in the Summary Compen-
sation Table approximated the median of the comparative group consistent with
our policy to place more emphasis on incentive compensation. In establishing
base salary levels in that range, the Human Resources Committee considers the
competitiveness of AEP's entire compensation package.
Base salaries are adjusted, as appropriate, and reviewed annually to reflect
individual and corporate performance and consistency with compensation changes
within the Company and the compensation peer group of other electric utilities.
The Committee meets without the presence of Dr. Draper, chairman, president
and chief executive officer, to evaluate his performance and compensation and
reports on that evaluation to all outside directors of the Board. After full
discussion, the outside directors then determine Dr. Draper's base salary.
Annual Incentive. The primary purpose of annual incentive compensation is to
motivate senior managers to meet and exceed annual objectives which are part of
the long term strategic plan in order to maximize shareholder value.
The Senior Officer Annual Incentive Compensation Plan (SOIP) provides a
variable, performance-based portion of the executive officers' total compensa-
tion except in the case of Mr. Addis. Mr. Addis does not participate in the
SOIP; however, he does participate in the AEP Energy Services Incentive Compen-
sation Plan and receives a discretionary distribution from the annual bonus
pool that is funded as a percentage of pre-tax operating income associated with
energy and other trading activities for which Mr. Addis is responsible. Each
officer's annual incentive compensation is set forth in the Bonus column of the
Summary Compensation Table.
SOIP participants are assigned an annual target award expressed as a per-
centage of their base salary for the period. In January 2000, the Committee es-
tablished targets as follows: Dr. Draper, 75%; and the other executive officers
named in the compensation table (other than Mr. Addis), 55%. Actual awards can
vary from 0-200% of the target award based on performance.
SOIP awards are based on the following preestablished performance criteria:
. Total investor return.
. Return on stockholder equity.
. Average price of power sold to AEP's retail customers compared with
other utilities.
. Safety.
For 2000, AEP performance merited an award of approximately 76%.
20
To more closely align the financial interests of the executive officers
with the Company's shareholders, SOIP and Energy Services Incentive Plan par-
ticipants may elect to defer their awards, with the deferrals treated as if
invested in Common Stock of the Company, although no stock is actually pur-
chased. Dividend equivalents are credited during the deferral period.
Long-Term Incentive. The primary purpose of longer term, equity based, in-
centive compensation is to motivate senior managers to maximize shareholder
value by linking a portion of their compensation directly to shareholder re-
turn.
Long-term incentive awards are made under the AEP 2000 Long-Term Incentive
Plan. The plan provides a list of measurements and incentives from which the
Committee may select those which provide the most effective incentives at any
given time as the Company pursues its strategies and plans. In 2000, for the
executive officers other than Mr. Addis, AEP's long term incentive compensa-
tion program consisted of grants of stock options and performance share units.
Prior to 2000, grants of performance share units were made under the Perfor-
mance Share Incentive Plan.
Stock Options
In September 2000, the Committee granted stock options to executive offi-
cers other than Mr. Addis (as described in the table Option Grants in 2000).
This initial grant was structured to provide a special incentive to achieve
the benefits upon which the merger between AEP and CSW was based. It is not
expected that additional options will be awarded to these persons before 2003.
Stock options granted to the executive officers, when combined with base
salaries plus annual incentive payments and the value of performance share
units that these officers may potentially earn at target, are set by the Com-
mittee so that total compensation is intended to fall at the median range paid
by AEP's electric utility comparator group for median performance. The number
of options granted is based on the Black-Scholes option pricing model.
Mr. Addis was not granted options because he participates in the AEP Energy
Services Phantom Equity Plan that, depending on performance, may pay an award in
2002 based on the value of Energy Services determined as a multiple of after-tax
operating income.
Performance Shares
The Committee has annually established performance share unit targets which
are earned based on AEP's subsequent three-year total shareholder returns mea-
sured relative to the S&P peer utilities. In January 2000, the Committee es-
tablished targets as a percentage of then base salaries as follows: Dr. Drap-
er, 75%; the other executive officers named in the Summary Compensation Table
(other than Mr. Addis), 55%; and Mr. Addis, 20%. In accordance with Mr. Addis'
employment agreement, his target was 20% because of his participation in the
AEP Energy Services Phantom Equity Plan. The performance share awards which
will ultimately be paid to participants for a performance period can range
from 0-200% of the target.
AEP's total shareholder return for 1998-2000 ranked twenty-first relative
to the S&P peer utilities and, as a result, none of the performance share unit
targets originally established for that period (and dividend credits) were
earned.
Payments of earned performance share awards are deferred in the form of
phantom stock units (equivalent to shares of AEP Common Stock). Such deferrals
continue until termination of employment or, if so elected by the recipient,
with payments commencing not later than five years thereafter. Once the offi-
cers meet and maintain their respective equivalent stock ownership targets
discussed above, they may then elect either to continue to defer or to receive
further earned performance share awards in cash and/or Common Stock. When
awards are deferred, dividend equivalents are credited as though reinvested in
additional phantom stock units. The performance share unit targets and a fur-
ther description of performance share awards are shown under Long-Term Incen-
tive Plans--Awards in 2000.
Tax Policy on Deductibility of Compensation
The Committee has considered the impact of Section 162(m) of the Internal
Revenue
21
Code, which provides a limit on the deductibility of compensation in excess of
$1,000,000 paid in any year to the Company's chief executive officer or any of
its other four executive officers named in the Summary Compensation Table. It
is the Committee's expectation, when consistent with sound executive compensa-
tion principles and the needs of the Company, that compensation would be qual-
ified for deductibility where appropriate.
Award payments under the AEP 2000 Long-Term Incentive Plan have been
structured to be exempt from the deduction limit because they are made
pursuant to a shareholder approved performance driven plan.
Award payments under the SOIP and AEP Energy Services Incentive Compensa-
tion and Phantom Equity plans are not eligible for the performance-based ex-
emption and the deduction limit does apply to such awards. Since Dr. Draper
has deferred his 2000 SOIP award to dates past his retirement from the Company
(providing an exemption from the deduction limit), the Committee has not
deemed it necessary at this time to qualify compensation paid pursuant to the
SOIP for deductibility under Section 162(m). The Committee may decide to do so
in the future.
Except for Mr. Addis, no named officer in the Summary Compensation Table
had taxable compensation paid in 2000 in excess of the deduction limit and all
such compensation was fully deductible. The Committee intends to continue to
evaluate the impact of this Code restriction.
Human Resources Committee Members
Morris Tanenbaum, Chair Lester A. Hudson, Jr.
John P. DesBarres Donald G. Smith
William R. Howell
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AEP, S&P 500 INDEX & S&P ELECTRIC UTILITY INDEX**
[INDEX CHART APPEARS HERE]
AEP S&P 500 S&P ELECTRIC
------ ------- ------------
1995 100.00 100.00 100.00
1996 107.48 122.96 99.97
1997 142.65 163.98 126.55
1998 136.80 210.85 147.36
1999 99.37 255.21 123.65
2000 153.69 231.91 191.23
Assumes $100 Invested on Jan- * Total Return Assumes
uary 1, 1996 in AEP Common Reinvestment of Divi-
Stock, S&P 500 Index and S&P dends
Electric Utility Index ** Fiscal Year Ending De-
cember 31
The total return performance shown on the graph above is not necessarily
indicative of future performance.
22
Share Ownership of Directors and Executive Officers
The following table sets forth the beneficial ownership of AEP Common Stock and
stock-based units as of January 1, 2001 for all directors as of the date of
this proxy statement, all nominees to the Board of Directors, each of the per-
sons named in the Summary Compensation Table and all directors and executive
officers as a group. Unless otherwise noted, each person had sole voting and
investment power over the number of shares of Common Stock and stock-based
units of AEP set forth across from his or her name. Fractions of shares and
units have been rounded to the nearest whole number.
Stock
Name Shares Units(a) Total
---- ------ -------- -----
P. D. Addis................................. 10,032(b)(c)(d) 22,572 32,604
E. R. Brooks................................ 151,895(b)(e) 785 152,680
D. M. Carlton............................... 6,431 785 7,216
D. M. Clements, Jr.......................... 2,354(b) 16,497 18,851
J. P. DesBarres............................. 5,000(c) 1,854 6,854
E. L. Draper, Jr............................ 9,535(b)(c) 106,181 115,716
H. W. Fayne................................. 5,590(b)(f) 11,163 16,753
R. W. Fri................................... 2,000 2,560 4,560
W. R. Howell................................ 1,692 785 2,477
L. A. Hudson, Jr............................ 1,853(d) 4,566 6,419
L. J. Kujawa................................ 1,326(d) 4,305 5,631
W. J. Lhota................................. 18,854(b)(c)(f) 16,249 35,103
J. L. Powell................................ 4,020 785 4,805
R. L. Sandor................................ 1,092 785 1,877
T. V. Shockley, III......................... 93,965(b)(d)(e) -0- 93,965
D. G. Smith................................. 2,500 2,967 5,467
L. G. Stuntz................................ 1,500(c) 4,618 6,118
K. D. Sullivan.............................. -0- 3,477 3,477
M. Tanenbaum................................ 1,720 4,517 6,237
All directors, nominees and executive
officers as a group (21 persons)........... 420,794(f)(g) 210,322 631,116
--------
(a) This column includes amounts deferred in stock units and held under AEP's
various director and officer benefit plans.
(b) Includes the following numbers of share equivalents held in the AEP Retire-
ment Savings Plan and, for Messrs. Brooks and Shockley, the CSW Retirement
Savings Plan (in the case of the AEP Retirement Savings Plan such persons
have sole voting power, but the investment/disposition power is subject to
the terms of the Savings Plan): Mr. Addis, 377; Mr. Brooks, 41,833; Mr.
Clements, 2,354: Dr. Draper, 3,947; Mr. Fayne, 5,014; Mr. Lhota, 16,674;
Mr. Shockley, 6,234; and all executive officers, 89,803.
(c) Includes the following numbers of shares held in joint tenancy with a fam-
ily member: Mr. Addis, 5,623; Mr. DesBarres, 5,000; Dr. Draper, 5,588; Mr.
Lhota, 2,180; and Ms. Stuntz, 300.
(d) Includes the following numbers of shares held by family members over which
beneficial ownership is disclaimed: Mr. Addis, 4,032; Dr. Hudson, 750; Mr.
Kujawa, 26; and Mr. Shockley, 496.
(e) Includes the following numbers of shares attributable to options exercis-
able within 60 days: Mr. Brooks, 65,105 and Mr. Shockley, 49,938.
(f) Does not include, for Messrs. Fayne and Lhota, 85,231 shares in the Ameri-
can Electric Power System Educational Trust Fund over which Messrs. Fayne
and Lhota share voting and investment power as trustees (they disclaim ben-
eficial ownership). The amount of shares shown for all directors and execu-
tive officers as a group includes these shares.
(g) Represents less than 1% of the total number of shares outstanding.
23
Share Ownership of Certain Beneficial Owners
Set forth below are the only persons or groups known to AEP as of December 31,
2000, with beneficial ownership of five percent or more of AEP Common Stock.
AEP Shares
------------------------
Amount of
Name, Address of Beneficial Percent of
Beneficial Owner Ownership Class
----------------- ------------- ----------
AXA Financial, ..................................... 28,478,272(a) 8.9%
Inc., parent holding company of Alliance Capital
Management L.P. and The Equitable Life Assurance
Society of the U.S.
1290 Avenue of the Americas
New York, NY 10104
AXA Rosenberg (U.S.)
4 Orinda Way
Orinda, CA 94563
Capital Research and................................. 17,455,480(b) 5.4%
Management Company
333 South Hope St.
Los Angeles,
CA 90071
--------
(a) Based on the Schedule 13G jointly filed with the SEC, AXA, as a parent
holding company of AXA Rosenberg (U.S.) and AXA Financial, Inc., parent
holding company of Alliance Capital Management L.P., an investment advis-
er, and The Equitable Life Assurance Society of the U.S., an insurance
company and an investment adviser, reported that they have sole voting
power for 14,861,006 shares, shared voting power for 3,299,463 shares,
sole dispositive power for 28,370,072 shares and shared dispositive power
for 108,200 shares.
(b) Based on the Schedule 13G, Capital Research and Management Company, an in-
vestment adviser, reported that it has sole dispositive power for
17,455,480 shares. Capital Research disclaims beneficial ownership.
Shareholder Proposals
To be included in AEP's proxy statement and form of proxy for the 2002 annual
meeting of shareholders, any proposal which a shareholder intends to present
at such meeting must be received by AEP, attention: Susan Tomasky, Secretary,
at AEP's office at 1 Riverside Plaza, Columbus, Ohio 43215 by November 9,
2001.
For any proposal intended to be presented by a shareholder without inclu-
sion in AEP's proxy statement and form of proxy for the 2002 annual meeting,
the proxies named in AEP's form of proxy for that meeting will be entitled to
exercise discretionary authority on that proposal unless AEP receives notice
of the matter by February 8, 2002. However, even if notice is timely received,
the proxies may nevertheless be entitled to exercise discretionary authority
on the matter to the extent permitted by Securities and Exchange Commission
regulations.
Solicitation Expenses
The costs of this proxy solicitation will be paid by AEP. Proxies will be so-
licited principally by mail, but some telephone, telegraph or personal solici-
tations of holders of AEP Common Stock may be made. Any officers or employees
of the AEP System who make or assist in such solicitations will receive no
compensation, other than their regular salaries, for doing so. AEP will re-
quest brokers, banks and other custodians or fiduciaries holding shares in
their names or in the names of nominees to forward copies of the proxy-solic-
iting materials to the beneficial owners of the shares held by them, and AEP
will reimburse them for their expenses incurred in doing so at rates pre-
scribed by the New York Stock Exchange.
24
Exhibit A
Audit Committee Charter
The Audit Committee of the Board of Directors shall be responsible for
overseeing and reporting to the Board with respect to the general policies and
practices of the Company (and the subsidiaries of the Company included in the
consolidated financial statements of the Company) with respect to accounting,
financial reporting, internal auditing and financial controls; and for main-
taining, by means of regularly scheduled meetings and otherwise, a direct ex-
change of information between the Board and the Company's internal auditors
and independent accountants. The Audit Committee's composition shall meet the
requirements of the audit committee policy of the New York Stock Exchange.
Without limiting the generality of the preceding paragraph, the Audit Com-
mittee's duties shall include: (1) reviewing and approving the terms of the
engagement of the Company's independent accountants with such accountants, in-
cluding the scope and general extent of their planned review, the general na-
ture of the audit procedures which will be utilized, any non-audit services
performed or planned, and the compensation to be paid to such accountants for
all audit and other services; (2) assuring annual receipt of a formal written
statement from the independent accountants delineating all relationships be-
tween the independent accountants and the Company and discussing any such re-
lationships and impact on their independence and recommending that the Board
take appropriate action in response to the independent outside accountants'
report to satisfy itself of their independence; (3) reviewing with the
Company's independent accountants, with the manager of internal audits, with
the chief accounting officer of the Company and with other appropriate person-
nel of the Company and its subsidiaries, the general policies and procedures
of the Company with respect to internal auditing, accounting and financial
controls, and the adequacy of such policies and procedures; (4) reviewing any
reports of material weaknesses in internal controls prepared by the Company's
independent accountants or internal auditors, and the action taken by the ap-
propriate personnel of the Company and its subsidiaries in response to any
suggestions contained in such reports; (5) reviewing with the Company's inde-
pendent accountants, with the chief accounting officer of the Company, and
with other appropriate personnel of the Company and its subsidiaries any pro-
posed accounting changes which may have significant impact on the Company's
financial statements; (6) reviewing with the Company's independent accoun-
tants, upon completion of their audit, the annual financial statements of the
Company and of the Company and its subsidiaries consolidated, any reports or
opinions that such accountants propose to render in connection therewith, and
any other matters in connection therewith that the independent accountants or
the Committee consider relevant, including the independent accountants' quali-
tative judgments about the appropriateness of the accounting principles used
and clarity of the financial disclosure practices; (7) reviewing with the in-
dependent accountants the Company's interim financial results to be included
in the Company's quarterly reports to be filed with the Securities and Ex-
change Commission prior to the filing of the Form 10-Q; (8) recommending the
appointment or discharge of the independent accountants to the Board of Direc-
tors; (9) supervising on a continuing basis the implementation of the AEP Cor-
porate Compliance Program, including reporting by the chief compliance offi-
cer, the development of specific programs of legal compliance in various
important areas of concern to the operations of the AEP System companies, and
the designation of successor chief compliance officers; (10) reviewing possi-
ble conflict of interest situations involving directors; and (11) directing
and supervising special investigations of the affairs of the Company, includ-
ing the authority to retain independent counsel and other professionals to as-
sist in the investigation.
In the discharge of its duties: (1) the Audit Committee shall hold such
meetings as it deems necessary but shall meet a minimum of four times prior to
the next annual meeting of the shareholders of the Company; (2) at the request
of the Company's independent accountants, chief accounting officer, or manager
of internal audits the chair of the Audit Committee shall convene a meeting of
the Committee to consider any matter that the person requesting the meeting
believes should be brought to the attention of the Committee, the Board of Di-
rectors or the shareholders; and (3) the Audit Committee may require any offi-
cer or employee of the Company or its subsidiaries to furnish it with any in-
formation, documents or reports that it may specify and to appear before it in
person.
A-1
[LOGO OF AMERICAN ELECTRIC POWER]
[GRAPHIC] PRINTED WITH SOY INK
[LOGO] RECYCLED PAPER
AMERICAN ELECTRIC POWER COMPANY, INC.
Proxy Solicited on Behalf of the Board of Directors
for the Annual Meeting to be held April 25, 2001
---------------------------------------------------------------------------
The undersigned appoints E. Linn Draper, Jr., Henry W. Fayne and Susan
Tomasky, and each of them, acting by a majority if more than one be
present, attorneys and proxies of the undersigned, with power of
substitution, to represent the undersigned at the annual meeting of
shareholders of American Electric Power Company, Inc. to be held on April
25, 2001, and at any adjournments thereof, and to vote all shares of Common
P Stock of the Company which the undersigned is entitled to vote on all
matters coming before said meeting.
R
Trustee's Authorization. The undersigned authorizes Fidelity Management
O Trust Company to vote all shares of Common Stock of the Company credited to
the undersigned's account under the American Electric Power System
X Retirement Savings Plan at the annual meeting in accordance with the
instructions on the reverse side.
Y
Election of Directors. Nominees: 01. E.R. Brooks, 02. D.M. Carlton, 03. J.
P. DesBarres, 04. E.L. Draper, Jr., 05.
R.W. Fri, 06. W.R. Howell, 07. L.A.
Hudson, Jr., 08. L.J. Kujawa, 09. J.L.
Powell, 10. R.L. Sandor, 11. T.V.
Shockley, III 12. D.G. Smith, 13. L. G.
Stuntz, 14. K.D. Sullivan.
You are encouraged to specify your choices by marking the appropriate boxes
(SEE REVERSE SIDE), but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations.
---------------------------------------------------------------------------
Comments:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(If you have written in the above space, please mark the
"Special Attention" box on the other side of this card.)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH HERE /\
[AEP LOGO]
Admission Ticket
-------------------------------------
Annual Meeting of Shareholders Agenda
Wednesday, April 25, 2001 . 9:30 a.m. . Introduction and Welcome
Bayfront Plaza Convention Center . Election of Directors
1901 North Shoreline Boulevard . Ratification of Auditors
Corpus Christi, Texas . Chairman's Report
. Comments and Questions
from Shareholders
Directions to Bayfront Plaza Convention |
Center (361) 883-8543 |
|
Take I-37 South to Shoreline Boulevard (dead end |
at Corpus Christi Bay). | [MAP LOGO]
|
Turn left (North) at Shoreline and proceed for |
approximately 3/4 of a mile. |
|
The Bayfront Convention Center is on the left (West), |
just before the dead end at the Art Museum. |
If you plan to attend the annual meeting, please bring this admission ticket
with you.
Please mark your
[X] votes as in this
example
The proxies are directed to vote as specified below and in their discretion on
all other matters coming before the meeting. If no direction is made, the
proxies will vote FOR all nominees listed on the reverse side and FOR Proposal
2.
The Board of Directors recommends a vote FOR all nominees for election as
directors and FOR Proposal 2.
1. Election of FOR WITHHELD 2. Approval of FOR AGAINST ABSTAIN
Directions [ ] [ ] Auditors. [ ] [ ] [ ]
(see Reverse).
For, except vote withheld from the following nominee(s).
SPECIAL ATTENTION
Mark here if you have written a comment on [ ]
reverse
ANNUAL REPORT AND PROXY STATEMENT
Mark here to discontinue annual report and proxy
statement mailing for this account (for multiple- [ ]
account holders only).
ANNUAL MEETING
Mark here if you plan to attend the annual [ ]
meeting.
Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
----------------------------------------------------, 2001
----------------------------------------------------, 2001
SIGNATURE(S) DATE
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/\ FOLD AND DETACH HERE /\
Your vote is important. You may vote the shares held in this account in any one
of the following three ways:
. Vote by mail. Complete, date, sign and mail your proxy card (above) in
the enclosed postage-paid envelope or, otherwise, return it to AEP, P.O.
Box 8673, Edison, New Jersey 08818.
. Vote by phone. Call toll-free, 1-877-PRX-VOTE (1-877-779-8683)
24 hours a day, 7 days a week from the U.S. and Canada to vote your
proxy.
. Vote by internet. Access the Web site at http://www.eproxyvote.com/aep
24 hours a day, 7 days a week.
If you vote by phone or via the Internet, please have your social security
number and proxy card available. The sequence of numbers appearing in the box
above, just below the perforation, and your social security number are necessary
to verify your vote. A phone or Internet vote authorizes the named proxies in
the same manner as if you marked, signed and returned this proxy card.
If you vote by phone or vote using the Internet, there is no need for you to
mail back your proxy card.
THANK YOU FOR VOTING
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