-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ov22i3m0QUWEWGP4HCe4ugShd6kcGakqEI/oRkZ2OY6b6QmR5LrXnYg11DU4R1kP NyP9u3pv1FpRXfNMdpEL9g== 0000912057-95-001515.txt : 19950615 0000912057-95-001515.hdr.sgml : 19950615 ACCESSION NUMBER: 0000912057-95-001515 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950426 FILED AS OF DATE: 19950320 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN ELECTRIC POWER COMPANY INC CENTRAL INDEX KEY: 0000004904 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 134922640 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-03525 FILM NUMBER: 95521940 BUSINESS ADDRESS: STREET 1: 1 RIVERSIDE PLZ CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142231000 FORMER COMPANY: FORMER CONFORMED NAME: KINGSPORT UTILITIES INC DATE OF NAME CHANGE: 19660906 DEF 14A 1 AEP NOTICE AND PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant /X/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 American Electric Power Company, Inc. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) American Electric Power Company, Inc. - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): /X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------ 2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------ 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------ 4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------ 5) Total fee paid: ------------------------------------------------------------------------ / / Fee paid previously with preliminary materials. / / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ------------------------------------------------------------------------ 2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------ 3) Filing Party: ------------------------------------------------------------------------ 4) Date Filed: ------------------------------------------------------------------------ AMERICAN ELECTRIC POWER COMPANY, INC. 1 Riverside Plaza Columbus, OH 43215 [LOGO] March 9, 1995 Dear Shareholder: This year's annual meeting of shareholders will be held in the Alumni Memorial Union, University of Findlay, 1000 North Main Street, Findlay, Ohio, on Wednesday, April 26, 1995 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 the Company's affairs. Directors and officers will be available to talk individually with shareholders before and after the meeting. E. LINN DRAPER, JR. Chairman of the Board, President and Chief Executive Officer ADMISSION TO THE MEETING WILL BE BY TICKET ONLY. IF YOU PLAN TO ATTEND THE MEETING, PLEASE MARK THE BOX PROVIDED ON THE ENCLOSED PROXY CARD, OR SEND A REQUEST IN LIEU OF THE CARD, AND WE WILL SEND YOU AN ADMISSION TICKET ABOUT TWO WEEKS PRIOR TO THE MEETING DATE. If we receive your request for a ticket after April 19, your ticket will be held for you at the door. Attendance at the meeting will be limited to shareholders or their proxies. A shareholder may designate up to three proxies to represent him or her at the meeting. In order to ensure maximum shareholder representation at the meeting, I urge each of you, whether or not you expect to attend in person, to fill in, date, sign and return your proxy promptly in the enclosed envelope. Sincerely, [SIGNATURE] NOTICE OF 1995 ANNUAL MEETING March 9, 1995 Columbus, Ohio THE ANNUAL MEETING of shareholders of AMERICAN ELECTRIC POWER COMPANY, INC., a New York corporation, will be held in the Alumni Memorial Union, University of Findlay, 1000 North Main Street, Findlay, Ohio, on Wednesday, April 26, 1995 at 9:30 o'clock in the morning, for the following purposes: 1. To elect 12 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 1995; and 3. To consider and act on such other matters as may properly come before the meeting. Only shareholders of record at the close of business on March 8, 1995 are entitled to notice of and to vote at the meeting or any adjournment thereof. G.P. Maloney SECRETARY PROXY STATEMENT March 9, 1995 THIS PROXY STATEMENT and the accompanying proxy card are to be mailed to shareholders, commencing on or about March 21, 1995, 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 26, 1995 in Findlay, Ohio. Only the holders of shares of Common Stock at the close of business on March 8, 1995 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 March 8, 1995, there were 185,235,000 shares of Common Stock, $6.50 par value, outstanding. When proxy cards are returned properly signed, 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 proxy cards of shareholders who are participants in the Dividend Reinvestment and Stock Purchase Plan include both the shares registered in their names and the whole shares held in their Plan accounts on March 8, 1995. 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 box 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. 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 revoked, or by attending the meeting and voting in person. 1. ELECTION OF DIRECTORS TWELVE 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 successors have been elected. The Restated Certificate of Incorporation of the Company provides that the number of directors of the Company shall be such number, not less than 12 nor more than 17, as shall be determined from time to time, as prescribed in the By-Laws, by resolution of the Board of Directors. On July 27, 1994, the Board of Directors adopted a resolution increasing the number of directors constituting the entire Board from 12 to 13, and elected Mr. Donald G. Smith to fill the vacancy thus created. In addition, on January 25, 1995, the Board of Directors adopted a resolution reducing the number of directors from 13 to 12 to reflect the retirement of Mr. A. Joseph Dowd. The 12 nominees named on pages 3-6 were selected by the Board of Directors on the recommendation of the Committee on Directors 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. Except for Mr. Donald G. Smith, who is standing for election for the first time, all of the Board's nominees were elected by the shareholders at the 1994 annual meeting. 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. 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 12 -- 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. The following brief biographies of the nominees include their principal occupations, ages on the date of this statement, accounts of their business experience and names of certain companies of which they are directors. Data with respect to the number of shares of the Company's Common Stock beneficially owned by each of them appears on pages 20 and 21. 2 NOMINEES FOR DIRECTOR PETER J. DEMARIA Received his B.A. in 1955 from Queens College and [PHOTO] TREASURER OF THE COMPANY; M.B.A. in 1963 from New York University. Certified EXECUTIVE VICE PRESIDENT -- Public Accountant (1965). Joined AEP Service ADMINISTRATION AND CHIEF Corporation in 1959. In 1978 became senior vice ACCOUNTING OFFICER, AEP SERVICE president and chief accounting officer of AEP Ser- CORPORATION vice Corporation and treasurer of the Company and Age 60 in 1984 became executive vice president -- admin- Director since 1993 istration of AEP Service Corporation. -------------------------------------------------------------------------------------- E. LINN DRAPER, JR. Received his B.A. and B.S. (chemical engineering) [PHOTO] CHAIRMAN, PRESIDENT AND CHIEF degrees from Rice University in 1964 and 1965, EXECUTIVE OFFICER OF THE COMPANY respectively, and Ph.D. (nuclear engineering) in AND AEP SERVICE CORPORATION; 1970 from Cornell University. Joined Gulf States CHAIRMAN AND CHIEF EXECUTIVE Utilities Company, an unaffiliated electric OFFICER OF ALL OTHER MAJOR utility, in 1979. Chairman of the board, president COMPANY SUBSIDIARIES and chief executive officer of Gulf States Age 53 (1987-1992). Elected president of the Company and Director since 1992 president and chief operating officer of AEP Service Corporation in March 1992 and chairman of the board and chief executive officer of the Company and all of its major subsidiaries in April 1993. A director of VECTRA Technologies, Inc. -------------------------------------------------------------------------------------- ROBERT M. DUNCAN Received his B.S. and J.D. from The Ohio State [PHOTO] RETIRED, University in 1948 and 1952, respectively. After COLUMBUS, OHIO two years in the private practice of law, held a Age 67 series of governmental legal positions culminating Director since 1985 in service as a judge for the U.S. District Court for the Southern District of Ohio, a position held from 1974 to 1985. Private practice of law (1985-1991). Vice president and general counsel, The Ohio State University (1992-1994). A trustee of Nationwide Investing Foundation, Nationwide Investing Foundation II, Nationwide Separate Account Trust and Financial Horizons Investment Trust. A director of Nationwide Financial Services Inc. --------------------------------------------------------------------------------------
3 NOMINEES FOR DIRECTOR -- CONTINUED ARTHUR G. HANSEN Received his B.S.E.E. in 1946 and M.S. in 1948 from [PHOTO] EDUCATIONAL CONSULTANT, Purdue University, his Ph.D. (mathematics) in 1958 ZIONSVILLE, INDIANA from Case Western Reserve University, and honorary Age 70 doctoral degrees in engineering and science from Director since 1979 Purdue and Indiana universities. Was dean of the College of Engineering (1966-1969) and president (1969-1971) of Georgia Institute of Technology, president of Purdue University (1971-1982) and chancellor of The Texas A&M University System (1982-1986). Director of Research, Hudson In- stitute (1987-1988). A director of International Paper Company, Navistar International Corporation and The Interlake Corporation. -------------------------------------------------------------------------------------- LESTER A. HUDSON, JR. Received a B.A. from Furman University in 1961 and [PHOTO] VICE CHAIRMAN OF WUNDAWEVE an M.B.A. from the University of South Carolina in CARPETS, INC., GREENVILLE, 1965. Joined Dan River Inc. (textile fabric SOUTH CAROLINA manufacturer) in 1970 and was elected president and Age 55 chief operating officer in 1981 and chief execu- Director since 1987 tive officer in 1987. Resigned from Dan River in 1989. Joined WundaWeve Carpets, Inc. (carpet manufacturer) as chairman, president and chief ex- ecutive officer in June 1990. Chairman of WundaWeve November 1991. Vice chairman of WundaWeve June 1993. A director of American National Bankshares Inc. -------------------------------------------------------------------------------------- GERALD P. MALONEY Holds B.S. degrees in both electrical engineering [PHOTO] VICE PRESIDENT AND SECRETARY OF and business administration from Massachusetts THE COMPANY; EXECUTIVE VICE Institute of Technology (1955) and an M.B.A. from PRESIDENT -- Rutgers University (1962). Joined AEP Service Cor- CHIEF FINANCIAL OFFICER, poration in 1955. In 1974 became senior vice presi- AEP SERVICE CORPORATION dent -- finance of AEP Service Corporation and vice Age 62 president of the Company; in 1991 became executive Director since February 1994 vice president -- chief financial officer of AEP Service Corporation; and in December 1994 became secretary of the Company. --------------------------------------------------------------------------------------
4 ANGUS E. PEYTON Graduated from Princeton University in 1949 and [PHOTO] PARTNER, BROWN & PEYTON, received his LL.B. from the University of Virginia ATTORNEYS, CHARLESTON, in 1952. Served as an assistant attorney general of WEST VIRGINIA West Virginia (1956-1957), as chairman of the West Age 68 Virginia Industrial Development Authority, and as Director since 1978 West Virginia Commerce Commissioner (1965-1969). Formed his present law firm in 1969. A director of One Valley Bancorp of West Virginia, Inc. -------------------------------------------------------------------------------------- TOY F. REID Received B.S. degrees in chemistry and chemical [PHOTO] RETIRED, engineering from the University of South Carolina KINGSPORT, TENNESSEE and the University of Illinois, respectively, and Age 71 an M.S. degree in chemical engineering from the Director since 1983 Georgia Institute of Technology. Joined Eastman Kodak Company in 1948. In subsequent years, held various positions at Eastman Kodak Company until appointed in 1979 as executive vice president of Eastman Kodak Company and general manager of the Eastman Chemicals Division. Retired in 1989. - -------------------------------------------------------------------------------------- DONALD G. SMITH Joined Roanoke Electric Steel Corporation (steel [PHOTO] CHAIRMAN OF THE BOARD, PRESIDENT, manufacturer) in 1957. Held various positions with CHIEF EXECUTIVE OFFICER AND Roanoke Electric Steel before being named president TREASURER OF ROANOKE ELECTRIC and treasurer in 1985, chief executive officer in STEEL CORPORATION, ROANOKE, 1986 and chairman of the board in 1989. VIRGINIA Age 59 Director since July 1994 --------------------------------------------------------------------------------------
5 NOMINEES FOR DIRECTOR -- CONTINUED LINDA GILLESPIE STUNTZ Holds an A.B. from Wittenberg University (1976) and [PHOTO] PARTNER, STUNTZ & DAVIS, P.C., J.D. from Harvard Law School (1979). Private ATTORNEYS, WASHINGTON, D.C. practice of law (1979-1981). U.S. House of Repre- Age 40 sentatives, Committee on Energy and Commerce: Director since February 1993 Associate Minority Counsel, Subcommittee on Fossil and Synthetic Fuels (1981-1986) and Minority Counsel and Staff Director (1986-1987). Private practice of law (1987-1989). U.S. Department of Energy (1989-1993): Acting Deputy Secretary (Jan- uary 1992-July 1992) and Deputy Secretary (July 1992-January 1993). Returned to the private prac- tice of law in March 1993. A director of Schlum- berger Limited and Resources For The Future. Member, Advisory Council, Electric Power Research Institute. -------------------------------------------------------------------------------------- MORRIS TANENBAUM Graduated from The Johns Hopkins University in 1949 [PHOTO] RETIRED, with a B.A. in chemistry and received a Ph.D. in SHORT HILLS, NEW JERSEY physical chemistry in 1952 from Princeton Uni- Age 66 versity. Joined Bell Telephone Laboratories in 1952 Director since 1989 and held various positions with AT&T companies. Became vice chairman of the board of AT&T in 1986 and chief financial officer in 1988. Retired in 1991. A director of Cabot Corporation. A trustee of Battelle Memorial Institute, Massachusetts Insti- tute of Technology and The Johns Hopkins Univer- sity and honorary trustee of The Brookings Institution. -------------------------------------------------------------------------------------- ANN HAYMOND ZWINGER Received her B.A. in art history with honors from [PHOTO] AUTHOR, ILLUSTRATOR AND Wellesley College (1946) and M.A. in art history CONSULTANT, from Indiana University (1950). Adjunct professor COLORADO SPRINGS, COLORADO at Colorado College. Writes for AUDUBON MAGAZINE Age 70 and other natural history publications. Books in- Director since 1977 clude BEYOND THE ASPEN GROVE, 1970, LAND ABOVE THE TREES, 1972, WIND IN THE ROCK, 1978, A DESERT COUNTRY NEAR THE SEA, 1983, THE MYSTERIOUS LANDS, 1989 and RUN, RIVER, RUN, 1975, which received the Friends of American Writers Award for non-fiction and John Burroughs Memorial Association Award. Member of founding board, Utility Women's Conference. Secretary, Colorado Board, The Nature Conservancy. --------------------------------------------------------------------------------------
6 Dr. Draper and Messrs. DeMaria and Maloney are directors of Appalachian Power Company, Columbus Southern Power Company, Indiana Michigan Power Company, Kentucky Power Company and Ohio Power Company (all of which are subsidiaries of the Company with one or more classes of publicly held preferred stock or debt securities) and other subsidiaries of the Company. Dr. Draper and Messrs. DeMaria and Maloney are also directors of AEP Generating Company, a subsidiary of the Company. FUNCTIONS OF THE BOARD OF DIRECTORS AND COMMITTEES UNDER NEW YORK LAW, the Company is managed under the direction of the Board of Directors. The Board establishes broad corporate policies and authorizes various types of transactions, but it is not involved in day-to-day operational details. During 1994, the Board held eight regular meetings. The Board has six standing committees, the functions of which are described in the following paragraphs. The AUDIT COMMITTEE consists of Messrs. Duncan, Hudson and Peyton and Ms. Zwinger. The Audit Committee oversees, and reports to the Board concerning, the general policies and practices of the Company and its subsidiaries with respect to accounting, financial reporting, and internal auditing and financial controls. It also maintains a direct exchange of information between the Board and the Company's independent accountants and reviews possible conflict of interest situations involving directors. During 1994 the Audit Committee held four meetings. The COMMITTEE ON DIRECTORS consists of Messrs. Duncan and Hudson, Dr. Hansen and Ms. Zwinger. The Committee on Directors is responsible for: (i) recommending the size of the Board within the boundaries imposed by the corporate charter; (ii) recommending selection criteria for nominees for election or appointment to the Board; (iii) conducting independent searches for qualified nominees and screening the qualifications of candidates recommended by others; and (iv) recommending to the Board for its consideration one or more nominees for appointment to fill vacancies on the Board as they occur and the slate of nominees for election at the annual meeting. During 1994 the Committee on Directors held one meeting. The Committee on Directors will consider shareholder recommendations of candidates to be nominated as directors of the Company. 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 does not undertake to adopt or take any other action concerning the recommendation, or to give the proponent its reasons for not doing so. The CORPORATE PUBLIC POLICY COMMITTEE consists of Messrs. Duncan, Hudson, Peyton, Reid and Smith and Drs. Hansen and Tanenbaum and Mses. Stuntz and Zwinger. The Corporate Public 7 Policy Committee is responsible for examining the Company's policies on major public issues affecting the AEP System, as well as established System policies which affect the relationship of the Company and its subsidiaries 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 the management of the AEP System on any such policy matters presented to the Committee for consideration and study. During 1994 the Corporate Public Policy Committee held four meetings. The EXECUTIVE COMMITTEE consists of Dr. Draper and Messrs. Peyton and Reid. It 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 Executive Committee did not meet during 1994. The FINANCE COMMITTEE consists of Messrs. Peyton and Reid, Ms. Stuntz and Dr. Tanenbaum. The Finance Committee monitors and reports to the Board with respect to the capital requirements and financing plans and programs of the Company and its subsidiaries including, among other things, reviewing and making such recommendations as it considers appropriate concerning the short and long-term financing plans and programs of the Company and its subsidiaries and the implementation of the same. During 1994 the Finance Committee held four meetings. The HUMAN RESOURCES COMMITTEE consists of Drs. Hansen and Tanenbaum and Mr. Reid. The Human Resources Committee is responsible for: (i) reviewing the salaries and other compensation and benefits provided to members of the Board who are officers of the Company or employees of any of its subsidiaries, and recommending to the Board the amount of salary, compensation and benefits to be paid to such persons each year; (ii) reviewing and approving management proposals concerning salaries, compensation and benefits to be paid to certain senior officers of subsidiaries of the Company; (iii) reviewing and making recommendations to the Board with respect to the compensation of directors; (iv) evaluating the Company's hiring, development, promotional and succession planning practices for those management positions described in (ii) above; and (v) periodic review of the Company's overall affirmative action performance. During 1994 the Human Resources Committee held four meetings. During 1994, no incumbent director attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all Committees on which he or she served. 8 COMPENSATION OF DIRECTORS DIRECTORS who are officers of the Company or employees 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 the Board of Directors of the Company. The other members of the Board receive an annual retainer of $23,000 for their services, an additional annual retainer of $3,000 for each Committee that they chair, a fee of $1,000 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 $1,000 per day for any inspection trip or conference (except a trip or conference on the same day as a Board or Committee meeting). The Company maintains a group 24-hour accident insurance policy to provide a $1,000,000 accidental death benefit for each director (three-year premium was $16,065). The current policy will expire on September 1, 1997, and the Company expects to renew the coverage. In addition, the Company pays each director (excluding officers of the Company or employees of any of its subsidiaries) an amount to provide for the federal and state income taxes incurred in connection with the maintenance of this coverage (approximately $1,000 annually). The Board has adopted a policy which permits directors to elect annually to defer receipt of all or a portion of their retainer and fees to be payable in a lump sum or monthly installments after they cease to be a director. The deferred compensation accrues interest compounded quarterly at the daily prime lending rate in effect from time to time at a specified major financial institution. This policy is implemented by individual deferred-compensation agreements which set forth the terms of the deferral. The Board has adopted a retirement plan for directors (excluding officers of the Company or employees of any of its subsidiaries) which provides for annual retirement payments for life to such directors commencing at the later of the director's retirement or age 72 in an amount equal to the annual retainer at the time of retirement with a 20% reduction for each year that service as a director is less than five. OTHER MATTERS THE DIRECTORS and officers of the Company 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 directors and officers for any such losses. Such insurance is provided by Associated Electric & Gas Insurance Services, Energy Insurance Mutual, The Chubb Insurance Company and 9 Great American Insurance Company, effective January 1, 1995 through December 31, 1995, and pays up to an aggregate amount of $100,000,000 on any one claim and in any one policy year. The total premium for the four policies is $1,455,334. Fiduciary liability insurance provides coverage for 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 imposed under the Employee Retirement Income Security Act of 1974. This coverage, provided by Federal Insurance Company, was renewed, effective July 1, 1994 through June 30, 1995, for a premium of $67,042. It provides $20,000,000 of aggregate coverage with a $5,000 deductible for each loss. 2. APPROVAL OF AUDITORS ON THE RECOMMENDATION of the Audit Committee, the Board of Directors has appointed the accounting firm of Deloitte & Touche LLP as independent auditors of the Company for the year 1995, subject to approval by the shareholders at the annual meeting. Deloitte & Touche LLP is considered to be the firm best qualified to perform this important function because of its ability and the familiarity of its personnel with the Company's affairs. It and predecessor firms have been the Company's auditors since 1911. Approval of this proposal requires the affirmative vote of holders of a majority of the shares present in person or by proxy at the meeting. Fees billed by Deloitte & Touche LLP for services rendered to the Company and its subsidiaries during 1994 were $2,483,000. 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. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR 1995. 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. 10 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, except for a shareholder proposal which was excluded from this proxy statement in accordance with the rules of the Securities and Exchange Commission. VOTING PROCEDURES 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 in connection with the approval of the auditors. 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 beneficial 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 instructions from the beneficial owner. It is the policy of the Company that shareholders be provided privacy in voting. All proxy (voting instruction) cards and ballots, which identify shareholders, are held confidential, except as may be necessary to meet any applicable legal requirements. Proxy cards are returned in envelopes addressed to an independent third-party tabulator, who receives, inspects, and tabulates the proxies. Voted proxies and ballots are not seen by nor reported to the Company 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. EXECUTIVE COMPENSATION THE FOLLOWING TABLE shows for 1994, 1993 and 1992 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 the Company at December 31, 1994. 11 SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ANNUAL ------------------- COMPENSATION ---------------- PAYOUTS ALL OTHER SALARY BONUS ------------------- COMPENSATION NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) LTIP PAYOUTS($)(2) ($)(3) - ---------------------------------------- ---- ------- ------- ------------------- ------------- E. LINN DRAPER, JR. -- Chairman of the 1994 620,000 209,436 137,362 29,385 board, president and chief executive 1993 538,333 148,742 18,180 officer of the Company and the Service 1992 395,833 8,730 63,700 Corporation; chairman and chief executive officer of other subsidiaries PETER J. DEMARIA -- Treasurer and 1994 305,000 103,029 59,032 18,750 director of the Company; executive vice 1993 280,000 77,364 17,811 president -- administration and chief 1992 273,000 6,021 15,576 accounting officer and director of the Service Corporation; vice president, treasurer and director of other subsidiaries G.P. MALONEY -- Vice president, 1994 300,000 101,340 58,094 19,745 secretary and director of the Company; 1993 269,000 74,325 18,000 executive vice president -- chief 1992 261,000 5,757 17,036 financial officer and director of the Service Corporation; vice president and director of other subsidiaries WILLIAM J. LHOTA -- Executive vice 1994 280,000 94,584 54,409 19,185 president and director of the Service 1993 249,000 68,799 17,160 Corporation; vice president and 1992 230,000 5,073 15,116 director of other subsidiaries JAMES J. MARKOWSKY -- Executive vice 1994 267,000 90,193 51,930 14,755 president -- engineering and 1993 247,000 65,259 11,165 construction and director of the 1992 219,000 4,497 7,020 Service Corporation; vice president and director of other subsidiaries - ------------------------ (1) Reflects payments under the Management Incentive Compensation Plan ("MICP"). Amounts for 1994 are estimates but should not change significantly. For 1994 and 1993, these amounts include both cash
12 paid and a portion deferred in the form of restricted stock units. These units are paid out in cash after three years based on the price of AEP Common Stock at that time. Dividend equivalents are paid during the three-year period. At December 31, 1994, the deferred amounts (included in the above table) and accrued dividends for Dr. Draper, Messrs. DeMaria, Maloney and Lhota and Dr. Markowsky were equivalent to 2,204, 1,109, 1,080, 1,004 and 956 units having values of $72,456, $36,458, $35,505, $33,006 and $31,428, respectively, based upon a $32 7/8 per share closing price of AEP's Common Stock as reported on the New York Stock Exchange. For 1992, MICP payments were made entirely in cash. (2) Reflects payments under the Performance Share Incentive Plan (which became effective January 1, 1994) for the one-year transition performance period ending December 31, 1994. Dr. Draper, Messrs. DeMaria, Maloney and Lhota and Dr. Markowsky received 2,050, 881, 867, 812 and 775 shares of Common Stock, respectively, representing one-half of their payments. See pages 18 and 19 for additional information. (3) For 1994, includes (i) employer matching contributions under the AEP System Employees Savings Plan: $4,500 for each of the named executive officers; (ii) employer matching contributions under the AEP System Supplemental Savings Plan (which became effective January 1, 1994), a non-qualified plan designed to supplement the AEP Savings Plan: Dr. Draper, $14,100; Mr. DeMaria, $4,650; Mr. Maloney, $4,500; Mr. Lhota, $3,900; and Dr. Markowsky, $3,510; and (iii) subsidiary companies director fees: Dr. Draper, $10,785; Mr. DeMaria, $9,600; Mr. Maloney, $10,745; Mr. Lhota, $10,785; and Dr. Markowsky, $6,745.
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1994 Each of the awards set forth below constitutes a grant of performance share units, which represent units equivalent to shares of Common Stock, pursuant to the Company's Performance Share Incentive Plan. Since it is not possible to predict 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 units were granted in the form of shares of Common Stock are not included in the table. The ability to earn performance share units is tied to achieving specified levels of total shareholder return ("TSR") relative to the S&P Electric Utility Index. Notwithstanding AEP's TSR ranking, no performance share units are earned unless AEP shareholders realize a positive TSR over the relevant three-year performance period. The Human Resources Committee may, at its discretion, reduce the number of performance share units otherwise earned. In accordance with the performance goals established for the periods set forth below, the threshold, target and maximum awards are equal to 25%, 100% and 200%, respectively, of the performance share units held. No payment will be made for performance below the threshold. Payment of awards earned for the one-year transition performance period ending December 31, 1994 were made 50% in cash and 50% in Common Stock. For subsequent performance periods, payments of earned awards are deferred in the form of restricted stock units (equivalent 13 to shares of AEP Common Stock) until the officer has met the equivalent 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, 2,235 1994 (1) (1) (1) Jr. 4,470 1994-1995 1,118 4,470 8,940 6,705 1994-1996 1,676 6,705 13,410 P. J. DeMaria 960 1994 (1) (1) (1) 1,920 1994-1995 480 1,920 3,840 2,885 1994-1996 721 2,885 5,770 G. P. Maloney 945 1994 (1) (1) (1) 1,890 1994-1995 473 1,890 3,780 2,840 1994-1996 710 2,840 5,680 W. J. Lhota 885 1994 (1) (1) (1) 1,770 1994-1995 443 1,770 3,540 2,650 1994-1996 663 2,650 5,300 J. J. Markowsky 845 1994 (1) (1) (1) 1,690 1994-1995 423 1,690 3,380 2,525 1994-1996 631 2,525 5,050 - ------------------------ (1) For the 1994 transition performance period, the actual number of performance share units earned was: Dr. Draper 4,100; Mr. DeMaria 1,761; Mr. Maloney 1,734; Mr. Lhota 1,624; and Dr. Markowsky 1,550 (see page 12 for the cash value of these payouts).
RETIREMENT BENEFITS The American Electric Power System Retirement Plan provides pensions for all employees of AEP System companies (except for employees covered by certain collective bargaining agreements), including the executive officers of the Company. The Retirement Plan is a noncontributory defined benefit plan. 14 The following table shows the approximate annual annuities under the Retirement Plan that would be payable to employees in certain higher salary classifications, assuming retirement at age 65 after various periods of service. The amounts shown in the table are the straight life annuities payable under the Retirement Plan 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 retirement annuity is reduced 3% per year in the case of retirement between ages 60 and 62 and further reduced 6% per year in the case of retirement between ages 55 and 60. If an employee retires after age 62, there is no reduction in the retirement annuity. PENSION PLAN TABLE
YEARS OF ACCREDITED SERVICE HIGHEST AVERAGE --------------------------------------------------------------- ANNUAL EARNINGS 15 20 25 30 35 40 - --------------- -------- -------- -------- -------- -------- -------- $250,000 $ 58,065 $ 77,420 $ 96,775 $116,130 $135,485 $152,110 350,000 82,065 109,420 136,775 164,130 191,485 214,760 450,000 106,065 141,720 176,775 212,130 247,485 277,410 600,000 142,065 189,420 236,775 284,130 331,485 371,385 750,000 178,065 237,420 296,775 356,130 415,485 465,360
Compensation upon which retirement benefits are based consists of the average of the 36 consecutive months of the employee's highest salary, as listed in the Summary Compensation Table, out of the employee's most recent 10 years of service. As of December 31, 1994, the number of full years of service credited under the Retirement Plan to each of the executive officers of the Company named in the Summary Compensation Table were as follows: Dr. Draper, two years; Mr. DeMaria, 35 years; Mr. Maloney, 39 years; Mr. Lhota, 30 years; and Dr. Markowsky, 23 years. Dr. Draper's employment agreement described below provides him with a supplemental retirement annuity that credits him with 24 years of service in addition to his years of service credited under the Retirement Plan less his actual pension entitlement under the Retirement Plan and any pension entitlements from prior employers. The Company has determined to pay supplemental retirement benefits to 23 AEP System employees (including Messrs. DeMaria, Maloney and Lhota and Dr. Markowsky) whose pensions may be adversely affected by amendments to the Retirement Plan made as a result of the Tax Reform Act of 1986. Such payments, if any, will be equal to any reduction occurring because of such amendments. Assuming retirement in 1995 of the executive officers named in the Summary Compensation Table, none would be eligible to receive supplemental benefits. The Company made available a voluntary deferred-compensation program in 1982 and 1986, which permitted certain executive employees of AEP System companies to defer receipt of a portion of their salaries. Under this program, an executive was able to defer up to 10% or 15% 15 annually (depending on the terms of the program offered), over a four-year period, of his or her salary, and receive supplemental 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 executive retires. The following table sets forth, for the executive officers named in the Summary Compensation Table, the amounts of annual deferrals and, assuming retirement at age 65, annual supplemental retirement payments under the 1982 and 1986 programs.
1982 PROGRAM 1986 PROGRAM ---------------------------------- ---------------------------------- ANNUAL AMOUNT OF ANNUAL AMOUNT OF ANNUAL SUPPLEMENTAL ANNUAL SUPPLEMENTAL AMOUNT RETIREMENT AMOUNT RETIREMENT DEFERRED PAYMENT DEFERRED PAYMENT NAME (4-YEAR PERIOD) (15-YEAR PERIOD) (4-YEAR PERIOD) (15-YEAR PERIOD) - ----------------------------------- --------------- ---------------- --------------- ---------------- P. J. DeMaria...................... $10,000 $52,000 $13,000 $53,300 G. P. Maloney...................... 15,000 67,500 16,000 56,400
EMPLOYMENT AGREEMENT Dr. Draper has a contract with the Company and AEP Service Corporation which provides for his employment for an initial term from no later than March 15, 1992 until March 15, 1997. Dr. Draper commenced his employment with the Company and AEP Service Corporation on March 1, 1992. The Company or AEP Service Corporation may terminate the contract at any time and, if this is done for reasons other than cause and other than as a result of Dr. Draper's death or permanent disability, AEP Service Corporation must pay Dr. Draper's then base salary through March 15, 1997, less any amounts received by Dr. Draper from other employment. 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. The Committee is composed entirely of independent outside directors. See page 8. The Human Resources Committee recognizes that the executive officers are charged with managing a $15 billion, multi-state electric utility during challenging times and with addressing many difficult and complex issues. The Committee believes that compensation must be competitive in order to attract, retain, reward and motivate the highly qualified individuals needed to manage AEP to meet corporate objectives and that it should be closely tied to performance in order to provide incentives that will maximize shareholder value. 16 STOCK OWNERSHIP GUIDELINES. The Board of Directors, upon the Committee's recommendation, underscored the importance of linking executive and shareholder interests by adopting in December 1994 stock ownership guidelines for senior management participants in the Performance Share Incentive Plan described below. 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 target for the CEO is 45,000 shares and ranges down to 6,000 shares for vice presidents. Since these levels are equivalent to approximately one or more times the officer's annual salary, each officer is expected to achieve the ownership target within a period of five years commencing on January 1, 1995. Common Stock equivalents earned through the Management Incentive Compensation Plan, also described below, and the Performance Share Incentive Plan are included in determining compliance with the ownership targets. PAY MIX AND MEASUREMENT BASE SALARY. When reviewing salaries, the Committee considers external pay practices used by other electric utilities and by industry in general. In addition, the Committee considers the respective positions held by the executive officers, their levels of responsibility, performance and experience, and the relationship of their salaries to the salaries of other AEP managers and employees. For compensation comparison purposes, the Human Resources Committee uses the 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. In recognition of AEP's relatively large size and operational complexity, executive officer salary levels are targeted to the third quartile (between the 50th and 75th percentiles) of the range of compensation paid by the other electric utilities in this compensation peer group. Base salary levels in 1994 for the five most highly compensated executive officers of AEP named in the Summary Compensation Table were at about the median of the range of the compensation peer group. In establishing salary levels against that range, the Human Resources Committee considers the competitiveness of AEP's entire compensation package. Salaries are reviewed and adjusted 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 the outside directors of the Board. These directors then act on the Committee's recommendation. The Committee has also taken into account management's ability to address the potential impact of increased competition in the electric utility industry. It is the Committee's opinion that 17 in this ever-changing environment, Dr. Draper and his senior management team are developing and implementing strategies to position the Company for the future. The Company's New Directions program, outlined in the 1994 annual report, is one step. The benefits of these efforts to the Company cannot, of course, be quantifiably measured but the Committee believes these efforts are vital to the Company's continuing success in the 1990s. ANNUAL INCENTIVE. A variable, performance-based portion of the executive officers' total compensation is paid through the Management Incentive Compensation Plan ("MICP"), which is included in the "Bonus" column in the Summary Compensation Table. The MICP was established (effective January 1, 1990) to motivate and reward superior management performance in serving customer needs and creating shareholder value. Each participant is assigned an annual target award expressed as a percentage of annual salary. The target award is 30% for the executive officers named in the compensation table. Actual awards can vary from 0-150% of the target award -- based on performance. The MICP awards for the executive officers named in the compensation table are based entirely on preestablished AEP corporate performance criteria specified in the MICP, which include return on stockholder equity (weighted at 25%) and total investor return reflecting stock price and payment of dividends (weighted at 25%), both measured relative to the performance of the utilities in the S&P Electric Utility Index, and the extent to which the average price of power sold to retail customers (weighted at 50%) is lower as compared with other utilities in the states which AEP serves. For 1994, the AEP corporate performance target was achieved to the extent of 112.6%. This percentage is an estimate but should not change significantly. To more closely align the financial interests of the executive officers with the Company's shareholders, 20% of the MICP awards have been generally deferred for three years and treated as if they are invested in Common Stock of the Company, although no stock is actually purchased. Dividend equivalents are credited during the three-year period. LONG-TERM INCENTIVE. As a result of the Committee's review of the competitiveness of the Company's total compensation program for executive and other senior officers, the Committee recommended to the Board of Directors that the Company adopt the Performance Share Incentive Plan (the "Plan") to provide longer-term, performance-driven, equity incentive award opportunities directly related to shareholder value. The Board of Directors approved the Plan in December 1993 and, at the 1994 annual meeting, the shareholders also approved it. The Plan grants performance share units annually which are paid based on AEP's subsequent three-year total shareholder returns measured relative to the S&P peer utilities. In 1994, for each of the three performance periods, the Committee granted Dr. Draper and the other executive 18 officers named in the Summary Compensation Table performance share units based on approximately 40% and 35%, respectively, of their base salaries (the two shorter transition period awards were prorated to grant one-third and two-thirds of the full-cycle award). The number of performance share units granted has been determined after an evaluation of long-term incentive opportunities provided by the S&P peer companies, again targeting the third quartile of competitive practice. However, the awards which will ultimately be paid to participants under the Plan for a performance period are not determinable in advance and, in fact, could be zero. The Plan ended a one-year transition performance period at year end 1994. AEP's total shareholder return for 1992-1994 ranked fifth relative to the S&P 24 peer utilities and, as a result, 170% of the performance share units granted (and dividend credits) were earned. The associated award payments, listed on page 12, were made 50% in cash and 50% in shares of Common Stock. Officers are not permitted to sell these shares of Common Stock if such shares are required to be held to meet the equivalent stock ownership targets discussed above. Like that portion of the MICP awards deferred for three years, for subsequent Plan performance periods, payments of earned awards under the Plan are also deferred in the form of restricted stock units (equivalent to shares of AEP Common Stock). Such Plan deferrals continue until officers meet and maintain their respective equivalent stock ownership targets, and then the officers may elect either to continue to defer or to receive further earned Plan awards in cash and/ or Common Stock. Dividend equivalents are credited as though reinvested in additional restricted stock units, again until officers meet and maintain their respective equivalent stock ownership targets, with such dividends then paid in cash. The Plan was amended to provide for the deferral in order to reflect the intention of the Committee to place, on an expedited basis, more of the earned Plan awards at risk similar to the risk experienced by all other shareholders. The Plan is further described on pages 13 and 14. HUMAN RESOURCES COMMITTEE MEMBERS Toy F. Reid, Chairman Arthur G. Hansen Morris Tanenbaum 19 EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AEP S&P 500 S&P ELECTRIC 1989 100 100 100 1990 92.1 96.9 102.5 1991 122.4 126.4 133.7 1992 127.5 136.1 141.8 1993 152.6 149.8 159.7 1994 145.6 151.7 138.9
The total return performance shown on the graph above is not necessarily indicative of future performance. SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS THE FOLLOWING TABLE sets forth the beneficial ownership of Common Stock of the Company as of December 31, 1994 for all directors as of the date of this proxy statement, all nominees to the Board of Directors, each of the persons 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 of the Company set forth across from his or her name. Fractions of shares have been rounded to the nearest whole share. 20
NAME SHARES - --------------------------- ----------------------- P. J. DeMaria.............. 6,105(a)(b)(c)(d)(e) E. L. Draper, Jr........... 1,492(b)(d) R. M. Duncan............... 1,340 A. G. Hansen............... 923 L. A. Hudson, Jr........... 1,853(e) W. J. Lhota................ 7,414(b)(c)(d) G. P. Maloney.............. 4,249(b)(c)(d) NAME SHARES - --------------------------- ----------------------- J. J. Markowsky............ 4,861(b)(e) A. E. Peyton............... 3,188(f) T. F. Reid................. 1,000(d) D. G. Smith................ 800 L. G. Stuntz............... 400 M. Tanenbaum............... 1,083 A. H. Zwinger.............. 12,300(e) All directors and executive officers as a group (15 persons) ..... 135,393(c)(g) - ------------ (a) Mr. DeMaria owns 100 shares of Cumulative Preferred Shares 9.50% Series, $100 par value, of Columbus Southern Power Company. (b) Includes shares held by the trustee of the AEP System Employees Savings Plan as follows: Mr. DeMaria, 2,398 shares; Dr. Draper, 1,368 shares; Mr. Lhota, 5,986 shares; Mr. Maloney, 2,464 shares; Dr. Markowsky, 4,779 shares; and all directors and executive officers as a group, 19,323 shares. Includes shares held by the trustee of the AEP Employee Stock Ownership Plan as follows: Mr. DeMaria, 83 shares; Mr. Lhota, 60 shares; Mr. Maloney, 85 shares; Dr. Markowsky, 66 shares; and all directors and executive officers as a group, 341 shares. With respect to the shares held in these plans, such persons have sole voting power, but the investment/disposition power is subject to the terms of such plans. (c) Does not include, for Messrs. DeMaria, Lhota and Maloney, 85,231 shares in the American Electric Power System Educational Trust Fund over which Messrs. DeMaria, Lhota and Maloney share voting and investment power as trustees (they disclaim beneficial ownership). The amount of shares shown for all directors and executive officers as a group includes these shares. (d) Includes shares held in joint tenancy with a spouse as follows: Mr. DeMaria, 1,232 shares; Dr. Draper, 124 shares; Mr. Lhota, 1,368 shares; Mr. Maloney, 1,700 shares; and Mr. Reid, 1,000 shares. (e) Includes shares held by family members over which beneficial ownership is disclaimed as follows: Mr. DeMaria, 2,392 shares; Mr. Hudson, 750 shares; Dr. Markowsky, 16 shares; and Mrs. Zwinger, 3,000 shares. (f) Includes 315 shares over which Mr. Peyton shares voting and investment power which are held by trusts of which he is a trustee, but he disclaims beneficial ownership of 169 of such shares. (g) Represents less than 1% of the total number of shares outstanding.
21 TRANSACTIONS WITH MANAGEMENT MS. STUNTZ, a director, was a partner in the Washington, D.C. law firm of Van Ness Feldman, P.C. in 1994. Several organizations of which certain AEP System companies have been members and to which they have provided financial support, were clients of Van Ness Feldman, P.C. in 1994. SHAREHOLDER PROPOSALS TO BE INCLUDED in the Company's proxy statement and form of proxy for the 1996 annual meeting of shareholders, any proposal which a shareholder intends to present at such meeting must be received by the Company at its office at 1 Riverside Plaza, Columbus, Ohio 43215 not later than the close of business on November 10, 1995. SOLICITATION EXPENSES THE COSTS of this proxy solicitation will be paid by the Company. Proxies will be solicited principally by mail, but some telephone, telegraph or personal solicitations of holders of Common Stock of the Company may be made. Any officers or employees of the Company or of American Electric Power Service Corporation who make or assist in such solicitations will receive no compensation, other than their regular salaries, for doing so. The Company will request brokers, banks and other custodians or fiduciaries holding shares in their names or in the names of nominees to forward copies of the proxy-soliciting materials to the beneficial owners of the shares held by them, and the Company will reimburse them for their expenses incurred in doing so at rates prescribed by the New York Stock Exchange. 22 Notice of 1995 Annual Meeting and Proxy Statement [LOGO] [LOGO] AMERICAN ELECTRIC POWER PRINTED WITH SOY INK COMPANY, INC. [LOGO] 1 Riverside Plaza PRINTED ON RECYCLED PAPER Columbus, OH 43215 AMERICAN ELECTRIC POWER COMPANY, INC. PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING TO BE HELD APRIL 26, 1995 PROXY The undersigned appoints E. Linn Draper, Jr., Peter J. DeMaria and Gerald P. Maloney, 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 26, 1995, and at any adjournments thereof, and to vote all shares of Common Stock of the Company which the undersigned is entitled to vote on all matters coming before said meeting. TRUSTEE'S AUTHORIZATION. The undersigned authorizes Key Trust Company of Ohio, N.A. to vote all shares of Common Stock of the Company credited to the undersigned's account under the American Electric Power System Employees Savings and Employee Stock Ownership plans at the annual meeting in accordance with the instructions on the reverse side. Election of Directors. Nominees: P.J. DeMaria, E.L. Draper, Jr., R.M. Duncan, A.G. Hansen, L.A. Hudson, Jr., G.P. Maloney, A.E. Peyton, T.F. Reid, D.G. Smith, L.G. Stuntz, M. Tanenbaum, A.H. Zwinger. 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. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. SEE REVERSE SIDE - -------------------------------------------------------------------------------- TRIANGLE FOLD AND DETACH HERE TRIANGLE THE 88TH ANNUAL MEETING OF SHAREHOLDERS WILL BE HELD AT 9:30 A.M. WEDNESDAY, APRIL 26, 1995, AT THE ALUMNI MEMORIAL UNION, UNIVERSITY OF FINDLAY, 1000 NORTH MAIN STREET, FINDLAY, OHIO. On the bottom half of the proxy card there appears a map and directions to the site of the annual meeting in Findlay, Ohio. FROM TOLEDO/DETROIT: Take I-75 South to U.S. 224 Exit. Go east on Trenton Avenue to North Main Street. Turn south to campus on right. FROM DAYTON/CINCINNATI: Take I-75 North to U.S. 224 Exit. Go east on Trenton Avenue to North Main Street. Turn south to campus on right. FROM COLUMBUS: Take State Route 15 north to I-75 North to U.S. 224 Exit. Go east on Trenton Avenue to North Main Street. Turn south to campus on right. [AMERICAN ELECTRIC POWER LOGO] X Please mark your 0116 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. FOR WITHHELD FOR AGAINST ABSTAIN 1. Election of / / / / 2. Approval / / / / / / Directors of (See Reverse). Auditors. For, except vote withheld from the following nominee(s): ___________________________________ I plan to attend the meeting in / / Findlay. Please send me an admission ticket. 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. __________________________________ __________________________________ SIGNATURE(S) DATE - -------------------------------------------------------------------------------- TRIANGLE FOLD AND DETACH HERE TRIANGLE ADMISSION TO MEETING If you do not receive your admission ticket prior to the meeting date, we will have a check-in area at the meeting site where admission tickets will be available. 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 the record date, March 8, 1995, which will enable you to gain admittance to the meeting. [Logo] PRINTED WITH SOY INK [Logo] Printed on recycled paper -----END PRIVACY-ENHANCED MESSAGE-----