-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, THyJ/w46BVi2exfabKnfewAwOP6/n/68tHe6jSrAl2u48nUVO3eDMDeNHvp+OJIO 5yQTKEcN736Ksd1kWgDr/w== 0000950123-97-000580.txt : 19970131 0000950123-97-000580.hdr.sgml : 19970131 ACCESSION NUMBER: 0000950123-97-000580 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19970130 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INDIANA MICHIGAN POWER CO CENTRAL INDEX KEY: 0000050172 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 350410455 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: 1934 Act SEC FILE NUMBER: 005-42647 FILM NUMBER: 97513897 BUSINESS ADDRESS: STREET 1: ONE SUMMIT SQ STREET 2: P O BOX 60 CITY: FORT WAYNE STATE: IN ZIP: 46801 BUSINESS PHONE: 2194252111 MAIL ADDRESS: STREET 1: 1 RIVERSIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43215 FORMER COMPANY: FORMER CONFORMED NAME: INDIANA MICHIGAN ELECTRIC CO/IN DATE OF NAME CHANGE: 19871104 FILED BY: 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: SC 13E4 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 SC 13E4 1 SCHEDULE 13E-4 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 13E-4 ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934) ------------------------ INDIANA MICHIGAN POWER COMPANY (NAME OF ISSUER) AMERICAN ELECTRIC POWER COMPANY, INC. (NAME OF PERSON FILING STATEMENT)
TITLE CUSIP - ------------------------------------------------------------------------------------------------------ Indiana Michigan Power Company, Cumulative Preferred Stock -- 4-1/8% Series 454889 30 4 -- 4.12% Series 454889 20 5 -- 4.56% Series 454889 82 5 -- 5.90% Series 454889 85 8 -- 6-1/4% Series 454889 84 1 -- 6-7/8% Series 454889 86 6 -- 6.30% Series 454889 83 3
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES) ARMANDO A. PENA TREASURER AMERICAN ELECTRIC POWER COMPANY, INC. 1 RIVERSIDE PLAZA COLUMBUS, OHIO 43215 (614) 223-1000 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT) JANUARY 30, 1997 (DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS) CALCULATION OF FILING FEE
- ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- TRANSACTION VALUATION* AMOUNT OF FILING FEE - ------------------------------------------------------------------------------------------------------- $156,976,700 $31,396 - ------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------
* Solely for purposes of calculating the filing fee and computed pursuant to Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and Rule 0-11(b)(1) thereunder, the transaction value equals the total amount of funds, excluding fees and other expenses, required to purchase all outstanding shares of each class of securities listed above pursuant to the Offer described in the Offer to Purchase and Proxy Statement filed as an Exhibit hereto. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: - -------------------------------------------------------------------------------- Form or Registration No.: - -------------------------------------------------------------------------------- Filing Party: - -------------------------------------------------------------------------------- Date Filed: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 ITEM 1. SECURITY AND ISSUER. (a) The name of the issuer is Indiana Michigan Power Company ("I&M"), One Summit Square, Fort Wayne, Indiana 46801. (b) Incorporated herein by reference to the information appearing on the front cover of the Offer to Purchase and Proxy Statement, and to the information appearing under the captions "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" and "Transactions and Agreements Concerning the Shares" in the Offer to Purchase and Proxy Statement. (c) Incorporated herein by reference to the information appearing under the caption "Price Range of Shares; Dividends" in the Offer to Purchase and Proxy Statement. (d) American Electric Power Company, Inc., a New York corporation ("American"), is the person filing this Statement and is the parent holding company of I&M. American's principal office is at 1 Riverside Plaza, Columbus, Ohio 43215. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) Incorporated herein by reference to the information appearing under the caption "Source and Amount of Funds" in the Offer to Purchase and Proxy Statement. (b) Incorporated herein by reference to the information appearing under the caption "Source and Amount of Funds" in the Offer to Purchase and Proxy Statement. ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. Incorporated herein by reference to the information appearing under the caption "Purpose of the Offer; Certain Effects of the Offer" in the Offer to Purchase and Proxy Statement. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. Incorporated herein by reference to the information appearing under the caption "Transactions and Agreements Concerning the Shares" in the Offer to Purchase and Proxy Statement. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. Incorporated herein by reference to the information appearing under the caption "Transactions and Agreements Concerning the Shares" in the Offer to Purchase and Proxy Statement. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. Incorporated herein by reference to the information appearing under the caption "Fees and Expenses Paid to Dealers" in the Offer to Purchase and Proxy Statement. ITEM 7. FINANCIAL INFORMATION. (a) Incorporated herein by reference to the financial statements included in the Annual Report on Form 10-K for the year ended December 31, 1995 of I&M and the Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 1996 and September 30, 1995 of I&M, and to the information appearing under the caption "Summary of Consolidated Financial Information" in the Offer to Purchase and Proxy Statement. (b) Not applicable. ITEM 8. ADDITIONAL INFORMATION. (a) Not applicable. 3 (b) Incorporated herein by reference to the information appearing under the caption "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. (c) Incorporated herein by reference to the information appearing under the caption "Purpose of the Offer; Certain Effects of the Offer" in the Offer to Purchase and Proxy Statement. (d) Not applicable. (e) See Exhibits 99.(a)(1) and 99.(a)(2). ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION ----------- ------------------------------------------------------------------------------- 99.(a)(1) Offer to Purchase and Proxy Statement, dated January 30, 1997. 99.(a)(2) Letter of Transmittal for each series of securities. 99.(a)(3) Notice of Guaranteed Delivery. 99.(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. 99.(a)(5) Form of Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. 99.(a)(6) Summary Simplified Instructions 99.(a)(7) Summary Advertisement, dated January 30, 1997. 99.(a)(8) Letter to Shareholders, dated January 30, 1997. 99.(a)(9) Press Release, dated January 29, 1997. 99.(b) Not applicable. 99.(c) Not applicable. 99.(d) Tax Opinion of Simpson Thacher & Bartlett. 99.(e) Not applicable. 99.(f) Not applicable.
4 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: January 29, 1997 American Electric Power Company, Inc. By: /s/ ARMANDO A. PENA -------------------------------------- Armando A. Pena Treasurer 5 EXHIBIT INDEX
SEQUENTIALLY NUMBERED EXHIBIT NO. DESCRIPTION PAGE - ----------- --------------------------------------------------------------------------------- ------------ 99. (a) (1) Offer to Purchase and Proxy Statement, dated January 30, 1997. 99. (a) (2) Letter of Transmittal for each series of securities. 99. (a) (3) Notice of Guaranteed Delivery. 99. (a) (4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. 99. (a) (5) Form of Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees. 99. (a) (6) Summary Simplified Instructions. 99. (a) (7) Summary Advertisement, dated January 30, 1997. 99. (a) (8) Letter to Shareholders, dated January 30, 1997. 99. (a) (9) Press Release, dated January 29, 1997. 99. (b) Not applicable. 99. (c) Not applicable. 99. (d) Tax Opinion of Simpson Thacher & Bartlett 99. (e) Not applicable. 99. (f) Not applicable.
EX-99.A.1 2 OFFER TO PURCHASE AND PROXY STATEMENT 1 OFFER TO PURCHASE AND PROXY STATEMENT AMERICAN ELECTRIC POWER COMPANY, INC. OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF INDIANA MICHIGAN POWER COMPANY 119,767 SHARES, CUMULATIVE PREFERRED STOCK, 4- 1/8% SERIES AT A PURCHASE PRICE OF $62.31 PER SHARE, CUSIP NUMBER 454889 30 4 40,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.12% SERIES AT A PURCHASE PRICE OF $64.17 PER SHARE, CUSIP NUMBER 454889 20 5 60,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.56% SERIES AT A PURCHASE PRICE OF $69.94 PER SHARE, CUSIP NUMBER 454889 82 5 400,000 SHARES, CUMULATIVE PREFERRED STOCK, 5.90% SERIES AT A PURCHASE PRICE OF $101.83 PER SHARE, CUSIP NUMBER 454889 85 8 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6- 1/4% SERIES AT A PURCHASE PRICE OF $103.79 PER SHARE, CUSIP NUMBER 454889 84 1 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6- 7/8% SERIES AT A PURCHASE PRICE OF $106.45 PER SHARE, CUSIP NUMBER 454889 86 6 350,000 SHARES, CUMULATIVE PREFERRED STOCK, 6.30% SERIES AT A PURCHASE PRICE OF $103.71 PER SHARE, CUSIP NUMBER 454889 83 3 ------------------------ INDIANA MICHIGAN POWER COMPANY PROXY STATEMENT WITH RESPECT TO ITS COMMON STOCK AND CUMULATIVE PREFERRED STOCK ------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. ------------------------ American Electric Power Company, Inc., a New York corporation ("AEP"), invites the holders of each series of cumulative preferred stock listed above (each a "Series of Preferred," and the holder thereof a "Preferred Shareholder") of Indiana Michigan Power Company, an Indiana corporation and direct utility subsidiary of AEP ("I&M"), to tender any and all of their shares of a Series of Preferred ("Shares") for purchase at the purchase price per Share listed above plus accrued and unpaid dividends for the Shares tendered, net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and Proxy Statement and in the accompanying Letter of Transmittal (which together constitutes the "Offer"). AEP will purchase any and all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. See "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension of Tender Period; Termination; Amendments." THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED BELOW). SEE "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF THE OFFER." Concurrently with the Offer, the Board of Directors of I&M is soliciting proxies for use at the Special Meeting of Shareholders of I&M to be held at AEP's principal office, 1 Riverside Plaza, Columbus, Ohio 43215, on February 28, 1997 at 4:15 p.m., New York City time, or any adjournment or postponement of such meeting (the "Special Meeting"). The Special Meeting is being held to consider an amendment (the "Proposed Amendment") to I&M's Amended Articles of Acceptance (the "Articles") which would remove a provision of the Articles that limits I&M's ability to issue unsecured debt. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT, THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. IN ADDITION, PREFERRED SHAREHOLDERS OF RECORD HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT IN THE AMOUNT OF $1.00 PER SHARE TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE PREFERRED SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE PURCHASE PRICE PER SHARE LISTED ABOVE. ------------------------ The Company will pay to a Soliciting Dealer (as defined herein) a solicitation fee for Shares tendered, accepted for payment and paid for pursuant to the Offer, subject to certain conditions. See "Fees and Expenses Paid to Dealers." ------------------------ THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") NOR HAS THE SEC PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ------------------------ NEITHER AEP, I&M, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. I&M'S BOARD OF DIRECTORS RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ------------------------ This Offer to Purchase and Proxy Statement is first being mailed on or about January 30, 1997 to Preferred Shareholders of record on January 27, 1997. ------------------------ Each Series of Preferred is traded in the over-the-counter market (the "OTC") and is not listed on any national securities exchange, except for the 4- 1/8% Series, which is traded on the Chicago Stock Exchange ("CSE"). On January 28, 1997, the last reported sale price as reported by the CSE was $47.00 for the 4- 1/8% Series of Preferred (on December 11, 1996) and the last reported sale price as reported by the National Quotation Bureau, Inc. was $55.75 for the 4.12% Series of Preferred (on January 8, 1997). There were no sales prices available for the 4.56% Series, the 5.90% Series, the 6 1/4% Series, the 6 7/8% Series and the 6.30% Series. Preferred Shareholders are urged to obtain a current market quotation, if available, for the Shares. ------------------------ The Dealer Managers for the Offer are: MERRILL LYNCH & CO. SALOMON BROTHERS INC The date of this Offer to Purchase and Proxy Statement is January 30, 1997. 2 NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF AEP OR I&M AS TO WHETHER PREFERRED SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES OF ANY SERIES OF PREFERRED PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AEP OR I&M. IMPORTANT Any Preferred Shareholder desiring to accept the Offer and tender all or any portion of his or her Shares should either (i) request his or her broker, dealer, commercial bank, trust company or nominee to effect the transaction for him or her, or (ii) complete and sign the Letter of Transmittal, in accordance with the instructions in such Letter of Transmittal, mail or deliver the same and any other required documents to First Chicago Trust Company of New York (the "Depositary"), and deliver the certificates for such Shares to the Depositary, along with the Letter of Transmittal, or tender such Shares pursuant to the procedure for book-entry transfer set forth below under "Terms of the Offer -- Procedure for Tendering Shares," on or prior to the Expiration Date (as defined below). A Preferred Shareholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or nominee must contact such broker, dealer, commercial bank, trust company or nominee if he or she desires to tender such Shares. Any Preferred Shareholder who desires to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply in a timely manner with the procedure for book-entry transfer, should tender such Shares by following the procedures for guaranteed delivery set forth below under "Terms of the Offer -- Procedure for Tendering Shares." EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL, AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR SUCH SERIES OF PREFERRED OR A NOTICE OF GUARANTEED DELIVERY MAY BE USED TO TENDER SHARES OF SUCH SERIES OF PREFERRED. Questions or requests for assistance may be directed to Morrow & Co., Inc. ("Morrow" or the "Information Agent") or to Merrill Lynch & Co. ("Merrill Lynch") and Salomon Brothers Inc ("Salomon Brothers") (Merrill Lynch and Salomon Brothers collectively the "Dealer Managers") at their respective telephone numbers and addresses set forth on the back cover of this Offer to Purchase and Proxy Statement. Requests for additional copies of this Offer to Purchase and Proxy Statement, the Letter of Transmittal or other tender offer or proxy materials may be directed to the Information Agent, and such copies will be furnished promptly at the companies' expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 2 3 TABLE OF CONTENTS
PAGE ---- SUMMARY............................................................................... 4 TERMS OF THE OFFER.................................................................... 7 Number of Shares; Purchase Prices; Expiration Date; Dividends.................... 7 Procedure for Tendering Shares................................................... 7 Withdrawal Rights................................................................ 9 Acceptance of Shares for Payment and Payment of Purchase Price and Dividends..... 10 Certain Conditions of the Offer.................................................. 11 Extension of Tender Period; Termination; Amendments.............................. 12 PROPOSED AMENDMENT AND PROXY SOLICITATION............................................. 13 Introduction..................................................................... 13 Voting Securities, Rights and Procedures......................................... 13 Proxies.......................................................................... 14 Special Cash Payments............................................................ 15 Security Ownership of Certain Beneficial Owners and Management................... 15 Business to Come Before the Special Meeting...................................... 16 Explanation of the Proposed Amendment............................................ 16 Reasons for the Proposed Amendment............................................... 18 Relationship with Independent Public Accountants................................. 19 PRICE RANGE OF SHARES; DIVIDENDS...................................................... 19 PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.................................... 21 CERTAIN FEDERAL INCOME TAX CONSEQUENCES............................................... 23 SOURCE AND AMOUNT OF FUNDS............................................................ 25 TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES..................................... 26 FEES AND EXPENSES PAID TO DEALERS..................................................... 26 CERTAIN INFORMATION REGARDING AEP AND I&M............................................. 27 SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION......................................... 27 MISCELLANEOUS......................................................................... 29
3 4 SUMMARY The following summary is provided solely for the convenience of the Preferred Shareholders. This summary is not intended to be complete and is qualified in its entirety by reference to the full text and more specific details contained in this Offer to Purchase and Proxy Statement and the Letter of Transmittal and any amendments hereto or thereto. Preferred Shareholders are urged to read this Offer to Purchase and Proxy Statement and the Letter of Transmittal in their entirety. Each of the capitalized terms used in this summary and not defined herein has the meaning set forth elsewhere in this Offer to Purchase and Proxy Statement. The Companies.............. AEP, 1 Riverside Plaza, Columbus, Ohio 43215, is a registered holding company under the Public Utility Holding Company Act of 1935, as amended (the "Holding Company Act"), which owns, directly or indirectly, all of the outstanding common stock of its electric utility subsidiaries, including I&M. The service area of AEP's electric utility subsidiaries covers portions of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. I&M, One Summit Square, Fort Wayne, Indiana 46801, is a utility primarily engaged in the generation, purchase, transmission and distribution of electric power to approximately 537,000 customers in Indiana and Michigan, and in supplying electric power at wholesale to other electric utility companies and municipalities. The Shares................. 4- 1/8% Cumulative Preferred Stock (par value $100 per share) 4.12% Cumulative Preferred Stock (par value $100 per share) 4.56% Cumulative Preferred Stock (par value $100 per share) 5.90% Cumulative Preferred Stock (par value $100 per share) 6- 1/4% Cumulative Preferred Stock (par value $100 per share) 6- 7/8% Cumulative Preferred Stock (par value $100 per share) 6.30% Cumulative Preferred Stock (par value $100 per share) The Offer and Purchase Price...................... Offer to purchase any or all shares of each Series of Preferred at the price set forth below. $ 62.31 per 4- 1/8% Share $ 64.17 per 4.12% Share $ 69.94 per 4.56% Share $101.83 per 5.90% Share $103.79 per 6- 1/4% Share $106.45 per 6- 7/8% Share $103.71 per 6.30% Share Independent Offer.......... The Offer for one Series of Preferred is independent of the Offer for any other Series of Preferred. The Offer is not conditioned upon any minimum number of Shares of the applicable Series of Preferred being tendered. Preferred Shareholders who wish to tender their Shares are not required to vote in favor of the Proposed Amendment. The Offer is subject, however, to shareholder approval of the Proposed Amendment and certain other conditions. Expiration Date of the Offer...................... The Offer expires at 5:00 p.m., New York City time February 28, 1997, unless extended (the "Expiration Date"). How to Tender Shares....... See "Terms of the Offer -- Procedure for Tendering Shares". For further information, call the Information Agent or the Dealer Managers or consult your broker for assistance. 4 5 Withdrawal Rights.......... Tendered Shares of any Series of Preferred may be withdrawn at any time until the Expiration Date with respect to such Series of Preferred and, unless previously accepted for payment, may also be withdrawn after March 28, 1997. See "Terms of the Offer -- Withdrawal Rights." Purpose of the Offer....... AEP is making the Offer because AEP believes that the purchase of Shares is economically attractive to I&M and indirectly to AEP and its shareholders. In addition, the Offer gives Preferred Shareholders the opportunity to sell their Shares at a price which AEP believes to be a premium over the market price and without the usual transaction costs associated with a market sale. See "Purpose of the Offer; Certain Effects of the Offer." Dividends.................. I&M declared and paid the regular quarterly dividend on each Series of Preferred payable on January 2, 1997 to holders of record as of the close of business on December 6, 1996 (the "January 1997 Dividend"). Tendering Preferred Shareholders will be entitled to any dividends accrued prior to the Payment Date (as defined herein), in respect of any later dividend periods (or any portion thereof). Brokerage Commissions...... Not payable by Preferred Shareholders. Solicitation Fee........... AEP will pay to each designated Soliciting Dealer (as defined herein) a solicitation fee of $1.50 per Share for Shares of the 4- 1/8% Series, the 4.12% Series and the 4.56% Series that are tendered, accepted for payment and paid for pursuant to the Offer (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share for Shares of the 4- 1/8% Series, the 4.12% Series and the 4.56% Series). AEP will pay a solicitation fee of $0.50 per Share for Shares of the 5.90% Series, the 6- 1/4% Series, the 6.30% Series and the 6- 7/8% Series that are tendered, accepted for payment and paid for pursuant to the Offer; provided, however, that any fee payable pursuant to this sentence shall be paid 80% to the Dealer Managers and 20% to any designated Soliciting Dealer (which may be a Dealer Manager). I&M will pay a separate fee of $0.50 per Share for Shares of the 4- 1/8 Series, the 4.12% Series and the 4.56% Series that are not tendered pursuant to the Offer but which are voted in favor of the Proposed Amendment. A Soliciting Dealer will not be entitled to a solicitation fee or a separate fee for Shares beneficially owned by such Soliciting Dealer. Proposed Amendment......... Concurrently with the Offer, the Board of Directors of I&M is soliciting proxies for use at the Special Meeting of Shareholders of I&M. The Special Meeting is being held to consider an amendment to I&M's Articles which would remove a provision that limits I&M's ability to issue unsecured debt. If the Proposed Amendment is approved by the shareholders, the clause of the Articles that places restrictions on I&M's ability to issue or assume indebtedness will be eliminated with respect to any Shares that remain outstanding after the consummation of the Offer. See "Purpose of the Offer; Certain Effects of the Offer." Record Date................ January 27, 1997. Special Cash Payment....... Preferred Shareholders of record have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares. If the Proposed Amendment is approved and adopted by I&M's sharehold- 5 6 ers, I&M will make a special cash payment of $1.00 per Share to each Preferred Shareholder who voted in favor of the Proposed Amendment but who did not tender his or her Shares (the "Special Cash Payment"). Preferred Shareholders who validly tender their Shares will be entitled only to the purchase price per Share listed on the front cover of this Offer to Purchase and Proxy Statement plus an amount in cash equivalent to any dividends accrued and unpaid prior to the Payment Date. Stock Transfer Tax......... Except as described herein, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. See Instruction 6 of the applicable Letter of Transmittal. See "Terms of the Offer -- Acceptance of Shares for Payment of Purchase Price and Dividends." Payment Date............... Promptly after the Expiration Date or any extension thereof. Further Information........ Additional copies of this Offer to Purchase and Proxy Statement and the applicable Letter of Transmittal may be obtained by contacting Morrow, 909 Third Avenue, New York, New York 10022-4799, telephone (800)-566-9061 (toll free) and (212) 754-8000 (brokers and dealers). Questions about the Offer should be directed to Merrill Lynch at (888) ML4-TNDR (toll free) (888-654-8637 (toll free)) or to Salomon Brothers at (800) 558-3745 (toll free). 6 7 TERMS OF THE OFFER NUMBER OF SHARES; PURCHASE PRICES; EXPIRATION DATE; DIVIDENDS Upon the terms and subject to the conditions described herein and in the applicable Letter of Transmittal, AEP will purchase any and all Shares that are validly tendered on or prior to the applicable Expiration Date (and not properly withdrawn in accordance with "Terms of the Offer -- Withdrawal Rights") at the purchase price per Share listed on the front cover of this Offer to Purchase and Proxy Statement for the Shares tendered, plus accrued and unpaid dividends for the Shares tendered to the Payment Date, net to the seller in cash. See "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension of Tender Period; Termination." On January 27, 1997, there were issued and outstanding 119,767 Shares of the 4- 1/8% Series of Preferred; 40,000 Shares of the 4.12% Series of Preferred; 60,000 Shares of the 4.56% Series of Preferred; 400,000 Shares of the 5.90% Series of Preferred; 300,000 Shares of the 6- 1/4% Series of Preferred; 300,000 Shares of the 6- 7/8% Series of Preferred; and 350,000 Shares of the 6.30% Series of Preferred. THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED HEREIN, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. SEE "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF THE OFFER." The Offer is being sent to all persons in whose names Shares are registered on the books of I&M as of the close of business on January 27, 1997 and transferees of such persons. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. With respect to each Series of Preferred, the Expiration Date is the later of 5:00 p.m. New York City time, on February 28, 1997 or the latest time and date to which the Offer with respect to such Series of Preferred is extended. AEP expressly reserves the right, in its sole discretion, and at any time and/or from time to time, to extend the period of time during which the Offer for any Series of Preferred is open, by giving oral or written notice of such extension to the Depositary and making a public announcement thereof, without extending the period of time during which the Offer for any other Series of Preferred is open. There is no assurance whatsoever that AEP will exercise its right to extend the Offer for any Series of Preferred. If AEP decides, in its sole discretion, to (i) decrease the number of Shares of any Series of Preferred being sought, (ii) increase or decrease the consideration offered in the Offer to holders of any Series of Preferred or (iii) increase or decrease the Soliciting Dealers' fees and, at the time that notice of such increase or decrease is first published, sent or given to holders of such Series of Preferred in the manner specified herein, the Offer for such Series of Preferred is scheduled to expire at any time earlier than the tenth business day from the date that such notice is first so published, sent or given, such Offer will be extended until the expiration of such ten-business-day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:00 a.m. through 11:59 p.m., New York City time. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED. The January 1997 Dividend was declared on each Series of Preferred and was paid on January 2, 1997 to holders of record as of the close of business on December 6, 1996. Tendering Preferred Shareholders will be entitled to any dividends accrued prior to the Payment Date in respect of any later dividend periods (or any portion thereof). PROCEDURE FOR TENDERING SHARES To tender Shares pursuant to the Offer, the tendering owner of Shares must either: (a) send to the Depositary (at one of its addresses set forth on the back cover of this Offer to Purchase and Proxy Statement) a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees and any other documents required by the Letter of Transmittal and either (i) certificates for the Shares to be tendered must be received by the Depositary at one of such 7 8 addresses or (ii) such Shares must be delivered pursuant to the procedures for book-entry transfer described herein (and a confirmation of such delivery must be received by the Depositary), in each case by the Expiration Date; or (b) comply with the guaranteed delivery procedure described under "Guaranteed Delivery Procedure" below. A tender of Shares made pursuant to any method of delivery set forth herein or in the Letter of Transmittal will constitute a binding agreement between the tendering holder and AEP upon the terms and subject to the conditions of the Offer. The Depositary will establish an account with respect to the Shares at The Depository Trust Company and the Philadelphia Depository Trust Company (each a "Book Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase and Proxy Statement, and any financial institution that is a participant in the system of a Book-Entry Transfer Facility may make delivery of Shares by causing such Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the procedures of such Book-Entry Transfer Facility. Although delivery of Shares may be effected through book-entry transfer, such delivery must be accompanied by either (i) a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees and any other required documents or (ii) an Agent's Message (as hereinafter defined) and, in any case, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and Proxy Statement on or prior to the Expiration Date. DELIVERY OF SUCH LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY OR TO AEP DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility, received by the Depositary and forming a part of the book-entry transfer when a tender is initiated, which states that such Book-Entry Transfer Facility has received an express acknowledgment from a participant tendering Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that AEP may enforce such agreement against such participant. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc. ("NASD"), or by a commercial bank or trust company having an office or correspondent in the United States that is a participant in an approved Signature Guarantee Medallion Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal need not be guaranteed if (a) the Letter of Transmittal or is signed by the registered owner of the shares tendered therewith and such owner has not completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on the Letter of Transmittal or (b) such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. If Shares are registered in the name of a person other than the signatory on the Letter of Transmittal, or if unpurchased Shares are to be issued to a person other than the registered holder(s), the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the Shares with the signature(s) on the Shares or stock powers guaranteed as stated above. See Instructions 4, 6 and 7 to the Letter of Transmittal. Guaranteed Delivery Procedure. If a Preferred Shareholder desires to tender Shares pursuant to the Offer and such Preferred Shareholder's certificates are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such Shares may nevertheless be tendered if all of the following guaranteed delivery procedures are complied with: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by AEP and I&M herewith, is received (with any required signatures or signature guarantees) by the Depositary as provided below on or prior to the Expiration Date; and 8 9 (iii) the certificates for all tendered Shares in proper form for transfer or a Book-Entry Confirmation with respect to all tendered Shares, together with a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal, are received by the Depositary no later than 5:00 p.m., New York City time, within three business days after the date of execution of such Notice of Guaranteed Delivery. THE NOTICE OF GUARANTEED DELIVERY MAY BE DELIVERED BY HAND OR MAILED TO THE DEPOSITARY AND MUST INCLUDE AN ENDORSEMENT BY AN ELIGIBLE INSTITUTION IN THE FORM SET FORTH IN SUCH NOTICE OF GUARANTEED DELIVERY. In all cases, Shares shall not be deemed validly tendered unless a properly completed and duly executed Letter of Transmittal or, if applicable, an Agent's Message, is received by the Depositary. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer in all cases will be made only after timely receipt by the Depositary of certificates for (or an Agent's Message with respect to) such Shares, a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees and all other documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. BECAUSE IT IS THE TIME OF RECEIPT, NOT THE TIME OF MAILING, WHICH DETERMINES WHETHER A TENDER HAS BEEN MADE PRIOR TO THE EXPIRATION DATE, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING PREFERRED SHAREHOLDER WHO IS A UNITED STATES PERSON MUST NOTIFY THE DEPOSITARY OF SUCH PREFERRED SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY COMPLETING AND EXECUTING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE CASE OF A FOREIGN PREFERRED SHAREHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY). SEE "CERTAIN FEDERAL INCOME TAX CONSEQUENCES." EACH PREFERRED SHAREHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF THE OFFER. All questions as to the form of documents and the validity, eligibility (including the time of receipt) and acceptance for payment of any tender of Shares will be determined by AEP, in its sole discretion, and its determination will be final and binding. AEP reserves the absolute right to reject any or all tenders of Shares that (i) it determines are not in proper form or (ii) the acceptance for payment of or payment for which may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any defect or irregularity in any tender of Shares. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. WITHDRAWAL RIGHTS Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable, except that they may be withdrawn after March 28, 1997, unless previously accepted for payment as provided in this Offer to Purchase and Proxy Statement. To be effective, a written notice of withdrawal must be timely received by the Depositary, at one of its addresses set forth on the back cover of this Offer to Purchase and Proxy Statement, and must specify the name of the person who tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with 9 10 signatures guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered owner (if different from that of the tendering Preferred Shareholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and the name of the registered holder (if different from the name of such account). Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in "Terms of the Offer -- Procedure for Tendering Shares" at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by AEP, in its sole discretion, and its determination will be final and binding. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or will incur any liability for failure to give a any such notification. ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE AND DIVIDENDS Upon the terms and subject to the conditions of the Offer, and as promptly as practicable after the Expiration Date, AEP will accept for payment (and thereby purchase) and pay for Shares validly tendered and not withdrawn as permitted in "Terms of the Offer -- Withdrawal Rights." Thereafter, payment for all Shares validly tendered on or prior to the Expiration Date and accepted pursuant to the Offer will be made by the Depositary by check as promptly as practicable after the Expiration Date. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made promptly but only after timely receipt by the Depositary of certificates for such Shares (or of an Agent's Message), a properly completed and duly executed Letter of Transmittal and any other required documents. For purposes of the Offer, AEP will be deemed to have accepted for payment (and thereby purchased) Shares that are validly tendered and not withdrawn as, if and when it gives oral or written notice to the Depositary of its acceptance for payment of such Shares. AEP will pay for Shares that it has purchased pursuant to the Offer by depositing the purchase price therefor plus accrued and unpaid dividends thereon with the Depositary, which will act as agent for tendering Preferred Shareholders for the purpose of receiving payment from AEP and transmitting payment to tendering Preferred Shareholders. Under no circumstances will interest be paid on amounts to be paid to tendering Preferred Shareholders, regardless of any delay in making such payment. Certificates for all Shares not validly tendered will be returned or, in the case of Shares tendered by book-entry transfer, such Shares will be credited to an account maintained with a Book-Entry Transfer Facility, as promptly as practicable, without expense to the tendering Preferred Shareholder. If certain events occur, AEP may not be obligated to purchase Shares pursuant to the Offer. See "Terms of the Offer -- Certain Conditions of the Offer." AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered owner, or if tendered Shares are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner, such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See Instruction 6 of the accompanying Letter of Transmittal. 10 11 CERTAIN CONDITIONS OF THE OFFER AEP WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. PREFERRED SHAREHOLDERS WHO TENDER THEIR SHARES WILL ONLY BE ENTITLED TO THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS OFFER TO PURCHASE AND PROXY STATEMENT. In addition, notwithstanding any other provision of the Offer, AEP will not be required to accept for payment or pay for any Shares tendered, and may terminate or amend the Offer (by oral or written notice to the Depositary and timely public announcement) or may postpone (subject to the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") for prompt payment for or return of Shares) the acceptance for payment of, or payment for, Shares tendered, if at any time after January 29, 1997, and at or before the Expiration Date, any of the following shall have occurred (which shall not have been waived by AEP): (a) there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, or before any court, authority, agency or tribunal that (i) challenges the acquisition of Shares pursuant to the Offer or otherwise in any manner relates to or affects the Offer or (ii) in the reasonable judgment of AEP, would or might materially and adversely affect the business, condition (financial or otherwise), income, operations or prospects of AEP and its subsidiaries taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of AEP or any of its subsidiaries or materially impair the Offer's contemplated benefits to AEP; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or AEP or any of its subsidiaries, by any legislative body, court, authority, agency or tribunal that, in AEP's reasonable judgment, would or might directly or indirectly (i) make the acceptance for payment of, or payment for, some or all of the Shares illegal or otherwise restrict or prohibit consummation of the Offer; (ii) delay or restrict the ability of AEP, or render AEP unable, to accept for payment or pay for some or all of the Shares; (iii) materially impair the contemplated benefits of the Offer to AEP or I&M (including materially increasing the effective interest cost of certain types of unsecured debt); or (iv) materially affect the business, condition (financial or otherwise), income, operations or prospects of AEP and its subsidiaries taken as a whole, or otherwise materially impair in any way the contemplated future conduct of the business of AEP or any of its subsidiaries; (c) there shall have occurred (i) any significant decrease in the market price of the Shares, (ii) any change in the general political, market, economic or financial conditions in the United States or abroad that, in the reasonable judgment of AEP, would or might have a material adverse effect on AEP's business, operations, prospects or ability to obtain financing generally or the trading in the Shares or other equity securities of AEP; (iii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation on, or any event that, in AEP's reasonable judgment, would or might affect the extension of credit by lending institutions in the United States; (iv) the commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States; (v) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market; (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, in AEP's reasonable judgment, a material acceleration or worsening thereof; (vii) any decline in either the Dow Jones Industrial Average 11 12 or the Standard and Poor's Composite 500 Stock Index by an amount in excess of 15% measured from the close of business on January 29, 1997; or (viii) a decline in the ratings accorded any of AEP's or I&M's securities by Standard & Poor's Rating Services ("S&P"), Moody's Investors Service, Inc. ("Moody's") or Duff & Phelps, Inc. ("D&P") or that S&P, Moody's or D&P has announced that it has placed any such rating under surveillance or review with negative implications. (d) any tender or exchange offer with respect to some or all of the Shares (other than the Offer) or other equity securities of AEP, or a merger, acquisition or other business combination proposal for AEP, shall have been proposed, announced or made by any person or entity; (e) there shall have occurred any event or events that have resulted, or in AEP's reasonable judgment, may result, in an actual or threatened change in the business, condition (financial or otherwise), income, operations, stock ownership or prospects of AEP and its subsidiaries; or (f) the Securities and Exchange Commission (the "SEC") shall have withheld approval, under the Holding Company Act, of the acquisition of the Shares by AEP pursuant to the Offer or the approval and adoption of the Proposed Amendment at the Special Meeting or the issuance of short-term debt by AEP and/or I&M; and, in the sole judgment of AEP, such event or events make it undesirable or inadvisable to proceed with the Offer or with such acceptance for payment or payment. With respect to the approval of the SEC referenced in clause (f) above, the SEC must find that the acquisition of the Shares by AEP is not detrimental to the public interest or the interests of the investors or consumers, and that the consideration paid in connection with the acquisition and the adoption of the Proposed Amendment, including fees, commissions and other remuneration, is reasonable. The foregoing conditions (including the condition that the Proposed Amendment be approved and adopted at the Special Meeting) are for the sole benefit of AEP and may be asserted by AEP regardless of the circumstances (including any action or inaction by AEP) giving rise to any such condition, and any such condition may be waived by AEP, in whole or in part, at any time and from time to time in its sole discretion. A decision by AEP to terminate or otherwise amend any Offer, following the occurrence of any of the foregoing, with respect to one Series of Preferred will not create an obligation on behalf of AEP to terminate or otherwise amend in a similar manner the Offer with respect to any other Series of Preferred. The failure by AEP at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by AEP concerning the events described above will be final and binding on all parties. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS AEP expressly reserves the right, in its sole discretion, and at any time and/or from time to time prior to the Expiration Date, to extend the period of time during which the Offer for any Series of Preferred is open by giving oral or written notice of such extension to the Depositary, without extending the period of time during which the Offer for any other Series of Preferred is open. There can be no assurance, however, that AEP will exercise its right to extend the Offer for any Series of Preferred. During any such extension, all Shares of the subject Series of Preferred previously tendered will remain subject to the Offer, except to the extent that such Shares may be withdrawn as set forth in "Terms of the Offer -- Withdrawal Rights." AEP also expressly reserves the right, in its sole discretion, to, among other things, terminate the Offer and not accept for payment or pay for any Shares tendered, subject to Rule 13e-4(f)(5) under the Exchange Act, which requires AEP either to pay the consideration offered or to return the Shares tendered promptly after the termination or withdrawal of the Offer upon the occurrence of any of the conditions specified in "Terms of the Offer -- Certain Conditions of the Offer" by giving oral or written notice of such termination to the Depositary, and making a public announcement thereof. Subject to compliance with applicable law, AEP further reserves the right, in its sole discretion, to amend the Offer in any respect. Amendments to the Offer may be made at any time and/or from time to time 12 13 effected by public announcement thereof, such announcement, in the case of an extension, to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to Preferred Shareholders affected thereby in a manner reasonably designed to inform such Preferred Shareholders of such change. Without limiting the manner in which AEP may choose to make a public announcement, except as required by applicable law, AEP shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. If AEP materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, AEP will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) under the Exchange Act. Those rules require that the minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price, a change in percentage of securities sought or a change in the dealer's solicitation fee) will depend on the facts and circumstances, including the relative materiality of such terms or information. The SEC has stated that, in its view, an offer should remain open for a minimum of five business days from the date that a notice of such a material change is first published, sent or given. If the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that AEP publishes, sends or gives to Preferred Shareholders a notice that it will (i) increase or decrease the price it will pay for Shares, (ii) decrease the percentage of Shares it seeks, or (iii) increase or decrease the soliciting dealers' fees the Offer will be extended until the expiration of such period of ten business days. THE OFFER FOR EACH SERIES OF PREFERRED IS INDEPENDENT OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. IF AEP EXTENDS OR AMENDS ANY OFFER WITH RESPECT TO ONE SERIES OF PREFERRED FOR ANY REASON, AEP WILL HAVE NO OBLIGATION TO EXTEND THE OFFER FOR ANY OTHER SERIES OF PREFERRED. PROPOSED AMENDMENT AND PROXY SOLICITATION INTRODUCTION This Offer to Purchase and Proxy Statement is first being mailed on or about January 30, 1997 to the shareholders of I&M in connection with the solicitation of proxies by the Board of Directors of I&M (the "Board") for use at the Special Meeting. At the Special Meeting, the shareholders of record of I&M will vote upon the Proposed Amendment to the Articles. While Preferred Shareholders who wish to tender their Shares pursuant to the Offer are not required to vote in favor of or against the Proposed Amendment, the Offer is conditioned upon the Proposed Amendment being approved and adopted at the Special Meeting. In addition, Preferred Shareholders of record have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares. If the Proposed Amendment is approved and adopted by I&M's shareholders, I&M will make a special cash payment in the amount of $1.00 per Share (the "Special Cash Payment") to each Preferred Shareholder of record who voted in favor of the Proposed Amendment, provided that such Shares have not been tendered pursuant to the Offer. If a Preferred Shareholder votes against the Proposed Amendment or abstains, such Preferred Shareholder shall not be entitled to the Special Cash Payment (regardless of whether the Proposed Amendment is approved and adopted). Those Preferred Shareholders who validly tender their Shares will be entitled only to the purchase price per Share listed on the front cover of this Offer to Purchase and Proxy Statement. VOTING SECURITIES, RIGHTS AND PROCEDURES Only holders of record of I&M's voting securities at the close of business on January 27, 1997 (the "Record Date") will be entitled to vote in person or by proxy at the Special Meeting. The outstanding voting securities of I&M are divided into two classes: common stock and cumulative preferred stock. The class of cumulative preferred stock has been issued in the seven Series of Preferred with the record holders of all 13 14 Shares of the cumulative preferred stock voting together as one class. The shares outstanding as of the Record Date, and the vote to which each share is entitled in consideration of the Proposed Amendment, are as follows:
SHARES VOTES PER CLASS OUTSTANDING SHARE --------------------------------------------------------- ------------- ----------- Common Stock (No Par Value).............................. 1,400,000 1 vote Cumulative Preferred Stock (Par Value $100 Per Share).... 1,569,767 1 vote
The affirmative vote of the holders of at least two-thirds of the outstanding shares of each of I&M's (i) common stock and (ii) cumulative preferred stock, all series voting together as one class, is required to approve the Proposed Amendment to be presented at the Special Meeting. Abstentions and broker non-votes will have the effect of votes against the Proposed Amendment. AEP HAS ADVISED I&M THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF I&M IN FAVOR OF THE PROPOSED AMENDMENT. Votes at the Special Meeting will be tabulated preliminarily by the Depositary. Inspectors of Election, duly appointed by the presiding officer of the Special Meeting, will definitively count and tabulate the votes and determine and announce the results at the Special Meeting. I&M has no established procedure for confidential voting. There are no rights of appraisal in connection with the Proposed Amendment. PROXIES THE ENCLOSED PROXY IS SOLICITED BY I&M'S BOARD, WHICH RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF I&M'S COMMON STOCK WILL BE VOTED IN FAVOR OF THE PROPOSED AMENDMENT. Shares of I&M's cumulative preferred stock represented by properly executed proxies received at or prior to the Special Meeting will be voted in accordance with the instructions thereon. If no instructions are indicated, duly executed proxies will be voted in accordance with the recommendation of the Board. It is not anticipated that any other matters will be brought before the Special Meeting. However, the enclosed proxy gives discretionary authority to the proxy holders named therein should any other matters be presented at the Special Meeting, and it is the intention of the proxy holders to act on any other matters in accordance with their best judgment. Execution of a proxy will not prevent a shareholder from attending the Special Meeting and voting in person. Any shareholder giving a proxy may revoke it at any time before it is voted by delivering to the Secretary of I&M written notice of revocation bearing a later date than the proxy, by delivering a duly executed proxy bearing a later date, or by voting in person by ballot at the Special Meeting. Withdrawal of Shares tendered pursuant to the Offer will not revoke a properly executed proxy. I&M will bear the cost of the solicitation of proxies by the Board. I&M has engaged Morrow & Co., Inc. to act as Information Agent in connection with the solicitation of proxies for a fee of $5,800, plus reimbursement of reasonable out-of-pocket expenses. Proxies will be solicited by mail or by telephone. In addition, officers and employees of I&M may also solicit proxies personally or by telephone; such persons will receive no additional compensation for these services. The Information Agent has not been retained to make, and will not make, solicitations or recommendations in connection with the Proposed Amendment. I&M has requested that brokerage houses and other custodians, nominees and fiduciaries forward solicitation materials to the beneficial owners of shares of I&M's cumulative preferred stock held of record by such persons and will reimburse such brokers and other fiduciaries for their reasonable out-of-pocket expenses incurred in connection therewith. The solicitation of proxies has been approved by the SEC under the Holding Company Act. An application has been filed with the SEC under the Holding Company Act requesting approval of the Proposed Amendment and the acquisition of the Shares by AEP pursuant to the Offer. 14 15 SPECIAL CASH PAYMENTS Subject to the terms and conditions set forth in this Offer to Purchase and Proxy Statement, if (but only if) the Proposed Amendment is approved and adopted by the shareholders of I&M, I&M will make a Special Cash Payment to each Preferred Shareholder who voted in favor of the Proposed Amendment, in person by ballot or by proxy, at the Special Meeting in the amount of $1.00 for each Share held by such Preferred Shareholder on the Record Date which is so voted, provided that such Shares have not been tendered pursuant to the Offer. SPECIAL CASH PAYMENTS WILL BE MADE TO PREFERRED SHAREHOLDERS AS OF THE RECORD DATE (IF SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER) ONLY IN RESPECT OF EACH SHARE WHICH IS VOTED FOR THE ADOPTION OF THE PROPOSED AMENDMENT; PROVIDED, HOWEVER, THAT THOSE PREFERRED SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS OFFER TO PURCHASE AND PROXY STATEMENT. If the Proposed Amendment is approved and adopted, Special Cash Payments will be paid out of I&M's general funds, promptly after the Proposed Amendment shall have become effective. However, no accrued interest will be paid on the Special Cash Payments regardless of any delay in making such payments. Only Preferred Shareholders on the Record Date (or their legal representatives or attorneys-in-fact) are entitled to vote at the Special Meeting and to receive Special Cash Payments from I&M. Any beneficial holder of Shares who is not the registered holder of such Shares as of the Record Date (as would be the case for any beneficial holder whose Shares are registered in the name of such holder's broker, dealer, commercial bank, trust company or other nominee) must arrange with the record Preferred Shareholder to execute and deliver a proxy form on such beneficial owner's behalf. If a beneficial holder of Shares intends to attend the Special Meeting and vote in person, such beneficial holder must obtain a legal proxy form from his or her broker, dealer, commercial bank, trust company or other nominee. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As noted above, AEP owns all the outstanding common stock of I&M. Pursuant to Section 13(d) of the Exchange Act, a beneficial owner of a security is any person who directly or indirectly has or shares voting or investment power over such security. No person or group is known by management of I&M to be the beneficial owner of more than 5% of the Shares as of the Record Date. I&M's directors and executive officers do not beneficially own any Shares as of the Record Date. The beneficial ownership of AEP's common stock held by each director, as well as directors and executive officers as a group, as of December 31, 1996, is set forth in the following table. Fractions of shares have been rounded to the nearest whole number.
NAME(1) SHARES -------------------------------------------------------------- ------- C. R. Boyle................................................... 3,454(a) G. A. Clark................................................... 955 P. J. DeMaria................................................. 7,603) (c)(d) W. N. D'Onofrio............................................... 3,981(a) E. L. Draper, Jr.............................................. 6,793(a)(c) W. J. Lhota................................................... 14,054) (b)(c) G. P. Maloney................................................. 5,512) (b)(c) J. J. Markowsky............................................... 7,123(a)(d) D. B. Synowiec................................................ 2,335(a) D. M. Trenary................................................. 160(a) J. H. Vipperman............................................... 5,510(a)(c) W. E. Walters................................................. 5,200(a) E. W. Wittkamper.............................................. 2,902(a)(c) All directors and executive officers as a group............... 150,811(e)
15 16 - --------------- (a) Includes shares and share equivalents held in the following plans in the amounts listed below:
AEP EMPLOYEE AEP PERFORMANCE AEP EMPLOYEES STOCK OWNERSHIP SHARE INCENTIVE SAVINGS PLAN PLAN (SHARES) PLAN (SHARES) (SHARE EQUIVALENTS) --------------- --------------- ------------------- Mr. Boyle.................................. 50 -- 3,404 Mr. Clark.................................. 8 -- 946 Mr. DeMaria................................ 90 881 2,945 Mr. D'Onofrio.............................. 64 -- 3,917 Dr. Draper................................. -- 2,050 2,383 Mr. Lhota.................................. 64 812 11,809 Mr. Maloney................................ 92 867 3,053 Dr. Markowsky.............................. 71 775 6,154 Mr. Synowiec............................... 58 -- 2,277 Mr. Trenary................................ 44 -- 116 Mr. Vipperman.............................. 86 527 4,766 Mr. Walters................................ 48 -- 5,152 Mr. Wittkamper............................. 37 -- 1,628 All Directors and Executive Officers....................... 712 5,912 48,550
With respect to the shares and share equivalents held in these plans, such persons have sole voting power, but the investment/disposition power is subject to the terms of such plans. (b) 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. (c) Includes the following numbers of shares held in joint tenancy with a family member: Mr. DeMaria, 1,232; Dr. Draper, 2,083; Mr. Lhota, 1,368; Mr. Maloney, 1,500; Mr. Vipperman, 60; and Mr. Wittkamper, 1,237. (d) Includes the following numbers of shares held by family members over which beneficial ownership is disclaimed: Mr. DeMaria, 2,392 and Dr. Markowsky, 18. (e) Represents less than 1% of the total number of shares outstanding. BUSINESS TO COME BEFORE THE SPECIAL MEETING The following Proposed Amendment to the Articles is the only item of business expected to be presented at the Special Meeting: To remove in its entirety ARTICLE 6(A), Subparagraph 7(B)(c), limiting I&M's ability to issue unsecured indebtedness. THE FOLLOWING STATEMENTS, UNLESS THE CONTEXT OTHERWISE REQUIRES, ARE SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT OF A PROVISION OF THE ARTICLES, AND ARE QUALIFIED IN THEIR ENTIRETY BY THE ARTICLES AND SUBPARAGRAPH 7(B)(C) (AS DESCRIBED BELOW). EXPLANATION OF THE PROPOSED AMENDMENT ARTICLE 6(A), Subparagraph 7(B)(c) of the Articles currently provides that, so long as any shares of I&M's cumulative preferred stock of any series are outstanding, I&M shall not, without the consent of the holders of such shares entitled to cast a majority of the total number of votes which holders of the cumulative preferred stock then outstanding are entitled to cast, issue or assume any unsecured debt securities (other than for purposes of the reacquisition, redemption or other retirement of any evidences of indebtedness theretofore 16 17 issued or assumed by I&M or the reacquisition, redemption or other retirement of all outstanding shares of I&M cumulative preferred stock) if, immediately after such issue or assumption, the total principal amount of all unsecured debt securities (other than the principal amount of all long-term unsecured debt securities not in excess of 10% of the capitalization of I&M) issued or assumed by I&M and then outstanding would exceed 10% of the capitalization of I&M (the "Debt Limitation Provision"). The Proposed Amendment, if adopted, would eliminate in its entirety Subparagraph 7(B)(c), as set forth below, from the Articles. Unless otherwise defined, capitalized terms used in Paragraph 7(B) are used as defined in the Articles. ARTICLE 6(A), Paragraph 7(B) of the Articles states: "(B) So long as any shares of the Cumulative Preferred Stock of any series are outstanding, the Corporation shall not, without the consent (given by vote at a meeting called for that purpose) of the holders of such shares entitled to cast a majority of the total number of votes which holders of the Cumulative Preferred Stock then outstanding are entitled to cast: . . . (c) Issue or assume any unsecured debt securities for purposes other than (i) the reacquisition, redemption or other retirement of any evidences of indebtedness theretofore issued or assumed by the Corporation, or (ii) the reacquisition, redemption or other retirement of all outstanding shares of the Cumulative Preferred Stock, if, immediately after such issue or assumption, the total principal amount of all unsecured debt securities (other than the principal amount of all long-term unsecured debt securities not in excess of 10% of the Capitalization of the Corporation) issued or assumed by the Corporation and then outstanding would exceed 10% of the Capitalization of the Corporation. For purposes of this subparagraph (c) only: (I) "unsecured debt securities" shall be deemed to mean any unsecured notes, debentures, or other securities representing unsecured indebtedness, but shall not include contractual commitments and agreements for the purchase of property, materials, power, energy or equipment to be used, consumed or resold in the ordinary course of the Corporation's business; (II) "long-term unsecured debt securities" shall be deemed to mean all unsecured debt securities outstanding, as of any specified time of computation, other than (x) unsecured debt securities maturing by their terms on a date less than ten years subsequent to such time of computation, and (y) the principal amount required under any sinking fund or other debt retirement provision, to be reacquired, redeemed or otherwise retired by the Corporation on a date less than ten years subsequent to such time of computation; provided, however, that the principal amount of any class of unsecured debt securities, which at the time of issuance or assumption by the Corporation matured by its terms on a date ten or more years subsequent to such issuance or assumption, and which at the time of such computation (aa) is not required to be reacquired, redeemed or otherwise retired, through sinking fund or other debt retirement provision, prior to maturity of such class or (bb) represents the final maturity of a series of maturities within such class, shall continue to be deemed to be long-term unsecured debt securities until such final requirement or maturity shall occur on a date less than five years subsequent to such time of computation; and (III) the "Capitalization of the Corporation" shall be deemed to mean, as of any specified time of computation, an amount equal to the sum of the total principal amount of all bonds or other debt securities representing secured indebtedness issued or assumed by the Corporation and then to be outstanding, and the aggregate of the par value of, or stated capital represented by, the outstanding shares of all classes of stock and of the surplus of the Corporation, paid in, earned and other, if any;" 17 18 REASONS FOR THE PROPOSED AMENDMENT I&M believes that regulatory, legislative, technological and market developments are likely to lead to a more competitive environment in the electric utility industry. I&M and AEP's other electric utility subsidiaries believe that they currently have a favorable competitive position because of their relatively low costs. As competition intensifies, flexibility and cost reduction will be even more crucial to success. Because the electric utility industry is extremely capital intensive, control and minimization of financing costs are of particular importance. In response to the competitive forces and regulatory changes faced by I&M and AEP's other electric utility subsidiaries, AEP and its public utility subsidiaries have from time to time considered, and expect to continue to consider, various strategies designed to enhance their competitive position and to increase their ability to adapt to and anticipate changes in their utility business. I&M believes that adoption of the Proposed Amendment is key to financial flexibility and capital cost reduction. If adopted, the Debt Limitation Provision will be eliminated. Historically, I&M's debt financing generally has been accomplished through the issuance of long-term first mortgage bonds, a modest amount of unsecured short-term debt and long-term installment purchase contracts for pollution control bonds. First mortgage bonds represent secured indebtedness placing a first priority lien on substantially all of I&M's assets. I&M's first mortgage bonds issued under its Mortgage and Deed of Trust between I&M and its bondholders contain certain restrictive covenants with respect to, among other things, the disposition of assets and the ability to issue additional first mortgage bonds. Unsecured debt generally has fewer restrictions than first mortgage bonds. Short-term debt, a low cost form of debt available to I&M, represents one type of unsecured indebtedness. Pollution control bond financing, a favorable type of financing due to its tax-exempt status, is available only for very limited purposes. The Proposed Amendment will not only allow I&M to issue a greater amount of unsecured debt, but also will allow I&M to issue a greater amount of total debt. I&M, however, presently has no intention of issuing a greater amount of total debt than it would have issued absent the adoption of the Proposed Amendment, except that I&M expects to issue additional unsecured debt to fund the purchase of the Shares from AEP. Rather, it is I&M's intention to attain flexibility in the mix of its outstanding debt and therefore have the option to use more short-term and other unsecured debt and less first mortgage bonds. Inasmuch as the Debt Limitation Provision contained in the Articles limits I&M's flexibility in planning and financing its business activities, I&M believes it ultimately will be at a competitive disadvantage if the Debt Limitation Provision is not eliminated. The industry's new competitors (for example, power marketers, exempt wholesale generators, independent power producers and cogeneration facilities) generally are not subject to the type of financing restrictions the Articles impose on I&M. Recently, several other utilities with the same or similar charter restrictions have successfully eliminated such provisions by soliciting their shareholders for the same or similar amendments. In addition, some potential utility competitors, and other AEP public utility subsidiaries, including Columbus Southern Power Company and Kentucky Power Company, have no comparable provision restricting the issuance of unsecured debt. Although I&M sells relatively low-cost power, I&M must continue to explore new ways of reducing costs and enhancing flexibility. I&M believes that the adoption of the Proposed Amendment will be in the best long-term competitive interests of its shareholders. Financial Flexibility. If the Proposed Amendment is adopted, I&M will have increased flexibility (i) to choose among different types of debt financing and (ii) to finance projects using the most cost effective means. I&M believes that various types of unsecured debt alternatives will increase in importance as an option in financing its construction program and refinancing first mortgage bonds. The availability and flexibility of unsecured debt is necessary to take full advantage of changing conditions in securities markets. As a result, I&M may increase the amount of unsecured debt to more than 20% of capitalization. In addition, although I&M's earnings currently are sufficient to meet the earnings coverage tests that must be satisfied before issuing additional first mortgage bonds and preferred stock, there is no guarantee that this will be true in the future. Other utilities have been unable to issue first mortgage bonds during certain periods because of restrictive covenants in their mortgages. I&M's inability to issue first mortgage bonds or preferred stock in the future, combined with the inability to issue additional unsecured debt, would limit I&M's financing options to more costly options, including additional common equity. Moreover, continued 18 19 reliance on the issuance of first mortgage bonds under I&M's Mortgage and Deed of Trust could limit I&M's ability in the future to strategically redeploy its assets. Under the Debt Limitation Provision, I&M's use of unsecured short-term debt is presently restricted. However, I&M believes that the prudent use of such debt in excess of this provision is vital to effective financial management of its business. Not only is unsecured short-term debt generally one of the least expensive forms of capital, it also provides flexibility in meeting seasonal and business cycle fluctuations in cash requirements, acts as a bridge between issues of permanent capital and can be used when unfavorable conditions prevail in the market for long-term capital. Lower Costs. As previously mentioned, I&M's short-term debt issuances generally represent one of its lowest-cost forms of financing. I&M is reassessing its historically modest use of short-term debt. By increasing its use of short-term debt, I&M may be able to lower its cost structure further, thereby making its products more competitive and reducing its business risks. However, with the Debt Limitation Provision in place, the availability and corresponding benefits of short-term debt diminish. And although short-term debt may expose the borrower to more volatility in interest rates, it should be noted that the cost of short-term debt seldom exceeds the cost of other forms of capital available at the same time. IT IS FOR ALL THE ABOVE REASONS THAT I&M'S BOARD BELIEVES THE BEST LONG-TERM INTERESTS OF SHAREHOLDERS ARE SERVED BY, AND ENCOURAGES SHAREHOLDERS TO VOTE FOR, THE ADOPTION OF THE PROPOSED AMENDMENT. RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS Upon recommendation of the Audit Committee of AEP's board of directors, such board employed on January 31, 1996 Deloitte & Touche LLP as independent public accountants for AEP and its subsidiaries, including I&M, for the year 1996. A representative of Deloitte & Touche LLP will not be present at the Special Meeting unless prior to the day of the Special Meeting the Secretary of I&M has received written notice from a Preferred Shareholder addressed to the Secretary at 1 Riverside Plaza, Columbus, Ohio 43215, that such Preferred Shareholder will attend the Special Meeting and wishes to ask questions of a representative of Deloitte & Touche LLP. PRICE RANGE OF SHARES; DIVIDENDS I&M's Cumulative Preferred Stock 4- 1/8% is traded on the CSE under the symbol "IMIGO", and the 4.12% Series, 4.56% Series, 5.90% Series, 6- 1/4% Series, 6- 7/8% Series and 6.30% Series are traded in the over-the-counter market under the symbols "IMIGP", "IMIGN", "IMIGL", "IMIGH", "IMIGM", and "IMIGI", respectively. The last reported sale price on the CSE and in the over-the-counter market, as the case may be, as of the close of business on January 28, 1997, for each of the Series of Preferred is shown on the front cover of this Offer to Purchase and Proxy Statement. However, Preferred Shareholders should be aware that there is no established trading market for the Shares (other than the 4 1/8% Series) and that the Shares of each Series of Preferred only trade sporadically and on a limited basis and, therefore, the last reported sales price may not necessarily reflect the market value of the Shares. 19 20 PREFERRED SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS, IF AVAILABLE, FOR THE SHARES. The following table sets forth the high and low sales prices of each Series of Preferred on the CSE or in the over-the-counter market, as the case may be, as reported by the National Quotation Bureau, Inc., and the cash dividends paid thereon for the fiscal quarters indicated. DIVIDENDS AND PRICE RANGES OF CUMULATIVE PREFERRED STOCK BY QUARTERS (1996 AND 1995)
1996 -- QUARTERS 1995 -- QUARTERS ----------------------------------------- ----------------------------------------- 1ST 2ND 3RD 4TH 1ST 2ND 3RD 4TH -------- -------- -------- -------- -------- -------- -------- -------- CUMULATIVE PREFERRED STOCK ($100 Par Value) 4- 1/8% Series Dividends Paid Per Share................. $1.03125 $1.03125 $1.03125 $1.03125 $1.03125 $1.03125 $1.03125 $1.03125 Market Price -- $ Per Share (CSE) -- Quotations not available 4.56% Series Dividends Paid Per Share................. $1.14 $1.14 $1.14 $1.14 $1.14 $1.14 $1.14 $1.14 Market Price -- $ Per Share (OTC) Ask -- High/Low........................ -- -- -- -- -- -- -- -- Bid -- High............................ 51 51 1/4 52 52 46 5/8 47 1/4 47 1/2 49 1/2 -- Low.............................. 49 3/8 51 51 1/4 52 45 1/2 46 1/4 47 1/4 47 1/2 4.12% Series Dividends Paid Per Share................. $1.03 $1.03 $1.03 $1.03 $1.03 $1.03 $1.03 $1.03 Market Price -- $ Per Share (OTC) Ask -- High/Low........................ -- -- -- -- -- -- -- -- Bid -- High............................ 51 49 49 3/4 50 46 1/2 47 51 51 -- Low.............................. 48 1/4 48 3/4 49 49 3/4 43 46 46 46 5.90% Series Dividends Paid Per Share................. $1.475 $1.475 $1.475 $1.475 $1.475 $1.475 $1.475 $1.475 Market Price -- $ Per Share (OTC) -- Quotations not available 6- 1/4% Series Dividends Paid Per Share................. $1.5625 $1.5625 $1.5625 $1.5625 $1.5625 $1.5625 $1.5625 $1.5625 Market Price -- $ Per Share (OTC) -- Quotations not available 6.30% Series Dividends Paid Per Share................. $1.575 $1.575 $1.575 $1.575 $1.575 $1.575 $1.575 $1.575 Market Price -- $ Per Share (OTC) -- Quotations not available 6- 7/8% Series Dividends Paid Per Share................. $1.71875 $1.71875 $1.71875 $1.71875 $1.71875 $1.71875 $1.71875 $1.71875 Market Price -- $ Per Share (OTC) -- Quotations not available
- --------------- CSE -- Chicago Stock Exchange. OTC -- Over-the-Counter. Note -- The above bid and asked quotations represent prices between dealers and do not represent actual transactions. Market quotations provided by National Quotation Bureau, Inc. Dash indicates quotation not available. Dividends for a Series of Preferred are payable when, as and if declared by I&M's Board of Directors at the rate per annum included in such title of the Series of Preferred listed on the front cover of this Offer to Purchase and Proxy Statement. The January 1997 Dividend was declared on each Series of Preferred and was paid on January 2, 1997 to holders of record as of the close of business on December 6, 1996. Tendering Preferred Shareholders will be entitled to any dividends accrued and unpaid prior to the Payment Date in respect of any later dividend periods (or any portion thereof). 20 21 PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER AEP believes that the purchase of the Shares at this time represents an attractive economic opportunity that will benefit I&M, and indirectly, AEP and its shareholders. In addition, the Offer gives Preferred Shareholders the opportunity to sell their Shares at a price which AEP believes to be a premium to the market price on the date of the announcement of the Offer and without the usual transaction costs associated with a sale. After the consummation of the Offer, AEP or I&M may purchase additional Shares on the open market, in privately negotiated transactions, through one or more tender offers or otherwise. Any such purchases may be on the same terms as, or on terms which are more or less favorable to holders of Shares than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act prohibits AEP and its affiliates (including I&M) from purchasing any Shares of a Series of Preferred, other than pursuant to the Offer, until at least ten business days after the Expiration Date with respect to that Series of Preferred. Any future purchases of Shares by AEP or I&M would depend on many factors, including the market price of the Shares, AEP's business and financial position, legal restrictions on AEP's ability to purchase Shares as well as general economic and market conditions. Preferred Shareholders are not under any obligation to tender Shares pursuant to the Offer. The Offer does not constitute notice of redemption of any Series of Preferred pursuant to I&M's Articles, nor does AEP or I&M intend to effect any such redemption by making the Offer. Further, the Offer does not constitute a waiver by I&M of any option it has to redeem Shares. The 4- 1/8% Series, 4.12% Series and 4.56% Series are not subject to mandatory redemption, but presently are callable at $106.125 per Share, $102.728 per Share and $102.00 per Share, respectively. Commencing in 2004 and continuing through the year 2008, a sinking fund for the 5.90% Series will require the redemption of 20,000 Shares on January 1 of each year and the redemption of the remaining Shares outstanding on January 1, 2009, in each case at $100 per Share; commencing in 2004 and continuing through the year 2008, a sinking fund for the 6- 1/4% Series will require the redemption of 15,000 Shares on April 1 of each year and the redemption of the remaining Shares outstanding on April 1, 2009, in each case at $100 per Share; commencing in 2004 and continuing through the year 2008, a sinking fund for the 6.30% Series will require the redemption of 17,500 Shares on July 1 of each year and the redemption of the remaining Shares outstanding on July 1, 2009, in each case at $100 per Share; and commencing in 2003 and continuing through the year 2007, a sinking fund for the 6-7/8% Series will require the redemption of 15,000 Shares on April 1 of each year and the redemption of the remaining Shares outstanding on April 1, 2008, in each case at $100 per Share. The Shares of each Series of Preferred have no preemptive or conversion rights. Upon liquidation or dissolution of I&M, owners of the Shares would be entitled to receive an amount equal to the liquidation preference per share ($100 except in the case of the 4 1/8% series which, under certain limited circumstances, will be $105.125) plus all accrued and unpaid dividends (whether or not earned or declared) thereon to the date of payment, prior to the payment of any amounts to the holders of I&M's common stock. Shares validly tendered to the Depositary pursuant to the Offer and not withdrawn in accordance with the procedures set forth herein shall be held until the Expiration Date (or returned to the extent the Offer is terminated in accordance herewith). To the extent that the Proposed Amendment is approved and the Shares tendered are accepted for payment and paid for in accordance with the terms hereof, AEP intends to sell its Shares to I&M and, at that time, it is expected that I&M will retire and cancel the Shares. However, in the event the Proposed Amendment is not adopted at the Special Meeting, AEP may elect, but is not obligated to, waive, subject to applicable law, such condition. In that case, subsequent to AEP's waiver and purchase of the Shares, I&M anticipates, as promptly as practicable thereafter, that it would call another special meeting of its shareholders and solicit proxies therefrom for an amendment substantially similar to the Proposed Amendment. At that meeting, AEP would vote any Shares acquired by it pursuant to the Offer or otherwise (together with its shares of common stock) in favor of such amendment, thereby maximizing the prospects for the adoption of the amendment. Any such purchase of Shares by AEP will reduce the number of Shares of each of the Series of Preferred that might otherwise trade publicly or become available for purchase and/or sale and 21 22 likely will reduce the number of owners of Shares of each of the Series of Preferred, which could adversely affect the liquidity and sale value of the Shares not purchased in the Offer. Liquidity of Trading Market. To the extent that Shares of any Series of Preferred are tendered and accepted for payment in the Offer, the trading market for Shares of such Series of Preferred that remain outstanding may be significantly more limited, which might adversely affect the liquidity, market value and price volatility of such Shares. Equity securities with a smaller outstanding market value available for trading (the "float") may command a lower price than would comparable equity securities with a greater float. Therefore, the market price for Shares that are not tendered in the Offer may be affected adversely to the extent that the amount of Shares purchased pursuant to the Offer reduces the float. The reduced float may also make the trading price of the Shares that are not tendered and accepted for payment more volatile. Preferred Shareholders of the remaining Shares may attempt to obtain quotations for the Shares from their brokers; however, there can be no assurance that any trading market will exist for such Shares following consummation of the Offer. To the extent a market continues to exist for the Shares after the Offer, the Shares may trade at a discount compared to present trading depending on the market for Shares with similar features, the performance of I&M, and other factors. There is no assurance that an active market in the Shares will exist and no assurance as to the prices at which the Shares may trade. 4- 1/8% Series. Depending on the number of Shares tendered and purchased pursuant to the Offer, the 4- 1/8% Series may no longer meet the requirements of the CSE for trading, which may adversely affect the market for the Shares of the 4- 1/8% Series. According to its published guidelines, the CSE would consider delisting the 4- 1/8% Series if, among other things, (i) the number of publicly-held Shares of the 4- 1/8% Series should fall below 50,000 or (ii) the number of Preferred Shareholders of the 4- 1/8% Series should fall below 500. If, as a result of the purchase of Shares pursuant to the Offer or otherwise, the 4-1/8% Series no longer meets the requirements of the CSE for continued listing and the listing of the 4- 1/8% Series is discontinued, the market for the 4- 1/8% Series could be adversely affected. In the event of the delisting of the 4- 1/8% Series currently listed on the CSE, it is possible that such Series would continue to trade on another securities exchange or in the over-the-counter market and that price quotations would be reported by such exchange, by the National Association of Securities Dealers, Inc. ("NASD") through the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or by other sources. The extent of the public market for the 4 1/8% Series and the availability of quotations, however, would depend upon such factors as the number of share holders remaining at such time, the interest in maintaining a market in the 4- 1/8% Series on the part of securities firms, the possible termination of registration under the Exchange Act as described below and other factors. The Shares of the 4- 1/8% Series are presently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of such Shares. If the 4- 1/8% Series remains listed on the CSE, the Shares of the 4- 1/8% Series will continue to be "margin securities." If the 4- 1/8% Series is delisted, depending upon factors similar to those described above, the 4- 1/8% Series might no longer constitute "margin securities" for purposes of the margin regulations of the Federal Reserve, in which case, the Shares of the 4- 1/8% Series could no longer be used as collateral for loans made by brokers. In addition, the 4- 1/8% Series is currently registered under Section 12(b) of the Exchange Act. Registration of the Shares of the 4- 1/8% Series under the Exchange Act may be terminated upon the application by I&M to the SEC if such Shares are no longer listed on a national securities exchange. Termination of registration of the Shares of the 4- 1/8% Series under the Exchange Act would substantially reduce the information required to be furnished by I&M to Preferred Shareholders and could make certain provisions of the Exchange Act no longer applicable to I&M. If registration of the 4- 1/8% Series under the Exchange Act were terminated, Shares of the 4- 1/8% Series would no longer be "margin securities" or be eligible for NASDAQ reporting. As of December 31, 1996, there were 712 registered holders of the 4 1/8% Series. OTC Series. The purchase of Shares of the 4.12% Series, 4.56% Series, the 5.90% Series, the 6- 1/4% Series, the 6- 7/8% Series and the 6.30% Series (collectively, the "OTC Series") pursuant to the Offer will reduce the number of holders of Shares of the OTC Series and the number of such Shares that might 22 23 otherwise trade publicly, and, depending upon the number of Shares so purchased, such reduction could adversely affect the liquidity and market value of the remaining Shares of the OTC Series held by the public. The extent of the public market for the Shares of the OTC Series and the availability of price quotations would, however, depend upon such factors as the number of stockholders remaining at such time, the interest in maintaining a market in the Shares of the OTC Series on the part of securities firms and other factors. As of December 31, 1996, there were 95 registered holders of the 4.12% Series, 68 registered holders of the 4.56% Series, 1 registered holder of the 5.90% Series, 1 registered holder of the 6- 1/4% Series, 1 registered holder of the 6- 7/8% Series and 1 registered holder of the 6.30% Series. Other Potential Effects of the Proposed Amendment on Preferred Shareholders who do not Tender. If the Proposed Amendment becomes effective, Preferred Shareholders of Shares that are not tendered and purchased pursuant to the Offer will no longer be entitled to the benefits of the Debt Limitation Provision, which will have been deleted by the Proposed Amendment. As discussed above, the Debt Limitation Provision places restrictions on I&M's ability to issue or assume unsecured indebtedness. Although I&M's debt instruments may contain certain restrictions on I&M's ability to issue or assume debt, any such restrictions may be waived and the increased flexibility afforded I&M by the deletion of the Debt Limitation Provision may permit I&M to take certain actions that may increase the credit risks with respect to I&M, adversely affecting the market price and credit rating of the remaining Shares or otherwise be materially adverse to the interests of the remaining Preferred Shareholders. In addition, to the extent that I&M elects to fund its purchase of the Shares by issuing additional unsecured debt, the remaining Preferred Shareholders' relative position in I&M's capital structure could be perceived to decline, which in turn could adversely affect the market price and credit rating of the remaining Shares. To this end, Moody's has advised I&M that Moody's Investor Service might reconsider its rating of I&M's preferred stock, absent some mitigating factors, and particularly in light of I&M's plan to fund the purchase of shares from AEP through the issuance of additional unsecured debt. Following the consummation of the Offer, the business and operations of I&M will be continued substantially as they are currently being conducted. Except as disclosed in this Offer to Purchase and Proxy Statement, AEP and I&M currently have no plans or proposals that relate to or would result in: (a) the acquisition by any person or entity of additional securities of I&M or the disposition of securities of I&M, other than in the ordinary course of business; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving I&M or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of I&M or any of its subsidiaries; (d) any change in the present Board or management of I&M; (e) any material change in the present dividend rate or policy, or indebtedness or capitalization of I&M; (f) any other material change in I&M's corporate structure or business; (g) any change in I&M's Articles or By-Laws or any actions that may impede the acquisition of control of I&M by any person; (h) a class of equity securities of I&M being delisted from a national securities exchange or no longer authorized to be quoted on the OTC; (i) a class of equity securities of I&M becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of I&M's obligation to file reports pursuant to Section 15(d) of the Exchange Act. NEITHER AEP, I&M, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. CERTAIN FEDERAL INCOME TAX CONSEQUENCES In the opinion of Simpson Thacher & Bartlett, tax counsel to AEP and I&M, the following summary describes the principal United States federal income tax consequences of sales of Shares pursuant to the Offer and the receipt of Special Cash Payments in connection with the approval and adoption of the Proposed Amendment. This summary is based on the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), administrative pronouncements, judicial decisions and existing and proposed Treasury Regulations, changes to any of which subsequent to the date of this Offer to Purchase and Proxy Statement may adversely affect the tax consequences described herein, possibly on a retroactive basis. This summary is 23 24 addressed to Preferred Shareholders who hold Shares as capital assets within the meaning of Section 1221 of the Code. This summary does not discuss all of the tax consequences that may be relevant to a Preferred Shareholder in light of such Preferred Shareholder's particular circumstances or to Preferred Shareholders subject to special rules (including certain financial institutions, tax-exempt organizations, insurance companies, dealers in securities or currencies, foreign persons or entities selling Shares pursuant to the Offer who own or have owned, actually or constructively, more than five percent of such Shares, Preferred Shareholders who acquired their Shares pursuant to the exercise of stock options or other compensation arrangements with I&M or Preferred Shareholders holding the Shares as part of a conversion transaction, as part of a hedge or hedging transaction, or as a position in a straddle for tax purposes). Preferred Shareholders should consult their tax advisors with regard to the application of the United States federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. As used herein, the term "United States Holder" means an owner of a Share that is (i) for United States federal income tax purposes a citizen or resident of the United States; (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof; (iii) an estate, or for taxable years beginning on or before December 31, 1996, in general, any trust, the income of which is subject to United States federal income taxation regardless of its source; or (iv) for taxable years beginning after December 31, 1996, any trust if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more United States fiduciaries have the authority to control all substantial decisions of such trust. A "Non-United States Holder" is a Preferred Shareholder that is not a United States Holder. Tax Considerations for Tendering Preferred Shareholders Characterization of the Sale. A sale of Shares by a Preferred Shareholder pursuant to the Offer will be a taxable transaction for Federal income tax purposes. United States Holders. A United States Holder will recognize gain or loss equal to the difference between the tax basis of such Holder's Shares and the amount of cash received in exchange therefor. A United States Holder's gain or loss will be long-term capital gain or loss if the holding period for the Shares is more than one year as of the date of the sale of such Shares. The excess of net long-term capital gains over net short-term capital losses is taxed at a lower rate than ordinary income for certain non-corporate taxpayers. The distinction between capital gain or loss and ordinary income or loss is also relevant for purposes of, among other things, limitations on the deductibility of capital losses. Non-United States Holders. Any gain realized upon the sale of Shares by a Non-United States Holder pursuant to the Offer generally will not be subject to United States Federal income tax unless (i) such gain is effectively connected with a trade or business in the United States of the Non-United States Holder, or (ii) in the case of a Non-United States Holder who is an individual, such individual is present in the United States for 183 days or more in the taxable year of such sale and certain other conditions are met. A Non-United States Holder described in clause (i) above will be taxed on the net gain derived from the sale at regular graduated United States Federal income tax rates. If a Non-United States Holder that is a foreign corporation falls under clause (i) above, it may also be subject to an additional "branch profits tax" at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty). Unless an applicable tax treaty provides otherwise, an individual Non-United States Holder described in clause (ii) above will be subject to a flat 30% tax on the gain derived from the sale, which may be offset by United States capital losses (notwithstanding the fact that the individual is not considered a resident of the United States). Tax Considerations for Non-Tendering Preferred Shareholders Preferred Shareholders, whether or not they receive Special Cash Payments, will not recognize any taxable gain or loss with respect to the Shares as a result of the modification of the Articles by the Proposed Amendment. United States Holders. There is no direct authority concerning the Federal income tax consequences of the receipt of Special Cash Payments. I&M will, for information reporting purposes, treat Special Cash Payments as ordinary non-dividend income to recipient United States Holders. 24 25 Non-United States Holders. I&M will treat Special Cash Payments paid to a Non-United States Holder of Shares as subject to withholding of United States Federal income tax at a 30% rate. However, Special Cash Payments that are effectively connected with the conduct of a trade or business by the Non-United States Holder within the United States are not subject to the withholding tax (provided such Non-United States Holder provides two originals of Internal Revenue Service ("IRS") Form 4224 stating that such Special Cash Payments are so effectively connected), but instead are subject to United States Federal income tax on a net income basis at applicable graduated individual or corporate rates. Any such effectively connected Special Cash Payments received by a foreign corporation may, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty). A Non-United States Holder of Shares eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS. Backup Withholding. ANY TENDERING PREFERRED SHAREHOLDER WHO FAILS TO COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 THAT IS INCLUDED IN THE APPLICABLE LETTER OF TRANSMITTAL (OR, IN THE CASE OF A FOREIGN PREFERRED SHAREHOLDER, FORM W-8 OBTAINABLE FROM THE DEPOSITARY) MAY BE SUBJECT TO A REQUIRED FEDERAL INCOME TAX BACKUP WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH PREFERRED SHAREHOLDER PURSUANT TO THE OFFER. To prevent backup United States Federal income tax withholding with respect to the purchase price of Shares purchased pursuant to the Offer, a United States Holder must provide the Depositary with the Preferred Shareholder's correct taxpayer identification number and certify that the Preferred Shareholder is not subject to backup withholding of Federal income tax by completing the Substitute Form W-9 included in the applicable Letter of Transmittal. Certain Preferred Shareholders (including, among others, all corporations and certain foreign shareholders) are exempt from backup withholding. For a corporate United States Holder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, the foreign holder must submit a Form W-8, Certificate of Foreign Status, signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A copy of Form W-8 may be obtained from the Depositary. Unless a Preferred Shareholder provides the appropriate certification, under the applicable law and regulations concerning "backup withholding" of Federal United States income tax, the Depositary will be required to withhold, and will withhold, 31% of the gross proceeds otherwise payable to such Preferred Shareholder or other payee. The amount of any backup withholding from a payment to a Preferred Shareholder will be allowed as a credit against such Preferred Shareholder's United States federal income tax liability and may entitle such Preferred Shareholder to a refund, provided that the required information is furnished to the IRS. SOURCE AND AMOUNT OF FUNDS Assuming that AEP purchases all outstanding Shares pursuant to the Offer, the total amount required by AEP to purchase such Shares will be approximately $162 million, exclusive of the accrued and unpaid dividends payments, but including fees and other expenses. AEP intends to fund the Offer through the use of its general funds (which, in the ordinary course, include funds from I&M) and funds borrowed pursuant to AEP's commercial paper program and committed lines of credit, including any bank revolving credit agreements. AEP and I&M sell commercial paper directly to commercial paper dealers who reoffer the commercial paper to investors and issue and sell short-term notes to several domestic and foreign banks through various credit arrangements, including revolving credit agreements or shared lines of credit. AEP and its significant subsidiaries, including I&M, have $500 million of committed lines of credit available for use by AEP and such subsidiaries. If necessary, AEP and its significant subsidiaries may negotiate increases to existing credit arrangements in order to fund the Offer. 25 26 TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES Each of AEP and I&M has been advised by its directors and executive officers that no directors or executive officers of the respective companies own any Shares. Based upon the companies' records and upon information provided to each company by its directors and executive officers, neither company nor, to the knowledge of either, any of their subsidiaries, affiliates, directors or executive officers, or associates of the foregoing, has engaged in any transactions involving Shares during the 40 business days preceding the date hereof. Neither company nor, to the knowledge of either, any of its directors or executive officers or an associate of the foregoing is a party to any contract, arrangement, understanding or relationship relating directly or indirectly to the Offer with any other person or entity with respect to any securities of I&M. FEES AND EXPENSES PAID TO DEALERS Dealer Manager Fees. Merrill Lynch and Salomon Brothers will act as Dealer Managers for AEP in connection with the Offer. AEP has agreed to pay the Dealer Managers a fee of $.50 per Share for any Shares tendered, accepted for payment and paid for pursuant to the Offer and a fee of $.50 per Share for any Shares that are not tendered pursuant to the Offer but which vote in favor of the Proposed Amendment. The Dealer Managers will also be reimbursed by AEP for their reasonable out-of-pocket expenses, including attorneys' fees, and will be indemnified against certain liabilities, including certain liabilities under the federal securities laws, in connection with the Offer. The Dealer Managers have rendered, are currently rendering and are expected to continue to render various investment banking and other advisory services to AEP and I&M. The Dealer Managers have received, and will continue to receive, customary compensation from AEP and I&M for such services. AEP has retained First Chicago Trust Company of New York as Depositary and Morrow & Co., Inc. as Information Agent in connection with the Offer. The Depositary and Information Agent will receive reasonable and customary compensation for their services and will also be reimbursed for reasonable out-of-pocket expenses, including attorney fees. AEP has agreed to indemnify the Depositary and Information Agent against certain liabilities, including certain liabilities under the federal securities law, in connection with the Offer. Neither the Depositary nor the Information Agent has been retained to make solicitations or recommendations in connection with the Offer. Solicited Tender Fees Separate Fees. Pursuant to Instruction 10 of the accompanying Letter of Transmittal, AEP will pay to each designated Soliciting Dealer a solicitation fee of $1.50 per Share for Shares of the 4- 1/8% Series, the 4.12% Series and the 4.56% Series that are tendered, accepted for payment and paid for pursuant to the Offer (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share for Shares of the 4- 1/8% Series, the 4.12% Series and the 4.56% Series). AEP will pay a solicitation fee of $.50 per Share for Shares of the 5.90% Series, the 6- 1/4% Series, the 6.30% Series and the 6- 7/8% Series that are tendered, accepted for payment and paid pursuant to the Offer; provided, however, that any fee payable pursuant to this sentence shall be paid 80% to the Dealer Managers and 20% to any designated Soliciting Dealer (which may be a Dealer Manager). I&M will pay a separate fee of $.50 per Share for Shares of the 4- 1/8% Series, the 4.12% Series and the 4.56% Series that are not tendered pursuant to the Offer but which are voted in favor of the Proposed Amendment. A designated Soliciting Dealer is an entity obtaining the tender or proxy, if the Letter of Transmittal or proxy, as the case may be, shall include its name and it is (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the NASD, (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company. No solicitation fee or separate fee (other than solicitation fees payable to the Dealer Managers as provided above) shall be payable to a Soliciting Dealer with respect to the tenders of Shares or the vote of Shares by a holder unless the Letter of Transmittal or proxy accompanying such tender or vote, as the case may be, designates such Soliciting Dealer. No solicitation fee or separate fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered or voted for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders. No solicitation fee or separate fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to 26 27 transfer the amount of such fee to a depositing holder (other than itself). No solicitation fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account and no separate fee shall be paid to a Soliciting Dealer with respect to Shares voted for such Soliciting Dealer's own account. A Soliciting Dealer shall not be entitled to a solicitation fee or a separate fee for Shares beneficially owned by such Soliciting Dealer. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, I&M, the Depositary, the Dealer Managers or the Information Agent for purposes of the Offer. Soliciting Dealers will include any of the organizations described in clauses (a) (b) and (c) above even when the activities of such organizations in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including the Letter of Transmittal and tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." Stock Transfer Taxes. AEP will pay all stock transfer taxes, if any, payable on account of the acquisition of Shares by AEP pursuant to the Offer, except in certain circumstances where special payment or delivery procedures are utilized pursuant to Instruction 6 of the accompanying Letter of Transmittal. CERTAIN INFORMATION REGARDING AEP AND I&M I&M is an operating utility primarily engaged in the generation, transmission and distribution of electric power to approximately 537,000 customers in Indiana and Michigan, and in supplying electric power at wholesale to other electric utility companies and municipalities. All of the common stock of I&M is owned, directly or indirectly, by AEP, a registered holding company under the Holding Company Act. The service area of AEP's electric utility subsidiaries covers portions of Indiana, Kentucky, Michigan, Ohio, Tennessee, Virginia and West Virginia. AEP and I&M are subject to the informational requirements of the Exchange Act and in accordance therewith file reports and other information with the SEC. Such reports and other information may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington D.C. 20549 at prescribed rates. The SEC maintains a Web site at http://www.sec.gov containing reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including AEP and I&M. Reports, proxy materials and other information about AEP are also available at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Reports, proxy materials and other information about I&M are also available at the offices of the CSE, One Financial Place, 440 South LaSalle Street, Chicago, Illinois 60605. In connection with the Offer AEP has filed an Issuer Tender Offer Statement on Schedule 13E-4 with the SEC that includes certain additional information relating to the Offer. AEP's Schedule 13E-4 will not be available at the SEC's regional offices. SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION Set forth below is certain consolidated historical financial information of I&M and its subsidiaries. The historical financial information (other than the ratios of earnings to fixed charges) was derived from the audited consolidated financial statements included in I&M's Annual Report on Form 10-K for the year ended December 31, 1995 and from the unaudited consolidated financial statements included in I&M's Quarterly Reports on Form 10-Q for the periods ended September 30, 1996 and September 30, 1995. 27 28 CONDENSED INCOME STATEMENT DATA:
(UNAUDITED) YEAR ENDED NINE MONTHS ENDED DECEMBER 31, SEPTEMBER 30, ----------------------- --------------------- 1995 1994 1996 1995 --------- --------- -------- -------- (THOUSANDS, EXCEPT RATIOS) Operating Revenues........................... $1,283,157 $1,251,309 $993,224 $969,843 Operating Income............................. 205,723 221,969 164,571 162,097 Allowance for Borrowed and Equity Funds Used During Construction........................ 2,755 3,441 2,000 1,886 Net Income................................... 141,092 157,502 113,820 109,572 Preferred Stock Dividend Requirements........ 11,791 11,681 8,264 8,843 Earnings Applicable to Common Stock.......... 129,301 145,821 105,556 100,729 Ratio of Earnings to Fixed Charges........... 2.31 2.23 2.45(a) 2.23(a)
- --------------- (a) Ratio for the twelve months ended September 30. CONDENSED BALANCE SHEET DATA (AT END OF PERIOD):
(UNAUDITED) DECEMBER 31, SEPTEMBER 30, ----------------------- ----------------------- 1995 1994 1996 1995 --------- --------- --------- --------- (THOUSANDS) ASSETS: Net Utility Plant In Service.............. $2,477,012 $2,534,443 $2,449,422 $2,484,117 Construction Work In Progress............. 90,587 74,923 79,103 80,718 Cash and Cash Equivalents................. 13,723 9,907 8,120 6,210 Other Current Assets...................... 271,513 264,247 268,133 256,276(a) Other Assets.............................. 1,075,502 994,515 1,071,233 1,048,555(a) ---------- ---------- ---------- ---------- $3,928,337 $3,878,035 $3,876,011 $3,875,876 ========== ========== ========== ========== LIABILITIES: Common Equity............................. $1,022,793 $1,006,892 $1,044,080 $1,021,876 Cumulative Preferred Stock................ 187,000 187,000 156,977 187,000 Long-term Debt (less amounts due within one year)............................... 1,034,048 929,887 1,039,819 1,037,790 Current Liabilities....................... 350,827 441,206 283,375 295,609(a) Other Liabilities......................... 1,333,669 1,313,050 1,351,760 1,333,601(a) ---------- ---------- ---------- ---------- $3,928,337 $3,878,035 $3,876,011 $3,875,876 ========== ========== ========== ==========
- --------------- (a) Certain amounts reclassified to conform with current-period presentation. The financial statements of AEP and I&M and related information included in their Annual Reports on Form 10-K for the year ended December 31, 1995, and their Quarterly Reports on Form 10-Q for the periods ended March 31, June 30, and September 30, 1996 and their Current Reports on Form 8-K, each dated December 23, 1996, each as filed with the SEC, are hereby incorporated by reference. All documents subsequently filed by AEP and I&M pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Offer to Purchase and Proxy Statement and prior to the Expiration Date (or any extension thereof) shall be deemed to be incorporated by reference in this Offer to Purchase and Proxy Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Offer to Purchase and Proxy Statement to the extent that a statement contained herein or in any other subsequently filed documents which is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offer to Purchase and Proxy Statement. 28 29 AEP and I&M will provide without charge to each person to whom a copy of this Offer to Purchase and Proxy Statement has been delivered, on the written or oral request of any such person, a copy of any or all of the documents described above which have been incorporated by reference in this Offer to Purchase and Proxy Statement, other than exhibits to such documents. Written requests for copies of such documents should be addressed to Mr. G. C. Dean, American Electric Power Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215 (telephone 614-223-1000). The information relating to AEP and I&M contained in this Offer to Purchase and Proxy Statement does not purport to be comprehensive and should be read together with the information contained in the documents incorporated by reference. MISCELLANEOUS The Offer is not being made to, nor will AEP accept tenders from, owners of Shares in any jurisdiction in which the Offer or its acceptance would not be in compliance with the laws of such jurisdiction. AEP is not aware of any jurisdiction where the making of the Offer or the tender of Shares would not be in compliance with applicable law. If AEP becomes aware of any jurisdiction where the making of the Offer or the tender of Shares is not in compliance with any applicable law, AEP will make a good faith effort to comply with such law. If, after such good faith effort, AEP cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the owners of Shares residing in such jurisdiction. In any jurisdiction in which the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on AEP's behalf by one or more registered brokers or dealers licensed under the laws of such jurisdiction. AMERICAN ELECTRIC POWER COMPANY, INC. INDIANA MICHIGAN POWER COMPANY 29 30 Facsimile copies of the Letter of Transmittal not will be accepted. The Letter of Transmittal and, if applicable, certificates for Shares should be sent or delivered by each tendering or voting Preferred Shareholder of I&M or his or her broker, dealer, bank or trust company to the Depositary at one of its addresses set forth below. THE DEPOSITARY IS: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Mail: By Hand: By Overnight Courier: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depositary Trust Company 14 Wall Street, 8th Floor Suite 4660 55 Water Street, DTC TAD Suite 4680 Jersey City, New Jersey 07303-2569 Vietnam Veterans Memorial Plaza New York, New York 10005 New York, New York 10041
Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of this Offer to Purchase and Proxy Statement, the Letter of Transmittal and Proxy or other tender offer or proxy materials may be directed to the Information Agent, and such copies will be furnished promptly at the companies' expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (toll free) or (212) 754-8000 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Group 1-888-ML4-TNDR (toll free) (800) 558-3745 (toll free) (1-888-654-8637 (toll free))
30 EX-99.A.2 3 LETTER OF TRANSMITTAL FOR EACH SERIES 1 4-1/8% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 4-1/8% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 30 4 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $62.31 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 2 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 3 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 4 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ---------------------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ------------------------------------------------------------ ---------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: , 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 5 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: , 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 4-1/8% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 7 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 8 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners tendering more than 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 9 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK ------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print) ____________________ Address ________________________________ Part 2 -- City __________ State ___ Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ____________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE __________________________________________ Date: _____________________ 1997. -------------------------------------------------------------------------------------------------------------------------------
10 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 11 4.12% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 4.12% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 20 5 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $64.17 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 12 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 13 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 14 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- -------------------------------------------------- (INCLUDE ZIP CODE) -------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) -------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------- -------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: , 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 15 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: , 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED - ------------------------ ------------------------- (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 4.12% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 16 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 17 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 18 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners tendering more than 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 19 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK ------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print)_____________________ Address_________________________________ Part 2 -- City ___________ State ___Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ____________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE __________________________________________ Date: _____________________ 1997. -------------------------------------------------------------------------------------------------------------------------------
20 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 21 4.56% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 4.56% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 82 5 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $69.94 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. . THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 22 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 23 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 24 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ---------------------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ------------------------------------------------------------ ---------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: , 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 25 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: , 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 4.56% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 26 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 27 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 28 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $1.50 per Share (except that for transactions for beneficial owners tendering more than 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share) for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 29 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK ------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print) ____________________ Address ________________________________ Part 2 -- City __________ State ___ Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ____________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE __________________________________________ Date: _____________________ 1997. -------------------------------------------------------------------------------------------------------------------------------
30 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 31 5.90% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 5.90% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 85 8 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $101.83 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 32 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 33 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 34 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------- (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ---------------------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address ---------------------------------------------------- ---------------------------------------------------- (INCLUDE ZIP CODE) ---------------------------------------------------- --------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: , 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 35 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: , 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED - ------------------------ ------------------------- (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 5.90% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 36 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 37 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 38 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 39 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK ------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print) ___________________ Address Part 2 -- City ___________ State ___Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ____________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE _________________________________________ Date: _____________________ 1997. -------------------------------------------------------------------------------------------------------------------------------
40 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 41 6-1/4% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 6-1/4% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 84 1 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $103.79 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 42 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 43 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 44 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ------------------------------------------------------------ ------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ------------------------------------------------------------ (PLEASE PRINT) Address ------------------------------------------------------------ ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ - -------------------------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated:_________________ , 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 45 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated:__________________ , 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED - ------------------------ ------------------------- (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 6-1/4% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 46 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 47 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 48 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 49 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print)_____________________ Address_________________________________ Part 2 -- City ________ State _____ Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE_____________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE _________________________________________ Date: _____________________ 1997. - ---------------------------------------------------------------------------------------------------------------------------------
50 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 51 6-7/8% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 6-7/8% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 86 6 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $106.45 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 52 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 53 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 54 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ---------------------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ ---------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: ___________________________________________________________________, 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 55 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: __________________________________________________________________, 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED - ------------------------ ------------------------- (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 6-7/8% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 56 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 57 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 58 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 59 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ ---------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print) ____________________ Address ________________________________ Part 2 -- City ________ State _____ Zip Code _____ Awaiting TIN [ ] ---------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ______________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE ___________________________________________ Date: _____________________ 1997. - ----------------------------------------------------------------------------------------------------------------------------------
60 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 61 6.30% I&M LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF 6.30% SERIES CUMULATIVE PREFERRED STOCK CUSIP NUMBER 454889 83 3 OF INDIANA MICHIGAN POWER COMPANY TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH BY AMERICAN ELECTRIC POWER COMPANY, INC. DATED JANUARY 30, 1997, FOR PURCHASE AT A PURCHASE PRICE OF $103.71 PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY BY MAIL: BY HAND: BY OVERNIGHT COURIER: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Suite 4660 55 Water Street, DTC TAD Floor Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza Suite 4680-I&M New York, NY 10041 New York, NY 10005
AMERICAN ELECTRIC POWER COMPANY, INC. ("AEP") WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL MEETING. PREFERRED SHAREHOLDERS OF RECORD OF INDIANA MICHIGAN POWER COMPANY ("I&M") HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. - -------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM W-9 BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX INFORMATION" BELOW. DO NOT SEND ANY CERTIFICATES TO MERRILL LYNCH & CO., SALOMON BROTHERS INC, MORROW & CO., INC., AMERICAN ELECTRIC POWER COMPANY, INC. OR INDIANA MICHIGAN POWER COMPANY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. QUESTIONS REGARDING AND REQUESTS FOR COPIES OF THE OFFER TO PURCHASE AND PROXY STATEMENT OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO MORROW & CO., INC., THE INFORMATION AGENT, AT 909 THIRD AVENUE, NEW YORK, NEW YORK 10022-4799 OR TELEPHONE (800) 566-9061 (TOLL FREE). 62 This Letter of Transmittal is to be used (a) if certificates are to be forwarded to the First Chicago Trust Company of New York ("Depositary") or (b) if delivery of tendered Shares (as defined below) is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC") (hereinafter collectively referred to as the "Book-Entry Transfer Facilities") pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined below). Preferred Shareholders (as defined below) who wish to tender Shares but who cannot deliver their Shares and all other documents required hereby to the Depositary by the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS TO AEP, I&M OR A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE A VALID DELIVERY. - -------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED (IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF SHARES TENDERED** - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. (BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of tendering institution Account No. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of tendering shareholder(s) Date of execution of Notice of Guaranteed Delivery Name of institution that guaranteed delivery If delivery is by book-entry transfer: Name of tendering institution Account no. Transaction Code No. Check Applicable Box: [ ] DTC [ ] PDTC 63 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to American Electric Power Company, Inc., a New York corporation ("AEP"), the shares in the amount set forth in the box above designated "Description of Shares Tendered" pursuant to AEP's offer to purchase any and all of the outstanding shares of the series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation, and direct utility subsidiary of AEP ("I&M"), shown on the first page hereof as to which this Letter of Transmittal is applicable (the "Shares") at the purchase price per Share shown on the first page hereof plus accrued and unpaid dividends thereon, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which as to the Shares, together with the Offer to Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and "Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase and Proxy Statement. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, AEP all right, title and interest in and to all the Shares that are being tendered hereby and hereby constitutes and appoints First Chicago Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being an irrevocable power coupled with an interest), to (a) deliver certificates for such Shares, or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility that holds such Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of AEP, (b) present such Shares for registration and transfer on the books of I&M and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer. The Depositary will act as agent for tendering stockholders for the purpose of receiving payment from AEP and transmitting payment to tendering stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that, when and to the extent the same are accepted for payment by AEP, AEP will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or AEP to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby. All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive the death, bankruptcy or incapacity of the undersigned, and any obligations of the undersigned hereunder shall be binding upon the heirs, legal representatives, successors, assigns, executors and administrators of the undersigned. Except as stated in the Offer, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and (b) the tender of such Shares complies with such Rule 14e-4. AEP's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and AEP upon the terms and subject to the conditions of the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase and Proxy Statement, AEP may terminate or amend the Offer or may not be required to purchase any of the Shares tendered hereby. In either event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned. 64 Unless otherwise indicated in the box below under the heading "Special Payment Instructions", please issue the check for the purchase price of any Shares purchased, and/or return any Shares not tendered or not purchased, in the name(s) of the undersigned (and, in the case of Shares tendered by book-entry transfer, by credit to the account at the Book-Entry Transfer Facility designated above). Similarly, unless otherwise indicated in the box below under the heading "Special Delivery Instructions", please mail the check for the purchase price of any Shares purchased and/or any certificates for Shares not tendered or not purchased (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned signature(s). In the event that both "Special Payment Instructions" and "Special Delivery Instructions" are completed, please issue the check for the purchase price of any Shares purchased and/or return any Shares not tendered or not purchased in the name(s) of, and mail said check and/or any certificates to, the person(s) so indicated. The undersigned recognizes that AEP has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder(s) thereof if AEP does not accept for payment any of the Shares so tendered. ---------------------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, 5 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER) ---------------------------------------------------------------- ---------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 4 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and/or certificates for Shares not tendered or not purchased are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned's signature(s). Mail: [ ] check and/or [ ] certificate(s) to: Name ---------------------------------------------------- (PLEASE PRINT) Address -------------------------------------------------- ------------------------------------------------------------ (INCLUDE ZIP CODE) ------------------------------------------------------------ ---------------------------------------------------------------- SIGNATURE(S) OF OWNER(S) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- Dated: ___________________________________________________________________, 1997 Name(s): - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): Address: - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) DAYTIME Area Code and Telephone No.: (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the stock certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.) 65 GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) Authorized Signature: Name: Name of Firm: Address of Firm: Area Code and Telephone No.: Dated: __________________________________________________________________, 1997 IF SHARES ARE BEING TENDERED, PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE. SOLICITED TENDERS (SEE INSTRUCTION 10) As provided in Instruction 10, AEP will pay to any Soliciting Dealer, as defined in Instruction 10, a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers will not be entitled to a solicitation fee for Shares beneficially owned by such Soliciting Dealer. The abovesigned represents that the Soliciting Dealer which solicited and obtained this tender is: Name of Firm: (PLEASE PRINT) Name of Individual Broker or Financial Consultant: Telephone Number of Broker or Financial Consultant: Identification Number (if known): Address: (INCLUDE ZIP CODE) The following to be completed ONLY if customer's Shares held in nominee name are tendered.
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED - ------------------------ ------------------------- (ATTACH ADDITIONAL LIST IF NECESSARY) - --------------------------------------------- --------------------------------------------- - --------------------------------------------- --------------------------------------------- - --------------------------------------------- ---------------------------------------------
The acceptance of compensation by such Soliciting Dealer will constitute a representation by it that (a) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (b) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer to Purchase and Proxy Statement; (c) in soliciting tenders of Shares, it has used no solicitation materials other than those furnished by AEP; and (d) if it is a foreign broker or dealer not eligible for membership in the National Association of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair Practice in making solicitations. The payment of compensation to any Soliciting Dealer is dependent on such Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary. THIS LETTER OF TRANSMITTAL IS TO BE USED FOR THE TENDER OF SHARES OF THE 6.30% SERIES (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) ONLY. ANY PERSON DESIRING TO TENDER SHARES OF ANY OTHER SERIES OF CUMULATIVE PREFERRED STOCK FOR WHICH AEP IS MAKING A TENDER OFFER MUST SUBMIT A LETTER OF TRANSMITTAL RELATING TO THAT SPECIFIC SERIES. 66 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc., or by a commercial bank or trust company having an office or correspondent in the United States which is a participant in an approved Medallion Signature Guarantee Program (each of the foregoing being referred to as an "Eligible Institution"). Signatures on this Letter of Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in one of the Book-Entry Transfer Facilities whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) has not completed the box above under the heading "Special Payment Instructions" or the box above under the heading "Special Delivery Instructions" on this Letter of Transmittal, or (b) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES. This Letter of Transmittal is to be used if (a) certificates are to be forwarded herewith or, (b) delivery of Shares is to be made by book-entry transfer pursuant to the procedures set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, as well as a properly completed and duly executed Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred Shareholders who wish to tender their Shares yet who cannot deliver their Shares and all other required documents to the Depositary on or prior to the Expiration Date must tender their Shares pursuant to the guaranteed delivery procedure set forth under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution, (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by AEP (with any required signature guarantees) must be received by the Depositary on or prior to the applicable Expiration Date and (c) the certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary's account at one of the Book-Entry Transfer Facilities of all Shares delivered electronically, together with a properly completed and duly executed Letter of Transmittal and any other documents required by this Letter of Transmittal must be received by the Depositary by 5:00 p.m. (New York City time) within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. No alternative, conditional or contingent tenders will be accepted. See "Terms of the Offer -- Number of Shares; Purchase Prices; Expiration Date; Dividends" in the Offer to Purchase and Proxy Statement. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares. 3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares by casting their vote and duly executing the proxy enclosed herewith or by voting in person at the Special Meeting. By executing a Notice of Guaranteed Delivery, a Preferred Shareholder is deemed to have tendered the Shares described in such Notice of Guaranteed Delivery and to have voted such Shares in accordance with the proxy returned therewith, if any. If no vote is indicated on an otherwise properly executed proxy, then all Shares in respect of such proxy will be voted in favor of the Proposed Amendment. See "Proposed Amendment and Proxy Solicitation" in the Offer to Purchase and Proxy Statement. The Offer is being sent to all persons in whose names Shares are registered on the books of I&M on the Record Date (as defined in the Offer to Purchase and Proxy Statement) and transferees thereof. Only a record holder of Shares on the Record Date may vote in person or by proxy at the Special Meeting. No record date is fixed for determining which persons are permitted to tender Shares. Any person who is the beneficial owner but not the record holder of Shares must arrange for the record transfer of such Shares prior to tendering. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box above under the heading "Description of Shares Tendered". In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box above under the heading "Special Payment Instructions" or "Special Delivery Instructions", as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 67 5. SIGNATURES ON THIS LETTER OF TRANSMITTAL AND/OR NOTICE OF GUARANTEED DELIVERY; STOCK POWERS AND ENDORSEMENTS. If either this Letter of Transmittal or the Notice of Guaranteed Delivery (together, the "Tender Documents") is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration, enlargement or any change whatsoever. If any of the Shares tendered under either Tender Document is held of record by two or more persons, all such persons must sign such Tender Document. If any of the Shares tendered under either Tender Document is registered in different names or different certificates, it will be necessary to complete, sign and submit as many separate applicable Tender Documents as there are different registrations or certificates. If either Tender Document is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1. If either Tender Document or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to AEP of the authority of such person so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, AEP will pay or cause to be paid any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be registered in the name of, any person other than the registered holder(s), or if tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. See "Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase Price and Dividends" in the Offer to Purchase and Proxy Statement. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the purchase price of any Shares purchased is to be issued in the name of, and/or any Shares not tendered or not purchased are to be returned to, a person other than the person(s) signing this Letter of Transmittal or if the check and/or any certificate for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to an address other than that shown in the box above under the heading "Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. Preferred Shareholders tendering Shares by book-entry transfer will have any Shares not accepted for payment returned by crediting the account maintained by such Preferred Shareholder at the Book-Entry Transfer Facility from which such transfer was made. 8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder is required to provide the Depositary with either a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, or a properly completed Form W-8. Failure to provide the information on either Substitute Form W-9 or Form W-8 may subject the tendering Preferred Shareholder to a $50 penalty imposed by the Internal Revenue Service and to 31% federal income tax backup withholding on the payment of the purchase price for the Shares. The box in Part 2 of Substitute Form W-9 may be checked if the tendering Preferred Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future. If the box in Part 2 is checked and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold 31% on all payments of the purchase price for the Shares thereafter until a TIN is provided to the Depositary. 9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses listed below. Requests for additional copies of the Offer to Purchase and Proxy Statement, this Letter of Transmittal or other tender offer materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. 68 10. SOLICITED TENDERS. AEP will pay a solicitation fee of $.50 per Share for any Shares tendered, accepted for payment and paid pursuant to the Offer, covered by the Letter of Transmittal which designates, under the heading "Solicited Tenders", as having solicited and obtained the tender, the name of (a) any broker or dealer in securities, including a Dealer Manager in its capacity as a dealer or broker, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (b) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (c) any bank or trust company (each of which is referred to herein as a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by a holder unless the Letter of Transmittal accompanying such tender designates such Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included in the materials provided to brokers and dealers). No such fee shall be payable to a Soliciting Dealer with respect to the tender of Shares by the holder of record, for the benefit of the beneficial owner, unless the beneficial owner has designated such Soliciting Dealer. If tendered Shares are being delivered by book-entry transfer, the Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary within three business days after expiration of the Offer to receive a solicitation fee. No such fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a depositing holder (other than itself). No such fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, the Depositary, the Information Agent or the Dealer Managers for purposes of the Offer. Soliciting Dealers will include any organizations described in clauses (a), (b) or (c) above even when the activities of such organization in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including this Letter of Transmittal, and rendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." 11. IRREGULARITIES. All questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by AEP, in its sole discretion, and its determination shall be final and binding. AEP reserves the absolute right to reject any and all tenders of Shares that it determines are not in proper form or the acceptance for payment of or payment for Shares that may, in the opinion of AEP's counsel, be unlawful. AEP also reserves the absolute right to waive any of the conditions to the Offer or any defect or irregularity in any tender of Shares and AEP's interpretation of the terms and conditions of the Offer (including these instructions) shall be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as AEP shall determine. None of AEP, I&M, the Dealer Managers, the Depositary, the Information Agent or any other person shall be under any duty to give notice of any defect or irregularity in tenders, nor shall any of them incur any liability for failure to give any such notice. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. 12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any of your certificate(s) for Shares have been lost, stolen or destroyed, please call the Depositary at 1-800-649-2153. In addition, you should advise the Depositary of any certificate(s) you have in your possession. You will need to complete an Affidavit of Loss with respect to the lost certificate(s) (which will be provided by the Depositary) and pay an indemnity bond premium fee. The tender of Shares pursuant to this Letter of Transmittal will not be valid unless prior to the Expiration Date: (a) such procedures have been completed and a replacement certificate for the Shares has been delivered to the Depositary or (b) a Notice of Guaranteed Delivery has been delivered to the Depositary. See Instruction 2. IMPORTANT: THIS LETTER OF TRANSMITTAL, DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal income tax law, a Preferred Shareholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payer) with either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or a properly completed Form W-8. If such Preferred Shareholder is an individual, the TIN is his or her social security number. For businesses and other entities, the number is the federal employer identification number. If the Depositary is not provided with the correct TIN or properly completed Form W-8, the Preferred Shareholder may be subject to a $50 penalty imposed by the Internal Revenue Code. In addition, payments that are made to such Preferred Shareholder with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. 69 Certain Preferred Shareholders (including, among others, all corporations and certain foreign individuals) are exempt from backup withholding. For a corporate United States Preferred Shareholder to qualify for such exemption, such Preferred Shareholder must provide the Depositary with a properly completed and executed Substitute Form W-9 attesting to its exempt status. In order for a foreign Preferred Shareholder to qualify as an exempt recipient, such Preferred Shareholder must submit to the Depositary a properly completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under penalties of perjury, attesting to that Preferred Shareholder's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If federal income tax backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Preferred Shareholder. Backup withholding is not an additional tax. Rather, the Federal income tax liability of persons subject to backup withholding will be reduced by the amount of the tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8 To avoid backup withholding on payments that are made to a Preferred Shareholder with respect to Shares purchased pursuant to the Offer, the Preferred Shareholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 attached hereto certifying that the TIN provided on Substitute Form W-9 is correct and that (a) the Preferred Shareholder has not been notified by the Internal Revenue Service that he or she is subject to federal income tax backup withholding as a result of failure to report all interest or dividends or (b) the Internal Revenue Service has notified the Preferred Shareholder that he or she is no longer subject to federal income tax backup withholding. Foreign Preferred Shareholders must submit a properly completed Form W-8 in order to avoid the applicable backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Preferred Shareholder is required to give the Depositary the social security number or employer identification number of the registered owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE YOUR TIN IN THE Social Security Number OR BOX AT RIGHT AND CERTIFY BY SIGNING AND Employer Identification Number DATING BELOW. TIN ______________________________ --------------------------------------------------------------------------------------- SUBSTITUTE Name (Please Print) ____________________ Address_________________________________ Part 2 -- City ________ State _____ Zip Code _____ Awaiting TIN [ ] --------------------------------------------------------------------------------------- FORM W-9 Part 3 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY. I CERTIFY THAT: (1) the number DEPARTMENT OF THE TREASURY shown on the form is my correct taxpayer identification number (or a TIN has not been INTERNAL REVENUE SERVICE issued to me but I have mailed or delivered an application to receive a TIN or intend to do so in the near future), (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or the IRS has notified me that I am no longer subject to backup withholding and (3) all other information provided on this form is true, correct and complete. SIGNATURE ______________________________________________ DATE_____________________ 1997 You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. --------------------------------------------------------------------------------------- PAYER'S REQUEST FOR TAXPAYER NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% IDENTIFICATION NUMBER ("TIN") OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED AND CERTIFICATION GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to do so in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments of the purchase price made to me will be withheld until I provide a number. SIGNATURE ___________________________________________ Date: _____________________ 1997. - ----------------------------------------------------------------------------------------------------------------------------------
70 THE DEALER MANAGERS: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281 Attn: Liability Management Department (888) ML4-TNDR (toll free) (800) 558-3745 (toll free) ((888) 654-8637 (toll free))
THE INFORMATION AGENT: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (call toll free) (212) 754-8000 EX-99.A.3 4 NOTICE OF GUARANTEED DELIVERY 1 NOTICE OF GUARANTEED DELIVERY FOR AMERICAN ELECTRIC POWER COMPANY, INC. OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF INDIANA MICHIGAN POWER COMPANY Cumulative Preferred Stock ($100 par value): 4- 1/8% Series 4.12% Series 4.56% Series 5.90% Series 6- 1/4% Series 6- 7/8% Series 6.30% Series This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if certificates for shares of a series of cumulative preferred stock (each a "Series of Preferred") of Indiana Michigan Power Company ("I&M"), an Indiana corporation and direct utility subsidiary of American Electric Power Company, Inc., a New York Corporation ("AEP"), to be tendered pursuant to the Offer (the "Shares") are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all other documents required by the Letter of Transmittal (as defined in the Offer to Purchase and Proxy Statement which is defined below) to be delivered to the Depositary (as defined below) on or prior to the Expiration Date (as defined in the Offer to Purchase and Proxy Statement). Such form may be delivered by hand or transmitted by mail to the Depositary. See "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. A SEPARATE NOTICE OF GUARANTEED DELIVERY MUST BE USED FOR EACH SERIES OF PREFERRED. THE ELIGIBLE INSTITUTION (AS DEFINED IN THE LETTER OF TRANSMITTAL) WHICH COMPLETES THIS FORM MUST DELIVER THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION. TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY By Mail: By Hand: By Overnight Courier: Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges P.O. Box 2569 c/o The Depository Trust Company 14 Wall Street, 8th Floor Suite 4660 55 Water Street, DTC TAD Suite 4680-I&M Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza New York, NY 10005 New York, NY 10041
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. 2 This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. The undersigned hereby tenders to AEP, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), and the related Letter of Transmittal (which together constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares listed below, pursuant to the guaranteed delivery procedure set forth in "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase and Proxy Statement. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN ADDITION, PREFERRED SHAREHOLDERS OF RECORD HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT) TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH PREFERRED SHAREHOLDER'S SHARES ARE NOT TENDERED PURSUANT TO THE OFFER. Number of Shares ----------------------------------------- ------------------------ ----------------------------------------- Certificate Nos. Signature(s) of Holder(s) (if available): Dated: , 1997 - ----------------------------------------- ---------------------------- - ----------------------------------------- Check one box if Shares will be delivered Name(s) of Holder(s): by book-entry transfer: ----------------------------------------- [ ] The Depository Trust Company ----------------------------------------- [ ] Philadelphia Depository Trust ----------------------------------------- Company Please Type or Print Account No.: Address: ---------------------------- -------------------------------- ----------------------------------------- Zip Code Area Code and Telephone No.: -------------------------
3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm that is a member of a registered national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, guarantees (a) that the above-named person(s) has a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended, (b) that such tender of Shares complies with such Rule 14e-4 and (c) to deliver to the Depositary at one of its addresses set forth above certificate(s) for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the Shares tendered hereby into the Depositary's account at The Depository Trust Company or the Philadelphia Depository Trust Company with a properly completed and duly executed Letter(s) of Transmittal, with any required signature guarantee(s) and any other required documents, all within three New York Stock Exchange trading days after the date hereof. - ----------------------------------------------- ------------------------------------- Name of Firm Authorized Signature - ----------------------------------------------- ------------------------------------- Address Name - ----------------------------------------------- ------------------------------------- City, State, Zip Code Title - ----------------------------------------------- Area Code and Telephone Number Dated: ________________________ , 1997
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. EX-99.A.4 5 LETTER TO BROKERS, ETC. 1 MERRILL LYNCH & CO. SALOMON BROTHERS INC THE DEALER MANAGERS FOR AMERICAN ELECTRIC POWER COMPANY, INC. OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF INDIANA MICHIGAN POWER COMPANY 119,767 SHARES, CUMULATIVE PREFERRED STOCK, 4-1/8% SERIES AT A PURCHASE PRICE OF $62.31 PER SHARE, CUSIP NUMBER 454889 30 4 40,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.12% SERIES AT A PURCHASE PRICE OF $64.17 PER SHARE, CUSIP NUMBER 454889 20 8 60,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.56% SERIES AT A PURCHASE PRICE OF $69.94 PER SHARE, CUSIP NUMBER 454889 82 5 400,000 SHARES, CUMULATIVE PREFERRED STOCK, 5.90% SERIES AT A PURCHASE PRICE OF $101.83 PER SHARE, CUSIP NUMBER 454889 85 8 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6-1/4% SERIES AT A PURCHASE PRICE OF $103.79 PER SHARE, CUSIP NUMBER 454889 84 1 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6-7/8% SERIES AT A PURCHASE PRICE OF $106.45 PER SHARE, CUSIP NUMBER 454889 86 6 350,000 SHARES, CUMULATIVE PREFERRED STOCK, 6.30% SERIES AT A PURCHASE PRICE OF $103.71 PER SHARE, CUSIP NUMBER 454889 83 3 ------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. ------------------------ January 30, 1997 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by American Electric Power Company, Inc., a New York corporation ("AEP"), to act as Dealer Managers and in connection therewith are enclosing the material listed below relating to the invitation of AEP to the holders of each series of cumulative preferred stock of Indiana Michigan Power Company, an Indiana corporation and direct utility subsidiary of AEP ("I&M"), listed above (each a "Series of Preferred") to tender any and all of their shares of a Series of Preferred ("Shares") for purchase at the purchase price per Share listed above plus accrued and unpaid dividends, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement, dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), the proxy and in the Letter of Transmittal for the Shares tendered. As to each Series of Preferred, the Offer to Purchase and Proxy Statement, together with the applicable Letter of Transmittal, constitutes the "Offer". AEP will purchase all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. The Offer for a Series of Preferred is not conditioned upon any minimum number of Shares of such Series of Preferred being tendered and is independent of the Offer for any other Series of Preferred. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO I&M'S AMENDED ARTICLES OF ACCEPTANCE, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN ADDITION, PREFERRED SHAREHOLDERS OF RECORD HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE AND SIGNING THE PROXY ENCLOSED HEREWITH OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY I&M'S SHAREHOLDERS, I&M WILL MAKE A SPECIAL CASH PAYMENT IN THE AMOUNT OF $1.00 PER SHARE TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. SEE "PROPOSED AMENDMENT AND PROXY SOLICITATION", "TERMS OF THE OFFER -- CERTAIN CONDITION OF THE OFFER" AND "TERMS OF THE OFFER -- EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT" IN THE OFFER TO PURCHASE AND PROXY STATEMENT. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. AEP will pay to each designated Soliciting Dealer a solicitation fee of $1.50 per Share for Shares of the 4 1/8% Series, the 4.12% Series and the 4.56% Series that are tendered, accepted for payment and paid for pursuant to the Offer (except that for transactions for beneficial owners equal to or exceeding 5,000 Shares, AEP will pay a solicitation fee of $1.00 per Share for Shares of the 4-1/8% Series, the 4.12% Series and the 4.56% Series). AEP will pay a solicitation fee of $.50 per Share for Shares of the 5.90% Series, the 6-1/4 Series, the 6.30% Series and the 6-7/8% Series that are tendered, accepted for payment and paid for pursuant to the Offer; provided, however, that any fee payable pursuant to this sentence shall be paid 80% to the Dealer Managers and 20% to any designated Soliciting Dealer (which may be a Dealer Manager). I&M will pay a separate fee of $.50 per Share for Shares of the 4-1/8% Series, the 4.12% Series and the 4.56% Series that are not tendered pursuant to the Offer but which are voted in favor of the Proposed Amendment. A designated Soliciting Dealer is an entity obtaining the tender or proxy, if the Letter of Transmittal or proxy, as the case may be, shall include its name and it is (i) any broker or dealer in securities, including the Dealer Managers in their capacity as a broker or dealer, which is a member of any national securities exchange or of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for membership in the NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member, or (iii) any bank or trust company. No solicitation fee or separate fee (other than solicitation fees payable to Dealer Managers as provided above) shall be payable to a Soliciting Dealer with respect to the tender of Shares or the vote of Shares by a holder unless the Letter of Transmittal or proxy accompanying such tender or vote, as the case may be, designates such Soliciting Dealer. No solicitation fee or separate fee shall be payable to a Soliciting Dealer in respect of Shares registered in the name of such Soliciting Dealer unless such Shares are held by such Soliciting Dealer as nominee and such Shares are being tendered or voted for the benefit of one or more beneficial owners identified on the Letter of Transmittal or on the Notice of Solicited Tenders (included below). No solicitation fee or separate fee shall be payable to a Soliciting Dealer if such Soliciting Dealer is required for any reason to transfer the amount of such fee to a 2 depositing holder (other than itself). No solicitation fee shall be paid to a Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's own account and no separate fee shall be paid to a Soliciting Dealer with respect to Shares voted for such Soliciting Dealer's own account. A Soliciting Dealer shall not be entitled to a solicitation fee or a separate fee for Shares beneficially owned by such Soliciting Dealer. No broker, dealer, bank, trust company or fiduciary shall be deemed to be the agent of AEP, I&M the Depositary (as defined below), the Dealer Managers or the Information Agent (as defined below) for purposes of the Offer. Soliciting Dealers will include any of the organizations described in clauses (i), (ii) and (iii) above even when the activities of such organizations in connection with the Offer consist solely of forwarding to clients materials relating to the Offer, including the Letter of Transmittal and tendering Shares as directed by beneficial owners thereof. No Soliciting Dealer is required to make any recommendation to holders of Shares as to whether to tender or refrain from tendering in the Offer. No assumption is made, in making payment to any Soliciting Dealer, that its activities in connection with the Offer included any activities other than those described above, and for all purposes noted in all materials relating to the Offer, the term "solicit" shall be deemed to mean no more than "processing shares tendered" or "forwarding to customers materials regarding the Offer." AEP will also, upon request, reimburse Soliciting Dealers for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. AEP will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal. In order for a Soliciting Dealer to receive a solicitation fee or a separate fee, First Chicago Trust Company of New York, as Depositary (the "Depositary"), must have received from such Soliciting Dealer a properly completed and duly executed Notice of Solicited Tenders and Proxies in the form attached hereto within three business days after the expiration of the Offer or a properly executed proxy on or before the Expiration Date. For your information and for forwarding to your clients for whom you hold Shares registered in your name (or in the name of your nominee), we are enclosing the following documents: 1. The Offer to Purchase and Proxy Statement, dated January 30, 1997. 2. A separate Letter of Transmittal for each Series of Preferred for your use and for the information of your clients. 3. A Proxy. 4. A letter to shareholders of I&M from its Chairman of the Board and Chief Executive Officer. 5. A Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to the Depositary by the applicable Expiration Date (as defined in the Offer to Purchase and Proxy Statement). 6. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space for obtaining such clients' instructions with regard to the Offer and with regard to the proxy solicitation by I&M. 7. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9, providing information relating to backup federal income tax withholding. 8. A return envelope addressed to First Chicago Trust Company of New York, the Depositary. 9. Cover Letter containing Summary Simplified Instructions. Each Series of Preferred has its own Letter of Transmittal, and only the applicable Letter of Transmittal for a particular Series or a Notice of Guaranteed Delivery may be used to tender Shares of such Series of Preferred. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on Friday, February 28, 1997, unless the Offer is extended. NEITHER AEP, I&M, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. Any questions or requests for assistance or additional copies of the enclosed materials may be directed to Morrow & Co., Inc., the Information Agent, or to us, as Dealer Managers, at the respective addresses and telephone numbers set forth on the back cover of the enclosed Offer to Purchase and Proxy Statement. Very truly yours, MERRILL LYNCH & CO. SALOMON BROTHERS INC NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS THE AGENT OF AEP, I&M, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 3 NOTICE OF SOLICITED TENDERS AND PROXIES FOR THE I&M 4-1/8% SERIES List below the number of Shares tendered or voted in favor of the Proposed Amendment but not tendered by each beneficial owner whose tender or vote you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders and Proxies. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. BENEFICIAL HOLDERS OF LESS THAN 5,000 SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
BENEFICIAL HOLDERS OF 5,000 OR MORE SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.00 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
* Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. 4 PROXY ONLY
- ------------------------------------------------------------------------------------------------ TO BE COMPLETED BY TO BE COMPLETED SOLICITING DEALER BY DEPOSITARY ------------------------------------------ NUMBER OF NUMBER OF $.50 FEE BENEFICIAL OWNERS SHARES VOTED SHARES VOTED PER SHARE - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 1.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 2.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 3.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 4.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 5.............................. - ------------------------------------------------------------------------------------------------ Total....................................... - ------------------------------------------------------------------------------------------------
All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 5 NOTICE OF SOLICITED TENDERS AND PROXIES FOR THE I&M 4.12% SERIES List below the number of Shares tendered or voted in favor of the Proposed Amendment but not tendered by each beneficial owner whose tender or vote you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders and Proxies.PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. BENEFICIAL HOLDERS OF LESS THAN 5,000 SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
BENEFICIAL HOLDERS OF 5,000 OR MORE SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.00 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. 6 PROXY ONLY
- ------------------------------------------------------------------------------------------------ TO BE COMPLETED BY TO BE COMPLETED SOLICITING DEALER BY DEPOSITARY ------------------------------------------ NUMBER OF NUMBER OF $.50 FEE BENEFICIAL OWNERS SHARES VOTED SHARES VOTED PER SHARE - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 1.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 2.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 3.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 4.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 5.............................. - ------------------------------------------------------------------------------------------------ Total....................................... - ------------------------------------------------------------------------------------------------
All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 7 NOTICE OF SOLICITED TENDERS AND PROXIES FOR THE I&M 4.56% SERIES List below the number of Shares tendered or voted in favor of the Proposed Amendment but not tendered by each beneficial owner whose tender or vote you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders and Proxies. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. BENEFICIAL HOLDERS OF LESS THAN 5,000 SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
BENEFICIAL HOLDERS OF 5,000 OR MORE SHARES (TENDERS ONLY)
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY ----------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $1.00 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4..................... - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5..................... - -------------------------------------------------------------------------------------------------- Total.............................. - --------------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. 8 PROXY ONLY
- ------------------------------------------------------------------------------------------------ TO BE COMPLETED BY TO BE COMPLETED SOLICITING DEALER BY DEPOSITARY ------------------------------------------ NUMBER OF NUMBER OF $.50 FEE BENEFICIAL OWNERS SHARES VOTED SHARES VOTED PER SHARE - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 1.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 2.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 3.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 4.............................. - ------------------------------------------------------------------------------------------------ Beneficial Owner No. 5.............................. - ------------------------------------------------------------------------------------------------ Total....................................... - ------------------------------------------------------------------------------------------------
All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 9 NOTICE OF SOLICITED TENDERS FOR THE I&M 5.90% SERIES List below the number of Shares tendered by each beneficial owner whose tender you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. TENDERS ONLY
- --------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY DEPOSITARY --------------------------------------------------------------- NUMBER OF VOI TICKET NUMBER OF $.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* SHARES ACCEPTED PER SHARE - --------------------------------------------------------------------------------------------------- Beneficial Owners No. 1........... - --------------------------------------------------------------------------------------------------- Beneficial Owners No. 2........... - --------------------------------------------------------------------------------------------------- Beneficial Owners No. 3........... - --------------------------------------------------------------------------------------------------- Beneficial Owners No. 4........... - --------------------------------------------------------------------------------------------------- Beneficial Owners No. 5........... - --------------------------------------------------------------------------------------------------- Total..................... - ---------------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 10 NOTICE OF SOLICITED TENDERS FOR THE I&M 6-1/4% SERIES List below the number of Shares tendered by each beneficial owner whose tender you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. TENDERS ONLY
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED SOLICITING DEALER BY EXCHANGE AGENT -------------------------------------------------------------- NUMBER OF NUMBER OF VOI TICKET SHARES $.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5............ - -------------------------------------------------------------------------------------------------- Total..................... - --------------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 11 NOTICE OF SOLICITED TENDERS FOR THE I&M 6-7/8% SERIES List below the number of Shares tendered by each beneficial owner whose tender you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. TENDERS ONLY
- -------------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY EXCHANGE AGENT -------------------------------------------------------------- NUMBER OF NUMBER OF VOI TICKET SHARES $.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* ACCEPTED PER SHARE - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 1............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 2............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 3............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 4............ - -------------------------------------------------------------------------------------------------- Beneficial Owner No. 5............ - -------------------------------------------------------------------------------------------------- Total..................... - --------------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 12 NOTICE OF SOLICITED TENDERS FOR THE I&M 6.30% SERIES List below the number of Shares tendered by each beneficial owner whose tender you have solicited. All Shares in a Series of Preferred beneficially owned by a beneficial owner, whether in one account or several, and in however many capacities, must be aggregated for purposes of completing the table below. Any questions as to what constitutes beneficial ownership should be directed to the Depositary. If the space below is inadequate, list the Shares in a separate signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY DEPOSITARY." ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE. TENDERS ONLY
- --------------------------------------------------------------------------------------------- TO BE COMPLETED BY TO BE COMPLETED ONLY SOLICITING DEALER BY EXCHANGE AGENT -------------------------------------------------------------- NUMBER OF NUMBER OF VOI TICKET SHARES $.50 FEE BENEFICIAL OWNERS SHARES TENDERED NUMBER* ACCEPTED PER SHARE - --------------------------------------------------------------------------------------------- Beneficial Owner No. 1....... - --------------------------------------------------------------------------------------------- Beneficial Owner No. 2....... - --------------------------------------------------------------------------------------------- Beneficial Owner No. 3....... - --------------------------------------------------------------------------------------------- Beneficial Owner No. 4....... - --------------------------------------------------------------------------------------------- Beneficial Owner No. 5....... - --------------------------------------------------------------------------------------------- Total................ - ---------------------------------------------------------------------------------------------
- --------------- * Complete if Shares delivered by book-entry transfer. Please submit a separate VOI ticket for Shares tendered when the solicitation fee is to be directed to another Soliciting Dealer. At the time of tendering Shares in book-entry form, please indicate your request in the comments field. All questions as to the validity, form and eligibility (including time of receipt) of any Notice of Solicited Tenders will be determined by the Depositary, in its sole discretion, which determination will be final and binding. Neither the Depositary nor any other person will be under any duty to give notification of any defects or irregularities in any Notice of Solicited Tenders or incur any liability for failure to give such notification. DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. PLEASE COMPLETE THE SIGNATURE FORM ON THE LAST PAGE. 13 The undersigned hereby confirms that: (i) it has complied with the applicable requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, in connection with such solicitation; (ii) it is entitled to such compensation for such solicitation under the terms and conditions of the Offer; (iii) in soliciting tenders of Shares, it has used no soliciting materials other than those furnished by AEP; and (iv) if it is a foreign broker or dealer not eligible for membership in the NASD, it has agreed to conform to the NASD's Rates of Fall Practice in making solicitations. - --------------------------------------------- --------------------------------------------- Firm Name Address (Including Zip Code) - --------------------------------------------- --------------------------------------------- By: Area Code and Telephone Number Title:
EX-99.A.5 6 LETTER TO CLIENTS OF BROKERS, ETC. 1 AMERICAN ELECTRIC POWER COMPANY, INC. OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF INDIANA MICHIGAN POWER COMPANY 119,767 SHARES, CUMULATIVE PREFERRED STOCK, 4-1/8% SERIES AT A PURCHASE PRICE OF $62.31 PER SHARE CUSIP NUMBER 454889 30 4 40,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.12% SERIES AT A PURCHASE PRICE OF $64.17 PER SHARE CUSIP NUMBER 454889 20 5 60,000 SHARES, CUMULATIVE PREFERRED STOCK, 4.56% SERIES AT A PURCHASE PRICE OF $69.94 PER SHARE CUSIP NUMBER 454889 82 5 400,000 SHARES, CUMULATIVE PREFERRED STOCK, 5.90% SERIES AT A PURCHASE PRICE OF $101.83 PER SHARE CUSIP NUMBER 454889 85 8 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6-1/4% SERIES AT A PURCHASE PRICE OF $103.79 PER SHARE CUSIP NUMBER 454889 84 1 300,000 SHARES, CUMULATIVE PREFERRED STOCK, 6-7/8% SERIES AT A PURCHASE PRICE OF $106.45 PER SHARE CUSIP NUMBER 454889 86 6 350,000 SHARES, CUMULATIVE PREFERRED STOCK, 6.30% SERIES AT A PURCHASE PRICE OF $103.71 PER SHARE CUSIP NUMBER 454889 83 3 ------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997, UNLESS THE OFFER IS EXTENDED. ------------------------ January 30, 1997 To Our Clients: Enclosed for your consideration are the Offer to Purchase and Proxy Statement, dated January 30, 1997, a proxy and a separate Letter of Transmittal for each series of cumulative preferred stock listed above (each a "Series of Preferred" and the holder thereof a "Preferred Shareholder") of Indiana Michigan Power Company ("I&M"), an Indiana corporation and direct utility subsidiary of American Electric Power Company, Inc. ("AEP"), of which you own shares. As to each Series of Preferred, the Offer to Purchase and Proxy Statement, together with the applicable Letter of Transmittal, constitutes the "Offer" of AEP to purchase any and all shares of the Series of Preferred ("Shares") at the purchase price per Share listed above plus accrued and unpaid dividends, net to the seller in cash, upon the terms and subject to the conditions of the Offer. AEP will purchase any and all Shares validly tendered and not withdrawn, upon the terms and subject to the conditions of the Offer. The Offer for a Series of Preferred is not conditioned upon any minimum number of Shares of such Series of Preferred being tendered and is independent of the Offer for any other Series of Preferred. While Preferred Shareholders who wish to tender their Shares pursuant to the Offer need not vote in favor of the proposed amendment to I&M's Amended Articles of Acceptance, as set forth in the Offer to Purchase and Proxy Statement (the "Proposed Amendment"), the Offer is conditioned upon the Proposed Amendment being approved and adopted at the Special Meeting (as defined in the Offer to Purchase and Proxy Statement). I&M's Board of Directors recommends voting for the Proposed Amendment. In addition, Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares. If the Proposed Amendment is approved and adopted by I&M's shareholders, I&M will make a special cash payment in the amount of $1.00 per Share to each Preferred Shareholder who voted in favor of the Proposed Amendment, provided that such Shares have not been tendered pursuant to the Offer. See "Proposed Amendment and Proxy Solicitation", "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension of Tender Period; Termination; Amendments" in the Offer to Purchase and Proxy Statement. WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. A TENDER OR A VOTE OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. ANY LETTER OF TRANSMITTAL FURNISHED TO YOU IS SOLELY FOR YOUR INFORMATION AND CANNOT BE USED BY YOU TO TENDER OR VOTE SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish us to tender and/or vote any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer. PLEASE READ THE FOLLOWING INFORMATION CAREFULLY: (1) The Offer is for any and all Shares outstanding as of January 30, 1997. The Offer for a Series of Preferred is independent of the Offer for any other Series of Preferred. (2) The Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on February 28, 1997, unless the Offer is extended with respect to a Series of Preferred. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf by the expiration of the Offer. If you would like to withdraw your Shares that we have tendered, you can withdraw them so long as the Offer remains open or at any time after the expiration of forty business days from the commencement of the Offer if such tendered Shares have not been accepted for payment. (3) While Preferred Shareholders who wish to tender their Shares pursuant to the Offer need not vote in favor of the Proposed Amendment, the Offer is conditioned upon the Proposed Amendment being approved and adopted at the Special Meeting. (4) Preferred Shareholders have the right to vote for or against the Proposed Amendment regardless of whether they tender their Shares. If the Proposed Amendment is approved and adopted by I&M's shareholders, I&M will make a special cash payment in the amount of $1.00 per Share to each Preferred Shareholder who voted in favor of the Proposed Amendment, provided that such Shares have not been tendered pursuant to the Offer. (5) Any stock transfer taxes applicable to the sale of Shares to AEP pursuant to the Offer will be paid by AEP, except as otherwise provided in Instruction 6 of the Letter of Transmittal. NEITHER AEP, I&M, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL 2 SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. If you wish to have us tender and/or vote any or all of your Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer, please so instruct us by completing, executing, detaching and returning to us the instruction form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the detachable part hereof. Your instructions should be forwarded to us in ample time to permit us to submit a tender and/or vote on your behalf by the expiration of the Offer or the Special Meeting, as applicable. The Offer is being made to all holders of Shares. AEP is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to a valid state statute. If AEP becomes aware of any valid state statute prohibiting the making of the Offer, AEP will make a good faith effort to comply with such statute. If, after such good faith effort, AEP cannot comply with such statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of Shares in such state. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of AEP by the Dealer Managers (as defined in the Offer) or one or more registered brokers or dealers licensed under the laws of such jurisdictions. INSTRUCTIONS WITH RESPECT TO OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE PREFERRED STOCK OF, AND PROXY SOLICITATION BY, INDIANA MICHIGAN POWER COMPANY The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase and Proxy Statement, dated January 30, 1997, a proxy and a separate Letter of Transmittal for each series of preferred stock of Indiana Michigan Power Company (each a "Series of Preferred") in which the undersigned owns shares (as to each Series of Preferred, the Offer to Purchase and Proxy Statement, together with the applicable Letter of Transmittal, constitutes the "Offer") in connection with the invitation of American Electric Power Company, Inc. ("AEP") to the holders of each Series of Preferred to tender any and all of their shares of a Series of Preferred ("Shares") for purchase at the purchase price per Share listed on the front cover of the Offer to Purchase and Proxy Statement plus accrued and unpaid dividends, net to the seller in cash, upon the terms and subject to the conditions of the Offer, and in connection with the proxy solicitation being conducted by the Board of Directors of Indiana Michigan Power Company. This will instruct you to tender to AEP the number of Shares indicated below (or, if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions of the Offer.
SERIES OF PREFERRED NUMBER OF SHARES TO BE TENDERED* - --------------------------------------------------------- --------------------------------------------------------- - --------------------------------------------------------- --------------------------------------------------------- - --------------------------------------------------------- --------------------------------------------------------- - --------------------------------------------------------- --------------------------------------------------------- - --------------------------------------------------------- ---------------------------------------------------------
You are further instructed to vote as designated hereunder in respect of the Proposed Amendment all shares which the undersigned is entitled to vote at the Special Meeting:** [ ] FOR [ ] AGAINST [ ] ABSTAIN SIGN HERE SIGNATURE(S): ---------------------------------------------------------------------------- NAME(S): ---------------------------------------------------------------------------- ADDRESS: ---------------------------------------------------------------------------- DATED: ____________, 1997 SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NO.:__________________ - --------------- * By executing and returning these Instructions, unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. ** By executing and returning these Instructions, unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be voted FOR the Proposed Amendment. EX-99.A.6 7 SUMMARY SIMPLIFIED INSTRUCTIONS 1 January 30, 1997 Dear Preferred Shareholder: Enclosed for your consideration is information pertaining to Indiana Michigan Power Company. We ask that you take one of the following actions: 1. If you wish to accept the Offer and tender your shares: - Complete, sign, and date the yellow Letter of Transmittal in accordance with the instructions in the Letter of Transmittal. - Enclose the Letter of Transmittal and related certificates in the brown envelope addressed to First Chicago at: Tenders & Exchanges, P.O. Box 2569, Suite 4660, Jersey City, New Jersey, 07303-2569. - In addition, even if you tender, please vote, sign and date the green proxy card and enclose in the white envelope addressed to First Chicago at: Tenders and Exchange, P.O. Box 2714, Jersey City, N.J. 07303-9714. PLEASE BE AWARE THAT THE OFFER IS CONDITIONED UPON SHAREHOLDERS APPROVING THE PROPOSED AMENDMENT. A FAILURE TO RETURN A PROXY IS A VOTE AGAINST. (Please note that you cannot receive a Special Cash Payment if you tender your shares). 2. If you wish to receive the Special Cash Payment, you must vote: - If you do not want to accept the Offer, you still must vote yes in order to receive the Special Cash Payment. Please vote by signing and dating the green proxy card. A FAILURE TO RETURN A PROXY IS A VOTE AGAINST. - Enclose your completed proxy card in the white envelope addressed to First Chicago at: Tenders & Exchanges, P.O. Box 2714, Jersey City, New Jersey 07303-9714. If you have any questions on how to tender or vote your shares, please call our proxy solicitor: Morrow & Co., Inc. at (800) 566-9061 2 January 30, 1997 Dear Preferred Shareholder: Enclosed for your consideration is information pertaining to Indiana Michigan Power Company. We ask that you take one of the following actions. 1. If you wish to accept the Offer and tender your shares: - Please direct your commercial bank, broker, trust company or other nominee to effect the transaction on your behalf. - Have the aforementioned party vote the green proxy card. PLEASE BE AWARE THAT THE OFFER IS CONDITIONED UPON SHAREHOLDERS APPROVING THE PROPOSED AMENDMENT. A FAILURE TO RETURN A PROXY IS A VOTE AGAINST. (Please note that you cannot receive a special cash payment if you tender your shares). 2. If you wish to receive the Special Cash Payment, you must vote: If you do not want to accept the offer, you still must vote yes in order to receive the special cash payment. Please direct your commercial bank, broker, trust company or other nominee to vote a green proxy on your behalf. A FAILURE TO RETURN A PROXY IS A VOTE AGAINST. If you have any questions on how to tender or vote your shares, please call our proxy solicitor: Morrow & Co., Inc. at (800) 566-9061 EX-99.A.7 8 SUMMARY ADVERTISEMENT 1 This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase and Proxy Statement dated January 30, 1997 and the related Letter of Transmittal, and is being made to all holders of Shares. AEP is not aware of any jurisdiction where the making of the Offer or the tender of Shares is not in compliance with any applicable law. If AEP becomes aware of any jurisdiction where the making of the Offer or the tender of Shares is not in compliance with any applicable law, AEP will make a good faith effort to comply with such law. If, after such good faith effort, AEP cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the owners of Shares residing in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of AEP by Merrill Lynch & Co., Salomon Brothers Inc or one or more registered brokers or dealers licensed under the laws of such jurisdiction. AMERICAN ELECTRIC POWER COMPANY, INC. NOTICE OF OFFER TO PURCHASE FOR CASH ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF APPALACHIAN POWER COMPANY 298,150 Shares, Cumulative Preferred Stock, 4-1/2% Series at a Purchase Price of $69.02 Per Share CUSIP Number 037735 10 7 500,000 Shares, Cumulative Preferred Stock, 5.90% Series at a Purchase Price of $103.17 Per Share CUSIP Number 037735 84 2 600,000 Shares, Cumulative Preferred Stock, 5.92% Series at a Purchase Price of $103.20 Per Share CUSIP Number 037735 85 9 300,000 Shares, Cumulative Preferred Stock, 6.85% Series at a Purchase Price of $107.26 Per Share CUSIP Number 037735 83 4 500,000 Shares, Cumulative Preferred Stock, 7.80% Series at a Purchase Price of $105.50 Per Share CUSIP Number 037735 86 7 INDIANA MICHIGAN POWER COMPANY 119,767 Shares, Cumulative Preferred Stock, 4-1/4% Series at a Purchase Price of $62.31 Per Share CUSIP Number 454889 30 4 40,000 Shares, Cumulative Preferred Stock, 4.12% Series at a Purchase Price of $64.17 Per Share CUSIP Number 454889 20 5 60,000 Shares, Cumulative Preferred Stock, 4.56% Series at a Purchase Price of $69.94 Per Share CUSIP Number 454889 82 5 400,000 Shares, Cumulative Preferred Stock, 5.90% Series at a Purchase Price of $101.83 Per Share CUSIP Number 454889 85 8 300,000 Shares, Cumulative Preferred Stock, 6-1/4% Series at a Purchase Price of $103.79 Per Share CUSIP Number 454889 84 1 300,000 Shares, Cumulative Preferred Stock, 6-7/8% Series at a Purchase Price of $106.45 Per Share CUSIP Number 454889 86 6 350,000 Shares, Cumulative Preferred Stock, 6.30% Series at a Purchase Price of $103.71 Per Share CUSIP Number 454889 83 3 OHIO POWER COMPANY 202,403 Shares, Cumulative Preferred Stock, 4-1/2% Series at a Purchase Price of $69.02 Per Share CUSIP Number 677415 40 8 42,575 Shares, Cumulative Preferred Stock, 4.08% Series at a Purchase Price of $64.56 Per Share CUSIP Number 677415 10 1 51,975 Shares, Cumulative Preferred Stock, 4.20% Series at a Purchase Price of $66.46 Per Share CUSIP Number 677415 20 0 88,363 Shares, Cumulative Preferred Stock, 4.40% Series at a Purchase Price of $69.62 Per Share CUSIP Number 677415 30 9 404,000 Shares, Cumulative Preferred Stock, 5.90% Series at a Purchase Price of $103.09 Per Share CUSIP Number 677415 79 6 395,000 Shares, Cumulative Preferred Stock, 6.02% Series at a Purchase Price of $103.71 Per Share CUSIP Number 677415 81 2 300,000 Shares, Cumulative Preferred Stock, 6.35% Series at a Purchase Price of $105.14 Per Share CUSIP Number 677415 82 0 American Electric Power Company, Inc. ("AEP"), a New York corporation, invites the holders of (i) each series of cumulative preferred stock listed above of Appalachian Power Company ("APCo"), a Virginia corporation and direct utility subsidiary of AEP (each, a "Series of APCo Preferred"), to tender any and all of their shares of a Series of APCo Preferred ("APCo Shares") for purchase at the price per share listed above plus accrued and unpaid dividends for the APCo Shares tendered, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement dated January 30, 1997 and in the related Letter of Transmittal (which together constitute the "APCo Offer"); (ii) each series of cumulative preferred stock listed above of Indiana Michigan Power Company ("I&M"), an Indiana corporation and direct utility subsidiary of AEP (each, a "Series of I&M Preferred"), to tender any and all of their shares of a Series of I&M Preferred ("I&M Shares") for purchase at the price per share listed above plus accrued and unpaid dividends for the I&M Shares tendered, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement dated January 30, 1997 and in the related Letter of Transmittal (which together constitute the "I&M Offer"); and (iii) each series of cumulative preferred stock listed above of Ohio Power Company ("OPCo"), an Ohio corporation and direct utility subsidiary of AEP (each, a "Series of OPCo Preferred"), to tender any and all of their shares of a Series of OPCo Preferred ("OPCo Shares") for purchase at the price per share listed above plus accrued and unpaid dividends for the OPCo Shares tendered, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and Proxy Statement dated January 30, 1997 and in the related Letter of Transmittal (which together constitute the "OPCo Offer"). For the purposes of this Notice, APCo, I&M and OPCo are collectively referred to as the "Company"; the Series of APCo Preferred, the Series of I&M Preferred and the Series of OPCo Preferred are collectively referred to as the "Series of Preferred"; the APCo Shares, the I&M Shares and the OPCo Shares are collectively referred to as the "Shares"; and the APCo Offer, the I&M Offer and the OPCo Offer are collectively referred to as the "Offer." ---------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 28, 1997 (THE "EXPIRATION DATE"), UNLESS THE OFFER IS EXTENDED. ---------------------------------------------------------------------------- THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER OF EACH COMPANY, HOWEVER, IS CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING RELATING TO SUCH COMPANY. SEE "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF THE OFFER" IN THE OFFER TO PURCHASE AND PROXY STATEMENT WITH RESPECT TO EACH COMPANY. Concurrently with each Offer, the Board of Directors of each Company is soliciting proxies for use at the Special Meeting of Shareholders of each Company to be held at AEP's principal office, 1 Riverside Plaza, Columbus, Ohio 43215, on February 28, 1997 or any adjournment or postponement of such meetings (collectively, the "Special Meeting"). Each Special Meeting is being held to consider amendments (collectively, the "Proposed Amendment") to each Company's articles of incorporation (collectively, the "Articles") which would remove similar provisions of each Company's Articles that limit each Company's ability to issue debt. The Board of Directors of each Company recommends voting for the Proposed Amendments relating to such Company. WHILE TENDERING HOLDERS OF A SERIES OF PREFERRED OF EACH COMPANY NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT RELATING TO SUCH COMPANY, THE OFFER, WITH RESPECT TO SUCH COMPANY, IS CONDITIONED UPON SUCH PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT SUCH COMPANY'S SPECIAL MEETING. IN ADDITION, RECORD HOLDERS OF EACH COMPANY'S SHARES HAVE THE RIGHT TO VOTE FOR OR AGAINST THE PROPOSED AMENDMENT RELATING TO SUCH COMPANY REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. IF A PROPOSED AMENDMENT IS APPROVED AND ADOPTED BY A COMPANY'S HOLDERS, THE COMPANY WILL MAKE A SPECIAL CASH PAYMENT IN THE AMOUNT OF $1.00 PER SHARE TO EACH HOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE HOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE PURCHASE PRICE PER SHARE LISTED ABOVE. Any holder of a Series of Preferred desiring to accept the Offer and tender all or any portion of his or her Shares should either (i) request his or her broker, dealer, commercial bank, trust company or nominee to effect the transaction for him or her, or (ii) complete and sign the Letter of Transmittal in accordance with the instruction in the Letter of Transmittal, mail or deliver the same and any other required documents to First Chicago Trust Company of New York (The "Depositary"), and deliver the certificates for such Shares to the Depositary, along with the Letter of Transmittal, or tender such Shares pursuant to the procedure for book-entry transfer set forth in the applicable Offer to Purchase and Proxy Statement under "Terms of the Offer -- Procedures of Tendering Shares," on or prior to the Expiration Date (set forth above). A holder of a Series of Preferred whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or nominee must contact such broker, dealer, commercial bank, trust company or nominee if he or she desires to tender such Shares. Any holder of a Series of Preferred who desires to tender Shares and whose certificates for such Shares are not immediately available, or who cannot comply in a timely manner with the procedure for book-entry transfer, should tender such Shares by following the procedures for guaranteed delivery set forth in the applicable Offer to Purchase and Proxy Statement under "Terms of the Offer -- Procedures for Tendering Shares." AEP will pay to each soliciting dealer a solicitation fee for any Shares tendered, accepted for payment and paid pursuant to the Offer. See "Fees And Expenses Paid To Dealers" in each Company's Offer to Purchase and Proxy Statement. EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL, AND ONLY THE APPLICABLE LETTER OF TRANSMITTAL FOR SUCH SERIES OF PREFERRED OR A NOTICE OF GUARANTEED DELIVERY MAY BE USED TO TENDER SHARES OF SUCH SERIES OF PREFERRED. NEITHER AEP, APCO, I&M, OPCO, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH SHAREHOLDER MUST MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. The Offer to Purchase and Proxy Statement with respect to each Company is first being mailed on or about January 30, 1997 to Preferred Shareholders of record on January 27, 1997. THE OFFER TO PURCHASE AND PROXY STATEMENT AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Information Agent or the Dealer Managers as set forth below. Requests for copies of the Offer to Purchase and Proxy Statement and the related Letter of Transmittal or other tender offer or proxy materials may be directed to the Information Agent and such copies will be furnished promptly at AEP's expense. Preferred Shareholders may also contact their local broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: MORROW & CO., INC. 909 Third Avenue New York, New York 10022-4799 (800) 566-9061 (Toll Free) or (212) 754-8000 The Dealer Managers for the Offer are: MERRILL LYNCH & CO. SALOMON BROTHERS INC World Financial Center Seven World Trade Center 250 Vesey Street New York, New York 10048 New York, New York 10281-1330 Attn: Liability Management Group 1-888-ML4-TNDR (Toll Free) 1-800-558-3745 (Toll Free) (1-888-654-8637 (Toll Free)) January 30, 1997 EX-99.A.8 9 LETTER TO SHAREHOLDERS 1 LOGO INDIANA MICHIGAN POWER COMPANY ONE SUMMIT SQUARE FORT WAYNE, INDIANA 46801 January 30, 1997 Dear Shareholder: Please find enclosed important information pertaining to the following two items: (i) a proposed amendment to the Amended Articles of Acceptance (the "Articles") of Indiana Michigan Power Company ("I&M" or "the Company") which will be considered at a Special Meeting of its shareholders; and (ii) an offer by American Electric Power Company, Inc. ("AEP") to purchase the outstanding shares of I&M's cumulative preferred stock. We will greatly appreciate your giving prompt attention to the enclosed material which you are urged to read in its entirety. The Articles presently limit I&M's ability to issue securities representing unsecured indebtedness, including short-term debt, to no more than 10% of the aggregate of its capital, surplus and secured debt. This debt restriction limits I&M's flexibility in planning and financing its business activities. With financial flexibility and capital cost reduction being crucial factors to being successful in the evolving competitive utility environment, I&M ultimately may be placed at a competitive disadvantage if this debt restriction is not removed from the Articles. The proposed amendment, as set forth and explained in the enclosed Offer to Purchase and Proxy Statement, would remove the debt restriction. Concurrently with I&M's proxy solicitation, AEP is offering to purchase the outstanding shares of I&M's cumulative preferred stock. While you need not vote in favor of the proposed amendment in order to tender your shares, AEP's offer is conditioned upon, among other things, the proposed amendment being approved and adopted at the Special Meeting. In addition, you have the right to vote for or against the proposed amendment regardless of whether you tender your shares. If you vote in favor of the proposed amendment and it passes, you will be entitled to receive a special cash payment in the amount of $1.00 per share for each share that you vote, provided your shares have not been tendered. Instructions for tendering your shares and information pertaining to the special cash payment are included with the enclosed material. It is important to your interests that all shareholders, regardless of the number of shares owned, participate in the affairs of the Company. Even if you plan to attend the Special Meeting, WE URGE YOU TO MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY. By signing and returning your proxy promptly, you are assuring that your shares will be voted. You are cordially invited to attend the Special Meeting which will be held at AEP's principal office, 1 Riverside Plaza, Columbus, Ohio, on Friday, February 28, 1997 at 4:15 p.m., eastern standard time or any adjournment or postponement of such meeting. If you have questions regarding the proposed amendment, the Special Meeting or AEP's tender offer please call Merrill Lynch & Co at (888) ML4-TNDR ((888) 654-8637 (toll free)) or Salomon Brothers Inc at (800) 558-3745 (toll free). Thank you for your continued interest in the Company. Sincerely yours, /s/ E. Linn Draper, Jr. E. Linn Draper, Jr. Chairman of the Board and Chief Executive Officer EX-99.A.9 10 PRESS RELEASE, DATED JANUARY 29, 1997 1 EXHIBIT 99(a)(9) Media Contact: ________________ 614-223-____ (w) 614-___-____ (h) ________________ 614-___-____ (w) 614-___-____ (h) Investor Contact: _____________ 614-223-____ (w) 614-___-____ (h) FOR IMMEDIATE RELEASE - January 30, 1997 APPALACHIAN POWER, INDIANA MICHIGAN POWER AND OHIO POWER SEEK ARTICLES AMENDMENTS AT SPECIAL MEETINGS; AMERICAN ELECTRIC POWER ANNOUNCES TENDER OFFER FOR APPALACHIAN POWER, INDIANA MICHIGAN POWER AND OHIO POWER PREFERRED STOCK COLUMBUS The boards of directors of Appalachian Power Company, Indiana Michigan Power Company and Ohio Power Company, each a utility subsidiary of American Electric Power Company, Inc. (NYSE:AEP), are soliciting proxies for use at a special meeting of shareholders to be held on February 28, 1997. The special meetings are being held to consider an amendment to each subsidiary's articles of incorporation. The amendment would remove a provision of the articles that limits the subsidiaries' ability to issue debt, including short-term debt. These debt restrictions limit the subsidiaries' flexibility in planning and financing their business activities. Since financing flexibility and capital cost reduction are crucial factors to being successful in the evolving competitive utility environment, the subsidiaries ultimately may be placed at a competitive disadvantage if the debt restrictions are not removed. Currently, power marketers, independent power producers and other utilities who have taken similar action are not hampered by these debt restrictions. If a proposed amendment is approved and adopted, the subsidiary will make a special cash payment in the amount of $1.00 per share to each preferred shareholder who voted in favor of the proposed amendment, provided that such shares are not tendered pursuant to AEP's offer. Those preferred shareholders who validly tender their shares will be entitled only to the purchase price per share listed below. In conjunction with the special meeting and proxy, AEP announced today that it will offer to purchase for cash any and all outstanding shares of preferred stock of Appalachian Power Company, Indiana Michigan Power Company and Ohio Power Company. The tender offers commence on Thursday, January 30, 1997 and are schedule to expire at 5:00 p.m. EDT on Friday, February 28, 1997, unless extended. Each of AEP's tender offers is conditioned upon, among other things, the proposed amendment being approved and adopted at the special meeting. In addition, preferred shareholders have the right to vote for or against the proposed amendment regardless of whether they tender their shares. 2 The series of preferred stock that AEP is offering to purchase and the applicable purchase price are as follows: Purchase Price (per share) Title of Series Appalachian Power Company, Cumulative Preferred Stock (no par value) - - 4 1/2% Series $ 69.02 - - 5.90% Series $103.17 - - 5.92% Series $103.20 - - 6.85% Series $107.26 - - 7.80% Series $105.50 Indiana Michigan Power Company, Cumulative Preferred Stock ($100 par value) - - 4 1/8% Series $ 62.31 - - 4.12% Series $ 64.17 - - 4.56% Series $ 69.94 - - 5.90% Series $101.83 - - 6 1/4% Series $103.79 - - 6 7/8% Series $106.45 - - 6.30% Series $103.71 Ohio Power Company, Cumulative Preferred Stock ($100 par value) - - 4 1/2% Series $ 69.02 - - 4.08% Series $ 64.56 - - 4.20% Series $ 66.46 - - 4.40% Series $ 69.62 - - 5.90% Series $103.09 - - 6.02% Series $103.71 - - 6.35% Series $105.14 In addition, an amount equal to any accrued and unpaid dividends on the tendered shares will be added to the above tender price. The Dealer Managers for the tender offer are Merrill Lynch & Co. and Salomon Brothers Inc, the Information Agent is Morrow & Co. and the Depositary is First Chicago Trust Company of New York. EX-99.D 11 TAX OPINION OF SIMPSON THACHER & BARTLETT 1 Exhibit 99(d) January 30, 1997 American Electric Power Company, Inc. 1 Riverside Plaza Columbus, Ohio 43215 Indiana Michigan Power Company One Summit Square Fort Wayne, Indiana 46801 Ladies and Gentlemen: We have acted as special counsel to American Electric Power Company, Inc. (the "Company") and Indiana Michigan Power Company ("I&M") in connection with the Company's tender offer for any and all of the outstanding shares of certain series of cumulative preferred stock (as listed on Schedule A attached hereto) of I&M (the "Preferred"). We have examined (i) the Offer to Purchase and Proxy Statement for the Preferred dated January 30, 1997 (the "Offer to Purchase and Proxy Statement"), which incorporates by reference the Annual Reports on Form 10-K of the Company and I&M for the fiscal year ended December 31, 1995, the Quarterly Reports on Form 10-Q of the Company and the I&M for the interim periods ended March 31, 1996, June 30, 1996, and 2 American Electric Power Company, Inc. -2- January 30, 1997 Indiana Michigan Power Company September 30, 1996 and the Current Reports on Form 8-K of the Company and I&M dated December 23, 1996 (the "OPPS Exchange Act Documents"), each as filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the Schedule 13E-4 for the Preferred, dated January 29, 1997, filed by the Company under the Exchange Act, including the related exhibits thereto, which Schedule 13E-4 incorporates by reference the OPPS Exchange Act Documents and the Quarterly Report on Form 10-Q of I&M for the interim period ended September 30, 1995, each as filed under the Exchange Act, and (iii) the Letters of Transmittal for the Preferred. In addition, we have examined, and have relied as to matters of fact upon, the originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company and I&M, and have made such other and further investigations as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as drafts or as certified, conformed, photostatic or facsimile copies, and the authenticity of originals of such latter documents. 3 American Electric Power Company, Inc. -3- January 30, 1997 Indiana Michigan Power Company Based upon the foregoing, and subject to the qualifications and limitations stated herein, we hereby advise you that the statements made in the Offer to Purchase and Proxy Statement under the caption "Certain Federal Income Tax Consequences," insofar as they purport to constitute summaries of matters of United States federal income tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. We are members of the Bar of the State of New York and we do not express any opinion herein concerning any law other than the federal income tax law of the United States. We hereby consent to the reference to our firm under the caption "Certain Federal Income Tax Consequences" in the Offer to Purchase and Proxy Statement. Very truly yours, /s/ Simpson Thacher & Bartlett SIMPSON THACHER & BARTLETT 4 SCHEDULE A LIST OF THE SHARES Indiana Michigan Power Company 1. Cumulative Preferred Stock, 4-1/8% Series (par value $100 per share) 2. Cumulative Preferred Stock, 4.12% Series (par value $100 per share) 3. Cumulative Preferred Stock, 4.56% Series (par value $100 per share) 4. Cumulative Preferred Stock, 5.90% Series (par value $100 per share) 5. Cumulative Preferred Stock, 6-1/4% Series (par value $100 per share) 6. Cumulative Preferred Stock, 6-7/8% Series (par value $100 per share) 7. Cumulative Preferred Stock, 6.30% Series (par value $100 per share) -----END PRIVACY-ENHANCED MESSAGE-----