exhibit3aswepco.htm

EX-3.A 3 exhibit3aswepco.htm CERTIFICATE OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION exhibit3aswepco.htm

Exhibit 3 (a)

CERTIFICATE OF AMENDMENT

RESTATED CERTIFICATE OF INCORPORATION

* * * * *

SOUTHWESTERN ELECTRIC POWER COMPANY, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors at a meeting duly held, adopted a resolution proposing and declaring advisable the following amendment to the Restated Certificate of Incorporation of said corporation:

RESOLVED, that the Restated Certificate of Incorporation of Southwestern Electric Power Company be amended by changing Article IV, Paragraph 7(a) thereof so that, as amended, said Paragraph 7(a) of Article IV shall be and read as follows:

"(a) Each record holder of outstanding shares of Preferred Stock shall, at all meetings of stockholders of the corporation, have one (1) vote for each share of Preferred Stock held by such holder, and the Preferred Stock shall vote with the Common Stock and not as a separate class, except as expressly provided in Paragraph (4) or (5) of this Article IV or in this Paragraph (7) and except as may be required by law. In such excepted cases, each record holder of outstanding shares of the Preferred Stock shall have ten (10) votes for each share of the Preferred Stock held by such holder, except as may be required by law, and shall not vote together with the Common Stock. Each record holder of outstanding shares of Common Stock shall, at all meetings of stockholders of the corporation, have one (1) vote for each share of Common Stock held by him, except as otherwise provided in this Paragraph (7)."

SECOND: That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said Southwestern Electric Power Company has caused this certificate to be signed by L. Rahmond Staggers, its Secretary, this 1st day of May, 2008.

__/s/ L. Rahmond Staggers________

By: L. Rahmond Staggers

Secretary

SOUTHWESTERN ELECTRIC POWER COMPANY

RESTATED CERTIFICATE OF INCORPORATION

Dated: December 14, 1970

(As Amended Through May 6, 1997)

FIRST. The name of this corporation is Southwestern Electric Power

Company.

SECOND. The location of its principal office in the State of Delaware is in

the City of Wilmington, County of New Castle. The name of the agent therein, and

in charge thereof and upon whom legal process against this corporation may be

served, is The Corporation Trust Company.

THIRD. The nature of the business of, and the objects and purposes proposed

to be transacted, promoted and carried on by, the corporation are to do any or

all of the things herein mentioned and set forth, as fully and to the same

extent, to all intents and purposes, as natural persons might or could do, and

in any part of the world, namely:

To produce, or in any manner acquire, and to sell and dispose of, and

distribute, artificial gas, and its by-products and residual products, and

to construct, or in any manner acquire, to own, hold, and operate, and to

sell, exchange, lease and incumber, or in any manner dispose of, works,

buildings, pipelines, mains, machinery, apparatus, appliances, facilities,

rights, privileges, franchises, ordinances, and all such real and personal

property as may be necessary, useful or convenient to the production,

acquisition, storage and distribution of the aforesaid products.

To mine for, prospect for, drill for, produce, buy and in any manner

acquire, and to market, sell, transport and distribute, natural gas; to

mine for, produce, buy and in any manner acquire, to refine, manufacture,

into its several products to sell, market, distribute and transport,

petroleum, and its products, and by-products, and to construct, lay,

purchase, or in any manner acquire, to maintain and operate, and to sell,

lease, encumber, or in any manner dispose of, works, buildings, pipelines,

mains, machinery, apparatus, appliances, facilities, rights, privileges,

franchises, ordinances, and all such real and personal property as may be

necessary, useful or convenient to the production, acquisition, storage,

transportation, and distribution of natural gas or petroleum, or both.

To manufacture, buy, sell, rent and deal in stoves, engines, motors,

lamps, and other apparatus and appliances calculated, directly or

indirectly, to promote the consumption or use of natural or artificial gas

or petroleum, or any of their products or by-products.

To lease, buy, or otherwise acquire, to hold and operate and to sell,

lease, incumber, or otherwise dispose of, petroleum oil and gas lands and

leases, and right to explore for and remove natural gas and petroleum, and

to take contracts for the drilling of oil and gas wells, and to carry out

and execute the same.

To generate, produce, buy, or in any manner acquire, and to sell,

dispose of and distribute, electricity for light, heat, power and other

purposes, and to construct, erect, or in any manner acquire, to own, hold

and operate, and to sell, exchange, lease, incumber, or in any manner

dispose of, works, poles, wires, conduits, subways, cables, machinery,

apparatus, appliances, facilities, rights, privileges, franchises,

ordinances and all such real and personal property as may be necessary,

useful or convenient in the production, accumulation, sale, transmission,

and distribution of electricity, and to manufacture, buy, sell, lease and

deal in, fixtures, chandeliers, electroliers, brackets, lamps, globes,

motors, generators, meters, dynamos, batteries and all other appliances,

appurtenances and devices capable of being employed in connection with the

generation, accumulation, distribution, transmission and use of

electricity.

To furnish light, heat and power by natural or artificial gas,

electricity, steam, water or other means, and to acquire, operate and

dispose of all such real and personal property, and such rights, privileges

and franchises, as shall be necessary, useful or convenient to such ends.

To construct, or in any manner acquire, to equip, to own, hold and

operate, and to sell, exchange, lease, incumber, or in any manner dispose

of, street railways, and interurban railways, for the transportation of

passengers, merchandise, mail, express and other freight, and to acquire,

hold, operate and dispose of such real and personal property, rights,

privileges, franchises and ordinances, as may be necessary, useful or

convenient for such purpose, including parks and other public places of

amusement and attraction calculated to promote the use of any such street

or interurban railway.

To purchase, subscribe for, or in any manner acquire, to own, and

hold, to receive and dispose of the income from, to sell, assign, transfer,

pledge, mortgage, or in any manner dispose of, and to exercise all the

rights of individual natural persons with respect to, any bonds,

securities, and evidences of indebtedness, of, or shares of stock in, any

corporation, association or joint stock company of the State of Delaware,

or of any other state, territory or country.

To sell, or in any manner dispose of, mortgage or pledge any stocks,

bonds or other obligations, or any property, which at any time may be held

by the Company, for its proper corporate purposes, as and when the Board of

Directors shall determine.

To manufacture, buy, sell and deal in ice; to carry on and conduct the

business of cold storage, refrigeration or freezing; and to acquire by

construction, purchase, or otherwise, and to maintain and operate any plant

or property useful for any of said purposes.

IN FURTHERANCE AND NOT IN LIMITATION of the general powers conferred by the

laws of the State of Delaware, it is expressly provided that the Company shall

also have the following additional powers, namely:

To acquire the good will, rights and property, and to undertake the

whole or any part of the assets or liabilities, of any person, firm,

association or corporation; to pay for the same in cash, the stock or bonds

of this Company, or otherwise; to hold, or in any manner dispose of, the

whole or any part of the property so purchased; to conduct in any lawful

manner the whole or any part of any business so acquired, and to exercise

all the powers necessary or convenient in and about the conduct and

management of such business.

To apply for, purchase, or in any manner acquire, and to hold, own,

use and operate, and to sell, or in any manner dispose of, and to grant

licenses or other rights, in respect of, and in any manner deal with, any

and all rights, inventions, improvements and processes used in connection

with or secured under letters patent or copyrights of the United States, or

other countries, or otherwise, and to work, operate and develop the same,

and to carry on any business, manufacturing or otherwise, which may,

directly or indirectly, effectuate these objects, or any of them.

To enter into, make, and perform contracts of every kind with any

person, firm, association or corporation, county, parish, state, territory,

or government, or other municipality, or governmental subdivision, and,

without limit as to amount, to draw, make, accept, endorse, discount,

execute and issue promissory notes, drafts, bills of exchange, warrants,

bonds, debentures, and other negotiable or transferable instruments, so far

as may be permitted by the laws of the State of Delaware.

To have one or more offices out of the State of Delaware, and to carry

on its business and promote its objects without restriction as to place or

amount.

To guarantee any dividends or bonds or contracts or other obligations.

While the owner of shares of stock of, or interests in, any

corporation, joint stock company, firm, or association, to exercise all the

rights and privileges of such ownership, including the right to vote

thereon, and to do anything needful or convenient for the protection,

improvement, betterment or enhancement in value of such shares of stock or

interests, or any bonds or obligations owned by the Company, and to in any

manner aid any such corporation, joint stock company, firm or association,

the stock, bonds, or other obligations, of, or interests in, which are held

by the Company.

To do any or all of the things herein set forth to the same extent as

natural persons might or could do, and in any part of the world, as

principals, agents, contractors, trustees, or otherwise; and in general to

carry on any business in connection therewith, whether manufacturing or

otherwise, and with all the powers conferred by the laws of Delaware upon

corporations organized under the Act* referred to in the last paragraph of

the original Certificate of Incorporation of the corporation (which

paragraph has been omitted from this Restated Certificate as stated above).

FOURTH. The aggregate number of shares of stock of all classes which the

corporation has authority to issue is Nine Million Four Hundred Sixty Thousand

(9,460,000) shares, of which Seven Million Six Hundred Thousand (7,600,000)

shares of the par value of Eighteen Dollars ($18) each shall be of a class

designated Common Stock, and One Million Eight Hundred Sixty Thousand

(1,860,000) shares of the par value of One Hundred Dollars ($100) each shall be

of a class designated Preferred Stock.

Seventy-five Thousand (75,000) shares of the Preferred Stock shall be

designated 5% Preferred Stock (the "5% Series") and shall constitute a series of

the Preferred Stock; Twenty-five Thousand (25,000) shares of the Preferred Stock

shall be designated 4.65% Preferred Stock (the "4.65% Series") and shall

constitute a series of the Preferred Stock; Sixty Thousand (60,000) shares of

the Preferred Stock shall be designated 4.28% Preferred Stock (the "4.28%

Series") and shall constitute a series of the Preferred Stock; and the remaining

shares of the Preferred Stock may be issued as additional shares of the 5%

Series, the 4.65% Series or the 4.28% Series, or as shares of one or more other

series, all as may be determined from time to time by the Board of Directors.

Shares of each series of the Preferred Stock shall have such designation,

preferences and relative, participating, optional or other special rights, and

qualifications, limitations or restrictions thereof, as are stated and expressed

herein or in the resolution or resolutions providing for the issue of shares of

such series adopted by the Board of Directors as hereinafter provided. The

powers, preferences and rights of the classes of stock of the corporation and

the qualifications, limitations or restrictions of such powers, preferences and

rights, and the express grant of authority to the Board of Directors to fix by

resolution or resolutions the designations and certain of the powers,

preferences and rights of the shares of any additional series of the Preferred

Stock and the qualifications, limitations or restrictions of such powers,

preferences and rights, to the extent not fixed herein, are as hereinafter

provided.

- ------------

* An Act of the Legislature of the State of Delaware entitled "An Act

Providing A General Corporation Law", approved March 10, 1899, and the acts

amendatory thereof and supplemental thereto.

Authority is hereby expressly granted to the Board of Directors of the

corporation to establish by resolution, from time to time, one or more other

series of the Preferred Stock and to fix and determine the designations, rates

of dividend, the dates from which dividends shall be cumulative, redemption

prices and terms and conditions of redemption, the terms, provisions and

conditions of any sinking fund, conversion rights, if any, and terms and

conditions of conversion, the amounts payable in the event of the voluntary

liquidation, dissolution or winding up of the corporation, and any other special

rights which the Board of Directors may have authority under the laws of

Delaware to fix and determine, applicable to the shares of the respective

series, provided that the terms and provisions set forth herein with respect to

the Preferred Stock shall be applicable to all shares of the Preferred Stock of

each series except as and to the extent otherwise provided herein or fixed and

determined by the Board of Directors by resolution establishing a particular

series pursuant to the authority herein vested in such Board. Any authorized and

unissued shares of the Preferred Stock and any shares of the Preferred Stock

from time to time having the status of unissued shares may be issued as shares

of the 5% Series, the 4.65% Series or the 4.28% Series, or as shares of any one

or more other series established by the Board of Directors as herein authorized.

(1) The holders of shares of the Preferred Stock shall be entitled to

receive, in respect of each share held, preferential dividends upon the par

value thereof at the annual rate specified in the designation of such share, and

no more, payable quarter-yearly on January first, April first, July first and

October first in each year, when and as declared by the Board of Directors, out

of the surplus or net profits of the corporation. Such dividends shall be

cumulative (a) as to the 75,000 outstanding shares of the 5% Series, from the

first day of the dividend period in which such shares were originally issued,

(b) as to the 25,000 outstanding shares of the 4.65% Series and the 60,000

shares of the 4.28% Series initially to be issued, from the date of issue

thereof, (c) as to the shares initially issued of any other series, from the

date of issue or such other date as may be provided in the resolution of the

Board of Directors authorizing the initial issue of shares of such series, and

(d) as to additional shares of any then outstanding series, from the first day

of the dividend period in which issued; and such dividends shall be paid, or

declared and set apart for payment, before any dividends shall be declared or

paid on or set apart for the Common Stock and before any payments are made to

any sinking fund created as herein provided for any series of Preferred Stock,

so that if for any past dividend period or the current dividend period dividends

on the Preferred Stock (of all series) shall not have been paid, or declared and

set apart for payment, the deficiency shall be fully paid or declared and funds

set apart for the payment thereof before any dividends shall be declared or paid

on or set apart for the Common Stock and before any payments are made to any

sinking fund created for any series of Preferred Stock. No dividend shall at any

time be paid on or set apart for any share of Preferred Stock, of any series,

unless at the same time there shall be paid on or set apart for all shares of

Preferred Stock (of all series) then outstanding dividends in such amount that

the holders of all shares of the Preferred Stock (of all series) shall receive

or have set apart for them a uniform percentage of the full annual dividend to

which they are, respectively, entitled. The term "dividend period" as used

herein, refers to each period of three consecutive calendar months ending on the

day next preceding the date on which dividends, if declared, shall be payable.

The holders of the shares of the Preferred Stock shall not be entitled to

receive any dividends thereon other than cash dividends at no more than the

annual rate specified in the designation of such shares. All shares of the

Preferred Stock at any time authorized, regardless of the series or designation

thereof, shall constitute one class of stock and, except as to those provisions

applicable only to the shares of a particular series as provided herein or as

fixed and determined by the Board of Directors pursuant to the authority herein

vested in the Board of Directors, shall be of equal rank and confer equal rights

upon the holders thereof. Whenever full cumulative dividends as aforesaid upon

the Preferred Stock (of all series) and upon any other shares of stock having

priority as to dividends over the Common Stock, then outstanding, for all past

dividend periods and for the current dividend period shall have been paid, or

declared and set apart for payment, and after complying with all provisions in

respect of any sinking fund or funds for the Preferred Stock of any series (if

and to the extent compliance with such provisions is a condition precedent to

the declaration or payment of dividends on Common Stock), the Board of Directors

may declare and authorize the payment of dividends on the Common Stock of the

corporation, SUBJECT, HOWEVER, to the restrictions hereinafter set forth.

(2) In the event of the involuntary liquidation, dissolution or winding up

of the corporation, the holders of shares of the Preferred Stock (of all series)

then outstanding shall be entitled to be paid in full, out of the net assets of

the corporation, the par value of their shares plus an amount equal to the

accrued dividends on such shares, and no more, before any amount shall be paid

or distributed to the holders of shares of the Common Stock. In the event of the

voluntary liquidation, dissolution or winding up of the corporation, the holders

of shares of the 5% Series, the 4.65% Series and the 4.28% Series then

outstanding shall be entitled to be paid in full, out of the net assets of the

corporation, the then effective respective redemption prices of such shares

(including an amount equal to the accrued dividends on such shares), and no

more, before any amount shall be paid or distributed to the holders of shares of

the Common Stock. After payment in full to the holders of all shares of the

Preferred Stock (of all series) and of all other shares of stock, if any, having

priority over the Common Stock as to assets, then outstanding, of the amounts to

which they are respectively entitled as herein provided, the remaining assets

and profits shall be divided among and paid or distributed to the holders of

shares of Common Stock.

(3) The corporation, on the sole authority of its Board of Directors, shall

have the right at any time or from time to time to redeem and retire all or any

part of the Preferred Stock, or all or any part of the shares of one or more

series of the Preferred Stock, upon and by the payment to the holders of the

shares to be redeemed, or upon or by setting aside as hereinafter provided for

the benefit of such holders, of the redemption price or prices fixed for the

shares to be redeemed, which redemption price (a) in the case of shares of the

5% Series shall be $109 per share plus accrued dividends to the date of

redemption, (b) in the case of shares of the 4.65% Series shall be $103.75 per

share if the date of redemption is on or prior to July 1, 1959, and $102.75 per

share if the date of redemption is subsequent to July 1, 1959, plus, in each

case, accrued dividends to the date of redemption, and (c) in the case of shares

of the 4.28% Series shall be $105.904 per share if the date of redemption is

prior to January 1, 1960, $104.904 per share if the date of redemption is on or

subsequent to January 1, 1960, and prior to January 1, 1965, and $103.904 per

share if the date of redemption is on or subsequent to January 1, 1965, plus, in

each case, accrued dividends to the date of redemption; PROVIDED that not later

than on the thirtieth day prior to the date fixed for such redemption, notice of

the intention of the corporation to redeem such shares, specifying the shares to

be redeemed and the date and place of redemption, shall be given to the holders

of record of the shares so to be redeemed, in the discretion of the Board of

Directors, either by publication in a newspaper of general circulation published

in the City of Chicago, Illinois, and in a newspaper of general circulation in

the City of New York, New York, or by depositing a copy of such notice in a

United States post office or mail box at any place in the United States

addressed to each holder of record of the shares to be redeemed at his address

as the same appears upon the records of the corporation; AND, PROVIDED FURTHER,

that if such notice is given by mail, unintentional omissions or errors in names

or addresses, or other defects in such mailing, shall not impair the validity of

the notice of, or proceedings for, such redemption. In every case of the

redemption of less than all the outstanding shares of any particular series of

Preferred Stock, the shares of such series to be redeemed shall be chosen by

proration (so far as may be without the issuance of fractional shares), by lot

or in such other equitable manner as may be prescribed by resolution of the

Board of Directors. The corporation may deposit, with a bank or trust company,

which shall be named in the notice of redemption, shall be located in the City

of New York, New York, or in Chicago, Illinois, and shall have capital, surplus

and undivided profits of at least $1,000,000, the aggregate redemption price of

the shares to be redeemed, in trust for the payment thereof on or before the

redemption date to or upon the order of the holders of such shares, upon

surrender of the certificates for such shares. Such deposit in trust may, at the

option of the corporation, be upon terms whereby in case the holder of any

shares of Preferred Stock called for redemption shall not, within ten years

after the date fixed for redemption of such shares, claim the amount so

deposited for the payment of the redemption price of such shares, such bank or

trust company shall on demand, when requested by resolution of the Board of

Directors of the corporation or its successor, pay to or upon the written order

of the corporation or its successor the amount so deposited, and thereupon such

bank or trust company shall be released from any and all further liability with

respect to the payment of such redemption price and the holder of said shares

shall be entitled to look only to the corporation or its successor for the

payment thereof. Upon the giving of notice of redemption and upon the deposit of

the redemption price, as aforesaid, or, if no such deposit is made, upon the

redemption date (unless the corporation defaults in making payment of the

redemption price as set forth in such notice), such holders shall cease to be

stockholders with respect to said shares, and from and after the making of said

deposit and the giving of said notice, or, if no such deposit is made, after the

redemption date (the corporation not having defaulted in making payment of the

redemption price as set forth in such notice), said shares shall no longer be

transferable on the books of the corporation, and said holders shall have no

interest in or claim against the corporation or its successor with respect to

said shares, but shall be entitled only to receive said moneys on the date fixed

for redemption, as aforesaid, from said bank or trust company, or from the

corporation or its successor, without interest thereon, upon surrender of the

certificates for said shares as aforesaid. All shares of the Preferred Stock so

redeemed shall be cancelled and retired.

The term "accrued dividends," as used in this Article FOURTH, shall be

deemed to mean, in respect of any share of the Preferred Stock (of any series)

as of any given date, the amount of dividends payable on such share, computed at

the annual dividend rate stated in the designation of such share from the date

on which dividends thereon became cumulative to and including such given date,

less the aggregate amount of all dividends which have been paid, or which have

been declared and set apart for payment, on such share. Accumulations of

dividends shall not bear interest.

Nothing herein contained shall limit any legal right of the corporation to

purchase or otherwise acquire any shares of the Preferred Stock of any series;

PROVIDED that the corporation shall not redeem, purchase or otherwise acquire

less than all the outstanding shares of the Preferred Stock if at the time of

such redemption, purchase or other acquisition dividends payable on the

Preferred Stock shall be in default in whole or in part unless, prior to or

concurrently with such redemption, purchase or other acquisition, all such

defaults in dividends shall have been cured, or unless such redemption, purchase

or other acquisition shall have been ordered, approved or permitted by the

Securities and Exchange Commission or any successor commission under the Public

Utility Holding Company Act of 1935. All shares of the Preferred Stock so

redeemed, purchased or acquired shall be cancelled and retired.

(4) So long as any shares of the Preferred Stock shall be outstanding, the

corporation shall not, without the affirmative vote or the consent of the record

holders of at least two-thirds of the total number of shares of the Preferred

Stock (of all series) at the time outstanding:

(a) create or authorize, by amendment to the Certificate of

Incorporation or otherwise, shares of any class of stock ranking prior to

the Preferred Stock as to dividends or assets or any security convertible

into shares of such prior ranking stock, OR issue any of such prior ranking

stock or any such convertible security after the expiration of one year

from such vote or consent of the holders of the shares of the Preferred

Stock; or

(b) change, alter or repeal, by amendment to the Certificate of

Incorporation or otherwise, any of the powers, preferences or rights of the

holders of the shares of the Preferred Stock so as to affect adversely any

of such powers, preferences or rights; PROVIDED that (i) any increase or

decrease in the authorized amount of the Preferred Stock or the creation,

or any increase or decrease in the authorized amount, of any class of stock

ranking on a parity with the Preferred Stock as to dividends or assets

shall not be deemed to affect adversely the powers, preferences or rights

of the holders of the shares of the Preferred Stock and (ii) if any such

change, alteration or repeal would affect adversely the powers, preferences

or rights of the holders of shares of one or more, but less than all, of

the series of the Preferred Stock at the time outstanding, the vote or

consent only of the record holders of at least two-thirds of the total

number of outstanding shares of the series so adversely affected shall be

required.

No vote or consent of the holders of the shares of the Preferred Stock

shall be required in respect of any transaction enumerated in this Paragraph (4)

if, at or prior to the time when such transaction is to take effect, provision

is made for the redemption or other retirement of all outstanding shares of the

Preferred Stock the vote or consent of which would otherwise be required by this

Paragraph (4).

No provision contained in this Paragraph (4) is intended or shall be

construed to relieve the corporation from compliance with any applicable

statutory provision requiring the vote or consent of the holders of a greater

number of the outstanding shares of the Preferred Stock.

(5) So long as any shares of the Preferred Stock shall be outstanding, the

corporation shall not, without the affirmative vote or consent of the record

holders of a majority of the total number of shares of the Preferred Stock (of

all series) at the time outstanding:

(a) merge or consolidate with or into any other corporation or

corporations, or sell or otherwise dispose of all or substantially all of

the assets of the corporation, unless such merger, consolidation, sale or

other disposition, or the exchange, issuance or assumption of all

securities to be exchanged, issued or assumed in connection with any such

merger, consolidation, sale or other disposition, shall have been ordered,

approved or permitted by the Securities and Exchange Commission or any

successor commission under the Public Utility Holding Company Act of 1935;

PROVIDED that the provisions of this subparagraph (a) shall not apply to

the purchase or other acquisition by the corporation of the franchises or

assets of another corporation in any manner not involving a statutory

merger or consolidation; or

(b) issue any shares of the Preferred Stock, including the reissuance

of any shares thereof reacquired by the corporation, or shares of any other

stock ranking on a parity with the Preferred Stock as to dividends or

assets, for any purpose OTHER THAN [in exchange for or to effect the

redemption or other retirement of not less than] an equal par amount or

stated value of the Preferred Stock or of stock ranking prior to or on a

parity with the Preferred Stock as to dividends or assets at the time

outstanding, UNLESS (1) the gross income of the corporation (after

deducting all taxes, including taxes based on income, and determined as

hereinafter provided) for twelve consecutive calendar months ending within

the fifteen calendar months immediately preceding the issuance of the

shares to be issued shall have been at least one and one-half times the sum

of (i) the annual interest charge on all indebtedness of the corporation

which will be outstanding immediately after the issuance of the shares to

be issued and (ii) the annual dividend requirement on all shares of the

Preferred Stock and of any other stock ranking prior to or on a parity with

the Preferred Stock as to dividends or assets (including the shares to be

issued) which will be outstanding immediately after the issuance of the

shares to be issued; AND (2) the common stock equity of the corporation,

computed as provided in Paragraph (6) hereof, shall be not less than the

aggregate amount payable in the event of the involuntary liquidation,

dissolution or winding up of the corporation in respect of all shares of

the Preferred Stock and of any other stock ranking prior to or on a parity

with the Preferred Stock as to dividends or assets which will be

outstanding immediately after the issuance of the shares to be issued.

Gross income shall be determined in accordance with such system of accounts

as may be prescribed by regulatory authorities having jurisdiction in the

premises or, in the absence of any such system of accounts, in accordance with

generally accepted accounting principles, provided that in computing gross

income of the corporation for the purposes of subparagraph (b) of this Paragraph

(5), (i) in the event any additional property or assets are to be acquired by

the corporation by the issuance, or the application of any of the proceeds from

the issuance, of any shares of the Preferred Stock or of stock ranking on a

parity with or junior to the Preferred Stock as to dividends or assets, to be

then issued, the gross income of the property or assets to be so acquired

(computed on the same basis as the gross income of the corporation as herein

provided and for the same period) may be included, on a pro forma basis, in

making such computation of gross income of the corporation, and (ii) the amounts

to be deducted from gross income as charges for depreciation, retirements,

renewals and replacements and/or amortization shall not be less in the aggregate

than an amount equal to 9% (or such other percentage as may upon application by

the corporation be approved by the Securities and Exchange Commission, or any

successor authority, under the Public Utility Holding Company Act of 1935) of

the arithmetical average of the amount of depreciable property of the

corporation at the beginning and the amount thereof at the end, of such 12-month

period, in plant accounts of the corporation, with respect to which bonds may at

the time be authenticated under any indenture securing first mortgage bonds of

the corporation, determined in accordance with generally accepted principles of

accounting, and provided that amounts included in plant acquisition adjustment

account, or accounts of similar purpose, shall not be included in the amount of

such property if adequate provision for the amortization of such amounts is made

by current charges to income or surplus. In computing the annual interest charge

and the annual dividend requirement referred to in said subparagraph (b), there

shall be excluded the interest charges and dividend requirements on all

indebtedness and shares of stock, respectively, which are to be redeemed or

otherwise retired by the issuance, or the application of any of the proceeds

from the issuance, of any shares of the Preferred Stock or of stock ranking

prior to or on a parity with the Preferred Stock at to dividends or assets, then

to be issued.

If for the purpose of meeting the requirements of clause (2) of

subparagraph (b) of this Paragraph (5), it shall have been necessary to take

into consideration any earned surplus of the corporation, the corporation shall

not thereafter pay any dividends on common stock (as defined in Paragraph (6) of

this Article Fourth) in an amount which would result in reducing the common

stock equity of the corporation, as defined in said Paragraph (6), to an amount

less than the aggregate amount payable in the event of the involuntary

liquidation, dissolution or winding up of the corporation in respect of all

shares of the Preferred Stock and of stock ranking prior to or on a parity with

the Preferred Stock as to dividends or assets at the time outstanding.

No vote or consent of the holders of the Preferred Stock shall be required

in respect of any transaction enumerated in this Paragraph (5) if, at or prior

to the time when such transaction is to take effect, provision is made for the

redemption or other retirement of all outstanding shares of the Preferred Stock

the vote or consent of which would otherwise be required by this Paragraph (5).

No provision contained in this Paragraph (5) is intended or shall be

construed to relieve the corporation from compliance with any applicable

statutory provision requiring the vote or consent of the holders of a greater

number of the outstanding shares of the Preferred Stock.

(6) So long as any shares of the Preferred Stock shall be outstanding, the

corporation shall not declare or pay any dividends on common stock of the

corporation (as herein defined) EXCEPT AS FOLLOWS:

(a) if and so long as the common stock equity (as herein defined) of

the corporation on the last day of a calendar month immediately preceding

the date on which a dividend on common stock is proposed to be declared is,

or as a result of the payment of such dividend would become, less than 20%

of total capitalization of the corporation (as herein defined), the

corporation shall not (except as hereinafter provided) declare any such

dividend in an amount which, together with all other dividends on common

stock paid within the year ending with and including the date on which such

dividend is proposed to be payable, exceeds 50% of the net income of the

corporation available for dividends on common stock (determined as herein

provided) for twelve consecutive calendar months ending on the last day of

the calendar month immediately preceding the month in which such dividend

is proposed to be declared; PROVIDED that if any dividends (or additional

dividends) on common stock could have been declared under the foregoing

limitation in any previous year or years, but were not declared, then such

dividend proposed to be paid may exceed 50% of the above specified net

income of the corporation by a total amount equal to the aggregate amount

of all dividends on common stock that could have been so declared but were

not declared; and

(b) if and so long as the common stock equity on the last day of a

calendar month immediately preceding the date on which a dividend on common

stock is proposed to be declared is, or as a result of the payment of such

dividend would become, less than 25% but not less than 20% of total

capitalization, the corporation shall not (except as hereinafter provided)

declare any such dividend in an amount which, together with all other

dividends on common stock paid within the year ending with and including

the date on which such dividend is proposed to be payable, exceeds 75% of

the net income of the corporation available for dividends on common stock

for twelve consecutive calendar months ending on the last day of the

calendar month immediately preceding the month in which such dividend is

proposed to be declared; PROVIDED that if any dividends (or additional

dividends) on common stock could have been declared under the foregoing

limitation of this paragraph in any previous year or years, but were not

declared, then such dividend proposed to be paid may exceed 75% of the

above specified net income of the corporation by a total amount equal to

the aggregate amount of all dividends on common stock that could have been

so declared but were not declared; and

capitalization, the corporation shall not declare dividends on common stock

which would reduce the common stock equity below 25% of total

capitalization, EXCEPT to the extent provided or permitted in subparagraphs

(a) and (b) above.

"Dividends on common stock" of the corporation shall mean and include all

dividends on common stock (other than dividends payable solely in shares of

Common Stock or applied by the recipient to the purchase from the corporation of

shares of its Common Stock), distributions on, and purchases or other

acquisitions for value of, shares of Common Stock of the corporation or other

stock of the corporation, if any, ranking junior to the Preferred Stock as to

dividends or assets.

"Common stock equity" of the corporation shall mean the aggregate of (a)

the par value of, or stated capital represented by, the outstanding shares of

all stock of the corporation ranking junior to the Preferred Stock as to

dividends or assets, and all premiums in respect of such junior ranking stock,

as carried on the books of the corporation, and (b) the amount of all surplus

accounts of the corporation, after deducting from such aggregate (1) the excess,

if any, of the aggregate amount payable in the event of the involuntary

liquidation, dissolution or winding up of the corporation in respect of all

outstanding shares of stock of the corporation ranking prior to the Common Stock

as to dividends or assets, over the aggregate par value of, or stated capital

represented by, such outstanding shares of prior ranking stock and any premiums

thereon, (2) any amounts recorded on the books of the corporation (estimated, if

not known) for used or useful utility plant and other property in excess of the

original cost of such plant or property, (3) any intangible items (such as

unamortized debt discount and expense, capital stock discount and expense) set

forth on the asset side of the balance sheet of the corporation as a result of

accounting convention, (4) the excess, if any, for the period from February 1,

1940, to December 31, 1976, of an amount equal to 15% of the gross operating

revenues derived by the corporation from the operation of its properties for

such period (after excluding or deducting from such revenues all non-operating

income, revenues derived directly from properties leased to the corporation, and

the aggregate cost of electric energy and gas purchased for exchange or resale),

over the aggregate amount charged or provided by the corporation on its books

for maintenance, repairs and depreciation of property for such period; provided

that no deduction shall be made or be required to be made for or in respect of

any items or amounts referred to in clauses (2) and (3) of this paragraph in the

event such items or amounts are being amortized or are provided for, or are

being provided for, by reserves, and (5) the excess, if any, for the period

beginning January 1, 1977, to the end of a month ending within ninety days next

preceding the date as of which common stock equity is being determined, of an

aggregate amount equal to 2.9% annually (or such other percentage as may upon

application by the corporation be approved by the Securities and Exchange

Commission, or any successor authority, under the Public Utility Holding Company

Act of 1935) of the arithmetical average of the amount of depreciable property

of the corporation at the beginning, and the amount thereof at the end, of each

calendar year and portion thereof contained in such period, in plant accounts of

the corporation, with respect to which bonds may at the time be authenticated

under any indenture securing first mortgage bonds of the corporation, determined

in accordance with generally accepted principles of accounting (excluding

amounts included in plant acquisition adjustment account, or accounts of similar

purpose, if adequate provision for the amortization of such amounts is made by

current charges to income or surplus), over the aggregate amount charged or

provided by the corporation on its books as charges for depreciation,

retirements, renewals and replacements and/or amortization for such period.

"Total capitalization" of the corporation shall mean the aggregate of (i)

the principal amount of all outstanding bonds, debentures, notes and other

securities representing indebtedness (whether secured or unsecured) of the

corporation maturing more than twelve months after the date as of which total

capitalization is being determined, and (ii) the par value of, or stated capital

represented by, the outstanding shares of the capital stock of all classes of

the corporation, all premiums in respect of such stock, as carried on the books

of the corporation, and the amount of all surplus accounts of the corporation,

AFTER DEDUCTING from such aggregate any amounts required to be deducted, in the

determination of common stock equity, pursuant to the provisions of clauses (2)

and (3) of the foregoing definition of "common stock equity."

"Net income of the corporation available for dividends on common stock"

shall be determined by deducting from the sum of the total operating revenues

and other income of the corporation for any given period, all operating expenses

for such period (including maintenance, repairs and depreciation, taxes based on

income and all other taxes, all proper accruals, interest charges, amortization

charges, other proper income deductions and dividends paid or accrued on

outstanding shares of stock of the corporation ranking prior to the Common Stock

as to dividends, for such period), all as determined in accordance with such

system of accounts as may be prescribed by regulatory authorities having

jurisdiction in the premises or, in the absence of any such system of accounts,

in accordance with generally accepted accounting principles.

(7) The voting rights of the holders of shares of the Preferred Stock and

of the Common Stock of the corporation shall be as follows:

(a) No holder of shares of the Preferred Stock shall be entitled to

vote, at any meeting of stockholders of the corporation, for the election

of directors or in respect of any other matter, EXCEPT as expressly

provided in Paragraph (4) or (5) of this Article Fourth or in this

Paragraph (7) AND EXCEPT as may be required by law. In such excepted cases,

each record holder of outstanding shares of the Preferred Stock shall have

one (1) vote for each share of the Preferred Stock held by him. Each record

holder of outstanding shares of Common Stock shall, at all meetings of

stockholders of the corporation, have one (1) vote for each share of Common

Stock held by him, EXCEPT as otherwise provided in this Paragraph (7).

(b) If and when dividends payable on the Preferred Stock shall be in

default in an amount equivalent to four full quarter-yearly dividends or

more per share on all shares of the Preferred Stock then outstanding, and

thereafter until all dividends on such Preferred Stock in default shall

have been paid, the record holders of the shares of the Preferred Stock,

voting separately as one class, shall be entitled, at each meeting of the

shareholders at which directors are elected, to elect the smallest number

of directors necessary to constitute a majority of the full Board of

Directors of the corporation, and EXCEPT as provided in the following

subparagraph (c), the record holders of the shares of Common Stock, voting

separately as a class, shall be entitled at any such meeting to elect the

remaining directors of the corporation. The term of office of each director

of the corporation shall terminate upon the election of his successor. At

each election of directors by a class vote pursuant to the provisions of

this paragraph, the class first electing the directors which it is entitled

to elect shall name the directors who are to be succeeded by the directors

then elected by such class, whereupon the term of office of the directors

so named shall terminate. The term of office of the directors not so named

shall terminate upon the election by the other class of the directors which

it is entitled to elect.

then outstanding shall be paid (and such dividends shall be paid, or

declared and set apart for payment, out of any funds legally available

therefor, as soon as reasonably practicable), the holders of the shares of

the Preferred Stock shall thereupon be divested of the special right with

respect to the election of directors provided for in subparagraph (b) of

this Paragraph (7), and the voting power of the holders of the shares of

the Preferred Stock and the Common Stock shall revert to the status

existing before the first dividend payment date on which dividends on the

Preferred Stock were not paid in full, but always subject to the same

provisions for vesting such special rights in the record holders of shares

of the Preferred Stock in case of further like default or defaults in the

payment of dividends thereon as described in said subparagraph (b).

Dividends shall be deemed to have been paid, as that term is used in this

subparagraph (c), whenever such dividends shall have been declared and

paid, or declared and provision made for the payment thereof, or whenever

there shall be (i) funds available for the payment thereof and (ii)

sufficient surplus or net profits of the corporation legally available for

the payment thereof which shall have accrued since the date of the default

giving rise to such special voting right; and thereupon the holders of a

majority of the shares of the Common Stock shall have the right to elect

directors to succeed those elected by the holders of the Preferred Stock,

PROVIDED that in the event all dividends in default on the Preferred Stock

at the time of the election of such successor directors shall not actually

be paid or declared and set apart for payment within thirty days after such

election, such successor directors so elected shall resign forthwith and

the directors elected by the holders of the shares of the Preferred Stock

shall forthwith be reelected to fill the vacancies so created and shall

assume office as directors.

(d) In case of any vacancy in the Board of Directors occurring among

the directors elected by the holders of the shares of the Preferred Stock,

voting separately as a class, pursuant to subparagraph (b) of this

Paragraph (7), the remaining directors elected by such holders, by the

affirmative vote of a majority thereof, or the remaining director so

elected if there be but one, may elect a successor or successors to hold

office for the unexpired term or terms of the director or directors whose

place or places shall be vacant. Likewise, in case of any vacancy in the

Board of Directors occurring among the directors elected by the holders of

the shares of the Common Stock, voting separately as a class, pursuant to

subparagraph (b) of this Paragraph (7), the remaining directors elected by

such holders, by the affirmative vote of a majority thereof, or the

remaining director so elected if there be but one, may elect a successor or

successors to hold office for the unexpired term or terms of the director

or directors whose place or places shall be vacant.

(e) Whenever the right shall have accrued to the holders of the shares

of the Preferred Stock, voting separately as a class, to elect directors,

pursuant to subparagraph (b) of this Paragraph (7), it shall be the duty of

the President, a Vice President or the Secretary of the corporation

forthwith to call and cause notice to be given to the stockholders of the

corporation entitled to vote of a meeting to be held, at such time as the

officers of the corporation may fix, for the purpose of electing directors,

provided that such meeting shall be held not less than 45 days, nor more

than 90 days, after the accrual of such right to elect directors. At all

meetings of stockholders at which directors are elected during such times

as the holders of shares of the Preferred Stock shall have the special

right, voting separately as a class, to elect directors pursuant to

subparagraph (b) of this Paragraph (7), the presence in person or by proxy

of the holders of a majority of the outstanding shares of the Common Stock

shall be required to constitute a quorum of such class for the election of

directors, and, except as hereinafter stated, the presence in person or by

proxy of the holders of a majority of the outstanding shares of all series

of the Preferred Stock shall be required to constitute a quorum of such

class for the election of directors; PROVIDED, HOWEVER, that (i) the

absence of a quorum of the holders of stock of either such class shall not

prevent the election at any such meeting, or adjournment thereof, of

directors by the other such class if the necessary quorum of the holders of

stock of such class is present in person or by proxy at such meeting, and

(ii) in the absence of a quorum of the holders of stock of either such

class, a majority of those holders of the stock of such class who are

present in person or by proxy shall have power to adjourn the election of

the directors to be elected by such class, and (iii) at any such adjourned

meeting, the presence in person or by proxy of the holders of not less than

35% of the outstanding shares of the Preferred Stock shall constitute a

quorum of the Preferred Stock for the election of directors by such class,

and (iv) if at any such adjourned meeting the holders of at least 35% of

the outstanding shares of the Preferred Stock shall not be present in

person or by proxy, the directors to be elected by such class shall be

elected by vote of the holders of not less than a majority of the

outstanding shares of Common Stock. Not less than thirty days' notice in

writing of any such adjourned meeting shall, upon request, be given by the

Company at its expense to the record holders of such class or classes.

(f) In consideration of the issue, sale or delivery by the

corporation, and the purchase or other acquisition by the holders thereof,

of shares of the capital stock (both preferred and common) of the

corporation, each and every present and future holder of shares of the

capital stock (both preferred and common) of the corporation shall be

conclusively deemed, by purchasing, acquiring or holding such shares, to

have expressly consented to all and singular the terms and provisions of

this Paragraph (7) and to have agreed that the voting rights of such

holder, and the restrictions and qualifications thereof, shall be as set

forth in this Paragraph (7).

(g) Except when some mandatory provision of law shall be controlling

and except as otherwise provided in Paragraph (4) of this Article Fourth,

no particular series of the Preferred Stock shall be entitled to vote as a

separate series or class on any matter and all shares of the Preferred

Stock of all series shall be deemed to constitute but one class for any

purpose for which a vote of the stockholders of the corporation by classes

may now or hereafter be required.

(8) The rights of the holders of shares of the Preferred Stock shall not be

deemed to be adversely affected by any increase in the number of authorized or

outstanding shares of Common Stock, or the creation and issue of shares of any

class of stock subordinate in all respects to the rights of the Preferred Stock.

(9) No share of stock or evidence of indebtedness shall be deemed to be

"outstanding," as that term is used in this Certificate of Incorporation (as

amended), if prior to or concurrently with the event in reference to which a

determination as to the amount thereof outstanding is to be made, the requisite

funds for the redemption, payment or other retirement thereof shall be deposited

in trust for that purpose and, in the case of redemption, the requisite notice

for the redemption thereof shall be given or the depositary of such funds shall

be irrevocably authorized and directed to give or complete such notice of

redemption.

(10) No holder of shares of stock of any class of the corporation shall be

entitled, as a matter of right, to subscribe for, purchase or receive any shares

of stock of any class of the corporation, or any rights or options of the

corporation which it may issue or sell, whether out of the number of shares now

authorized or hereafter authorized. Nor shall any holder of shares of stock of

any class of the corporation be entitled, as a matter of right, to subscribe

for, purchase or receive any shares of stock or bonds, debentures or other

obligations which the corporation may issue or sell, which shall be convertible

into or exchangeable for stock of any class of the corporation, or to which

shall be attached or appertain any warrant or warrants (or other instrument or

instruments) which shall confer upon the holder or owner the right to subscribe

for or purchase from the corporation any shares of its capital stock of any

class; and all such additional issues of shares of stock of any class, or of

rights or options, or of bonds, debentures or other obligations convertible into

or exchangeable for stock or to which such warrants or other instruments shall

be attached or appertain, may be issued and disposed of as determined by the

Board of Directors to such persons (whether stockholders or not), at such times,

for such consideration and upon such terms, permitted by the laws of Delaware,

as the Board of Directors in its absolute discretion may deem advisable.

(11) The corporation reserves the right to increase or decrease its

authorized capital stock or any class thereof, or any series of any such class,

or to reclassify the same, and to amend, alter, change or repeal any provision

contained in the Certificate of Incorporation (as amended) of the corporation,

or in this amendment or any future amendment to said Certificate, in the manner

now or hereafter prescribed by law, BUT SUBJECT to such conditions and

limitations as are hereinbefore prescribed; and all rights granted to or

conferred upon stockholders in the Certificate of Incorporation (as amended) of

the corporation, or in this amendment or any future amendment to said

Certificate, are granted and conferred subject to this reservation.

(12) Neither a consolidation or merger of the corporation with or into any

other corporation, nor a merger of any other corporation into the corporation,

nor the purchase or other acquisition, redemption or other retirement by the

corporation of all or any part of the outstanding shares of its Preferred Stock

of any class, shall be deemed to be a distribution of assets, or a liquidation,

dissolution or winding up, of the corporation within the meaning of any of the

provisions of the Certificate of Incorporation (as amended) of the corporation,

as then in effect.

(13) The amount of capital stock with which the corporation will commence

business is the sum of Five Thousand Dollars ($5,000.00), being Fifty (50)

shares of the Common Stock of the corporation.

FIFTH. The corporation is to have perpetual existence.

SIXTH. The private property of the stockholders shall not

be subject to the payment of corporate debts to any extent

whatever.

SEVENTH. The number of Directors of the corporation shall be fixed from

time to time by the By-laws, and such number may be increased or decreased in

such manner as may be provided in the By-laws. In case of any increase in the

number of Directors, the additional Directors shall be elected, as may be

provided by the By-laws, by the Directors then in office, or by the stockholders

at an annual or special meeting. In case of any vacancy in the Board of

Directors through death, resignation, disqualification or other cause, the

remaining Directors may elect a successor to hold office for the unexpired

portion of the term of the Director whose place shall be vacant, and until the

election of his successor.

Subject always to By-laws made by the stockholders the Board of Directors

may make By-laws from time to time, and may alter, amend or repeal such By-laws,

but any By-laws made by the Board of Directors may be altered, amended or

repealed by the stockholders, at any annual meeting, or at any special meeting,

provided notice of such proposed alteration, amendment or repeal shall have been

included in the notice of such special meeting.

With the consent of the holders of two-thirds in amount of each class of

stock of the corporation at the time outstanding, such consent being expressed

in writing or by a vote at any special meeting called for such purpose, the

Directors shall have authority to dispose, in any manner, of the whole property

of the corporation, including the franchises and good will thereof, and to

receive any form of consideration therefor, including bonds, debentures or

obligations of, or shares of stock in, any corporation, or any other or

different form of consideration.

The Board of Directors shall have power to fix and to determine, and to

vary, the amount of the working capital of the Company, and to direct and

determine the use and disposition of any surplus or net profits over and above

the capital stock paid in; and to determine the date or dates for the

declaration and payment of dividends.

The Board of Directors, by the affirmative vote of a majority of the whole

Board, may appoint from the Directors an Executive Committee, of which a

majority shall constitute a quorum, and, to such extent as shall be provided in

the By-laws or in the resolution appointing them, such Committee shall have and

may exercise all or any of the powers of the Board of Directors, including the

power to cause the seal of the corporation to be affixed to all papers that may

require it. The Board of Directors, by the affirmative vote of a majority of the

whole Board, may appoint any other standing committees, and such standing

committees shall have and may exercise such powers as shall be authorized by the

By-laws or by the resolution appointing them. The Board of Directors may appoint

not only other officers of the Company, but also one or more Vice Presidents,

one or more Assistant Treasurers and one or more Assistant Secretaries, and, to

the extent provided in the By-laws or in the resolution appointing them, the

persons so appointed, respectively, shall have and may exercise all the powers

of the President, Secretary and Treasurer, respectively. Any officer elected or

appointed by the Board of Directors may be removed at any time by the

affirmative vote of a majority of the whole Board. Any other officer or employee

of the Company may be removed at any time by vote of the Board of Directors, or

by any committee or superior officer upon whom such power of removal may be

conferred by the By-laws or by resolution of the Board.

Subject to the provisions of the statute under which this corporation is

organized, the corporation may keep its books outside of the state.

The Board of Directors shall have power from time to time to determine

whether, and to what extent, and at what times and places, and under what

conditions and regulations, the accounts and books of the corporation (other

than the stock ledger) or any of them, shall be open to the inspection of the

stockholders, and no stockholder shall have any right to inspect any account or

book or document of the corporation, except as conferred by statute, or

authorized by the Directors, or by a resolution of the stockholders.

It is the intention that the objects, purposes and powers specified in

Section numbered "THIRD" hereof shall, except where otherwise specified in said

Section, be in nowise limited or restricted by reference to or inference from

the terms of any other section or paragraph in this Restated Certificate, but

that the objects, purposes and powers specified in said Section numbered

"THIRD", and in each of the clauses or paragraphs in this Charter or Restated

Certificate, shall be regarded as independent objects, purposes and powers.

CERTIFICATE OF AMENDMENT

RESTATED CERTIFICATE OF INCORPORATION

SOUTHWESTERN ELECTRIC POWER COMPANY

Southwestern Electric Power Company, a Delaware corporation (the

"corporation"), certifies as follows:

1. In accordance with the provisions of Section 242 of Title 8 of

the Delaware Code, the Board of Directors and the Preferred and Common

Stockholders of the corporation have duly adopted the following amendments to

the corporation's Restated Certificate of Incorporation, as heretofore amended

(the "Certificate"):

2. Paragraph (5), subsection (b), of Article "Fourth" of the

Certificate is further amended to read as follows:

"(b) issue any shares of the Preferred Stock, including the

reissuance of any shares thereof reacquired by the corporation, or shares

of any other stock ranking on a parity with the Preferred Stock as to

dividends or assets, for any purpose OTHER THAN [in exchange for or to

effect the redemption or other retirement of not less than] an equal par

amount or stated value of the Preferred Stock or of stock ranking prior

to or on a parity with the Preferred Stock as to dividends or assets at

the time outstanding, UNLESS (1) the gross income of the corporation

(after deducting all taxes, including taxes based on income, and

determined as hereinafter provided) for twelve consecutive calendar

months ending within the fifteen calendar months immediately preceding

the issuance of the shares to be issued shall have been at least one and

one-half times the sum of (i) the annual interest charge on all

indebtedness of the corporation which will be outstanding immediately

after the issuance of the shares to be issued and (ii) the annual

dividend requirement on all shares of the Preferred Stock and of any

other stock ranking prior to or on a parity with the Preferred Stock as

to dividends or assets (including the shares to be issued) which will be

outstanding immediately after the issuance of the shares to be issued;

AND (2) the common stock equity of the corporation, computed as provided

in Paragraph (6) hereof, shall be not less than the aggregate amount

payable in the event of the involuntary liquidation, dissolution or

winding up of the corporation in respect of all shares of the Preferred

Stock and of any other stock ranking prior to or on a parity with the

Preferred Stock as to dividends or assets which will be outstanding

immediately after the issuance of the shares to be issued."

3. Paragraph 5, subsection (c), of Article "Fourth" of the

Certificate is further amended by deleting Paragraph 5, subsection (c) in its

entirety.

IN WITNESS WHEREOF, Southwestern Electric Power Company has caused

this Certificate of Amendment to be signed by Michael D. Smith, its President,

and its corporate seal to be hereunto affixed and attested by Marilyn S.

Kirkland, its Secretary, this 2nd day of May, 1997.

SOUTHWESTERN ELECTRIC POWER COMPANY

By /S/ MICHAEL D. SMITH

President

(CORPORATE SEAL)

ATTEST:

/S/ MARILYN S. KIRKLAND

Secretary