SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[X] Definitive Information Statement
APPALACHIAN POWER COMPANY
(Name of Registrant As Specified in Charter)
John M. Adams, Jr.
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11.
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applies:______________________________________________
2) Aggregate number of securities to which transaction
applies:______________________________________________
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computed pursuant to Exchange Act Rule 0-11:1
______________________________________________________
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______________________________________________________
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state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
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<PAGE>
APPALACHIAN POWER COMPANY
40 Franklin Road, S.W.
Roanoke, Virginia 24011
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF
APPALACHIAN POWER COMPANY:
The annual meeting of the stockholders of Appalachian Power
Company will be held on Tuesday, April 26, 1994, at 11:00 a.m. at
the principal office of American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio, for the following
purposes:
1. To elect eight directors of the Company to hold office
for one year or until their successors are elected and
qualified; and
2. To transact such other business (none known as of the
date of this notice) as may legally come before the
meeting or any adjournment thereof.
Only holders of record of Common Stock and certain issues of
Cumulative Preferred Stock, no par value, at the close of
business on March 4, 1994 are entitled to notice of and to vote
at the annual meeting.
THERE WILL BE NO SOLICITATION OF PROXIES BY THE BOARD OF
DIRECTORS OF THE COMPANY.
JOHN F. DI LORENZO, JR.,
Secretary
March 24, 1994
<PAGE>
INFORMATION STATEMENT
This information statement is being furnished in connection
with the annual meeting of stockholders of Appalachian Power
Company (the "Company"), to be held on Tuesday, April 26, 1994 at
11:00 a.m. at the principal office of American Electric Power
Service Corporation, 1 Riverside Drive, Columbus, Ohio.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND US A PROXY.
Voting at Meeting
On March 4, 1994, the date for determining stockholders
entitled to notice of and to vote at the meeting, there were
555,365 shares of Cumulative Preferred Stock and 13,499,500
shares of Common Stock outstanding.
Each holder of Cumulative Preferred Stock (except holders of
the 5.90%, 5.92% and 7.80% Cumulative Preferred Stock) and each
holder of Common Stock has the right to one vote for each share
standing in such holder's name on the books of the Company at the
close of business on March 4, 1994 for the election of directors
and on any other business which may come before the meeting.
Holders of Cumulative Preferred Stock issued by the Company on or
after June 1, 1977 are not entitled to notice of, or to vote at,
the meeting.
Principal Stockholders
American Electric Power Company, Inc. ("AEP"), 1 Riverside
Plaza, Columbus, Ohio 43215, a registered public utility holding
company under the Public Utility Holding Company Act of 1935,
owns all of the Company's outstanding Common Stock. The Common
Stock represents approximately 96% of the combined voting power
of the capital stock of the Company entitled to vote at the
meeting. The Colonial Group, Colonial Management Associates,
Inc. and John A. McNeice, Jr., One Financial Center, Boston,
Massachusetts 02111, have reported that they jointly beneficially
own 13,675 shares of the Company's 7.40% Cumulative Preferred
Stock, which constitutes 5.5% of such series and 2.4% of the
voting power of all Cumulative Preferred Stock. Other than such
ownership, the management of the Company does not know of any
person (including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934) who beneficially
owns more than 5% of the Cumulative Preferred Stock of the
Company entitled to vote at the meeting.
AEP also owns, directly or indirectly, all of the common
stock of the other companies which constitute the American
Electric Power System (the "AEP System"). The AEP System is an
integrated electric utility system and, as a result, the member
companies of the AEP System, including the Company, have
contractual, financial and other business relationships with the
other member companies, such as participation in the AEP System
savings and retirement plans and tax returns; sales of electrici-
ty; sales, transportation and handling of fuel; sales or rentals
of property; and interest or dividend payments on the securities
held by the companies' respective parents. American Electric
Power Service Corporation (the "Service Corporation"), a wholly-
owned subsidiary of AEP, renders management, advisory, engineer-
ing and other similar services at cost to the principal operating
companies of the AEP System, including the Company.
ELECTION OF DIRECTORS
Eight directors are to be elected to hold office for one
year or until their successors are elected and qualify. The
Company has been informed that AEP will nominate, and cast the
votes of all of the outstanding shares of Common Stock for, the
persons named below. In the event that any of such persons
should unexpectedly be unable to stand for election, AEP has
informed the Company that it will cast its votes for a substitute
chosen by the Board of Directors of the Company and approved by
AEP.
The following brief biographies of the nominees include
their ages as of March 15, 1994, an account of their business
experience and the names of certain publicly-held corporations of
which they are also directors.
<TABLE>
<CAPTION>Name Age Business Experience
<S> <C> <C>
PETER J. DEMARIA 59 Vice president and treasurer
of the Company, treasurer of
AEP and executive vice pres-
ident-administration and
chief accounting officer of
the Service Corporation.
Joined the Service Corpora-
tion in 1959, became an
assistant treasurer in 1969,
assistant vice president in
1971, vice president in
1974, treasurer and senior
vice president in 1978 and
assumed his present posi-
tions with AEP in 1978 and
the Service Corporation in
1984. Has been a director
of the Company since 1988,
treasurer of the Company
since 1978 and a vice presi-
dent since 1991. A director
of AEP and certain other AEP
System companies.
A. JOSEPH DOWD 64 Vice President of the Compa-
ny, secretary of AEP and
senior vice president and
general counsel of the Ser-
vice Corporation. Joined
the Service Corporation in
1962, became a vice presi-
dent and its general counsel
in 1973, and secretary of
AEP in 1974. Assumed his
present positions with the
Service Corporation in 1975.
Has been a director and vice
president of the Company
since 1977. A director of
AEP and certain other AEP
System companies.
E. LINN DRAPER, JR. 52 Chairman of the board and
chief executive officer of
the Company, chairman of the
board, president and chief
executive officer of AEP and
the Service Corporation.
Joined the Service Corpora-
tion in 1992 as president
and chief operating officer
and assumed his present
position in 1993. President
of AEP and vice president
and director of the Company
from 1992 until assuming his
present positions in 1993.
From 1987 until 1992 was
chairman of the board, pres-
ident and chief executive
officer of Gulf States Util-
ities Company, an unaffili-
ated electric utility. A
director of the Company,
AEP, certain other AEP Sys-
tem companies and Pacific
Nuclear Systems, Inc.
LUKE M. FECK 58 Senior vice president-public
affairs of the Service Cor-
poration since 1990. From
1980 to 1989, editor of the
Columbus Dispatch, a daily
newspaper. A director of
the Company since 1993.
WILLIAM J. LHOTA 54 Vice president of the Compa-
ny and executive vice presi-
dent of the Service Corpora-
tion. Joined Ohio Power
Company, a subsidiary of
AEP, in 1965, was president
of Columbus Southern Power
Company, a subsidiary of
AEP, from 1987 until 1989
when he became executive
vice president-operations of
the Service Corporation. He
assumed his present position
with the Service Corporation
in 1993. Has been a vice
president of the Company
since 1989 and a director of
the Company since 1990. A
director of certain other
AEP System companies and
Huntington Bancshares Incor-
porated.
G. P. MALONEY 61 Vice president of the Compa-
ny and of AEP and executive
vice president-chief finan-
cial officer of the Service
Corporation. Joined the
Service Corporation in 1955,
became its controller in
1965, vice president-finance
in 1970, senior vice presi-
dent-finance in 1974 and
assumed his present position
with the Service Corporation
in 1991. Became vice presi-
dent and director of the
Company in 1970 and vice
president of AEP in 1974. A
director of AEP and certain
other AEP System companies.
JAMES J. MARKOWSKY 49 Executive vice president-
engineering and construction
of the Service Corporation.
Joined the Service Corpora-
tion in 1971 as a senior
engineer, became assistant
vice president-mechanical
engineering in 1984, senior
vice president and chief
engineer in 1988 and assumed
his present position in
1993. Has been a director
of the Company since 1993.
A director of certain other
AEP System companies.
JOSEPH H. VIPPERMAN 53 President of the Company.
Joined the Company in 1962
and was transferred to the
Service Corporation and
became controller in 1978,
vice president in 1980 and
was executive vice presi-
dent-operations of the Ser-
vice Corporation from 1984
until 1989. Became a vice
president of the Company in
1985, executive vice presi-
dent in 1989 and assumed his
present position in 1990.
Has been a director since
1985.
</TABLE>
Messrs. DeMaria, Dowd, Draper, Lhota and Maloney are
directors of Columbus Southern Power Company ("CSPCo"), Indiana
Michigan Power Company ("I&M"), Kentucky Power Company ("Ken-
tucky") and Ohio Power Company ("Ohio"), all of which are
subsidiaries of AEP and have one or more classes of publicly held
preferred stock or debt securities. Dr. Markowsky is a director
of CSPCo and Ohio. Messrs. DeMaria, Dowd, Draper, Lhota, Maloney
and Markowsky are also directors of AEP Generating Company,
another subsidiary of AEP.
OTHER BUSINESS
Management does not intend to bring any matters before the
meeting other than the election of directors and does not know of
any matters that will be brought before the meeting by others.
EXECUTIVE COMPENSATION
Certain executive officers of the Company are employees of
the Service Corporation. The salaries of these executive
officers are paid by the Service Corporation and a portion of
their salaries has been allocated and charged to the Company.
The following table shows for 1993, 1992 and 1991 the compensa-
tion earned from all AEP System companies by (i) the chief
executive officer and four other most highly compensated
executive officers (as defined by regulations of the Securities
and Exchange Commission) of the Company at December 31, 1993 and
(ii) a chief executive officer and executive officer, both of
whom retired in 1993.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION> Annual Compensation
All Other
Name and Principal Position Salary Bonus Compensation
<S> Year ($) ($)(1) ($)(2)
<C> <C> <C> <C>
E. Linn Draper, Jr. - Chairman of the 1993 538,333 148,742 18,180
board and chief executive officer of 1992 395,833 8,730 63,700
the Company; chairman of the board,
president and chief executive officer
of AEP and the Service Corporation;
chairman of the board and chief execu-
tive officer of other AEP System
companies (3)
Richard E. Disbrow - Chairman of the 1993 200,000 55,260 102,753
board and chief executive officer of 1992 600,000 13,234 17,676
the Company, AEP, the Service Corpora- 1991 540,000 86,994 17,272
tion and other AEP System companies
(3)
Peter J. DeMaria - Vice president, 1993 280,000 77,364 17,811
treasurer and director of the Company; 1992 273,000 6,021 15,576
treasurer and director of AEP; execu- 1991 258,000 41,564 14,987
tive vice president-administration and
chief accounting officer and director
of the Service Corporation; vice
president, treasurer and director of
other AEP System companies
John E. Katlic - Senior vice presi- 1993 279,167 74,677 45,452
dent-fuel supply and director of the 1992 325,000 6,400 9,396
Service Corporation; president, chief 1991 300,000 38,419 9,402
operating officer and director of coal
mining subsidiaries (retired October
31, 1993)
G. P. Maloney - Vice president and 1993 269,000 74,325 18,000
director of the Company; vice presi- 1992 261,000 5,757 17,036
dent of AEP; executive vice president- 1991 246,000 39,631 16,662
chief financial officer and director
of the Service Corporation; vice
president and director of other AEP
System companies
A. Joseph Dowd - Vice president and 1993 268,000 61,707 15,760
director of the Company; secretary and 1992 260,000 4,779 13,876
director of AEP; senior vice presi- 1991 245,000 32,891 14,002
dent, general counsel, assistant
secretary and director of the Service
Corporation; vice president and direc-
tor of other AEP System companies
William J. Lhota - Vice president and 1993 249,000 68,799 17,160
director of the Company; executive 1992 230,000 5,073 15,116
vice president and director of the 1991 210,000 33,831 14,385
Service Corporation; vice president
and director of other AEP System
companies
</TABLE>
____________
(1) Reflects payments under the AEP Management Incentive
Compensation Plan ("MICP") in which individuals in key
management positions with AEP System companies participate.
Amounts for 1993 are estimates but should not change
significantly. For 1991 and 1993, these amounts included
both cash paid and a portion deferred in the form of
restricted stock units. These units are paid out in cash
after three years based on the price of AEP Common Stock at
that time. Dividend equivalents are paid during the three-
year period. At December 31, 1993, Dr. Draper and Messrs.
DeMaria, Maloney, Dowd and Lhota held 813, 746, 715, 593 and
639 units having a value of $30,177, $27,701, $26,526,
$22,020 and $23,730, respectively, based upon a $37-1/8 per
share closing price of AEP's Common Stock as reported on the
New York Stock Exchange. For 1992, MICP payments were made
entirely in cash.
(2) Includes amounts contributed by AEP System companies under
the American Electric Power System Employees Savings Plan on
behalf of their employee participants. For 1993 this amount
was $7,075 for Dr. Draper and Messrs. Katlic, Maloney, Dowd
and Lhota and $6,000 for Mr. Disbrow and $7,006 for Mr.
DeMaria. The AEP System Savings Plan is available to all
employees of AEP System companies (except for employees
covered by certain collective bargaining agreements) who
have met minimum service requirements.
Includes director's fees for AEP System companies. For 1993
these fees were: Dr. Draper, $11,105; Mr. Disbrow, $3,580;
Mr. DeMaria, $10,805; Mr. Katlic, $2,300; Mr. Maloney,
$10,925; Mr. Dowd, $8,685; and Mr. Lhota, $10,085.
Includes payments of $93,173 and $36,077 for unused accrued
vacation which Messrs. Disbrow and Katlic, respectively,
received upon their retirement.
(3) Dr. Draper was elected chairman of the board and chief
executive officer of the Company and other AEP System
companies and chairman of the board, president and chief
executive officer of AEP and the Service Corporation,
succeeding Mr. Disbrow, who retired, effective April 28,
1993.
RETIREMENT BENEFITS
The American Electric Power System Retirement Plan provides
pensions for all employees of AEP System companies (except for
employees covered by certain collective bargaining agreements),
including the executive officers of the Company. The Retirement
Plan is a noncontributory defined benefit plan.
The following table shows the approximate annual annuities
under the Retirement Plan that would be payable to employees in
certain higher salary classifications, assuming retirement at age
65 after various periods of service. The amounts shown in the
table are the straight life annuities payable under the Plan
without reduction for the joint and survivor annuity. Retirement
benefits listed in the table are not subject to any deduction for
Social Security or other offset amounts. The retirement annuity
is reduced 3% per year in the case of retirement between ages 60
and 62 and further reduced 6% per year in the case of retirement
between ages 55 and 60. If an employee retires after age 62,
there is no reduction in the retirement annuity.
<TABLE>
PENSION PLAN TABLE
<CAPTION> Years of Accredited Service
Highest Average
Annual Earnings 15 20 25 30 35 40
<S> <C> <C> <C> <C> <C> <C>
$250,000 $ 58,155 $ 77,540 $ 96,925 $116,310 $135,695 $152,230
350,000 82,155 109,540 136,925 164,310 191,695 214,970
450,000 106,155 141,540 176,925 212,310 247,695 277,620
550,000 130,155 173,540 216,925 260,310 303,695 340,270
700,000 166,155 221,540 276,925 332,310 387,695 434,245
</TABLE>
Compensation upon which retirement benefits are based
consists of the average of the 36 consecutive months of the
employee's highest salary, as listed in the Summary Compensation
Table, out of the employee's most recent 10 years of service.
With respect to Messrs. Disbrow and Katlic, since they retired in
1993, the amounts of $600,000 and $316,944, respectively, are the
actual salaries upon which their retirement benefits are based.
Mr. Disbrow's retirement benefit was enhanced by computing his
benefit based on his 1992 base salary as described in the AEP
Board Human Resources Committee Report in this information
statement. As of December 31, 1993, the number of full years of
service credited under the Retirement Plan to each of the
executive officers of the Company named in the Summary Compensa-
tion Table were as follows: Dr. Draper, 1 year; Mr. Disbrow, 39
years; Mr. DeMaria, 34 years; Mr. Katlic, 10 years; Mr. Maloney,
38 years; Mr. Dowd, 31 years; and Mr. Lhota, 29 years.
Dr. Draper's employment agreement described below provides
him with a supplemental retirement annuity that credits him with
24 years of service in addition to his years of service credited
under the Retirement Plan less his actual pension entitlement
under the Retirement Plan and any pension entitlements from prior
employers.
Mr. Katlic has a contract with the Service Corporation under
which the Service Corporation agrees to provide him with a
supplemental retirement annuity equal to the annual pension that
Mr. Katlic would have received with service of 30 years under the
AEP System Retirement Plan as then in effect, less his actual
annual pension entitlement under the Retirement Plan. Mr. Katlic
commenced receiving his supplemental annuity upon his retirement
effective October 31, 1993.
AEP has determined to pay supplemental retirement benefits
to 23 AEP System employees (including Messrs. Disbrow, DeMaria,
Maloney and Lhota) whose pensions may be adversely affected by
amendments to the Retirement Plan made as a result of the Tax
Reform Act of 1986. Such payments, if any, will be equal to any
reduction occurring because of such amendments. Upon his
retirement on April 28, 1993, Mr. Disbrow began receiving an
annual supplemental benefit of $2,642. Assuming retirement of
the remaining eligible employees in 1994, none would be eligible
to receive supplemental benefits.
AEP made available a voluntary deferred-compensation program
in 1982 and 1986, which permitted certain executive employees of
AEP System companies to defer receipt of a portion of their
salaries. Under this program, an executive was able to defer up
to 10% or 15% annually (depending on the terms of the program
offered), over a four-year period, of his or her salary, and
receive supplemental retirement or survivor benefit payments over
a 15-year period. The amount of supplemental retirement payments
received is dependent upon the amount deferred, age at the time
the deferral election was made, and number of years until the
executive retires. The following table sets forth, for the
executive officers named in the Summary Compensation Table, the
amounts of annual deferrals and, assuming retirement at age 65,
annual supplemental retirement payments under the 1982 and 1986
programs.
<TABLE>
<CAPTION> 1982 Program 1986 Program
Annual Amount of Annual Amount of
Annual Supplemental Annual Supplemental
Amount Retirement Amount Retirement
Deferred Payment Deferred Payment
Name (4-Year Period) (15-Year Period) (4-Year Period) (15-Year Period)
<S> <C> <C> <C> <C>
Mr. Disbrow $15,000 $54,375 -- --
Mr. DeMaria 10,000 52,000 $13,000 $53,300
Mr. Katlic 10,000 24,500 -- --
Mr. Maloney 15,000 67,500 16,000 56,400
Mr. Dowd 10,000 34,000 10,000 25,500
</TABLE>
EMPLOYMENT AGREEMENT
Dr. Draper has a contract with AEP and the Service
Corporation which provides for his employment for an initial term
from no later than March 15, 1992 until March 15, 1997. Dr.
Draper commenced his employment with AEP and the Service
Corporation on March 1, 1992. AEP or the Service Corporation may
terminate the contract at any time and, if this is done for
reasons other than cause and other than as a result of Dr.
Draper's death or permanent disability, the Service Corporation
must pay Dr. Draper's then base salary through March 15, 1997,
less any amounts received by Dr. Draper from other employment.
AEP BOARD HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Human Resources Committee of the AEP Board of Directors
regularly reviews executive compensation policies and practices
and evaluates the performance of management in the context of the
Company's performance. The Committee is composed entirely of
independent outside directors.
The Human Resources Committee recognizes that the executive
officers are charged with managing a $15 billion, multi-state
electric utility during challenging times and with addressing
many difficult and complex issues. The Committee believes that
compensation must be competitive in order to attract, retain,
reward and motivate the highly qualified individuals needed to
manage AEP to meet corporate objectives and that it should be
closely tied to performance in order to provide incentives that
will maximize shareowner value.
Pay Mix and Measurement
Base Salary. The major component of compensation for the
executive officers is their annual salaries.
When reviewing salaries, the Committee considers external
pay practices used by other competitive electric utilities and by
industry in general. In addition, the Committee considers the
respective positions held by the executive officers, their levels
of responsibility, performance and experience, and the relation-
ship of their salaries to the salaries of other AEP managers and
employees.
For compensation comparison purposes, the Human Resources
Committee uses the electric utility companies in the S&P Electric
Utility Index. In recognition of AEP's relatively large size and
operational complexity, executive officer salary levels are
targeted to the third quartile (between the 50th and 75th
percentiles) of the range of compensation paid by the other
electric utilities in this compensation peer group. Base salary
levels in 1993 for the five most highly compensated executive
officers of AEP named in the Summary Compensation Table (who were
employed as such at the end of the year) were at about the median
of the range of the compensation peer group. In establishing
salary levels against that range, the Human Resources Committee
considers the competitiveness of AEP's entire compensation
package.
Salaries are reviewed and adjusted annually to reflect indi-
vidual and corporate performance and consistency with compensa-
tion changes within the entire Company and the compensation peer
group of other electric utilities.
The Committee meets without the presence of Dr. Draper,
chairman, president and chief executive officer of AEP, to
evaluate his performance and compensation and reports on that
evaluation to the outside directors of the Board. These
directors then act on the Committee's recommendation. Dr.
Draper's increased salary, effective May 1, 1993, reflects the
salary increase he received upon becoming chairman and chief
executive officer of AEP.
Mr. Disbrow, the former chairman and chief executive
officer, retired several years in advance of his normal
retirement date to facilitate the management transition. In
recognition of this, and his many years of distinguished service
with the AEP System, the Committee determined to pay his supple-
mental retirement annuity by computing such benefit on the basis
of his 1992 base salary rather than the 36 consecutive months of
his highest base salary that would have been used, as specified
in the Retirement Plan, had he retired at age 65.
Annual Incentive. A variable, performance-based portion of
the executive officers' total compensation is paid through the
Management Incentive Compensation Plan ("MICP"), which is
included in the "Bonus" column in the Summary Compensation Table.
The MICP was established (effective January 1, 1990) to motivate
and reward superior management performance in serving customer
needs and creating shareholder value. Each participant is
assigned an annual target award expressed as a percentage of
annual salary. The target award ranges from 25-30% for the
executive officers. Actual awards can vary from 0-150% of the
target award based on performance.
The MICP awards for the executive officers (except for Mr.
Katlic) are based entirely on pre-established AEP corporate
performance criteria specified in the MICP, which include return
on stockholder equity (weighted at 25%) and total investor return
reflecting stock price and payment of dividends (weighted at
25%), both measured relative to the performance of the utilities
in the S&P Electric Utility Index, and the extent to which the
average price of power sold to retail customers (weighted at 50%)
is lower as compared with other utilities in AEP's service area.
Fifty percent (50%) of Mr. Katlic's award is based on certain
fuel supply performance criteria. For 1993, the AEP corporate
performance and fuel supply performance targets were achieved to
the extent of 92.1% and 121.9%, respectively. These percentages
are estimates but should not change significantly.
To more closely align the long-term financial interests of
the executive officers with AEP's shareowners, 20% of the MICP
awards have been generally deferred for three years (although the
full amounts of the awards are shown in the Summary Compensation
Table) and treated as if they are invested in AEP Common Stock,
although no stock is actually purchased. However, for 1992, the
full amount of the MICP awards was paid in cash in view of the
small value of the deferrals that would otherwise have been
involved.
Long-Term Incentive. As a result of the Committee's review
of the competitiveness of AEP's total compensation program for
executive and other senior officers, the Committee recommended to
the Board of Directors that AEP adopt the Performance Share
Incentive Plan ("PSI Plan") to provide longer-term, performance-
driven, equity incentive award opportunities directly related to
shareowner value. An independent consulting firm advised the
Committee that 19 of the 24 S&P utilities provide their senior
officers with longer-term incentive opportunities, in addition to
annual incentives, and that the absence of such a plan created a
significant competitive deficiency, and resulted in AEP's
executive officer total compensation being substantially below
the median for the companies in the S&P Utility Index. The AEP
Board of Directors approved the PSI Plan, subject to AEP
shareowner approval at the annual meeting and approval by the
Securities and Exchange Commission under the Public Utility
Holding Company Act of 1935.
Performance share units earned by a participant are based on
a pre-established factor. This factor reflects, for a period of
at least three years, the relative ranking of AEP's total
shareholder return ("TSR") compared to the TSR's of the peer
group of companies comprising the S&P Electric Utility Index.
Notwithstanding AEP's TSR ranking, no performance share units are
earned unless AEP shareowners realize a positive TSR. The
Committee granted performance share units for the period
beginning January 1, 1994 and ending December 31, 1996 and
certain transition periods.
Performance share units granted for the 1994-96 performance
periods were determined based on an evaluation of long-term
incentive opportunities provided by the S&P peer companies, again
targeting the third quartile of competitive practice.
January 26, 1994 Human Resources Committee Members
Toy F. Reid, Chairman
Arthur G. Hansen
Morris Tanenbaum
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of
AEP Common Stock as of December 31, 1993 for all directors as of
the date of this Information Statement, each of the persons named
in the Summary Compensation Table and all directors and executive
officers as a group. Unless otherwise noted, each person had
sole voting and investment power over the number of shares of AEP
Common Stock set forth across from his or her name. Fractions of
shares have been rounded to the nearest whole share. No
executive officer, director or nominee owns any shares of any
series of the Cumulative Preferred Stock of the Company.
NAME SHARES(a)
P. J. DeMaria 5,789(b)(c)
R. E. Disbrow 9,822(b)
A. J. Dowd 4,707
E. L. Draper, Jr. 951(b)
L. M. Feck 714(b)
J. E. Katlic 2,290
W. J. Lhota 6,673(b)(c)
G. P. Maloney 4,227(b)(c)
J. J. Markowsky 4,362(b)
J. H. Vipperman 3,668(b)
All directors and
executive officers as a group (9 persons) 119,117(b)(c)
(a) The holdings of AEP Common Stock of the following
individuals include shares held by the trustee of the AEP System
Employees Savings Plan, over which they have voting power but the
investment/disposition power is subject to the terms of such
Plan: Mr. DeMaria, 2,081 shares; Mr. Disbrow, 4,027 shares; Mr.
Dowd, 4,203 shares; Dr. Draper, 836 shares; Mr. Feck, 521 shares;
Mr. Katlic, 2,230 shares; Mr. Lhota, 5,245 shares; Mr. Maloney,
2,142 shares; Dr. Markowsky, 4,281 shares; Mr. Vipperman, 3,539
shares; and all directors and executive officers as a group,
24,861 shares. Messrs. Disbrow's, Dowd's and Maloney's holdings
include 85 shares each, and Messrs. DeMaria's, Katlic's, Lhota's,
Markowsky's and Vipperman's holdings include 83, 60, 60, 66 and
80 shares, respectively, and the holdings of all directors and
executive officers as a group include 506 shares, each held by
the trustee of the AEP Employee Stock Ownership Plan over which
shares such persons have sole voting power, but the invest-
ment/disposition power is subject to the terms of such Plan. The
shares beneficially owned by the directors and executive officers
of the Company as a group and by the individuals listed above in
each case represent less than 1% of the total number of shares of
AEP Common Stock outstanding as of December 31, 1993.
(b) Includes shares with respect to such directors,
nominees and executive officers share voting and/or investment
power as follows: Mr. DeMaria, 3,624 shares; Mr. Disbrow, 283
shares; Dr. Draper, 115 shares; Mr. Feck, 90 shares; Mr. Lhota,
1,368 shares; Mr. Maloney, 2,000 shares; Dr. Markowsky, 15
shares; and Mr. Vipperman, 49 shares. Mr. DeMaria disclaims
beneficial ownership of 807 shares.
(c) Does not include 85,231 shares in the American Electric
Power System Education 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.
MEETINGS OF THE BOARD OF DIRECTORS
Regular meetings of the Board of Directors were held once
each month during the year. In addition, the Board of Directors
holds special meetings from time to time as required. During
1993, the Board held twelve regular meetings and two special
meetings.
Directors of the Company receive a fee of $100 for each
meeting of the Board of Directors attended in addition to their
salaries.
The Board of Directors of the Company has no committees.
INDEPENDENT AUDITORS
The public accounting firm of Deloitte & Touche has been
selected as the independent auditors of the Company for the year
1994.
A representative of Deloitte & Touche will not be present at
the meeting unless prior to the day of the meeting the Secretary
of the Company has received written notice from a stockholder
addressed to the Secretary at 1 Riverside Plaza, Columbus, Ohio
43215, that such stockholder will attend the meeting and wishes
to ask questions of a representative of the firm.
JOHN F. DI LORENZO, JR.,
Secretary
March 24, 1994
