IBEW Resolution Limiting AEP Executive Severance Agreements to 2.99 Times Annual Pay and Bonus Passes Shareholder Vote

AEP board adopts new severance policy
Business Briefs

Richmond Times-Dispatch, Feb 19, 2005

VIRGINIA
American Electric Power's board of directors has adopted a new severance policy for senior executives that requires shareholder approval for future severance packages exceeding 2.99 times an executive's annual pay and bonus.

A similar proposal was approved by 58 percent of AEP's shareholders at the company's April 2004 annual meeting. The board adopted the new policy to be consistent with that proposal, AEP said.

When it submitted its successful shareholder proposal last year, the International Brotherhood of Electrical Workers Pension Benefit Plan noted that executive severance agreements had not been at issue at AEP but had been at other companies, AEP said in a statement yesterday.

Columbus, Ohio-based AEP operates in Virginia as Appalachian Power Co. and is the state's second-largest electric-utility.

AEP's new policy covers severance and separation benefits as well as other special benefits that are available to senior executives and not to other groups of employees, the company said.