Exhibit 10.3
ALLEGHENY POWER SYSTEM, INC.
RESTRICTED STOCK PLAN FOR OUTSIDE DIRECTORS
Amended and Restated as of January 1, 2008
1.
Purpose. The purpose of this Restricted Stock Plan for
Outside Directors (the “Plan”) is to enable Allegheny
Power System, Inc. (“APS”) and its controlled
subsidiaries (“Subsidiaries”) to attract and retain
persons of outstanding competence to serve on the Boards of
Directors of APS and its Subsidiaries by paying such persons a
portion of their retainer fee in APS Common Stock pursuant to the
terms hereof. The Plan is hereby amended and restated effective
January 1, 2008 to update the Plan for certain changes in the
applicable law and to make certain other clarifying changes.
2.
Definitions.
(a) The term “Change in
Control” shall be deemed to mean, and to occur at, the time
when either (i) any entity, person or group (other than APS,
any subsidiary, or any savings, pension or other benefit plan for
the benefit of employees of APS or its subsidiaries) which
theretofore owned less than 20% of Common Stock in a transaction or
series of transactions that results in such entity, person or group
directly or indirectly owning beneficially 20% or more of the
outstanding Common Stock or (ii) the election or appointment,
within a twelve-month period, of persons to the APS Board of
Directors who were not directors of APS at the beginning of such
twelve-month period, whose election or appointment was not voted or
approved in advance by a majority of those persons who were
directors at the beginning of such period, and which newly elected
or appointed directors shall constitute a majority of the APS Board
of Directors.
(b) The term “Outside
Director” or “Participant” means a member of the
Boards of Directors of APS and its Subsidiaries who is not, at any
time during his service as a director, an employee (within the
meaning of Section 3(6) of the Employee Retirement Income
Security Act of 1974) of APS or any of its Subsidiaries.
(c) The term “Subsidiary”
means any corporation 50% or more of the outstanding Common Stock
of which is owned, directly or indirectly, by APS.
(d) The term “Service”
shall mean service as an Outside Director.
3.
Eligibility. All who serve as Outside Directors of APS and
any of its Subsidiaries after calendar year 1994 shall be eligible
to receive stock awards hereunder.
4.
Stock Awards.
(a) A total of 25,000 shares of APS
Common Stock shall be available for awards under the Plan. Such
shares shall be shares of APS Common Stock previously unissued or
previously issued and reacquired by APS. Any restricted shares
awarded under this Plan with respect to which the restrictions do
not lapse and which are forfeited
as provided
herein shall be transferred into the record name of APS and again
be available for other awards under the Plan.
(b) Unless he or she chooses
otherwise pursuant to Section 4(e), each Outside Director
shall receive an annual award of 200 shares of APS Common Stock
with respect to each calendar year or portion thereof during which
he or she serves as an Outside Director beginning with the calendar
year 1995. Awards shall be made in January of each year or as soon
thereafter as all necessary regulatory approvals have been
received. However, for the calendar year in which an Outside
Director commences Service, the award of shares to such Outside
Director for such year shall be made in the month in which his or
her Service commences, if his or her Service commences after
January 31 of such year. All awards of shares made hereunder
shall be subject to the restrictions set forth in
Section 5.
(c) Subject to the provisions of
Section 5, certificates representing shares of APS Common
Stock awarded hereunder shall be registered in the name of the
respective Participants. During the period of time such shares are
subject to the restrictions set forth in Section 5, such
certificates shall be endorsed with a legend to that effect, and
shall be held by APS or an agent therefor. The Participant shall,
nevertheless, have all the other rights of a shareholder, including
the right to vote and the right to receive all cash dividends paid
with respect to such shares. Subject to the requirements of
applicable law, certificates representing such shares shall be
delivered to the Participant within 30 days after the lapse of the
restrictions to which they are subject.
(d) If as a result of a stock
dividend, stock split, recapitalization (or other adjustment in the
stated capital of APS) or as the result of a merger, consolidation,
or other reorganization, the common shares of APS are increased,
reduced, or otherwise changed, the number of shares available and
to be awarded hereunder shall be appropriately adjusted, and if by
virtue thereof a Participant shall be entitled to new or additional
or different shares, such shares to which the Participant shall be
entitled shall be subject to the terms, conditions, and
restrictions herein contained relating to the original shares. In
the event that warrants or rights are awarded with respect to
shares awarded hereunder, and the recipient exercises such rights
or warrants, the shares or securities issuable upon such exercise
shall be likewise subject to the terms, conditions, and restriction
herein contained relating to the original shares.
(e) (i) Each Outside Director
may choose prior to the effective date of the Plan or prior to
his/her initial election as a Director and annually thereafter to
receive Alternate Shares in lieu of the annual award of shares
subject to the restrictions set forth in Section 5. If the
Director chooses to receive Alternate Shares, he/she shall receive
certificates representing 200 shares of APS Common Stock free of
the restrictions set forth in Section 5(a) and (b) but subject
to the restriction set forth in Section 5(c).
(ii)
Any such choice will be effective only if made in a writing
delivered to the Secretary of APS prior to the effective date of
the Plan or, with respect to awards for years subsequent to 1995,
prior to the date of the APS stockholders meeting
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