ALLEGHENY ENERGY, INC.
1998 LONG-TERM INCENTIVE PLAN
Effective May 14, 1998
Amended and Restated January 1, 2008
PURPOSE AND ADOPTION OF THE PLAN
Purpose. The purpose of the Allegheny Energy, Inc. 1998 Long-Term Incentive Plan (as the same may be amended from time to time, the
“Plan”) is to assist Allegheny Energy, Inc., a Maryland corporation (the “Company”), and its Subsidiaries (as defined below) in attracting and retaining
highly competent key employees and directors and to act as an incentive in motivating selected key employees and directors of the Company and its
Subsidiaries (as defined below) to achieve long-term corporate objectives.
Adoption and Term. The Plan has been approved by the Board of Directors of the Company (the “Board”) to be effective as of the date of
approval of the Plan by the shareholders of the Company (the “Effective Date”). The Plan shall remain in effect until the tenth anniversary of the
Effective Date; provided, however, that the provisions of Articles VII and VIII with respect to performance-based awards to “covered employees”
under Section 162(m) of the Code (as defined below) shall expire as of the fifth anniversary of the Effective Date. This Plan is hereby amended and
restated effective as of January 1, 2008 to update it for changes in applicable law and to make certain other clarifying changes.
For the purposes of this Plan, capitalized terms shall have the following meanings:
Sec. 2.01 “Acquiring Corporation” shall have the meaning given to such term in Section 9.08(b).
Sec. 2.02 “Award” means any grant to a Participant of one or a combination of Non-Qualified Stock Options or Incentive Stock Options described i
Article VI, Restricted Shares described in Article VII and Performance Awards described in Article VIII.
Sec. 2.03 “Award Agreement” means a written agreement between the Company and a Participant or a written notice from the Company to a