Exhibit 10(h)(xxxv)
IDAHO POWER COMPANY
SECURITY PLAN FOR
SENIOR MANAGEMENT EMPLOYEES II
Effective January 1, 2005
(Amended July 20, 2006)
TABLE OF CONTENTS
Page
ARTICLE I........... PURPOSE; EFFECTIVE DATE....................................................................... 1
ARTICLE II.......... DEFINITIONS................................................................................................. 1
2.1...... Actuarial Equivalent.................................................................................................. 1
2.2...... Administrative Committee......................................................................................... 1
2.3...... Affiliate.................................................................................................................... 1
2.4...... Beneficiary............................................................................................................... 1
2.5...... Board...................................................................................................................... 2
2.6...... Change in Control.................................................................................................... 2
2.7...... Change in Control Period......................................................................................... 3
2.8...... Company................................................................................................................. 3
2.9...... Compensation Committee......................................................................................... 3
2.10.... Compensation.......................................................................................................... 3
2.11.... Disability.................................................................................................................. 3
2.12.... Early Retirement Date............................................................................................... 3
2.13.... Employer................................................................................................................. 3
2.14.... Final Average Monthly Compensation....................................................................... 4
2.15.... Key Employee......................................................................................................... 4
2.16.... Normal Form of Benefit............................................................................................ 4
2.17.... Normal Retirement Date........................................................................................... 4
2.18.... Participant................................................................................................................ 4
2.19.... Plan Year................................................................................................................. 4
2.20.... Retirement................................................................................................................ 4
2.21.... Retirement Plan........................................................................................................ 4
2.22.... Security Plan Retirement Benefit............................................................................... 4
2.23.... Target Retirement Percentage................................................................................... 4
2.24.... Termination Date...................................................................................................... 4
2.25.... Years of Participation............................................................................................... 4
ARTICLE III........ PARTICIPATION AND VESTING................................................................. 5
3.1...... Eligibility................................................................................................................... 5
3.2...... Vesting..................................................................................................................... 5
3.3...... Change in Employment Status................................................................................... 5
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TABLE OF CONTENTS
(Continued)
Page
3.4...... Non-Participating Affiliate......................................................................................... 5
ARTICLE IV........ BENEFIT ELECTION...................................................................................... 5
ARTICLE V......... SURVIVOR BENEFITS................................................................................... 6
5.1...... Pre-retirement Survivor Benefits............................................................................... 6
5.2...... Post-termination Survivor Benefit.............................................................................. 6
ARTICLE VI........ SECURITY PLAN RETIREMENT BENEFITS................................................ 7
6.1...... Normal Retirement Benefit........................................................................................ 7
6.2...... Early Retirement Benefit........................................................................................... 7
6.3...... Early Retirement Factor............................................................................................ 7
6.4...... Early Termination Benefits........................................................................................ 8
6.5...... Termination After Change in Control......................................................................... 8
6.6...... Form of Payment...................................................................................................... 8
6.7...... Code §162(m) Delay............................................................................................... 9
6.8...... Payment to Key Employee....................................................................................... 9
ARTICLE VII....... OTHER RETIREMENT PROVISIONS............................................................ 9
7.1...... Disability.................................................................................................................. 9
7.2...... Withholding Payroll Taxes........................................................................................ 9
7.3...... Payment to Guardian................................................................................................ 9
ARTICLE VIII...... BENEFICIARY DESIGNATION................................................................... 10
8.1...... Beneficiary Designation........................................................................................... 10
8.2...... Effect of Payment................................................................................................... 10
ARTICLE IX........ ADMINISTRATION...................................................................................... 10
9.1...... Administrative Committee Duties............................................................................ 10
9.2...... Indemnity of Administrative Committee................................................................... 11
ARTICLE X......... CLAIMS PROCEDURE................................................................................. 11
10.1.... Claim..................................................................................................................... 11
10.2.... Denial of Claim....................................................................................................... 11
10.3.... Review of Claim..................................................................................................... 11
10.4.... Final Decision......................................................................................................... 11
ARTICLE XI........ TERMINATION, SUSPENSION OR AMENDMENT.................................. 12
11.1.... Termination, Suspension or Amendment of Plan...................................................... 12
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TABLE OF CONTENTS
(Continued)
Page
11.2.... Change in Control.................................................................................................. 12
ARTICLE XII....... MISCELLANEOUS....................................................................................... 12
12.1.... Unfunded Plan........................................................................................................ 12
12.2.... Unsecured General Creditor................................................................................... 12
12.3.... Trust Fund............................................................................................................. 12
12.4.... Nonassignability..................................................................................................... 13
12.5.... Not a Contract of Employment............................................................................... 13
12.6.... Governing Law....................................................................................................... 13
12.7.... Validity.................................................................................................................. 13
12.8.... Notice.................................................................................................................... 13
12.9.... Successors............................................................................................................. 14
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IDAHO POWER COMPANY
SECURITY PLAN FOR SENIOR MANAGEMENT EMPLOYEES II
EFFECTIVE JANUARY 1, 2005
(Amended July 20, 2006)
ARTICLE I
PURPOSE; EFFECTIVE DATE
The purpose of this Security Plan for Senior Management Employees II (the "Plan") is to provide supplemental retirement benefits for certain key employees of Idaho Power Company, its subsidiaries and affiliates. It is intended that the Plan will aid in attracting individuals of exceptional ability and retain those critical to the operation of the Company, by providing them with these benefits. The effective date of this Plan is January 1, 2005. It is intended to be compliant with Section 409A of the Internal Revenue Code, which was added by the American Jobs Creation Act of 2004, effective January 1, 2005. It continues the program of supplemental retirement benefits provided under the Security Plan for Senior Management Employees I, which was amended and restated effective December 31, 2004 to freeze that plan as of December 31, 2004.
ARTICLE II
DEFINITIONS
As used in this Plan, the following terms shall be defined as stated in this Article, as interpreted by the Administrative Committee pursuant to its authority granted by Section 9.1 of this Plan.
2.1 Actuarial Equivalent. "Actuarial Equivalent" shall mean equivalence in value between two (2) or more forms and/or times of payment based on a determination by an actuary chosen by the Company using generally accepted actuarial assumptions, methods and factors as used in the Retirement Plan of Idaho Power Company which may be amended from time to time.
2.2 Administrative Committee. "Administrative Committee" shall mean the Fiduciary Committee appointed by the Compensation Committee pursuant to Section 9.1 hereof and the Chief Executive Officer of the Company.
2.3 Affiliate. "Affiliate" shall mean a business entity that is affiliated in ownership with the Company or an Employer and is recognized as an Affiliate by the Company for the purposes of this Plan.
2.4 Beneficiary. "Beneficiary" shall mean the person, persons or entity designated by the Participant pursuant to Article VIII to receive any benefits payable under the Plan. Each such designation shall be made in a written instrument filed with the Administrative Committee and shall become effective only when received, accepted and acknowledged in writing by the Administrative Committee or its designee.
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2.5 Board. "Board" shall mean the Board of Directors of the Company.
2.6 Change in Control. "Change in Control" shall mean any of the following events:
2.6.1 any person (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act") and as used in Section 13(d) of the Exchange Act, excluding (a) IDACORP, Inc. or any Subsidiary, (b) a corporation or other entity owned, directly or indirectly, by the stockholders of IDACORP, Inc. immediately prior to the transaction in substantially the same proportions as their ownership of stock of IDACORP, Inc., (c) an employee benefit plan (or related trust) sponsored or maintained by IDACORP, Inc. or any Subsidiary or (d) an underwriter temporarily holding securities pursuant to an offering of such securities ("Exchange Act Person")) is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20% or more of the combined voting power of the then outstanding voting securities eligible to vote generally in the election of directors of IDACORP, Inc.; provided, however, that no Change in Control will be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by IDACORP, Inc.;
2.6.2 consummation of a merger, consolidation, reorganization or share exchange, or sale of all or substantially all of the assets, of IDACORP, Inc. or the Company (a "Qualifying Transaction"), unless, immediately following such Qualifying Transaction, all of the following have occurred: (a) all or substantially all of the beneficial owners of IDACORP, Inc. immediately prior to such Qualifying Transaction beneficially own in substantially the same proportions, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation or other entity resulting from such Qualifying Transaction (including, without limitation, a corporation or other entity which, as a result of such transaction, owns IDACORP, Inc. or all or substantially all of IDACORP, Inc.'s assets either directly or through one or more subsidiaries) (as the case may be, the "Successor Entity"), (b) no Exchange Act Person is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20% or more of the combined voting power of the then outstanding voting securities eligible to vote generally in the election of directors of the Successor Entity and (c) at least a majority of the members of the board of directors of the Successor Entity are Incumbent Directors;
2.6.3 a complete liquidation or dissolution of IDACORP, Inc. or the Company; or
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2.6.4 within a 24-month period, individuals who were directors of the Board of Directors of IDACORP, Inc. (the "IDACORP Board of Directors") immediately before such period ("Incumbent Directors") cease to constitute at least a majority of the directors of the IDACORP Board of Directors; provided, however, that any director who was not a director of the IDACORP Board of Directors at the beginning of such period shall be deemed to be an Incumbent Director if the election or nomination for election of such director was approved by the vote of at least two-thirds of the directors of the IDACORP Board of Directors then still in office (a) who were in office at the beginning of the 24-month period or (b) whose election or nomination for election was so approved, in each case, unless such individual was elected or nominated as a result of an actual or threatened election contest or as a result of an actual or threatened solicitation of proxies or consents by or on behalf of any Exchange Act Person other than the IDACORP Board of Directors.
For avoidance of doubt, transactions for the purpose of dividing the Company's assets into separate distribution, transmission or generation entities or such other entities as IDACORP, Inc. or the Company may determine shall not constitute a Change in Control unless so determined by the IDACORP Board of Directors. For purposes of this definition, the term "Subsidiary" shall mean any corporation of which more than 50% of the outstanding stock having ordinary voting power to elect a majority of the board of directors of such corporation is now or hereafter owned, directly or indirectly, by IDACORP, Inc.
2.7 Change in Control Period. "Change in Control Period" shall mean the period beginning with a Change in Control, as defined in Section 2.6, and ending 24 months following the consummation of a Change in Control.
2.8 Company. "Company" shall mean the Idaho Power Company, an Idaho corporation, its successors and assigns.
2.10 Compensation. "Compensation" shall mean the base salary and annual bonus (not to exceed one (1) times base salary for the year in which the bonus was paid) paid to a Participant and considered to be "wages" for purposes of federal income tax withholding. Compensation shall be calculated before reduction for any amounts deferred by the Participant pursuant to any plan sponsored by the Employer which permits deferral of current compensation. Compensation does not include long-term incentive compensation in any form, expense reimbursements, or any form of non-cash compensation or benefits. A Participant who elects an accelerated distribution under the Security Plan for Senior Management Employees I (which was frozen as of December 31, 2004), shall not be credited with any additional Compensation under this Plan beginning on the effective date of the accelerated distribution.
2.12.1 attainment of age fifty-five (55); or
2.12.2 completion of thirty (30) years of Credited Service under the Retirement Plan but prior to Participant's Normal Retirement Date.
2.14 Final Average Monthly Compensation. "Final Average Monthly Compensation" shall mean the Compensation received by the Participant during any sixty (60) consecutive months (during the last ten (10) years of employment) for which the Participant's compensation was the highest divided by sixty (60). In determining Final Average Monthly Compensation, annual bonuses shall be allocated equally to the months in which they were paid. Final Average Monthly Compensation shall not include any Compensation payable to a Participant pursuant to a written severance agreement with the Employer.
2.19 Plan Year. "Plan Year" shall mean the calendar year.
2.25 Years of Participation. "Years of Participation" shall be twelve (12) month periods, and portions thereof, which shall begin on the earlier of the date an individual, who has been designated by the Employer, is approved by Administrative Committee pursuant to Section 3.1, or the date designated by the Administrative Committee, and shall end on the earlier of a Participant's Termination Date, or the date the Participant experiences a change in status, as provided in Sections 3.3 and 3.4. Partial Years of Participation, if any, shall be used in determining benefits under this Plan. Years of Participation under the Security Plan for Senior Management Employees I (which was frozen as of December 31, 2004), if any, shall be included in determining the total Years of Participation. A Participant who elects an accelerated distribution under the Security Plan for Senior Management Employees I (which was frozen as of December 31, 2004), shall cease to earn Years of Participation under this Plan on the effective date of the accelerated distribution.
3.2 Vesting. A Participant shall be one hundred percent (100%) immediately vested.
In the event a Participant who was a participant prior to December 1, 1994, in the Security Plan for Senior Management Employees I, or, if the Participant is deceased, the Beneficiary of such Participant, elects to receive the Frozen Benefit (the Frozen Retirement Benefit or Frozen Survivor Benefit, as defined in the Security Plan for Senior Management Employees I) under the Security Plan for Senior Management Employees I, no benefits shall be payable under this Plan.
ARTICLE V
SURVIVOR BENEFITS
5.1.1 Amount. The pre-termination survivor benefit shall be equal to sixty-six and two-thirds percent (66 2/3%) of the retirement benefit calculated under Section 6.1 assuming retirement occurred at the later of age sixty-two (62) or date of death. Final Average Monthly Compensation and the Retirement Plan benefit shall be determined as of the date of the Participant's death. For purposes of this section (a), the Retirement Plan benefit shall be the accrued benefit determined as of the date of death as defined in the Retirement Plan.
5.1.2 Payment. If the Participant is married on the date of death, the benefits shall be paid to the spouse of the Participant for the life of the spouse beginning on the first day of the month coincident with or following the date of death. If the spouse's date of birth is more than ten (10) years after the Participant's date of birth, the monthly benefit shall be reduced using the Actuarial Equivalent factors to reflect the number of years over ten (10) the spouse is younger than the Participant. If the Participant is unmarried on the date of death, the benefit shall be paid to the Participant's Beneficiary in a lump sum that is the Actuarial Equivalent of the value of a death benefit payable to an assumed spouse the same age as the Participant.
5.2 Post-termination Survivor Benefit.
5.2.1 Death Prior to Commencement of Benefits. If a Participant dies prior to commencement of benefits but after reaching a Termination Date:
(a) Amount. The amount of the post-termination survivor benefit shall be equal to sixty-six and two thirds percent (66 2/3%) of the retirement benefit payable to the Participant.
(b) Payment. If the Participant is married on the date of death, the benefits shall be paid to the spouse of the Participant for the life of the spouse beginning on the first day of the month coincident with or following the date of death. If the spouse's date of birth is more than ten (10) years after the Participant's date of birth, the monthly benefit shall be reduced using Actuarial Equivalent factors to reflect the number of years over ten (10) the spouse is younger than the Participant. If the Participant is unmarried on the date of death, the benefit shall be paid to the Participant's Beneficiary in a lump sum that is the Actuarial Equivalent of the value of a death benefit payable to an assumed spouse the same age as the Participant.
5.2.2 Death After Commencement of Benefits. If a Participant dies after commencement of benefits, a survivor benefit will be paid only if, and to the extent provided for, under the form of benefit elected by the Participant pursuant to Section 6.6.
ARTICLE VI
SECURITY PLAN RETIREMENT BENEFITS
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Exact Age When Payments Begin | Early Retirement Factor |
62 | 100% |
61 | 96% |
60 | 92% |
59 | 87% |
58 | 82% |
57 | 77% |
56 | 72% |
55 | 67% |
54 | 62% |
53 | 57% |
52 | 52% |
51 | 47% |
50 | 42% |
49 | 38% |
48 | 34% |
Early Retirement Factors will be prorated to reflect retirement based on completed months rather than exact age.
6.4.1 The Target Retirement Percentage shall be calculated based upon the Years of Participation and then multiplied by a fraction equal to the Participant's actual Years of Participation divided by the Years of Participation the Participant would have had at the Normal Retirement Date if the Participant had continued to be employed by the Employer to age sixty-two (62). The adjusted Target Retirement Percentage shall be multiplied by the factor described in Section 6.3 for each month between the Participant's benefits commencement date (age 55) and age sixty-two (62).
6.4.2 The Early Termination Benefit shall be offset by the Retirement Plan Normal Form of Benefit which would be payable on the date of benefit commencement (age 55) regardless of service, and by the Participant's retirement benefit (before any adjustment due to an accelerated distribution), if any, under the Security Plan for Senior Management Employees I (which was frozen as of December 31, 2004) payable as a single life annuity.
6.6.1 The Participant may also elect to receive Actuarial Equivalent payments in one of the forms of benefit listed below:
(a) A joint and survivor annuity with payments continued to the surviving spouse at an amount equal to two-thirds (2/3) of the Participant's benefit.
(b) A joint and survivor annuity with payments continued to the surviving spouse at an amount equal to the Participant's benefit.
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(c) A single life annuity, if the Participant had previously elected one of the joint and survivor annuity options listed above.
6.6.2 If the Actuarial Equivalent of the Security Plan Retirement Benefit is less than $10,000, the Administrative Committee may direct that the Participant's benefit be paid as a lump sum; provided that such lump sum payment shall be made on or before the later of (i) December 31 of the calendar year in which occurs the Participant's Termination Date or (ii) the date 2½ months after the Participant's Termination Date.
6.6.3 The election to receive benefits in a different form of payment may be made at any time prior to commencement of payment.
6.8 Payment to Key Employee. Notwithstanding the provisions in Sections 6.1, 6.2, 6.4 and 6.5 with respect to the commencement of payment of benefits, payment to a Key Employee shall be delayed for six months from the Key Employee's Termination Date, and the first payment shall include payments accumulated during the delay.
ARTICLE VII
OTHER RETIREMENT PROVISIONS
ARTICLE VIII
BENEFICIARY DESIGNATION
Any Beneficiary designation may be changed by a Participant by the filing of a written form prescribed by the Administrative Committee. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed. Any finalized divorce or marriage (other than common law) of a Participant subsequent to the date of filing of a Beneficiary designation form shall automatically revoke the prior designation. If a Participant fails to designate a Beneficiary as provided above, or if the Beneficiary designation is revoked by marriage or divorce, without execution of a new designation, or if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then Participant's designated Beneficiary shall be deemed to be the person or persons surviving the Participant in the first of the following classes in which there is a survivor, share and share alike:
8.1.1 the Participant's surviving spouse;
8.1.2 the Participant's children, except that if any of the children predecease the Participant but leave issue surviving, the issue shall take by right of representation;
8.1.3 the Participant's personal representative (executor or administrator).
In the administration of this Plan, the Administrative Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit and may from time to time consult with counsel who may be counsel to the Employer.
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Subject to Article X, the decision or action of the Administrative Committee in respect of any questions arising out of, or in connection with, the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
10.2 Denial of Claim. If the claim or request is denied, the written notice of denial shall state:
10.2.1 the reason for denial, with specific reference to the Plan provisions where applicable on which the denial is based;
10.2.2 a description of any additional material or information required and an explanation of why it is necessary; and
10.2.3 an explanation of the Plan's claims review procedure.
ARTICLE XI
TERMINATION, SUSPENSION OR AMENDMENT
12.3 Trust Fund. The Employer shall be responsible for the payment of all benefits provided under the Plan. At its discretion, the Employer may establish one or more trusts, with such trustees as the Board may approve, for the purpose of providing for the payment of such benefits. Such trust or trusts may be irrevocable, but the assets thereof shall be subject to the claims of the Employer's creditors. To the extent any benefits provided under the Plan are actually paid from any such trust, the Employer shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Employer.
12.9 Successors. Subject to Section 11.1, the provisions of this Plan shall bind and inure to the benefit of the Employer and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Employer, and successors of any such corporation or other business entity.
IDAHO POWER COMPANY
By:
Chief Executive Officer
By:
Secretary
Dated:
Adopted effective as of January 1, 2005
Amended by the Board July 20, 2006 14