EXHIBIT 10.8ac
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the ______ day of
______________, 199__, by and between Arizona Public Service Company, an Arizona
corporation (hereinafter referred to as the "Company") and __________________
(hereinafter referred to as the "Executive"):
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Company in various
managerial capacities, possesses intimate knowledge of the business and affairs
of the Company, and has acquired certain confidential information and data with
respect to the Company; and
WHEREAS, the Company desires to insure, insofar as possible,
that it will continue to have the benefit of the Executive's services and to
protect its confidential information and goodwill; and
WHEREAS, the Company recognizes that circumstances may arise
in which a change in the control of the Company through acquisition or otherwise
occurs thereby causing uncertainty of employment without regard to the
Executive's competence or past contributions which uncertainty may result in the
loss of valuable services of the Executive to the detriment of the Company and
its shareholders, and the Company and the Executive wish to provide reasonable
security to the Executive against changes in the Executive's relationship with
the Company in the event of any such change in control; and
WHEREAS, both the Company and the Executive are desirous that
a proposal for any change of control or acquisition will be considered by the
Executive objectively and with reference only to the business interests of the
Company and its shareholders;
WHEREAS, the Executive will be in a better position to
consider the Company's best interests if the Executive is afforded reasonable
security, as provided in this Agreement, against altered conditions of
employment which could result from any such change in control or acquisition;
and
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
mutually covenant and agree as follows:
1. Definitions.
(a) "Accrued Benefits" shall mean the benefits payable to
the Executive as described in Section 6.
(b) "Act" shall mean the Securities Exchange Act of 1934.
(c) "Base Period Income" shall be an amount equal to the
Executive's "annualized includible compensation" for the "base period"
as defined in Section 280G(d)(1) and (2) of the Code.
(d) "Beneficial Owner" shall have the same meaning as
given to that term in Rule 13d-3 of the General Rules and Regulations
of the Act, provided that any pledgee of Company voting securities
shall not be deemed to be the Beneficial Owner thereof prior to its
disposition of, or acquisition of voting rights with respect to, such
securities.
(e) "Cause" shall be limited to (i) the engaging by the
Executive in conduct which has caused demonstrable and serious injury
to the Company, monetary or otherwise, as evidenced by a determination
in a binding and final judgment, order or decree of a court or
administrative agency of competent jurisdiction, in effect after
exhaustion or lapse of all rights of appeal, in an action, suit or
proceeding, whether civil, criminal, administrative or investigative;
(ii) conviction of a felony, as evidenced by a binding and final
judgment, order or decree of a court of competent jurisdiction, in
effect after exhaustion or lapse of all rights of appeal, which the
Company determines has a significant adverse impact on it in the
conduct of its business; (iii) unreasonable neglect or refusal by the
Executive to perform the Executive's duties or responsibilities (unless
significantly changed without the Executive's consent); or (iv) a
significant violation by the Executive of the Company's established
policies and procedures as in effect of the date of the Change of
Control which could subject the Executive to disciplinary action by the
Company.
(f) "Change of Control" shall mean a change in ownership
or managerial control of the stock, assets or business of the Company
resulting from one (1) or more of the following circumstances:
(i) A change of control of the Company or
Pinnacle West Capital Corporation, the parent of the Company,
of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Act, or any successor regulation of similar import,
regardless of whether the Company or Pinnacle West Capital
Corporation is subject to such reporting requirement;
(ii) A change of control in ownership of the
Company through a transaction or series of transactions, such
that any Person (other than Pinnacle West Capital Corporation)
is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing twenty percent (20%) or
more of the combined voting power of the Company's then
outstanding securities;
(iii) Any consolidation or merger of the
Company or Pinnacle West Capital Corporation in which neither
the Company nor Pinnacle West Capital Corporation is the
continuing or surviving corporation or pursuant to which
shares of the common stock of the Company or Pinnacle West
Capital Corporation would be converted into cash (other than
cash attributable to dissenters' rights), securities or other
property provided by a Person other than the Company or
Pinnacle West Capital Corporation, other than a consolidation
or merger of either the Company or Pinnacle West Capital
Corporation in which the holders of the common stock of either
the Company or Pinnacle West Capital Corporation immediately
prior to the consolidation or merger have approximately the
same proportionate ownership of common stock of the surviving
corporation immediately after the consolidation or merger;
(iv) The shareholders of either the Company
or Pinnacle West Capital Corporation approve a sale, transfer
or other disposition of all or substantially all of the assets
of either the Company or Pinnacle West Capital Corporation to
a Person other than the Company or Pinnacle West Capital
Corporation; or
(v) During any period of two (2) consecutive
years, individuals who, at the beginning of such period,
constituted the Board of Directors of the Company or Pinnacle
West Capital Corporation cease, for any reason, to constitute
at least a majority thereof, unless the election or nomination
for election of each new director was approved by the vote of
at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of the period.
Notwithstanding any provision herein to the contrary, the filing of a
proceeding for the reorganization of the Company or Pinnacle West
Capital Corporation under Chapter 11 of the Federal Bankruptcy Code or
any successor or other statute of similar import shall not be deemed to
be a Change of Control for purposes of this Agreement.
(g) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(h) "Disability" shall have the same meaning as given to
that term in the Company's long-term disability plan for employees.
(i) "Employment Period" shall mean a period commencing on
the date of a Change of Control, and ending on the earlier (i) of the
second anniversary of such date, or (ii) the date on which the
Executive attains the age of sixty-five (65) provided that the
Executive meets the criteria of the "bona fide executive" exception to
the requirements of the Age Discrimination in Employment Act, codified
at 29 U.S.C. ss.631(c).
(j) "Good Reason" shall mean:
(i) the required relocation of the
Executive, without the Executive's consent, to an employment
location which is more than seventy-five (75) miles from the
Executive's employment location on the date of the Change of
Control;
(ii) a significant reduction by the Company
in the compensation and/or benefits provided to the Executive
as in effect on the date of the Change of Control as the same
may be increased from time to time during the Employment
Period which reduction is not generally effective for all
executives employed by the Company (or its successor) in the
Executive's class or category;
(iii) the removal of the Executive from or
any failure to reelect the Executive to any of the positions
held by the Executive on the date of the Change of Control or
any other positions to which the Executive shall thereafter be
elected or assigned except in the event that such removal or
failure to reelect relates to the termination by the Company
of the Executive's employment for Cause or by reason of death,
Disability or voluntary retirement;
(iv) a significant adverse change, without
the Executive's written consent, in the nature or scope of the
Executive's authority, powers, functions, duties or
responsibilities, or a material reduction in the level of
support services, staff, secretarial and other assistance,
office space and accoutrements available to a level below that
which was provided to the Executive on the date of the Change
of Control and that which is necessary to perform any
additional duties assigned to
the Executive following the Change of Control, which change or
reduction is not generally effective for all executives
employed by the Company (or its successor) in the Executive's
class or category; or
(v) breach of any material provision of this
Agreement by the Company.
(k) "Person" shall mean any individual, partnership,
joint venture, association, trust, corporation or other entity
(including a "group" as defined in Section 13(d)(3) of the Act), other
than an employee benefit plan of the Company or an entity organized,
appointed or established pursuant to the terms of any such benefit
plan.
(l) "Termination Date" shall mean, except as otherwise
provided in Section 12, (i) the Executive's date of death; (ii) the
date of the Executive's voluntary early retirement as agreed upon in
writing by the Company and the Executive; (iii) sixty (60) days after
the delivery of the Notice of Termination terminating the Executive's
employment on account of Disability pursuant to Section 9, unless the
Executive returns full-time to the performance of his or her duties
prior to the expiration of such period; (iv) the date of the Notice of
Termination if the Executive's employment is terminated by the
Executive voluntarily other than for Good Reason; and (v) sixty (60)
days after the delivery of the Notice of Termination if the Executive's
employment is terminated by the Company (other than by reason of
Disability) or by the Executive for Good Reason.
(m) "Termination Payment" shall mean the amount described
in Section 6(b)(i).
(n) "Total Payments" shall mean the sum of the
Termination Payment and any other payments to or for the benefit of the
Executive in the nature of compensation, receipt of which is contingent
on the Change of Control and to which Section 280G of the Code applies.
2. Employment Period. The Company and the Executive shall
retain the right to terminate the employment of the Executive at any time and
for any reason prior to a Change of Control. If a Change of Control occurs when
the Executive is employed by the Company, the Company will continue thereafter
to employ the Executive, and the Executive will remain in the employ of the
Company, in accordance with the terms and provisions of this Agreement, during
the Employment Period.
3. Duties. During the Employment Period, the Executive
shall, in the same capacities and positions held by the Executive at the time of
such Change of Control or in such other capacities and positions as may be
agreed to by the Company and the Executive in writing, devote the Executive's
best efforts, attention and skill to the business and affairs of the Company, as
such business and affairs now exist and as they may hereafter be conducted. The
services which are to be performed by the Executive hereunder are to be rendered
at an employment location which is not more than seventy-five (75) miles from
the Executive's employment location of the date of the Change of Control, or in
such other place or places as shall be mutually agreed upon in writing by the
Executive and the Company from time to time. The Executive shall not be required
to be absent from such employment location for more than forty-five (45)
consecutive days in any fiscal year without the Executive's consent.
4. Compensation. During the Employment Period, the Executive
shall be compensated as follows:
(a) The Executive shall receive, at such intervals
and in accordance with such standard policies as may be in effect on
the date of the Change of Control, an annual salary not less than the
Executive's annual salary as in effect as of the date of the Change of
Control, subject to adjustment as provided in Section 5;
(b) The Executive shall be reimbursed, at such
intervals and in accordance with such standard policies as may be in
effect on the date of the Change of Control, for any and all monies
advanced in connection with the Executive's employment for reasonable
and necessary expenses incurred by the Executive on behalf of the
Company, including travel expenses;
(c) The Executive shall be included to the extent
eligible thereunder in any and all plans providing general benefits for
the Company's employees, including but not limited to, group life
insurance, hospitalization, disability, medical, dental, pension,
profit sharing, savings and stock bonus plans and be provided any and
all other benefits and perquisites made available to other employees of
comparable status and position, on the same terms and conditions as
generally provided to employees of comparable status and position;
(d) The Executive shall receive annually not less
than the amount of paid vacation and not fewer than the number of paid
holidays received annually immediately prior to the Change of Control
or such greater amount of paid vacation and number of paid holidays as
may be made available annually to other employees of comparable status
and position with the Company; and
(e) The Executive shall be included in all plans
providing special benefits to other employees of comparable status,
including but not limited to bonus, deferred compensation, incentive
compensation, supplemental pension, stock option, stock appreciation,
stock bonus and similar or comparable plans extended by the Company
from time to time to managers and other employees of comparable status.
5. Annual Compensation Adjustments. During the Employment
Period, the Board of Directors of the Company, an appropriate committee of the
Board or the President of the Company, whichever is appropriate, shall consider
and appraise, at least annually, the Executive's compensation. In determining
such compensation, the Board, the appropriate committee thereof or the
President, whichever is appropriate, shall consider the commensurate increases
given to other corporate officers and key employees generally, the scope and
success of the Company's operations, the expansion of Executive's duties and the
Executive's performance of his duties.
6. Payments Upon Termination.
(a) Accrued Benefits. For purposes of this Agreement,
the Executive's Accrued Benefits shall include the following amounts:
(i) all salary earned or accrued through the Termination Date; (ii)
reimbursement for any and all monies advanced in connection with the
Executive's employment for reasonable and necessary expenses incurred
by the Executive through the Termination Date; (iii) any and all other
cash benefits previously earned through the Termination Date and
deferred at the election of the Executive or pursuant to any deferred
compensation plans then in effect; (iv) a lump sum payment of the bonus
or incentive compensation otherwise payable to the Executive with
respect to the year in which termination occurs under any bonus or
incentive compensation plan or plans in which the Executive is a
participant; and (v) all other payments and benefits to which the
Executive may be entitled under the terms of any benefit plan of the
Company. Payment of Accrued Benefits shall be made promptly in
accordance with the Company's prevailing practice and the terms of any
applicable benefit plans, contracts or arrangements.
(b) Termination Payment. (i) For purposes of this
Agreement and subject to the limits set forth in Section 6(b)(ii)
hereof, the Executive's Termination Payment shall be an amount equal to
(A) plus (B), multiplied by (C), where
(A) Equals the Executive's rate of annual
salary, as in effect on the date of the Change of
Control and as adjusted thereafter from time to time
pursuant to Section 5;
(B) Equals the amount of the average annual
dollar award paid to the Executive pursuant to the
Company's regular bonus plan or arrangement with
respect to the four (4) years (or the number of years
of the Executive's employment if less than four (4)
years) preceding the Termination Date which shall be
determined by dividing the total dollar amount paid
to the Executive under such plan or arrangement with
respect to such number of years by four (4) (or the
number of years of the Executive's employment if less
than four (4) years); and
(C) Equals one (1).
The Termination Payment shall be payable in a lump sum on the
Executive's Termination Date. Such lump sum payment shall not be reduced by any
present value or similar factor. The Executive shall not be required to mitigate
the amount of such payment by securing other employment or otherwise and such
payment shall not be reduced by reason of the Executive securing other
employment or for any other reason.
(ii) It is the intention of the Company and the
Executive that no portion of the Termination Payment and any other
payment under this Agreement, or payments to or for the benefit of the
Executive under any other agreement, plan or arrangement be deemed to
be an "excess parachute payment" as defined in Section 280G of the
Code. It is agreed that the present value of the Total Payments shall
not exceed an amount equal to two and ninety-nine hundredths (2.99)
times the Executive's Base Period Income, which is the maximum amount
which the Executive may receive without becoming subject to the tax
imposed by Section 4999 of the Code or which the Company may pay
without loss of deduction under Section 280G(a) of the Code. Present
value for purposes of this Agreement shall be calculated in accordance
with the regulations issued under Section 280G of the Code. Within
sixty (60) days following delivery of the Notice of Termination or
notice by the Company to the Executive of its belief that there is a
payment or benefit due the Executive which will result in an excess
parachute payment as defined in Section 280G of the Code, the Executive
and the Company shall, at the Company's expense, obtain the opinions,
which need not be unqualified, of legal counsel and certified public
accountants or a firm of recognized executive compensation consultants.
The Executive shall select said legal counsel, certified public
accountants and executive compensation consultants; provided that if
the Company does not accept one (1) or more of the parties selected by
the Executive, the Company shall provide the Executive with the names
of such legal counsel, certified public accountants and/or executive
compensation consultants as the Company may select; if the Executive
does not accept the party or parties selected by the Company, the legal
counsel, certified public accountants and/or executive compensation
consultants selected by the Executive and the Company, respectively,
shall select the legal counsel, certified public accountants and/or
executive compensation consultants, whichever is applicable, who shall
provide the opinions required by this Section 6(b)(ii). The opinions
required hereunder shall set forth (a) the amount of the Base Period
Income of the Executive, (b) the present value of Total Payments and
(c) the amount and present value of any excess parachute payments. In
the event that such opinions determine that there would be an excess
parachute payment, the Termination Payment or any other payment
determined by such counsel to be includible in Total Payments shall be
reduced or eliminated as specified by the Executive in writing
delivered to the Company within thirty (30) days of his or her receipt
of such opinions or, if the Executive fails to so notify the Company,
then as the Company shall reasonably determine, so that under the bases
of calculation set forth in such opinions there will be no excess
parachute payment. The provisions of this Section 6(b)(ii), including
the calculations, notices and opinions provided for herein shall be
based upon the conclusive presumption that the compensation and
benefits provided for in Section 4 hereof and any other compensation,
including but not limited to the Accrued Benefits, earned on or after
the date of Change of Control by the Executive pursuant to the
Company's compensation programs if such payments would have been made
in the future in any event, even though the timing of such payment is
triggered by the Change of Control, are reasonable compensation for
services rendered prior to the Change of Control; provided, however,
that in the event legal counsel so requests in connection with the
opinion required by this Section 6(b)(ii), a firm of recognized
executive compensation consultants, selected by the Executive and the
Company pursuant to the procedures set forth above, shall provide an
opinion, upon which such legal counsel may rely, as to the
reasonableness of any item of compensation as reasonable compensation
for services rendered prior to the Change of Control by the Executive.
In the event that the provisions of Sections 280G and 4999 of the Code
are repealed without succession, this Section 6(b)(ii) shall be of no
further force or effect.
7. Death. If the Executive shall die during the Employment
Period, but after delivery of a Notice of Termination by the Company for reasons
other than Cause or disability or by the Executive for Good Reason, the
Executive's employment shall terminate on his or her date of death and the
Executive's estate, heirs and beneficiaries shall be entitled to the Executive's
Accrued Benefits as of the Termination Date, all benefits available to them
under the Company's benefits plans as in effect on the Termination Date on
account of the Executive's death, and, subject to the provisions of this
Agreement, to such Termination Payment as the Executive would have been entitled
to had the Executive survived. In such event, the Termination Date shall be
sixty (60) days following delivery of the Notice of Termination subject to the
provisions of Section 12.
If the Executive shall die during the Employment Period, but
prior to the delivery of a Notice of Termination, the Executive's employment
shall terminate and the Executive's estate, heirs and beneficiaries shall
receive all the Executive's Accrued Benefits through the Termination Date and
all benefits available to them under the Company's benefit plans as in effect on
the Termination Date on account of the Executive's death.
8. Retirement. If, during the Employment Period, the
Executive and the Company shall execute an agreement providing for the voluntary
retirement of the Executive from the Company, the Executive shall receive only
his or her Accrued Benefits through the Termination Date.
9. Termination for Disability. If, as a result of the
Executive's Disability, the Executive shall have been absent from the
Executive's duties hereunder on a full-time basis for five (5) consecutive
months during the Employment Period, and within sixty (60) days after the
Company notifies the Executive in writing that it intends to terminate the
Executive's employment, the Executive shall not have returned to the performance
of his or her duties on a full-time basis, the Company may terminate the
Executive's employment, subject to Section 12. During the term of the
Executive's Disability prior to termination, the Executive shall continue to
receive all salary and benefits payable under Sections 4 and 5, including
participation in all employee benefit plans, programs and arrangements in which
the Executive was entitled to participate immediately prior to the disability
provided that the Executive's continued participation is permitted under the
terms and provisions of such plans, programs and arrangements. In the event that
the Executive's participation in any such plan, program or arrangement is barred
as the result of such Disability, the Executive shall be entitled to receive an
amount equal to the annual contributions, payments, credits or allocations which
would have been paid by the Company to the Executive, to the Executive's account
or on the Executive's behalf under such plans, programs and arrangements. In the
event the Executive's employment is terminated on account of the Executive's
Disability in accordance with this Section 9, the Executive shall receive his or
her Accrued Benefits in accordance with Section 6(a) hereof and shall remain
eligible for all benefits provided by any long-term disability programs of the
Company in effect at the time of such termination.
10. Termination Not Giving Rise to a Termination Payment. If,
during the Employment Period, the Executive's employment is terminated for
Cause, or if the Executive voluntarily terminates his or her employment other
than for Good Reason, subject to the procedures set forth in Section 12, the
Executive shall be entitled to receive only his or her Accrued Benefits in
accordance with Section 6(a).
11. Termination Giving Rise to a Termination Payment. If,
during the Employment Period, the Executive's employment is terminated by the
Executive for Good Reason or by the Company other than by reason of death,
Disability pursuant to Section 9 or Cause, subject to the procedures set forth
in Section 12,
(a) the Executive shall be entitled to receive and
the Company shall pay the Executive's Accrued Benefits in accordance
with Section 6(a) and, in lieu of further salary payments for periods
following the Termination Date, as severance pay, a Termination
Payment;
(b) the Executive and his or her dependents shall
continue to be covered for one (1) year, under the same terms and
conditions, by the medical plan and/or dental plan maintained by the
Company which covered that Executive and his or her dependents prior to
the Executive's Termination Date. The Executive and the Company shall
share the cost of such continued coverage in the same proportions as
they shared the cost of such coverage prior to the Executive's
Termination Date. For purposes of satisfying the Company's obligation
under the Consolidated Omnibus Budget Reconciliation Act ("COBRA") to
continue group health care coverage to the Executive and his or her
dependents as a result of the Executive's termination of employment,
the period during which the Executive is permitted to continue to
participate in the Company's medical plans and/ or dental plans under
this Section 11(b) shall be taken into account and treated as part of
the period during which the Executive and his or her dependents are
entitled to continued coverage under the Company's group health plans
under COBRA. Following the end of the continuation period specified in
this Section 11(b), the Executive and his or her dependents shall be
covered under such plans and arrangements only as required under the
provisions of COBRA;
(c) the Executive's termination shall be treated as a
"Normal Termination" as defined in the Pinnacle West Capital
Corporation Stock Option and Incentive Plan, as amended from time to
time, and in any successor plan thereto, which shall entitle the
Executive to exercise any outstanding stock options during the three
(3) month period beginning on the Executive's Termination Date, and any
restrictions remaining on any "Restricted Stock" (as defined in such
plan) awarded to the Executive shall lapse on his or her Termination
Date; and
(d) "out-placement" services will be provided by the
Company to the Executive for a period beginning on the Executive's
Termination Date. Such services shall be provided for a period equal to
one (1) week per year of service with the Company or an affiliate, plus
one (1) week for each two (2) years by which the Executive's age
exceeds age forty (40), plus one (1) week for each Ten Thousand Dollars
($10,000) of compensation, but in no event less than six (6) months.
Notwithstanding the foregoing, the Executive's right to out-placement
services shall terminate on the earlier of the date on which the
Executive becomes employed in a position commensurate with his or her
current salary and responsibilities or on the last day of the period
determined pursuant to the formula set forth in this Section 11(d). The
"out-placement" services shall be provided by an out-placement company
selected by the Company.
12. Termination Notice and Procedure. Any termination by the
Company or the Executive of the Executive's employment during the Employment
Period shall be communicated by written Notice of Termination to the Executive
if such Notice is delivered by the Company and to the Company if such Notice is
delivered by the Executive, all in accordance with the following procedures:
(a) The Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances alleged to
provide a basis for termination.
(b) Any Notice of Termination by the Company shall be
approved by a resolution duly adopted by a majority of the directors of
the Company then in office, specifying in detail the basis for such
termination.
(c) If the Company shall give a Notice of Termination
for Cause or by reason of Disability and the Executive in good faith
notifies the Company that a dispute exists concerning such termination
within the fifteen (15) day period following the Executive's receipt of
such notice, the Executive may elect to continue his or her employment
during such dispute. If it is thereafter determined that (i) the reason
given by the Company for termination did exist, the Executive's
Termination Date shall be the earlier of (A) the date on which the
dispute is finally determined, either by mutual written agreement of
the parties or pursuant to Section 14, (B) the date of the Company's
Notice of Termination for Cause, (C) the date of the Executive's death,
or (D) one day prior to the end of the Employment Period, and the
Executive shall not be entitled to a Termination Payment based on
events occurring after the Company delivered its Notice of Termination;
or (ii) the reason given by the Company for termination did not exist,
the employment of the Executive shall continue as if the Company had
not delivered its Notice of Termination and there shall be no
Termination Date arising out of such notice.
(d) If the Executive shall in good faith give a
Notice of Termination for Good Reason and the Company notifies the
Executive that a dispute exists concerning the termination within the
fifteen (15) day period following the Company's receipt of such notice,
the Executive may elect to continue his or her employment during such
dispute. If it is thereafter determined that (i) Good Reason did exist,
the Executive's Termination Date shall be the earlier of (A) the date
on which the dispute is finally determined, either by mutual written
agreement of the parties or by a court of competent jurisdiction, (B)
the date of the Executive's death, or (C) one day prior to the end of
the Employment Period, and the Executive's Termination Payment shall
reflect events occurring after the Executive delivered his or her
Notice of Termination; or (ii) Good Reason did not exist, the
employment of the Executive shall continue after such determination as
if the Executive had not delivered the Notice of Termination asserting
Good Reason.
(e) If the Executive does not elect to continue
employment pending resolution of a dispute regarding a Notice of
Termination under Sections 12(c) and (d), and it is finally determined
that the reason for termination set forth in such Notice of Termination
did not exist, if such notice was delivered by the Executive, the
Executive will be deemed to have voluntarily terminated his or her
employment and if delivered by the Company, the Company will be deemed
to have terminated the Executive other than by reason of death,
disability or Cause.
(f) If the opinion required to be delivered pursuant
to Section 6(b)(ii) shall not have been delivered on or before the date
that would otherwise constitute the Termination Date, the Termination
Date shall be delayed to the earlier of the date on which such opinion
is delivered or one (1) day prior to the end of the Employment Period.
13. Obligations of the Executive.
(a) The Executive agrees that if, during the
Employment Period, the Executive's employment is terminated in a manner
entitling the Executive to a Termination Payment or the Executive has
voluntarily terminated his or her employment, the Executive shall not,
for a period commencing on the Termination Date and ending after one
(1) year, (i) act in a similar capacity for any electric utility
company which competes to a substantial degree with the Company in the
State of Arizona or (ii) engage in any activity involving substantial
competition with the Company in the electric utility industry in the
State of Arizona, without the prior written approval of the Company's
Board of Directors; provided, however, that nothing in this Section
13(a) shall prohibit the Executive from owning stock or other
securities of a competitor amounting to less than twenty percent (20%)
of the stated capital of such competitor.
(b) The Executive covenants and agrees, during the
Executive's employment by the Company and following his or her
Termination Date, to hold in strict confidence any and all information
in the Executive's possession as a result of the Executive's employment
with the Company; provided that nothing in this Agreement shall be
construed as prohibiting the Executive from reporting any suspected
instance of illegal activity of any nature, any nuclear safety concern,
any workplace safety concern or any public safety concern to the United
States Nuclear Regulatory Commission, United States Department of Labor
or any federal or state governmental agency or prohibiting the
Executive from participating in any way in any state or federal
administrative, judicial or legislative proceeding or investigation
with respect to any such claims and matters.
14. Arbitration. All claims, disputes and other matters in
question between the parties arising under this Agreement, other than Section 13
which may be enforced by the Company through injunctive relief, shall be decided
by arbitration in accordance with the rules of the American Arbitration
Association, unless the parties mutually agree otherwise. Any arbitration
required under this Agreement shall be held in Phoenix, Arizona, unless the
parties mutually agree otherwise. The Company shall pay the costs of any such
arbitration. The award by the arbitrator shall be final, and judgment may be
entered upon it in accordance with applicable law in any state or Federal court
having jurisdiction thereof.
15. Expenses and Interest. If, after a Change of Control a
good faith dispute arises with respect to the enforcement of the Executive's
rights under this Agreement or if any arbitration or legal proceeding shall be
brought in good faith to enforce or interpret any provision contained herein, or
to recover damages for breach hereof and the Executive is the prevailing party,
the Executive shall recover from the Company any reasonable attorney's fees and
necessary costs and disbursements incurred as a result of such dispute or legal
proceeding, and prejudgment interest on any money judgment obtained by the
Executive calculated at the rate of interest announced by Bank One of Arizona
from time to time as its prime rate from the date that payments to the Executive
should have been made under this Agreement.
16. Payment Obligations Absolute. The Company's obligation
during and after the Employment Period to pay the Executive the compensation and
to make the arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, provided that the Company may apply
amounts payable under this Agreement to any debts owed to the Company by the
Executive on his or her Termination Date, and provided further that the amount
payable under this Agreement shall be offset by any amounts payable to the
Executive under a separate severance plan, agreement or arrangement established
by the Company so that in no event shall the total amount received by the
Executive be more than the amount permitted under Section 6(b)(ii). All amounts
payable by the Company under this Agreement shall be paid without notice or
demand. Each and every payment made under this Agreement by the Company shall be
final. Notwithstanding the foregoing, in the event that the Company has paid an
Executive more than the amount to which the Executive is entitled under this
Agreement, the Company shall have the right to recover all or any part of such
overpayment from the Executive or from whomsoever has received such amount.
17. Successors. (a) If all or substantially all of the
Company's business and assets are sold, assigned or transferred to any Person,
or if the Company merges into or consolidates or otherwise combines with any
Person which is a continuing or successor entity, then the Company shall assign
all of its right, title and interest in this Agreement as of the date of such
event to the Person which is either the acquiring or successor corporation, and
such Person shall assume and perform from and after the date of such assignment
the terms, conditions and provisions imposed by this Agreement upon the Company.
Failure of the Company to obtain such assignment shall be a breach of this
Agreement. In case of such assignment by the Company and of assumption and
agreement by such Person, all further rights as well as all other obligations of
the Company under this Agreement thenceforth shall cease and terminate and
thereafter the expression "the Company" wherever used herein shall be deemed to
mean such Person(s).
(b) This Agreement and all rights of the Executive
shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, estates, executors, administrators,
heirs and beneficiaries. In the event of the Executive's death, all
amounts payable to the Executive under this Agreement shall be paid to
the Executive's estate, heirs and representatives. This Agreement shall
inure to the benefit of, be binding upon and be enforceable by, any
successor, surviving or resulting corporation or other entity to which
all or substantially all of the Company's business and assets shall be
transferred whether by merger, consolidation, transfer or sale. This
Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company.
18. Enforcement. The provisions of this Agreement shall be
regarded as divisible, and if any of said provisions or any part hereof are
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remainder of such provisions or parts hereof
and the applicability thereof shall not be affected thereby.
19. Amendment or Termination. The term of this Agreement
shall run until December 31, 199__, and shall continue for additional one (1)
year periods thereafter, unless the Company notifies the Executive in writing
six (6) months prior to December 31, 199__ (or the anniversary of that date in
the event the Agreement continues beyond that date pursuant to the provisions of
this Section 19) that it does not intend to continue the Agreement.
Notwithstanding the foregoing, (i) if a Change of Control has occurred on or
before the date on which the Agreement would be terminated by the Company in
accordance with this Section 19, the Agreement shall not terminate with respect
to that Change of Control until the end of the Employment Period, and (ii) this
Agreement shall terminate if, prior to a Change in Control, the Executive ceases
to be employed by the Company as a manager or executive.
This Agreement sets forth the entire agreement between the
Executive and the Company with respect to the subject matter hereof, and
supersedes all prior oral or written negotiations, commitments, understanding
and writing with respect thereto.
This Agreement may not be terminated, amended or modified
during its term as specified above except by written instrument executed by the
Company and the Executive.
20. Withholding. The Company shall be entitled to withhold
from amounts to be paid to the Executive under this Agreement any federal, state
or local withholding or other taxes or charges which it is from time to time
required to withhold. The Company shall be entitled to rely on an opinion of
counsel if any question as to the amount or requirement of any such withholding
shall arise.
21. Venue; Governing Law. This Agreement and the Executive's
and Company's respective rights and obligations hereunder shall be governed by
and construed in accordance with the laws of the State of Arizona. Any action
concerning this Agreement shall be brought in the Federal or state courts
located in the County of Maricopa, Arizona, and each party consents to the venue
and jurisdiction of such courts.
22. Notice. Notices given pursuant to this Agreement shall be
in writing and shall be deemed given when received, and if mailed, shall be
mailed by United States registered or certified mail, return receipt
requested, addressee only, postage prepaid, if to the Company, to
Board of Directors
Arizona Public Service Company
400 North 5th Street
Phoenix, Arizona 85004
Attention: Corporate Secretary
or if to the Executive, to
or to such other address as the party to be notified shall have given to the
other.
23. Funding. Benefits payable under this Agreement shall
constitute an unfunded general obligation of the Company payable from its
general assets, and the Company shall not be required to establish any special
fund or trust for purposes of paying benefits under this Agreement. The
Executive shall not have any vested right to any particular assets of the
Company as a result of execution of this Agreement and shall be a general
creditor of the Company.
24. No Waiver. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
25. Headings. The headings herein contained are for reference
only and shall not affect the meaning or interpretation of any provision of this
Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
ARIZONA PUBLIC SERVICE COMPANY
By
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Its
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ATTEST:
By
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Its
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Executive