Exhibit 10.9
November 27, 1996
Mr. George Schreiber
New York, NY 10021
Dear George:
I am delighted to provide you with this offer of employment as Chief Financial
Officer of Arizona Public Service Company and Pinnacle West Capital Corporation.
This is an exciting and challenging time both in the Companies as well as the
industry. Your experience will have a direct impact on our efforts. The
information outlined below covers the major items regarding our offer of
employment. This offer of employment is for a three-year term and renewable by
mutual agreement after the completion of the second year.
As you know this offer is for the position of Executive Vice President and Chief
Financial Officer of Arizona Public Service Company (APS), and Executive Vice
President and Chief Financial Officer of Pinnacle West Capital Corporation
(PNW), with a 50/50 split of your time and efforts directed to each. You will
report directly to me in both Companies and your responsibilities will include
Corporate Finance, Accounting, Treasury, Investor Relations and Risk Management.
Changes in responsibility may occur during the contract term at the discretion
of the Company. The base salary of $375,000 is effective on your first day of
employment, February 3, 1997.
In addition to your base salary, you will participate in the APS Officer
Incentive Program which has a maximum target opportunity of 52% of annual base
salary in 1996. Incentive dollars are generally paid during the first quarter of
the subsequent year. The targets and payout thresholds are reviewed each year.
In 1997, your minimum incentive payment will be $125,000.
In addition to the base and incentive compensation referenced above, you will
also receive a semi-monthly auto allowance totaling $7,200 per year. You will
also be able to utilize a corporate club membership contingent upon your
acceptance. You will be responsible for all monthly dues.
As an additional incentive and contingent upon your acceptance of the position,
the Pinnacle West Board has granted you 1,200 shares of Restricted Stock as well
as 6,000 stock options. The description of these grants is attached. These
grants occur annually in November and are at the levels at which you would
normally participate in the Pinnacle West Capital Corporation Long-Term
Incentive Program. The 1996 grants were determined as if you had been an
employee of the Company at your proposed salary and responsibility levels.
Regarding pension, the Company will credit you with ten years of service which
will allow you to reach the maximum level of pension benefits at age 65.
During 1997, you will be provided with four weeks vacation. For purposes of
vacation, you will be eligible for five weeks vacation after five years of
service.
Mr. George Schreiber
November 27, 1996
Page 2
I have enclosed copies of our Employee Benefits and a schedule outlining the
employee premiums. Also enclosed is a description of our Employee Savings Plan
in which you will be eligible to participate 31 days after employment. Please
note that the Employee Savings Plan is a pre-tax savings plan and takes
advantage of Section 401(k) of the Code. Also, please note that the premiums
that apply to our medical and dental plan are done on a pre-tax basis.
We will also provide you with a relocation service for the disposition of your
real estate. We have a contract with Western Relocation Management Company.
Briefly, the procedure is that Western will select two independent real estate
appraisers. The two appraisers will appraise the property based on the normal
resale period for your area. Provided that both appraisals are within five
percent of one another, the two will be averaged. That average will be
considered the fair market value of the property. You will be given a written
offer in the amount of the fair value. You have sixty days within which to
decide to accept or reject that offer. If you sell the property to another buyer
for a higher price during the sixty day period, you can then assign the property
over to Western. You will receive a check in the amount of your equity based on
the fair market value assigned by Western, and you will then receive a check
after the closing of the property with the buyer to whom you sold the property
for the difference.
APS will pay all of the relocation company fees, as well as any maintenance of
the property during the period of time it is held for resale. We will also pay
normal closing costs and provide the relocation of all household effects to
Phoenix.
I have also included a copy of the change of control agreement, the Pinnacle
West Capital Corporation Long-Term Incentive Program and the executive insurance
program.
On behalf of APS, I look forward to having you join our team. In the event you
have any questions, feel free to contact me or Armando Flores who will
ultimately coordinate the details of your employment and relocation.
Sincerely,
WILLIAM J. POST
William J. Post
Executive Vice President
Pinnacle West Capital Corporation
and
Senior Vice President and
Chief Operating Officer
Arizona Public Service Company
Enclosures
The foregoing is agreed to and accepted
GEORGE A. SCHREIBER, JR.
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George Schreiber
Date: 12/3/96
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