Exhibit 10.99
STOCK OWNERSHIP INCENTIVE AGREEMENT
UNDER
PINNACLE WEST CAPITAL CORPORATION
2002 LONG-TERM INCENTIVE PLAN
THIS AWARD AGREEMENT is made and entered into as of _________ ___, 20___
(the "Date of Grant"), by and between Pinnacle West Capital Corporation (the
"Company"), and (FirstName) ("Employee").
BACKGROUND
A. The Board of Directors of the Company (the "Board of Directors") has
adopted, and the Company's shareholders have approved, the Pinnacle
West Capital Corporation 2002 Long-Term Incentive Plan (the "Plan"),
pursuant to which stock ownership incentive awards may be granted to
employees of the Company and its subsidiaries and to certain other
individuals.
B. The Company desires to grant to Employee a stock ownership incentive
award under the terms of the Plan.
C. Pursuant to the Plan, the Company and Employee agree as follows:
AGREEMENT
1. DEFINITIONS. For purposes of this Award Agreement, the
following terms have the meanings specified in this Section 1:
(a) "AWARD PERIOD" means the period beginning _________ ___,
20___ and ending _________ ___, 20___.
(b) "AVERAGE NUMBER OF SHARES OWNED" means (i) the sum of
the number of shares of Common Stock (as defined herein)
owned by Employee at the _____________ during the Award
Period divided by (ii) __________ (___), rounded down to
the next whole share.
(c) "AVERAGE SHARE PRICE" means the average _____________
price of the Common Stock on the New York Stock Exchange
during the Award Period.
(d) "BASE SALARY" means the base salary earned by Employee
during the Award Period.
(e) "COMMON STOCK" means the common stock of the Company.
(f) "OWNERSHIP LEVEL" means the Stock Ownership Value (as
defined herein) divided by Employee's Base Salary,
expressed as a ratio, carried out to two decimal places
and rounded down.
(g) "STOCK OWNERSHIP VALUE" means the Average Number of
Shares Owned multiplied by the Average Share Price.
2. GRANT OF AWARD. Pursuant to action of the Committee (as
defined herein), which was taken on the Date of Grant, the
Company grants to Employee the stock ownership incentive award
described in this Award Agreement.
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3. AWARD SUBJECT TO PLAN. This award is granted under and is
expressly subject to, all the terms and provisions of the
Plan, which terms are incorporated herein by reference, and
this Award Agreement. The Committee referred to in Section 4
of the Plan ("Committee") has been appointed by the Board of
Directors, and designated by it, as the Committee to make
awards.
4. STOCK OWNERSHIP INCENTIVE AWARD.
(a) GENERAL. Upon satisfaction of the "Threshold Performance
Goal" described in Section 4(b) below and the Ownership
Level described in Section 4(c) below, the Company will
deliver to Employee, as soon as practicable after the
end of the Award Period, but no later than _________
___, 20___, a number of shares of Common Stock equal to
_____ percent (__%) of Employee's Average Number of
Shares Owned, subject to the limitation described in
Subsection 4(d) below. Partial shares will be rounded
down to the nearest whole share, when applicable.
Attachment A provides a generic example of the operation
of a Stock Ownership Incentive Award.
(b) THRESHOLD PERFORMANCE GOAL. For purposes of this Award
Agreement, the threshold performance goal for the Award
Period will have been met if, during the Award Period,
the Company's earnings from continuing operations[,
excluding the effects of the rate case settlement, plus
SunCor Development Company's earnings from discontinued
operations] are at least $______ million.
(c) OWNERSHIP LEVEL. For purposes of this Agreement, the
Common Stock ownership requirement will have been met if
Employee's Ownership Level is at least ___ [insert
number].
(d) MAXIMUM AWARD. If Employee's Ownership Level exceeds
_______ (__), the number of shares of Common Stock
awarded to Employee will be ____ percent (__%) of the
number of shares represented by an Ownership Level of
_________ (__) or _______________ shares maximum.
5. EVIDENCE OF OWNERSHIP.
(a) SHARES HELD IN COMPANY PLANS. Employee is not required
to provide ownership evidence of shares of Common Stock
owned by Employee and held in any Company-sponsored
stock-based plan, such as the Pinnacle West Capital
Corporation Investors Advantage Plan or the Pinnacle
West Capital Corporation Savings Plan.
(b) SHARES HELD OUTSIDE COMPANY PLANS. Shares of Common
Stock owned by Employee outside of Company-sponsored
stock-based plans (for example, shares held in a
brokerage account) will be included in Employee's
Average Number of Shares Owned only if Employee provides
the Company with written evidence of such ownership (for
example, a copy of a brokerage account statement).
Employee must provide the Company with evidence of such
ownership no later than thirty (30) days following the
end of the Award Period.
6. TERMINATION OF AWARD. This Award Agreement will terminate and
be of no further force or effect as of the date during the
Award Period that Employee is no
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longer employed by the Company or any of its subsidiaries,
unless the termination of active employment is due to
Employee's death or Disability (as defined herein). In the
case of Employee's death or Disability, Employee will be
deemed to have been employed by the Company through the end of
the Award Period. No adjustment will be made to Employee's
"Base Salary" calculation as a result of Employee's death or
Disability (e.g., the base salary earned by Employee to the
date of Employee's death or Disability will not be annualized
over the Award Period). For avoidance of doubt, no
acceleration of the Award Period will occur as a result of a
change of control of the Company.
"Disability" shall mean a period of disability during which
Employee qualifies for benefits under employer's long-term
disability plan, or, if Employee does not participate in such
a plan, a period of disability during which Employee would
have qualified for benefits under such a plan, as determined
by the Committee, had Employee been a participant in such a
plan. The Committee may require such medical or other
evidence, as it deems necessary to judge the nature of
Employee's condition.
7. TAX WITHHOLDING. Employee must pay, or make arrangements
acceptable to the Company for the payment of, any and all
federal, state, and local income and payroll tax withholding
that in the opinion of the Company is required by law. Unless
Employee satisfies any such tax withholding obligation by
paying the amount in cash or by check , the Company will
withhold shares of Common Stock having a Fair Market Value on
the date of withholding sufficient to cover the withholding
obligation.
8. NON-TRANSFERABILITY. Neither this award nor any rights under
this Award Agreement may be assigned, transferred or in any
manner encumbered except by will or the laws of descent and
distribution, and any attempted assignment, transfer,
mortgage, pledge or encumbrance except as herein authorized,
will be void and of no effect.
9. DEFINITIONS; COPY OF PLAN AND PLAN PROSPECTUS. To the extent
not specifically defined in this Award Agreement, all
capitalized terms used in this Award Agreement will have the
same meanings ascribed to them in the Plan. By signing this
Award Agreement, Employee acknowledges receipt of a copy of
the Plan and the related Plan Prospectus.
10. CHOICE OF LAW. This Award Agreement will be governed by the
laws of the State of Arizona excluding any conflicts or choice
of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to another
jurisdiction.
An authorized representative of the Company has signed this Award
Agreement, and Employee has signed this Award Agreement to evidence Employee's
acceptance of the award on the terms specified in this Award Agreement, all as
of the Date of Grant.
PINNACLE WEST CAPITAL CORPORATION
By: _________________________________________
Its: Vice President and Treasurer
_____________________________________________
Employee
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ATTACHMENT A
GENERIC EXAMPLE
(STOCK OWNERSHIP INCENTIVE AWARD)
ASSUMPTIONS:
- Earnings threshold is met.
- Employee's Base Salary is $100,000.
- Employee's Ownership Level must be at least two (2) (Employee's
Ownership Level is based on Employee's title) and cannot exceed five
(5).
- Grant of shares at four percent (4%) of Employee's Average Number of
Shares Owned.
- Employee owns 5,800 shares of Common Stock at the end of each month
during 20___, resulting in the Average Number of Shares Owned
equaling 5,800.
- The Average Share Price for 20___ is $35.00 per share.
- Employee's Stock Ownership Value is $203,000 (5,800 shares X $35.00
per share)
- Employee's Ownership Level is $203,000 / $100,000, or 2.03.
- Employee meets the required Ownership Level of at least 2.
DELIVERY OF COMMON STOCK TO EMPLOYEE:
- Employee would receive 232 shares of Common Stock (4% of 5,800
shares, rounded down, which represents Employee's Average Number of
Shares Owned)
APPLICATION OF THE MAXIMUM:
- Same assumptions, except Average Number of Shares Owned equals
15,000.
- Employee's Stock Ownership Value is $525,000 (15,000 shares X $35.00
per share)
- Employee's Ownership Level is 525,000 / 100,000, or 5.25.
- Shares are not awarded for Ownership Levels above 5, so five times
Base Salary is $500,000 Stock Ownership Value, resulting in 14,285
shares ($500,000 / $35 per share). The 4% award would be based on
14,285 shares; as a result, Employee would receive 571 shares.
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