IDAHO POWER COMPANY EXECUTIVE DEFERRED COMPENSATION PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IDAHO POWER COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective November 15, 2000

 

 

 

 

 

 

 

TABLE OF CONTENTS

Page

TABLE OF CONTENTS............................................................................................................... i

SECTION 1 DEFINITIONS.......................................................................................................... 1

 

1.1       "Account"                                                                                                                 1

1.2       “Affiliate”...................................................................................................  ......... 1

1.3       “Beneficiary”.................................................................................................  ...... 1

1.4       “Board”........................................................................................................... ..... 1

1.5       “Change-in-Control”..........................................................................................  ... 1

1.6       “Code”............................................................................................................... .. 4

1.7       “Committee”........................................................................................................ . 4

1.8       “Company”..........................................................................................................   4

1.9       “Deferrable Compensation”...........   ...................................................................... 4

1.10     “Deferral Election”...........................  .................................................................... 4

1.11     “Disability”.........................................  .................................................................. 4

1.12     “Employer”...........................................  ............................................................... 5

1.13     “Event of Maturity”.................................  ............................................................. 5

1.14     “Participant”............................................. ............................................................ 5

1.15     “Plan”................................................................................................................... 5

1.16     “Plan Year”............................................... ........................................................... 5

1.17     “Pre-2005 Account”.................................... ......................................................... 5

1.18     “Post-2004 Account”.................................... ........................................................ 5

1.19     “Separation from Service”..............................  ...................................................... 5

1.20     “Subsidiary”.....................................................  ................................................... 5

1.21     “Termination of Employment”.............................   ................................................ 5

1.22     “Trust”................................................................................................................. 6

SECTION 2 ADMINISTRATION............................................................................................... 6

2.1       Administration...................................................................................................... 6

2.2       Rules and Regulations........................................... ............................................... 6

2.3       Books and Records............................................................................................... 7

2.4       Liability................................................................................................................ 7

2.5       Conflict of Interest................................................. .............................................. 7

2.6       Committee............................................................................................................ 7

SECTION 3 ELIGIBILITY; DEFERRAL ELECTION................................................................. 8

3.1       Eligibility.............................................................................................................. 8

3.2       Limitation on Participation........................................ ............................................ 8

3.3       Deferral Elections and Limit on Amount Deferred......   ......................................... 8

3.3.1    Initial Deferral Election.................................... ........................................ 8

3.3.2    Deferral Elections for Subsequent Years............ ...................................... 9

3.3.3    Timing of Deferral Elections............................... ..................................... 9

3.3.4    Payroll Deductions.................................................................................. 10

3.3.5    FICA Taxes........................................................................................... 10

3.3.6    No Spousal Rights...............................................  ................................. 10

3.4       Part-Year Participation....................................................................................... 10

3.5       Termination of Participation................................................................................. 10

 

 

 

 

 

 

3.6       Cancellation of 2005 Deferral Election................................................................ 10

3.7       2008 Transition Relief Elections.......................................................................... 10

SECTION 4 DEFERRED COMPENSATION ACCOUNT; TRUST.......................................... 11

4.1       Pre-2005 Account and Post-2004 Accounts......................................................... 11

4.2       Deemed Investment Options............................................................................... 11

4.2.1    Valuation of Assets................................................................................ 11

4.2.2    Deemed Investment Elections................................................................. 11

4.3       Funding of Plan.................................................................................................. 11

4.3.1    Unfunded Obligation.............................................................................. 11

4.3.2    Establishment of Trust............................................................................ 12

4.4       Assumption of Risk............................................................................................ 12

SECTION 5 PAYMENT AMOUNT, TIME AND MANNER OF PAYMENT........................... 12

5.1       Payment Amount................................................................................................ 12

5.2       Maturity.............................................................................................................. 12

5.2.1    Participant’s Pre-2005 Account................................................................ 12

5.2.2    Participant’s Post-2004 Account............................................................... 13

5.3       Time and Form of Payments................................................................................ 13

5.3.1    Participant’s Pre-2005 Account................................................................ 13

5.3.2    Participant’s Post-2004 Account............................................................... 13

5.3.3    New Designation of Form of Payment of a Participant’s Pre-2005 Account    14

5.3.4    New Designation of Form of Payment of a Participant’s Post-2004 Account  14

5.3.5    Code Section 162(m) Delay...................................................................... 15

5.4       Determination of Annual Installment Amounts...............................    .................... 15

5.5       Default............................................................................................ ................... 15

5.6       Withholding.......................................................................................................... 15

SECTION 6 DEATH OR DISABILITY...................................................................................... 16

6.1       Payment.............................................................................................................. 16

6.2       Death.................................................................................................................. 16

6.3       Beneficiaries........................................................................................................ 16

6.4       Beneficiary Designation..................................................................... .................. 16

6.5       Disclaimers by Beneficiaries............................................................... ................. 16

6.6       Special Rules....................................................................................................... 17

6.7       Surviving Spouse and Installment Payments..........................................  ............... 18

6.8       Disability............................................................................................................. 18

SECTION 7 WITHDRAWALS ................................................................................................. 18

7.1       Hardship Withdrawals.......................................................................................... 18

7.1.1    Financial Hardship.................................................................................... 18

7.1.2    Withdrawal Applications............................................................ .............. 19

7.1.3    Limitations................................................................................. ............. 19

7.2       Early Distribution................................................................................................. 19

SECTION 8 AMENDMENT; TERMINATION.......................................................................... 19

8.1       Amendment and Termination Generally.....................................................  .......... 19

8.2       Before a Change-in-Control.................................................................................. 20

8.2.1    Participants Who Have Experienced a Separation from Service........    ....... 20

 

 

 

 

 

 

8.2.2    Other Participants..................................................................................... 20

8.2.3 No Acceleration........................................................................................... 20

8.3       After a Change-in-Control................................................................................ .... 20

8.3.1    Existing Participants.................................................................................. 21

8.3.2    New Participants....................................................................................... 21

8.4       No Oral Amendments........................................................................................... 20

8.5       Plan Binding on Successors............................................................................... ... 21

8.6       Payment............................................................................................................... 21

SECTION 9 CLAIMS PROCEDURE.......................................................................................... 21

9.1       Initial Claim.......................................................................................................... 21

9.2       Denial.................................................................................................................. 21

9.3       Time.................................................................................................................... 21

9.4       Appeal................................................................................................................. 22

9.5       Final Decision..................................................................................................... . 22

SECTION 10 GENERAL PROVISIONS..................................................................................... 22

10.1     Attorneys’ Fees.................................................................................................... 22

10.2     Notices................................................................................................................. 22

10.3     Nontransferability; Spendthrift Provisions..........    .................................................. 22

10.4     Not an Employment Contract...............................  ................................................ 22

10.5     Successors............................................................................................................ 22

10.6     Incompetence....................................................................................................... 22

10.7     Expenses.............................................................................................................. 23

10.8     Governing Law..................................................................................................... 23

10.9     Unsecured General Creditor................................... .............................................. 23

10.10   Construction........................................................... ............................................. 23

10.10.1      ERISA Status ..................................................................................   23

10.10.2      IRC Status.........................................................................................  23

10.10.3      Rules of Document Construction: ........................................................ 24

10.11   Effect on Other Plans........................................................................................... 24

10.12   Effective Date...................................................................................................... 24

10.13   Section 409A........................................................................................................ 24

 

 

 

 

 

 

 

IDAHO POWER COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

 

IDAHO POWER COMPANY (“Company”) hereby establishes a nonqualified, unfunded supplemental deferred compensation plan for a select group of highly compensated employees known as the Idaho Power Company Executive Deferred Compensation Plan (“Plan”). The purposes of this Plan are to provide a means whereby certain amounts payable by the Company or affiliates of the Company to a select group of management or highly compensated employees may be deferred to some future period and to attract and retain certain executive employees of outstanding competence.

 

SECTION 1

DEFINITIONS

 

The following words and phrases shall have the following meanings, unless a different meaning is plainly required by the context. Any masculine terminology used in the Plan shall also include the feminine gender and the definition of any terms in the singular shall also include the plural.

 

1.1 “Account” means a Company internal bookkeeping account in the name of a Participant, representing the separate unfunded and unsecured general obligation of the Employer, to which shall be allocated amounts deferred by or otherwise allocated to the Participant under this Plan, together with investment earnings, gains and losses.

 

1.2 “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.

 

1.3 “Beneficiary” shall mean the person or persons designated as such by the Participant.  Each such designation shall be filed with the Company in a form acceptable to the Company and shall become effective only when received by the Company. Designated persons or entities shall not be considered Beneficiaries until the death of the Participant.

 

1.4 “Board” shall mean the Board of Directors of the Company.

 

1.5 “Change-in-Control” shall mean, with respect to a Pre-2005 Account, any of the following events:

 

(a) the public announcement by IDACORP, Inc. or by any person (which shall not include the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of any Subsidiary of the Company) (“Person”) that such Person, who or which, together with all Affiliates and Associates (within the meanings ascribed to such terms in Rule 12b-2 of the Securities Exchange Act of 1934, the “Exchange Act”) of such person, shall be the beneficial owner of twenty percent (20%) or more of the voting stock of IDACORP, Inc.;

 

 

 

 

 

 

(b) the commencement of, or after the first public announcement of any Person to commence, a tender or exchange offer the consummation of which would result in any Person becoming the beneficial owner of voting stock aggregating thirty percent (30%) or more of the then outstanding voting stock of IDACORP, Inc.;

 

(c) the announcement of any transaction relating to IDACORP, Inc. required to be described pursuant to the requirements of Item 6(e) of Schedule 14A of Regulation 14A of the Securities and Exchange Commission under the Exchange Act;

 

(d) a proposed change in the constituency of the Board of IDACORP, Inc., such that, during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of IDACORP, Inc. cease for any reason to constitute at least a majority thereof, unless the election or nomination for election by the shareholders of IDACORP, Inc. of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were members of the Board of IDACORP, Inc. at the beginning of the period.

 

(e) IDACORP, Inc. enters into an agreement of merger, consolidation, share exchange or similar transaction with any other corporation other than a transaction which would result in IDACORP, Inc.’s voting stock outstanding immediately prior to the consummation of such transaction continuing to represent (either by remaining outstanding or by being converted into voting stock of the surviving entity) at least two-thirds (2/3) of the combined voting power of IDACORP, Inc.’s or such surviving entity’s outstanding voting stock immediately after such transaction.

 

(f) the Board of IDACORP, Inc. approves a plan of liquidation or dissolution of the Company or IDACORP, Inc. or an agreement for the sale or disposition by the Company or IDACORP, Inc. (in one transaction or a series of transactions) of all or substantially all of the Company’s or IDACORP, Inc.’s assets to a person or entity which is not an affiliate of the Company or IDACORP, Inc. other than a transaction(s) for the purpose of dividing the assets of the Company or IDACORP, Inc. into separate distribution, transmission or generation entities or such other entities as the Company or IDACORP, Inc. may determine.

 

(g) Any other event which shall be deemed by a majority of the Executive Committee of the Board of IDACORP, Inc. to constitute a “Change in Control.”

 

(h) The acquisition of securities of Idaho Power Company representing more than fifty percent (50%) of the combined voting power of Idaho Power Company’s then outstanding securities by any unrelated entity, person or group of persons acting in concert.

 

“Change-in-Control” shall mean, with respect to a Post-2004 Account, any of the following events:

 

 

 

 

 

 

(a) any person (as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Section 13(d) of the Exchange Act, excluding (i) IDACORP, Inc. or any Subsidiary of IDACORP, Inc., (ii) 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., (iii) an employee benefit plan (or related trust) sponsored or maintained by IDACORP, Inc. or any Subsidiary of IDACORP, Inc. or (iv) 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.;

 

(b) 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: (i) 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”), (ii) 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 (iii) at least a majority of the members of the board of directors of the Successor Entity are Incumbent Directors;

 

(c) a complete liquidation or dissolution of IDACORP, Inc. or the Company; or

 

 

 

 

 

 

 

(d) 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 (i) who were in office at the beginning of the 24-month period or (ii) 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.

 

1.6 “Code” means the Internal Revenue Code of 1986, as amended.

 

1.7 “Committee” shall mean a Committee appointed by, or pursuant to authority of, the Board.

 

1.8 “Company” shall mean IDAHO POWER COMPANY, an Idaho corporation, or any successor corporation.

 

1.9 “Deferrable Compensation” for a Plan Year shall mean a Participant’s base salary (prior to 401(k) and flexible benefit plan deductions) which would otherwise be payable to the Participant in the Plan Year and/or any annual cash incentive award that would otherwise be payable to the Participant in the Plan Year.  Deferrable Compensation shall not include fringe benefits, accrued but unused leave or vacation pay, severance pay, or other similar amounts not included in a Participant’s base salary or annual cash incentive award.

 

1.10 “Deferral Election” shall mean the agreement executed by an eligible employee whereby an eligible employee elects to defer a portion of the applicable year’s salary and/or annual cash incentive award and contains such other information as is required by the Committee. 

 

1.11 “Disability” shall mean (a) with respect to Participants’ Pre-2005 Accounts, disability as that term was used in the Plan as of October 3, 2004 and (b) with respect to Participants’ Post-2004 Accounts, (i) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company and its Affiliates, (ii) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (iii) the Participant is determined to be disabled under a disability insurance program maintained by the Employer or an Affiliate, provided that such disability insurance program’s definition of disability complies with the requirements contained in Treasury Regulation Section 1.409A-3(i)(4).

 

 

 

 

 

 

 

1.12 “Employer” shall mean the Company and any business affiliated with the Company that employs persons who are designated by the Board or the Committee for participation in this Plan.

 

1.13 “Event of Maturity” shall mean any of the occurrences described in Section 5.2 by reason of which a Participant or Beneficiary may become entitled to a payment from this Plan.

 

1.14 “Participant” shall mean any employee of an Employer who has been designated by the Board or the Committee as eligible to participate in the Plan and who has executed a Deferral Election and returned it to the Committee.

 

1.15 “Plan” shall mean the Idaho Power Company Executive Deferred Compensation Plan set forth herein and as may be amended from time to time.

 

1.16 “Plan Year” shall mean the calendar year, beginning on each January 1 and ending on the following December 31.

 

1.17 “Pre-2005 Account” means a subaccount to which amounts were deferred for Plan Years through 2004.

 

1.18 “Post-2004 Account” means a subaccount to which amounts are deferred for Plan Years beginning in 2005 and thereafter.

 

1.19 “Separation from Service” shall mean a “separation from service,” as that term is used in Code Section 409A(a)(2)(A)(i).

 

1.20 “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 the respective entity.

 

 

 

 

 

 

 

1.21 “Termination of Employment” shall mean a complete severance of an employee’s employment relationship with the Employers and all Affiliates, if any, for any reason other than the employee’s death. Retirement constitutes a Termination of Employment. A transfer from employment with an Employer to employment with an Affiliate of an Employer shall not constitute a Termination of Employment. A decision by the Committee not to select a Participant for participation for a subsequent Plan year shall not constitute a Termination of Employment. If an Employer who is an Affiliate ceases to be an Affiliate because of a sale of substantially all of the stock or assets of the Employer, then Participants who are employed by that Employer and who cease to be employed by the Company or an Employer on account of the sale of substantially all the stock or assets of the Employer shall be deemed to have thereby had a Termination of Employment for the purpose of commencing payments from this Plan.  For avoidance of doubt, it is intended that the foregoing definition apply only with respect to a Participant’s Pre-2005 Account.  Notwithstanding anything contained in the Plan, a Deferral Election document or any other document to the contrary, with respect to any payments or benefits under the Plan that are subject to Code Section 409A and that could be paid due to a termination of employment, references to termination of the Participant’s employment shall be interpreted to mean the Participant’s Separation from Service.

 

1.22 “Trust” shall mean the trust described in Section 4.3. The Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan. Participants and their beneficiaries shall have no beneficial ownership interest in any assets of any such Trust.

 

SECTION 2

ADMINISTRATION

 

2.1 Administration. This Plan shall be administered by the Committee. The Committee shall have full discretionary power and authority to administer and interpret the Plan, determine all factual and legal questions under the Plan, including but not limited to eligibility and the amount of benefits, maintain records, determine deemed investment sources and generally be responsible for seeing that the purposes of the Plan are accomplished.  Determinations by the Committee shall be final and binding on all parties with respect to all matters relating to the Plan unless overridden by action of the Board. The Committee may from time to time adopt such rules and procedures as it deems appropriate to assist in the administration of the Plan. The Committee may delegate all or part of its administrative duties to one or more persons, whether or not such persons are members of the Committee or employees of the Company.

 

2.2 Rules and Regulations. The following general rules will apply to the administration of the Plan:

 

(a) No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure. The Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Committee upon request.

 

(b) All decisions on claims and on requests for a review of denied claims shall be made by the Committee.

 

(c) The Plan Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.

 

(d) A claimant may be represented by a lawyer or other representative (at the claimant’s own expense), but the Plan Committee reserves the right to require the claimant to furnish written authorization. A claimant’s representative shall be entitled, upon request, to copies of all notices given to the claimant.

 

(e) The decision of the Committee on a claim and on a request for a review of a denied claim shall be provided to the claimant in writing. If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.

 

 

 

 

 

 

 

(f) Prior to filing a claim or a request for a review of a denied claim, the claimant or his or her representative shall have a reasonable opportunity to review a copy of the Plan and all other pertinent documents in the possession of the Company.

 

(g) The Committee may permanently or temporarily delegate its responsibilities under this claims procedure to an individual or a committee of individuals.

 

2.3 Books and Records. The Committee shall maintain records of each Participant’s Pre-2005 Account balance and Post-2004 Account balance. A Participant shall not be entitled to examine, audit or otherwise have access to any financial statements, bookkeeping records or other records of account pertaining to the Employer or the Plan under any circumstances whatsoever.

 

2.4 Liability. No member of the Committee and no director, officer or member of the Board of the Company or its affiliates shall be liable to any persons for any actions taken under the Plan, or for any failure to effect any of the objectives or purposes of the Plan, by reason of insolvency or otherwise. Neither the officers nor any member of the Committee or the Board of Directors of the Company or any of its affiliates in any way secures or guarantees the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant. Each Participant and other person entitled at any time to payments hereunder shall look solely to the assets of the Company and its affiliates for such payments as an unsecured, general creditor. Nothing herein shall be construed to give a Participant, Beneficiary or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or in which it may have any right, title or interest now or in the future. After benefits shall have been paid to or with respect to a Participant and such payment purports to cover in full the benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in the other assets of the Company and its affiliates in connection with this Plan.

 

2.5 Conflict of Interest. If any individual to whom author