SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x//X/
Filed by a Partyparty other than the Registrant --/ /
Check the appropriate box:
/x// / Preliminary Proxy Statement
-/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
-/X/ Definitive Proxy Statement
-/ / Definitive Additional Materials
-/ / Soliciting Material Pursuant to [Section]Section 240.14a-12
Idaho Power CompanyIDAHO POWER COMPANY
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(Name of Registrant as Specified in itsIn Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x//X/ No fee required
-required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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-/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
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number,
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[LOGO OF IDACORP] [LOGO OF IDAHO POWER]
NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS
MayMAY 17, 2001, AT BOISE, IDAHO
April 6, 2001
TO THE SHAREHOLDERS OF IDACORP, INC. AND IDAHO POWER COMPANY:
Notice is hereby given that the Joint Annual Meeting of Shareholders of
IDACORP, Inc. ("IDACORP") and Idaho Power Company ("Idaho Power") will be held
on May 17, 2001 at 10:00 a.m. local time at the Idaho Power Corporate
Headquarters, 1221 West Idaho Street, Boise, Idaho, for the following purposes:
1. to elect three Directors of IDACORP and Idaho Power for a three year
term;
2. to amend certain Articles of Idaho Power's Restated Articles of
Incorporation to eliminate the mandatory retirement age for Directors and
to conform with the amended Bylaws of Idaho Power (Idaho Power shareholders
only);
3. to amend the IDACORP 2000 Long-Term Incentive and Compensation Plan to
approve the authorization of additional shares subject to the Plan
(IDACORP shareholders only);
4.3. to amend the IDACORP 2000 Long-Term Incentive and Compensation Plan to
increase Section 162(m) limits (IDACORP shareholders only);
5.4. to ratify the selection of Deloitte & Touche LLP as independent
auditor for IDACORP and Idaho Power for the fiscal year ending
December 31, 2001; and
6.5. to transact such other business that may properly come before the
meeting and any adjournment or adjournments thereof.
All shareholders of record at the close of business on March 29, 2001 are
entitled to notice of the meeting. Common shareholders of record of IDACORP and
Idaho Power and holders of Idaho Power 4% Preferred Stock and 7.68% Series,
Serial Preferred Stock at the close of business on March 29, 2001, are entitled
to vote at the meeting.
All shareholders are cordially invited to attend the Joint Annual Meeting
in person. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE RETURNVOTE YOUR PROXY PROMPTLY.
It is important that your shares be represented at the meeting. Please mark, sign,
date and return the accompanyingvote your
proxy, regardless of the size of your holdings, as promptly as possible. A self-addressed postage prepaid envelope is enclosed
for you to return the proxy card. Any
shareholder returningvoting a proxy card who attends the meeting may vote in person by
revoking that proxy prior to or at the meeting.
By Order of the Boards of Directors
Robert W. Stahman
Corporate Secretary
1
TO SHAREHOLDERS WHO RECEIVE MULTIPLE PROXIES IF YOU OWN IDACORP COMMON STOCK OR
IDAHO POWER PREFERRED STOCK OTHER THAN THE SHARES SHOWN ON THE ENCLOSED PROXY,
YOU WILL RECEIVE A PROXY IN A SEPARATE ENVELOPE FOR EACH SUCH HOLDING. PLEASE
EXECUTE AND RETURNVOTE EACH PROXY RECEIVED.
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JOINT PROXY STATEMENT
IDACORP, Inc.
Idaho Power Company
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707-0070
INTRODUCTION
As a result of the holding company formation on October 1, 1998, IDACORP
holds 100% of the issued and outstanding shares of common stock of Idaho Power
and approximately 92% of the total voting power of Idaho Power. The outstanding
shares of Idaho Power's preferred stock were unchanged by the holding company
formation and continue to be outstanding shares. Holders of voting preferred
stock of Idaho Power hold approximately 8% of Idaho Power's total outstanding
voting power.
GENERAL INFORMATION
This Joint Proxy Statement and the accompanying form of proxy will first be
sent to shareholders on or about April 6, 2001 and are provided to the
shareholders of IDACORP and Idaho Power in connection with the solicitation of
proxies on behalf of the Boards of Directors of IDACORP and Idaho Power for use
at their Joint Annual Meeting of Shareholders and any adjournments or
postponements thereof. The Joint Annual Meeting is scheduled to be held on May
17, 2001, at 10:00 a.m., local time, at the Idaho Power Corporate Headquarters,
1221 West Idaho Street, Boise, Idaho.
COST AND METHOD OF SOLICITATION
The cost of soliciting proxies will be paid by IDACORP and Idaho Power. In
order to be assured that a quorum of outstanding shares will be represented at
the meeting, proxies may be solicited by officers and regular employees of
IDACORP or Idaho Power, personally or by telephone, telegraph, fax or mail or
other electronic means, without extra compensation. In addition, the
solicitation of proxies from brokers, banks, nominees and institutional
investors will be made by Corporate Investor Communications, Inc., at a cost of
approximately $4,000 plus out-of-pocket expenses. IDACORP and Idaho Power will
reimburse banks, brokerage firms and other custodians, nominees and fiduciaries
for their expenses in sending proxy materials to beneficial owners.
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MATTERS TO BE VOTED UPON
As of April 6, 2001, the only known business to be presented at the 2001
Joint Annual Meeting of shareholders is as follows: Shareholders of IDACORP will
vote on (1) the election of three Directors of IDACORP,IDACORP; (2) the amendment of the
IDACORP 2000 Long-Term Incentive and Compensation Plan to authorize additional
shares subject to the Plan; (3) the amendment of the IDACORP 2000 Long-Term
Incentive and Compensation Plan to increase Section 162(m) limits; and (4) the
ratification of the appointment of Deloitte & Touche LLP as independent auditors
of IDACORP. Shareholders of Idaho Power will vote on (1) the election of three
Directors of Idaho Power (2) the amendment of Idaho Power's Restated Articles
of Incorporation; and (3)(2) the ratification of the appointment of Deloitte
& Touche LLP as independent auditors of Idaho Power. See "Other Business."
RECORD DATE
The Boards of Directors have fixed March 29, 2001, as the date for the
determination of shareholders of IDACORP and Idaho Power entitled to notice of
and to vote at the meeting. Only shareholders of record at the close of business
on March 29, 2001 will be entitled to vote at the meeting.
VOTING SECURITIES
The outstanding voting securities of IDACORP as of the record date for the
meeting are [___________]37,412,351 shares of common stock, no par value, each share being
entitled to one vote.
The outstanding voting securities of Idaho Power as of the record date for
the meeting are as follows: 37,612,351 shares of common stock, $2.50 par value,
held by IDACORP, each share being entitled to one vote; __________147,655 shares of 4%
Preferred Stock, $100 par value, each share being entitled to twenty votes; and
150,000 shares of 7.68% Series, Serial Preferred Stock, $100 par value, each
share being entitled to one vote. The aggregate voting power of outstanding
voting securities for Idaho Power is _____________40,715,451 votes.
VOTING
Shareholders of record may vote their proxies by telephone, through the
Internet or by marking, signing, dating and returning the proxy card in the
enclosed postage-prepaid envelope.
Shareholders whose shares are held by a bank or broker may be able to vote
by telephone or through the Internet. Follow the instructions you receive from
your bank or broker.
Shareholders voting through the Internet should understand that there may
be costs associated with electronic access, such as usage charges from Internet
access providers and telephone companies, that must be paid by the shareholder.
IDACORP and Idaho Power have been advised by counsel that the procedures
for Internet and telephone voting are consistent with the requirements of
applicable law.
Under the Idaho Business Corporation Act, a majority of the votes entitled
to be cast on a matter by a voting group constitutes a quorum of that voting
group for action on that matter. Assuming a quorum of each company is present,
the following votes are required for approval of each proposal at the Joint
Annual Meeting:
(i) Proposal No. 1 - directors of IDACORP and Idaho Power are elected
by the affirmative vote of a plurality of the votes cast by the shares entitled
to vote in the election of directors for that company. Votes may be cast in
favor or withheld; votes that are withheld will have no effect on the results.
(ii) Proposal No. 2 - the amendment of Idaho Power's Restated Articles of
Incorporation by Idaho Power shareholders is approved if the votes cast in favor
of the amendment exceed the votes cast opposing the amendment. The voting group
consists of (i) the outstanding common shares of Idaho Power, all of which are
held by IDACORP and will be voted for the amendments and which constitute
approximately 92% of the shares entitled to vote at the meeting, (ii) the
outstanding shares of 4% Preferred Stock, and (iii)
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the outstanding shares of the 7.68% Series, Serial Preferred Stock, all voting
as one group. Abstentions and broker non-votes, if any, will have no effect on
the results.
(iii) Proposal No. 3 - the amendment of the IDACORP 2000 Long-Term
Incentive and Compensation Plan to authorize additional shares subject to the
Plan by IDACORP shareholders, for New York Stock Exchange purposes, requires the
affirmative vote of a majority of the IDACORP votes cast, provided that the
total votes cast represent over 50% in interest of all securities entitled to
vote on the amendment. Under the laws of the State of Idaho, the Plan amendment
is approved if the votes cast in favor of the amendment exceed the votes cast
opposing the amendment. Abstentions and broker non-votes, if any, will have no
effect on the results, provided that the total votes cast represent over 50% in
interest of all securities entitled to vote on the amendment.
(iv)(iii) Proposal No. 43 - the amendment of the IDACORP 2000 Long-Term
Incentive and Compensation Plan to increase Section 162(m) limits by IDACORP
shareholders, for Internal Revenue Code purposes, requires the affirmative vote
of a majority of the IDACORP votes cast. Under the laws of the State of Idaho,
the Plan amendment is approved if the votes cast in favor of the amendment
exceed the votes cast opposing the amendment. Abstentions and broker non-votes,
if any, will have no effect on the result.
(v)2
(iv) Proposal No. 54 - the ratification of the selection of an
independent auditor for IDACORP and Idaho Power is approved where the votes cast
within the voting group in favor exceed the votes cast opposing ratification for
that company.
If no direction is given by a shareholder, proxies received will be voted
FOR Proposal No. 1, election of management's nominees for Directors, FOR
Proposal No. 2, amendment of the Idaho Power Restated Articles of Incorporation (Idaho
Power shareholders only), FOR Proposal No. 3, amendment of the IDACORP 2000 Long-Term Incentive and
Compensation Plan to authorize additional shares subject to the Plan (IDACORP
shareholders only), FOR Proposal No. 4,3, amendment of the IDACORP 2000 Long-Term
Incentive and Compensation Plan to increase Section 162(m) limits (IDACORP
shareholders only); and FOR Proposal No. 5,4, ratification of the selection of
Deloitte & Touche LLP as independent auditor for the fiscal year 2001.
A proxy may be revoked at any time before it is voted at the meeting. Any
shareholder who attends the meeting and wishes to vote in person may revoke his
or her proxy by oral notice at that time. Otherwise, revocation of a proxy must
be mailed to the Secretary of IDACORP or Idaho Power at 1221 West Idaho Street,
Boise, Idaho 83702-5627, and received prior to the meeting.
SECRET BALLOT
It is the policy of IDACORP and Idaho Power that all proxy cards and ballotsproxies for the Joint
Annual Meeting that identify shareholders, including employees, are to be kept
secret, and no such document shall be available for examination nor shall the
identity and vote of any shareholder be disclosed to IDACORP or Idaho Power
representatives or to any third party. Proxy cardsProxies shall be returned in
envelopes addressed to the
independent tabulator who receives, inspects and tabulates the proxies.
Individual voted proxies and ballots are not seen by nor reported to IDACORP or
Idaho Power except (i) as necessary to meet applicable legal requirements, (ii)
to allow the independent election inspectors to certify the results of the
shareholder vote, (iii) in the event
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of a matter of significance where there is
a proxy solicitation in opposition to the Board of Directors, based upon an
opposition proxy statement filed with the Securities and Exchange Commission, or
(iv) to respond to shareholders who have written comments on their proxies.
1. ELECTION OF DIRECTORS
IDACORP's and Idaho Power's Boards of Directors each consist of the same 10
members. IDACORP's Articles of Incorporation, as amended, and Idaho Power's
Restated Articles of Incorporation, as amended, provide that Directors be
elected for three-year terms with approximately one-third of the Board of
Directors to be elected at each annual meeting of shareholders. The three
Directors standing for election for the IDACORP and Idaho Power Boards of
Directors at the 2001 Joint Annual Meeting are identified below as nominees for
election with terms to expire in the year 2004. All nominees are currently
Directors of IDACORP and Idaho Power. Robert Bolinder has reached age 70, the
mandatory retirement age under the Idaho Power charter, and is retiring from the
Board.Board April 25, 2001. Mr. Bolinder has served as director since 1980. The Board
thanks Mr. Bolinder for his 21 years of distinguished service to IDACORP and
Idaho Power.
Unless otherwise instructed, proxies received will be voted in favor of the
election of the Director nominees of the appropriate company. While it is not
expected that any of the nominees will be unable to qualify for or accept
office, if for any reason one or more shall be unable to do so, the proxies will
be voted for nominees selected by the appropriate Board of Directors.
EACH BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ITS NOMINEES LISTED
BELOW.
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IDACORP AND IDAHO POWER NOMINEES FOR ELECTION -- TERMS EXPIRE 2004
ROTCHFORD L. BARKER ................... Director, American Ecology Corporation
(since 1996), Member and former director
Chicago Board of Trade; director of
Idaho Power and IDACORP since 1999. Age
64
JON H. MILLER ......................... Chairman of the Board of IDACORP and
Idaho Power since 1999; Private
Investor; formerly President and Chief
Operating Officer (1978-1990) and a
director (1977-1990) of Boise Cascade
Corporation; director of Fibermark
Corporation; director of Ida-West Energy
Company; director of Idaho Power since
1988 and IDACORP since 1998. Age 63
ROBERT A. TINSTMAN .................... Former President and Chief Executive
Officer (1995-1999) and director
(1995-1999) of Morrison Knudsen
Corporation; director of Home Federal
Savings & Loan; Chairman of
Contractorhub.com; director of IDACORP
Technologies, Inc.; director of Idaho
Power and IDACORP since 1999. Age 54
IDACORP AND IDAHO POWER CONTINUING DIRECTORS -- TERMS EXPIRE 2003
PETER T. JOHNSON ...................... Private Investor; former Administrator
of the Bonneville Power Administration
(1981-1986); director of Standard Insurance Company;StanCorp
Financial Group, Inc.; director and
Chairman of the Board of Ida-West Energy
Company; director of Idaho Power since
1993 and IDACORP since 1998. Age 69
5
PETER S. O'NEILL President,...................... Chairman and CEO, O'Neill Enterprises
Inc. (since 1990); director of Building
Materials Holding Corporation; director
of IDACORP Financial Services, Inc.;
director of Idaho Power since 1995 and
IDACORP since 1998. Age 64
JAN B. PACKWOOD ....................... President and Chief Executive Officer of
Idaho Power and IDACORP (since 1999);
formerly President and Chief Operating
Officer (1997-1999); Executive Vice
President (1996-1997) and Vice President
- Bulk Power (1989-1996) of Idaho Power;
director and President of Idaho Energy
Resources Company; director of IDACORP
Financial Services, Inc.; director of
Ida-West Energy Company; director of
IDACORP Services Co.; director of
IDACORP Technologies, Inc; director of
RMC, Inc.; director of Idaho Power since
1997 and IDACORP since 1998. Age 58
IDACORP AND IDAHO POWER CONTINUING DIRECTORS -- TERMS EXPIRE 2002
ROGER L. BREEZLEY ..................... Private Investor; formerly a director
(1983-1995), Chairman of the Board
(1987-1994) and Chief Executive Officer
(1987-1993) of U.S. Bancorp; President
and director of IDACORP Technologies,
Inc.; director of Idaho Power since 1993
and IDACORP since 1998. Age 63
4
JOHN B. CARLEY ........................ Former director of Albertson's, Inc;
formerly Chairman of the Executive
Committee of the Board of Directors
(1998- 1999)(1998-1999), President (1984-1996) and
Chief Operating Officer (1990-1996) of
Albertson's, Inc.; former director of
Boise Cascade Office Products Co.;
director of IDACORP Technologies, Inc.;
director of Idaho Power since 1990 and
IDACORP since 1998. Age 67
JACK K. LEMLEY ........................ Director of Lemley & Associates, Inc.
(since 1987), director and Chairman of
the Board and Chief Executive Officer of
American Ecology Corp. (Since 1995);
director of IDACORP Technologies, Inc.;
director of Idaho Power since 1995 and
IDACORP since 1998. Age 66
6
EVELYN LOVELESS ....................... Chief Executive Officer (since 1992) and
a director of Global, Inc.; director of
Farmers & Merchants Bank (since 1999);
formerly President of Global, Inc.
(1989-1992); director of Idaho Power
since 1987 and IDACORP since 1998. Age
67
7
MEETINGS OF THE BOARDS AND COMMITTEES
The IDACORP and Idaho Power Board of Directors held seven meetings in 2000.
The average attendance during 2000 at all meetings of the Boards and all
meetings of the committees of the Boards was 97 percent.
The Committees of each of IDACORP and Idaho Power are the Executive
Committee, the Audit Committee, the Compensation Committee and the Investment
Committee. The members of the Committees are the same individuals for both
IDACORP and Idaho Power. In 2000, IDACORP had one committee which Idaho Power
does not have - --- the Committee of Outside Directors. Board committees, their
membership during 2000 and a brief statement of their principal responsibilities
are presented below.
Executive CommitteeEXECUTIVE COMMITTEE
The Executive Committees act on behalf of the Boards of Directors of
IDACORP and Idaho Power, as applicable, when the respective Boards are not in
session, except on those matters which require action of the full Boards.
Members of the Committee are Jan B. Packwood (Chairman), Robert D. Bolinder,
John B. Carley, Jack K. Lemley and Jon H. Miller. During 2000, the Executive
Committee met one time.
Audit CommitteeAUDIT COMMITTEE
The Audit Committees of IDACORP and Idaho Power assist the Boards of
Directors in fulfilling oversight responsibilities by reviewing the financial
information which will be provided to the shareholders and others, the systems
of internal controls which management and the Boards have established, the audit
process and services provided by the independent auditors, the plans and
activities of the Internal Audit Department and the conducting of business under
the Business Conduct Guide. Members of the Committee are Jack K. Lemley
(Chairman), Rotchford L. Barker, Robert D. Bolinder and Peter T. Johnson. During
2000, the IDACORP and Idaho Power Audit Committee met four times.
Compensation Committee5
COMPENSATION COMMITTEE
The Compensation Committees of IDACORP and Idaho Power assist the Boards of
Directors in discharging duties and responsibilities regarding management of the
total compensation philosophy, total compensation programs for executives,
senior managers and employees, and all other compensation-related matters which
properly come before the Boards of Directors. Members of the Committee are John
B. Carley (Chairman), Peter T. Johnson, Evelyn Loveless and Peter S. O'Neill.
During 2000, the IDACORP and Idaho Power Compensation Committee met five times.
Investment CommitteeINVESTMENT COMMITTEE
The Investment Committees of IDACORP and Idaho Power assist the Boards of
Directors in fulfilling oversight responsibilities to participants and
beneficiaries under the Retirement Plan and to shareholders by reviewing Plan
design, formulating investment philosophies and establishing investment
policies, establishing performance measurement objectives and benchmarks,
monitoring the performance of investment managers, trustees, independent
consultants and consulting actuaries to the Plan, reviewing sufficiency of Plan
assets to cover liabilities and reviewing compliance with all applicable laws
and regulations pertaining to the Plan. Members of the Committee are Robert D.
Bolinder (Chairman), Roger L. Breezley, Jon H. Miller, Jan B. Packwood and
Robert A. Tinstman. During 2000, the IDACORP and Idaho Power Investment
Committee met two times.
8
Committee of Outside DirectorsCOMMITTEE OF OUTSIDE DIRECTORS
In September 1998, the IDACORP Board formed a Committee of Outside
Directors. The primary function of the Committee of Outside Directors is to
review and evaluate the performance of the Chief Executive Officer and to
establish individual and corporate goals and strategies relating to the Chief
Executive Officer. It also acts as a nominating committee to review and make
recommendations to the Board of Directors for Director candidates to fill Board
vacancies and considers shareholder nominees for the Board of Directors for whom
timely written resumes are received no earlier than 90 days, and no later than
60 days, prior to the annual meeting. Members of the Committee are all members
of the IDACORP Board of Directors who are not officers or employees or former
officers of IDACORP or one of its subsidiaries. Members of the Committee are
Rotchford L. Barker, Robert D. Bolinder, Roger L. Breezley, John B. Carley,
Peter T. Johnson, Jack K. Lemley, Evelyn Loveless, Jon H. Miller, Peter S.
O'Neill and Robert A. Tinstman. During 2000, the Committee of Outside Directors
met six times.
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TRANSACTIONS WITH MANAGEMENT
See Compensation Committee Interlocks and Insider Participation for
additional information regarding Mr. O'Neill.
2. AMENDMENT OF IDAHO POWER
RESTATED ARTICLES OF INCORPORATION
The Board of Directors of Idaho Power Company unanimously recommends that
the shareholders of Idaho Power Company approve an amendment to the Company's
Restated Articles of Incorporation, as amended (the "Charter") to eliminate the
mandatory retirement age for directors. The Board of Directors unanimously
approved the Charter amendment at its meeting on March 15, 2001, subject to
approval by the shareholders.
The Charter amendment is as follows (additions are underlined and deletions
are in brackets):
ARTICLE 4. DIRECTORS. (a) The number of directors constituting the
Board of Directors of the Corporation shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by
affirmative vote of a majority of the directors, but the number of
directors shall be no less than 9 and no greater than 15. The number of
directors may be increased or decreased, beyond the limits set forth above,
only by an amendment to the Restated Articles of Incorporation of the
Corporation pursuant to Article 10 of the Restated Articles of
Incorporation of the Corporation.
The Board of Directors shall be divided into three classes as nearly
equal in number as may be. The initial term of office of each director in
the first class shall expire at the annual meeting of shareholders in 1990;
the initial term of office of each director in the second class shall
expire at the annual meeting of shareholders in 1991; and the initial term
of office of each director in the third class shall expire at the annual
meeting of shareholders in 1992. At each annual election commencing at the
annual meeting of shareholders in 1990, the successors to the class of
directors whose term expires at that time shall be elected to hold office
for a term of three years to succeed those whose term expires, so that the
term of one class of directors shall expire each year. Each director shall
hold office for the term for which he is elected or appointed or until his
successor shall be elected and qualified or until his death, or until he
shall resign or be removed [;provided, however, that no person who will be
seventy (70) years of age or more on or before the annual meeting shall be
nominated to the Board of Directors, and any directors who reach the age of
seventy (70) shall be automatically retired from the Board].
In the event of any increase or decrease in the authorized number of
directors, (i) each director then serving as such shall nevertheless
continue as a director of the class of which he is a member until the
expiration of his current term, or his earlier resignation, removal from
office or death, (ii) the newly created or eliminated directorships
resulting from such increase and decrease
10
shall be apportioned by the Board of Directors among the three classes of
directors so as to maintain such classes as nearly equal in number as may
be.
The remaining sections of Article 4 are unchanged.
Reasons for the Amendment
The amendment to Article 4(a) eliminates the mandatory retirement age for
directors from the Charter and conforms the Charter to the IDACORP charter. The
Idaho Power bylaws, however, which may be amended by the board of directors
without a shareholder vote, retain this requirement. Eliminating this provision
from the Charter will allow the Board in the future to keep a director on the
Board who has reached age 70 simply by amending the bylaws.
THE IDAHO POWER COMPANY BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT IDAHO POWER SHAREHOLDERS VOTE "FOR" THIS PROPOSAL.
Under the laws of the State of Idaho, the Charter amendment is approved if
the votes cast in favor of the amendment exceed the votes cast opposing the
amendment. The voting group consists of (i) the outstanding common shares of
Idaho Power, all of which are held by IDACORP and will be voted for the
amendments and which constitute approximately 92% of the shares entitled to vote
at the meeting, (ii) the outstanding shares of 4% Preferred Stock and (iii) the
outstanding shares of the 7.68% Series, Serial Preferred Stock, all voting as
one group. An abstention or broker non-vote, if any, will have no effect on the
results. If a choice has been specified by a shareholder by means of the proxy,
the shares of stock will be vote accordingly. If no choice has been specified,
the shares will be voted "FOR" the proposal.
3. AMENDMENT OF THE IDACORP
2000 LONG-TERM INCENTIVE
AND COMPENSATION PLAN
TO INCREASE NUMBER OF SHARES SUBJECT TO THE PLAN
The IDACORP 2000 Long-Term Incentive and Compensation Plan (the "Plan") was
approved by the shareholders at the 2000 Annual Meeting.
The IDACORP Board of Directors approved a 1,300,000 increase in the number
of shares subject to the Plan at the January 18, 2001 meeting, subject to
shareholder approval at the 2001 Annual Meeting.
6
The complete text of the Plan is set forth as Exhibit "A" hereto. The
following is a summary of the material features of the Plan and is qualified in
its entirety by reference to Exhibit "A".
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Purpose of the PlanPURPOSE OF THE PLAN
The purpose of the Plan is to promote the success and enhance the value of
IDACORP by linking the personal interests of officers, key employees and
directors to those of IDACORP's shareholders and customers. The Plan is further
intended to assist IDACORP in its ability to motivate, attract and retain the
services of participants upon whose judgment, interest and special effort the
successful conduct of its operations is largely dependent.
Effective Date and DurationEFFECTIVE DATE AND DURATION
The Plan became effective upon approval by shareholders at the 2000 Annual
Meeting, and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time, until all shares subject to the
Plan shall have been purchased or acquired.
AmendmentsAMENDMENTS
The Board may, at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part, subject to certain restrictions as
stated in the Plan.
Administration of the PlanADMINISTRATION OF THE PLAN
The Plan is administered by the Compensation Committee or such other
committee as the Board of Directors shall select consisting solely of two or
more members of the Board of Directors (the "Committee"). The Committee has full
power under the Plan to determine persons to receive awards, the type of awards
and the terms thereof. The Committee may amend outstanding awards, subject to
certain restrictions as stated in the Plan.
Shares Subject to the PlanSHARES SUBJECT TO THE PLAN
Subject to approval by the shareholders at this meeting, the Plan
authorizes the grant of up to 2,050,000 shares of IDACORP, Inc. common stock.
Shares underlying awards that lapse or are forfeited or are not paid in shares
may be reused for subsequent awards. Shares may be authorized but unissued
shares of common stock, treasury stock or shares purchased on the open market.
The market value of a share of IDACORP common stock as of January 31, 2001 was
$41.19.
If any corporate transaction occurs that causes a change in the common
stock or corporate structure of IDACORP affecting the common stock, the
Committee shall make such adjustments to the number and/or class of shares of
stock that may be delivered under the Plan and the number and class and/or price
of shares of common stock subject to outstanding awards under the Plan, as it
deems appropriate and equitable to prevent dilution or enlargement of
participants' rights. The Committee may not amend an outstanding option for the
sole purpose of reducing the exercise price thereof.
Eligibility and ParticipationELIGIBILITY AND PARTICIPATION
Persons eligible to participate in the Plan include all officers, directors
and key employees of IDACORP and its subsidiaries, as determined by the
Committee. The approximate number of persons who are currently eligible to
participate under the Plan is 40, which includes 9 non-employee directors.
12
Grants Under the Plan
Section 162(m)GRANTS UNDER THE PLAN
SECTION 162(M). Stock options, SARs and performance unit/performance share
awards are intended to qualify for deductibility under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Dividend equivalents,
restricted stock, restricted stock units and other awards may qualify for
deductibility.
7
Subject to approval by the shareholders at the 2001 Annual Meeting, the
total number of shares with respect to which options or SARs may be granted in
any calendar year to any covered employee under Section 162(m) of the Code shall
not exceed 250,000 shares; (ii) the total number of shares of restricted stock
or restricted stock units that are intended to qualify for deduction that may be
granted in any calendar year to any covered employee shall not exceed 250,000
shares or units, as the case may be; (iii) the total number of performance
shares or performance units that may be granted in any calendar year to any
covered employee shall not exceed 250,000 shares or units, as the case may be;
(iv) the total number of shares that are intended to qualify for deduction
granted pursuant to Article 10 of the Plan in any calendar year to any covered
employee shall not exceed 250,000 shares; (v) the total cash award that is
intended to qualify for deduction that may be paid pursuant to Article 10 of the
Plan in any calendar year to any covered employee shall not exceed $500,000; and
(vi) the aggregate number of dividend equivalents that are intended to qualify
for deduction that a covered employee may receive in any calendar year shall not
exceed 1,000,000. A covered employee means those persons specified in Section
162(m) of the Code - generally the chief executive officer and the next four
most highly-compensated employees.
Stock Options.STOCK OPTIONS. The Committee may grant incentive stock options ("ISOs") and
nonqualified stock options ("NQSOs"). Options shall be exercisable for such
prices, shall expire at such times and shall have such other terms and
conditions as the Committee may determine at the time of grant and as set forth
in the award agreement. Dividend equivalents may also be granted.
The option exercise price is payable in cash, in shares of common stock of
IDACORP having a fair market value equal to the exercise price, by cashless
exercise or any combination of the foregoing.
Stock Appreciation Rights.STOCK APPRECIATION RIGHTS. The Committee may grant SARs with such terms and
conditions as the Committee may determine at the time of grant and as set forth
in the award agreement. SARs granted under the Plan may be in the form of
freestanding SARs or tandem SARs. The base value of a freestanding SAR shall be
equal to the average of the high and low sale prices of a share of IDACORP
common stock on the date of grant. The base value of a tandem SAR shall be equal
to the option exercise price of the related option.
Freestanding SARs may be exercised upon such terms and conditions as are
imposed by the Committee and as set forth in the SAR award agreement. A tandem
SAR may be exercised only with respect to the shares of common stock of IDACORP
for which its related option is exercisable.
Upon exercise of an SAR, a participant will receive the product of the
excess of the fair market value of a share of IDACORP common stock on the date
of exercise over the base value multiplied by the number of shares with respect
to which the SAR is exercised. Payment due to the participant upon exercise may
be made in cash, in shares of IDACORP common stock having a fair market value
equal to such cash amount, 13
or in a combination of cash and shares, as determined
by the Committee at the time of grant and as set forth in the award agreement.
Restricted Stock and Restricted Stock Units.RESTRICTED STOCK AND RESTRICTED STOCK UNITS. Restricted stock and
restricted stock units may be granted in such amounts and subject to such terms
and conditions as determined by the Committee at the time of grant and as set
forth in the award agreement. The Committee may establish performance goals, as
described below, for restricted stock and restricted stock units.
Participants holding restricted stock may exercise full voting rights with
respect to those shares during the restricted period and, subject to the
Committee's right to determine otherwise at the time of grant, will receive
regular cash dividends. All other distributions paid with respect to the
restricted stock shall be credited subject to the same restrictions on
transferability and forfeitability as the shares of restricted stock with
respect to which they were paid.
Performance Units and Performance Shares.8
PERFORMANCE UNITS AND PERFORMANCE SHARES. Performance units and performance
shares may be granted in such amounts and subject to such terms and conditions
as determined by the Committee at time of grant and as set forth in the award
agreement. The Committee shall set performance goals, which, depending on the
extent to which they are met during the performance periods established by the
Committee, will determine the number and/or value of performance units/shares
that will be paid out to participants.
Participants shall receive payment of the value of performance units/shares
earned after the end of the performance period. Payment of performance
units/shares shall be made in cash and/or shares of common stock which have an
aggregate fair market value equal to the value of the earned performance
units/shares at the end of the applicable performance period, in such
combination as the Committee determines. Shares may be granted subject to any
restrictions deemed appropriate by the Committee.
Other Awards.OTHER AWARDS. The Committee may make other awards which may include,
without limitation, the grant of shares of common stock based upon attainment of
performance goals established by the Committee as described below, the payment
of shares in lieu of cash or cash based on performance goals and the payment of
shares in lieu of cash under other IDACORP incentive or bonus programs.
Taxes.TAXES. Share withholding for taxes is permitted.
Performance Goals.PERFORMANCE GOALS. Performance goals, which are established by the
Committee, shall be based on one or more of the following measures: sales or
revenues, earnings per share, shareholder return and/or value, funds from
operations, operating income, gross income, net income, cash flow, return on
equity, return on capital, earnings before interest, operating ratios, stock
price, customer satisfaction, accomplishment of mergers, acquisitions,
dispositions or similar extraordinary business transactions, profit returns and
margins, financial return ratios and/or market performance. Performance goals
may be measured solely on a corporate, subsidiary or business unit basis, or a
combination thereof. Performance goals may reflect absolute entity performance
or a relative comparison of entity performance to the performance of a peer
group of entities or other external measure.
14
Termination of Employment or Board ServiceTERMINATION OF EMPLOYMENT OR BOARD SERVICE
Each award agreement shall set forth the participant's rights with respect
to each award following termination of employment with or service on the Board
of Directors of IDACORP.
TransferabilityTRANSFERABILITY
Except as otherwise determined by the Committee at the time of grant and
subject to the provisions of the Plan, awards may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution, and a participant's rights shall be
exercisable only by the participant or the participant's legal representative
during his or her lifetime.
Change in ControlCHANGE IN CONTROL
Upon a change in control, as defined below,
(a) Any and all options and SARs granted under the Plan shall become
immediately vested and exercisable;
(b) Any restriction periods and restrictions imposed on restricted stock,
restricted stock units, qualified restricted stock and qualified
restricted stock units shall be deemed to have expired; any
performance goals shall be deemed to have been met at the target
level; restricted stock and qualified restricted stock shall become
immediately vested in full and restricted stock units and qualified
restricted stock units shall be paid out in cash; and
9
(c) The target payout opportunity attainable under all outstanding awards
of performance units and performance shares and any other awards shall be deemed
to have been fully earned for the entire performance period(s) as of the
effective date of the change in control. All awards shall become immediately
vested. All performance shares and awards denominated in shares shall be paid
out in shares, and all performance units shall be paid out in cash.
For purposes of the above, a change in control of IDACORP means the
earliest of the following events to occur: (i) the acquisition by a party or
certain related parties of 20% or more of IDACORP's outstanding voting stock;
(ii) the commencement of a tender or exchange offer which would result in a
person owning 30% or more of IDACORP's outstanding voting stock; (iii) the
announcement of a transaction required to be described under Item 6 (e) of the
proxy rules; (iv) a proposed change in a majority of the Board of Directors
within a two-year period without the approval of two-thirds of the Board; (v)
entry into a merger or similar agreement, after which IDACORP's shareholders
would hold less than two-thirds of the voting securities of the surviving
entity; (vi) Board approval of a plan of liquidation or sale of all or
substantially all of IDACORP's assets; and (vii) any other event deemed by the
Executive Committee to be a change in control.
1610
Award Information
Option Grants UnderAWARD INFORMATION
OPTION GRANTS UNDER IDACORP 2000 Long-Term Incentive and Compensation PlanLONG-TERM INCENTIVE AND COMPENSATION PLAN
Number of Securities
Underlying Options Exercise Price Per Share
NameNUMBER OF SECURITIES EXERCISE PRICE
UNDERLYING OPTIONS PER SHARE
NAME & Position GrantedPOSITION GRANTED $ Expiration DateEXPIRATION DATE
- --------------- ------------------ ------------ ---------------
Jan B. Packwood ..................................... 100,000 $35.8125 July 18, 2010
President & CEO
J. LaMont Keen ...................................... 40,000 $35.8125 July 18, 2010
Senior Vice President -
Administration and CFO
James C. Miller ..................................... 40,000 $35.8125 July 18, 2010
Senior Vice President -
Delivery
Richard Riazzi ...................................... 40,000 $35.8125 July 18, 2010
Senior Vice President -
Generation & Marketing
All current executive ............................... 220,000 $35.8125 July 18, 2010
officers as a group
All current directors who - - -........................... -- -- --
are not executive officers as
a group
Each nominee for election - - -........................... -- -- --
as a director
Each associate of such - - -.............................. -- -- --
persons
Each other person who
- - -
receives 5% of such options ......................... -- -- --
All employees, including all - - -........................ -- -- --
current officers who are not
executive officers, as a
group
16
Stock options were granted on July 19, 2000 to 4 employees. The options vest
ratably (20% per year) over five years, have a 10-year term and have an exercise
price of $35.8125, the fair market value on the date of grant. The options
accelerate upon a change in control. Unvested options are forfeited upon
termination of employment. Vested options are exercisable at any time before the
earlier of the expiration date of the options and three months following the
termination of employment.
It is not possible to determine awards that will be made in the future pursuant
to the Plan.
Federal Income Tax Consequences11
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the principal federal income tax
consequences related to options awarded under the Plan. This summary is based on
IDACORP's understanding of present federal income tax law and regulations. The
summary does not purport to be complete or applicable to every specific
situation.
Capitalized terms not defined herein, which are defined in the Plan, shall
have the meanings set forth in the Plan.
Consequences to the Optionholder
Grant.CONSEQUENCES TO THE OPTIONHOLDER
GRANT. There are no federal income tax consequences to the optionholder
solely by reason of the grant of ISOs or NQSOs under the Plan.
Exercise.EXERCISE. The exercise of an ISO is not a taxable event for regular federal
income tax purposes if certain requirements are satisfied, including the
requirement that the optionholder generally must exercise the ISO no later than
three months following the termination of the optionholder's employment with
IDACORP. However, such exercise may give rise to alternative minimum tax
liability (see "Alternative Minimum Tax" below).
Upon the exercise of a NQSO, the optionholder will generally recognize
ordinary income in an amount equal to the excess of the fair market value of the
shares of IDACORP Common Stock at the time of exercise over the amount paid
therefor by the optionholder as the exercise price. The ordinary income
recognized in connection with the exercise by an optionholder of a NQSO will be
subject to both wage and employment tax withholding.
The optionholder's tax basis in the shares acquired pursuant to the
exercise of an option will be the amount paid upon exercise plus, in the case of
a NQSO, the amount of ordinary income, if any, recognized by the optionholder
upon exercise thereof.
17
Qualifying Disposition.QUALIFYING DISPOSITION. If an optionholder disposes of shares of IDACORP
common stock acquired upon exercise of an ISO in a taxable transaction, and such
disposition occurs more than two years from the date on which the option was
granted and more than one year after the date on which the shares were
transferred to the optionholder pursuant to the exercise of the ISO, the
optionholder will recognize long-term capital gain or loss equal to the
difference between the amount realized upon such disposition and the
optionholder's adjusted basis in such shares (generally the option exercise
price).
Disqualifying Disposition.DISQUALIFYING DISPOSITION. If the optionholder disposes of shares of
IDACORP common stock acquired upon the exercise of an ISO (other than in certain
tax-free transactions) within two years from the date on which the ISO was
granted or within one year after the transfer of shares to the optionholder
pursuant to the exercise of the ISO, at the time of disposition the optionholder
will generally recognize ordinary income equal to the lesser of (i) the excess
of each such share's fair market value on the date of exercise over the exercise
price paid by the optionholder or (ii) the optionholder's actual gain (i.e., the
excess, if any, of the amount realized on the disposition over the exercise
price paid by the optionholder). If the total amount realized on a taxable
disposition (including return of capital and capital gain) exceeds the fair
market value on the date of exercise of the shares of IDACORP common stock
purchased by the optionholder under the option, the optionholder will recognize
a capital gain in the amount of such excess. If the optionholder incurs a loss
on the disposition (i.e., if the total amount realized is less than the exercise
price paid by the optionholder), the loss will be a capital loss.
Other Disposition.OTHER DISPOSITION. If an optionholder disposes of shares of IDACORP common
stock acquired upon exercise of a NQSO in a taxable transaction, the
optionholder will recognize capital gain or loss in an amount equal to the
difference between the optionholder's basis (as discussed above) in the shares
sold and the total amount realized upon disposition. Any such capital gain or
loss (and any capital gain
12
or loss recognized on a disqualifying disposition of shares of IDACORP common
stock acquired upon exercise of ISOs as discussed above) will be short-term or
long-term depending on whether the shares of IDACORP common stock were held for
more than one year from the date such shares were transferred to the
optionholder.
Alternative Minimum Tax.ALTERNATIVE MINIMUM TAX. Alternative minimum tax ("AMT") is payable if and
to the extent the amount thereof exceeds the amount of the taxpayer's regular
tax liability, and any AMT paid generally may be credited against future regular
tax liability (but not future AMT liability). AMT applies to alternative minimum
taxable income; generally regular taxable income as adjusted for tax preferences
and other items is treated differently under the AMT.
For AMT purposes, the spread upon exercise of an ISO (but not a NQSO) will
be included in alternative minimum taxable income, and the taxpayer will receive
a tax basis equal to the fair market value of the shares of IDACORP common stock
at such time for subsequent AMT purposes. However, if the optionholder disposes
of the ISO shares in the year of exercise, the AMT income cannot exceed the gain
recognized for regular tax purposes, provided that the disposition meets certain
third-party requirements for limiting the gain on a disqualifying disposition.
If there is a disqualifying disposition in a year other than the year of
exercise, the income on the disqualifying disposition is not considered
alternative minimum taxable income.
18
Consequences toCONSEQUENCES TO IDACORP
There are no federal income tax consequences to IDACORP by reason of the
grant of ISOs or NQSOs or the exercise of an ISO (other than disqualifying
dispositions).
At the time the optionholder recognizes ordinary income from the exercise
of a NQSO, IDACORP will be entitled to a federal income tax deduction in the
amount of the ordinary income so recognized (as described above), provided that
IDACORP satisfies its reporting obligations described below. To the extent the
optionholder recognizes ordinary income by reason of a disqualifying disposition
of the stock acquired upon exercise of an ISO, IDACORP will be entitled to a
corresponding deduction in the year in which the disposition occurs.
IDACORP will be required to report to the Internal Revenue Service any
ordinary income recognized by any optionholder by reason of the exercise of a
NQSO. IDACORP will be required to withhold income and employment taxes (and pay
the employer's share of employment taxes) with respect to ordinary income
recognized by the optionholder upon the exercise of NQSOs.
Other Tax ConsequencesOTHER TAX CONSEQUENCES
The foregoing discussion is not a complete description of the federal
income tax aspects of options to be granted under the Plan. In addition,
administrative and judicial interpretations of the application of the federal
income tax laws are subject to change. Furthermore, the foregoing discussion
does not address state or local tax consequences.
THE IDACORP BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT IDACORP
SHAREHOLDERS VOTE "FOR" THIS PROPOSAL. Approval of the Plan amendment for New
York Stock Exchange purposes requires the affirmative vote of a majority of the
votes cast, provided that the total votes cast represent over 50% in interest of
all securities entitled to vote on the amendment. Under the laws of the State of
Idaho, the Plan amendment is approved if the votes cast in favor of the
amendment exceed the votes cast opposing the amendment. Abstentions and broker
non-votes, if any, will have no effect on the results, provided that the total
votes cast represent over 50% in interest of all securities entitled to vote on
the amendment. If a choice has been specified by a shareholder by means of the
proxy, the shares of common stock will be voted accordingly. If no choice has
been specified, the shares will be voted "FOR" the proposal.
4.13
3. AMENDMENT OF THE IDACORP 2000 LONG-TERM
INCENTIVE AND COMPENSATION PLAN TO
INCREASE SECTION 162(M) LIMITS
The IDACORP Board of Directors approved an increase in the annual limits
for grants to covered employees under Section 162(m) of the Code at the January
18, 2001 meeting, subject to shareholder approval at the 2001 Annual Meeting.
19
Subject to approval by the shareholders, the total number of shares with
respect to which options or SARs may be granted in any calendar year to any
covered employee under Section 162(m) of the Code shall not exceed 250,000
shares; (ii) the total number of shares of restricted stock or restricted stock
units that are intended to qualify for deduction that may be granted in any
calendar year to any covered employee shall not exceed 250,000 shares or units,
as the case may be; (iii) the total number of performance shares or performance
units that may be granted in any calendar year to any covered employee shall not
exceed 250,000 shares or units, as the case may be; (iv) the total number of
shares that are intended to qualify for deduction granted pursuant to Article 10
of the Plan in any calendar year to any covered employee shall not exceed
250,000 shares; (v) the total cash award that is intended to qualify for
deduction that may be paid pursuant to Article 10 of the Plan in any calendar
year to any covered employee shall not exceed $500,000; and (vi) the aggregate
number of dividend equivalents that are intended to qualify for deduction that a
covered employee may receive in any calendar year shall not exceed 1,000,000. A
covered employee means those persons specified in Section 162(m) of the Code --
generally the chief executive officer and the next four most highly-compensated
employees.
The prior limits were 100,000 for shares, $300,000 for cash and 400,000 for
dividend equivalents.
The complete text of the Plan is set forth as Exhibit "A" hereto. Under
Item 32 above, relating to an amendment to increase the number of authorized
shares for the Plan, is a summary of the material features of the Plan; that
summary is incorporated herein and is qualified in its entirety by reference to
Exhibit "A".
THE IDACORP BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT IDACORP
SHAREHOLDERS VOTE "FOR" THIS PROPOSAL. Approval of the Plan amendment for
Internal Revenue Code purposes requires the affirmative vote of a majority of
votes cast. Under the laws of the State of Idaho, the Plan amendment is approved
if the votes cast in favor of the amendment exceed the votes cast opposing the
amendment. Abstentions and broker non-votes, if any, will have no effect on the
results. If a choice has been specified by a shareholder by means of the proxy,
the shares of common stock will be voted accordingly. If no choice has been
specified, the shares will be voted "FOR" the proposal.
5.4. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITOR
At the Joint Annual Meeting, the shareholders will be asked to ratify the
selection by the IDACORP and the Idaho Power Boards of Directors of Deloitte &
Touche LLP as the firm of independent public accountants to audit the financial
statements of IDACORP and Idaho Power for the fiscal year 2001. This firm has
conducted consolidated annual audits of Idaho Power for many years and is one of
the world's largest firms of independent certified public accountants. A
representative of Deloitte & Touche LLP is expected to be present at the meeting
and will have an opportunity to make a statement and to respond to appropriate
questions.
2014
EACH BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE "FOR"
DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITOR
OF IDACORP AND IDAHO POWER
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee of the IDACORP, Inc. and Idaho Power Company Boards of
Directors (the Committee) is composed of four independent directors, as defined
in Sections 303.01(B)(2)(a) and (3) of the NYSE's listing standards, and
operates under a written charter adopted by each Board of Directors (Exhibit
"B"). The Committee recommends to each Board of Directors, subject to
shareholder ratification, the selection of the independent accountants.
Management is responsible for the internal controls and the financial
reporting process of IDACORP and Idaho Power. The independent accountants are
responsible for performing an independent audit of the consolidated financial
statements of IDACORP and Idaho Power in accordance with generally accepted
auditing standards and to issue a report thereon. The Committee's responsibility
is to monitor and oversee these processes.
In this context, the Committee has met and held discussions with management
and the independent accountants. Management represented to the Committee that
the consolidated financial statements of IDACORP and Idaho Power were prepared
in accordance with generally accepted accounting principles, and the Committee
has reviewed and discussed the audited consolidated financial statements of
IDACORP and Idaho Power Company with management and the independent accountants.
The Committee discussed with the independent accountants matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
The independent accountants also provided to the Committee the written
disclosures and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees), and the Committee discussed
with the independent accountants that firm's independence.
Finally, the Committee discussed with the independent accountants services,
other than audit services, (information technology services and other non-audit
services) which they have provided to IDACORP and Idaho Power
and determined that the providing of and payment for such services has not
affected the independence of the independent accountants.
Based on the Committee's review and discussions referred to above, the
Committee recommended to each Board of Directors that the audited consolidated
financial statements of IDACORP and Idaho Power be included in the combined
Annual Report on Form 10-K for the year ended December 31, 2000 for filing with
the Securities and Exchange Commission.
Jack K. Lemley (Chair)
Rotchford L. Barker
Robert D. Bolinder
Peter T. Johnson
2115
INDEPENDENT ACCOUNTANT BILLINGS FOR THE YEAR 2000
The following table sets forth the fees billed or expected to be billed by
the independent accountants to IDACORP and Idaho Power for the year 2000.
Fees BilledFEES BILLED
- -----------
Audit Fees $142,000.................................................. $251,430
Financial Information Systems Design
and Implementation Fee $129,748...................................... --
All Other Fees $240,887.............................................. $501,874
OTHER BUSINESS
Neither the IDACORP nor the Idaho Power Board of Directors nor management
intends to bring before the meeting any business other than the matters referred
to in the Notice of Meeting and this Joint Proxy Statement. In addition, other
than as explained in the next sentence, they have not been informed that any
other matter will be presented to the meeting by others. A shareholder submitted
a proposal for inclusion in the proxy statement, which IDACORP has omitted
pursuant to Rule 14a-8 of the Securities and Exchange Commission's proxy rules.
If the shareholder should present the proposal at the Joint Annual Meeting, it
is the intention of the persons named in the proxy to vote against such
proposal. If any other business should properly come before the meeting, or any
adjournment thereof, the persons named in the proxy will vote on such matters
according to their best judgment.
At the meeting, management will report on the business of IDACORP and Idaho
Power, and shareholders will have an opportunity to ask questions.
PRINCIPAL SHAREHOLDERS
The following table presents certain information regarding shareholders who
are known to IDACORP or Idaho Power to be the beneficial owners of more than 5
percent of any class of voting securities of IDACORP or Idaho Power as of March
1, 2001:
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF STOCK OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------- ---------------------- -------------------- --------
Idaho Power Common Stock IDACORP, Inc.(1) 37,612,351 100
Common Stock
1221 W. Idaho Street
Boise, Idaho 83702
(1) As a result of the formation of the holding company, IDACORP became the
holder of all issued and outstanding shares of Idaho Power common stock on
October 1, 1998.
2216
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of IDACORP common stock
and Idaho Power preferred stock beneficially owned on March 1, 2001, by the
Directors and nominees, by those Executive Officers named in the Summary
Compensation Table and by the Directors and Executive Officers of IDACORP and
Idaho Power as a group:
23
Amount of Percent
Title of Class Name of Beneficial Owner Beneficial Ownership(1) of ClassAMOUNT OF PERCENT
TITLE OF CLASS NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
- -------------- ------------------------ ----------------------- --------
Common Stock Rotchford L. Barker 8,409 *
Common Stock Robert D. Bolinder 1,409 *
Common Stock Roger L. Breezley 1,193 *
Common Stock John B. Carley 3,729 *
Common Stock Peter T. Johnson 2,409 *
Common Stock Jack K. Lemley 4,409 *
Common Stock Evelyn Loveless 1,987 *
Common Stock Jon H. Miller 909 *
Common Stock Peter S. O'Neill 1,567 *
Common Stock Jan B. Packwood 34,342 *
Common Stock Robert A. Tinstman 3,409 *
Common Stock J. LaMont Keen 18,664 *
Common Stock Richard Riazzi 9,197 *
Common Stock James C. Miller 5,285 *
Common Stock Robert W. Stahman 18,271 *
Common Stock All Directors and Executive Officers
of IDACORP as a group (15 persons) 113,193 *
Preferred Stock All Directors and Executive Officers
of IDACORP as a group (15 persons) 27 *
Common Stock All Directors and Executive Officers
of Idaho Power as a group (20 persons) 139,840 *
Preferred Stock All Directors and Executive Officers
of Idaho Power as a group (20 persons) 27 *
*Less than 1 percent.
(1)Includes shares of Common Stock subject to forfeiture and restrictions on
transfer issued pursuant to the 1994 Restricted Stock Plan.
All Directors and Executive Officers have sole voting and investment power
for the shares held by them including shares owned through the Employee Savings
Plan and the Dividend Reinvestment and Stock Purchase Plan.
SECTION 16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of IDACORP and Idaho Power records and copies of
reports on Forms 3, 4 and 5 furnished to IDACORP and Idaho Power or written
representations that no reports on Form 5 were required, IDACORP and Idaho Power
believe that during 2000 all persons subject to the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934, as amended, filed the
required reports on a timely basis except Jack K. Lemley for whom a late Form 5
was filed and for the officers of IDACORP and Idaho Power for whom late Form 5's
related to grants and awards under the Restricted Stock Plan were filed.
2417
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
GENERAL
The IDACORP Board of Directors Compensation Committee, which is the same as
the Idaho Power Compensation Committee, ("Committee") established all components
of 2000 compensation for the Executive Officers of IDACORP and Idaho Power.
There were no extra salary adjustments for the Executive Officers who serve in
the same positions at IDACORP and Idaho Power.
The Committee administers the IDACORP and Idaho Power executive
compensation program. As such, the Committee is responsible for recommending (1)
the compensation philosophy, (2) executive compensation plans that support the
philosophy, and (3) the appropriate levels of compensation for Executive
Officers. The Committee is composed of four independent, non-employee Directors.
Following the development of recommendations by the Compensation Committee, all
issues related to executive compensation are submitted to the full Boards of
Directors of IDACORP and Idaho Power (which are the same) for approval. The
Boards approved, without modification, all executive compensation
recommendations of the Committee for 2000.
COMPENSATION PHILOSOPHY
The compensation philosophy for IDACORP and Idaho Power Executive Officers
is consistent with the compensation philosophy Idaho Power has adopted for all
employees, except that for Executive Officers and senior managers the Committee
has aligned short-term and long-term incentive plans with corporate financial
performance and increased the percentage of their total compensation which is at
risk. The Idaho Power compensation program is designed to:
1. manage employee compensation as an investment with the expectation
employees will contribute to Idaho Power's financial performance, its
environmental record and public reputation;
2. be competitive with respect to those companies in the markets in which
we compete for employees, allowing Idaho Power to successfully attract
and retain the qualified employees necessary for long- termlong-term success;
3. recognize individuals for their demonstrated ability to perform their
position responsibilities and create long-term shareholder value; and
4. balance total compensation with Idaho Power's ability to pay.
25
2000 BASE SALARIES
Salary ranges for Executive Officers are reviewed annually and are
supported by salary comparisons with similar positions in electric utilities
throughout the United States with annual revenues ranging from $500 million to
$1 billion. The competitive point for executive compensation for 2000 was
targeted near the median of the salary levels for executive officers of these
utilities. Actual compensation of individual Executive Officers is based upon
their levels of responsibility, experience in their positions, prior experience,
breadth of knowledge and job performance. The electric utility group utilized by
the Committee to compare Executive Officer salaries is different from the EEI
100 Electric Utilities Index
18
group utilized by IDACORP to compare the financial performance of IDACORP and
Idaho Power with a nationally recognized industry standard.
In November of 1999, the Committee recommended adjustments to the 2000
salary ranges for the Executive Officer group based on the annual Executive
Officer compensation review referenced above. Salary adjustments for 2000
averaged approximately 10 percent, to move them nearer (but slightly below) the
median of the comparison group. The Committee considered each of the factors
discussed above but did not assign a formal weighting for each factor.
SHORT-TERM INCENTIVE COMPENSATION
The Committee implemented the Idaho Power Executive Incentive Plan
effective January 1, 1998 (Executive Incentive Plan). The Executive Incentive
Plan ties a portion of each executive's annual compensation to achieving certain
financial goals. For 2000, the established financial goals were in the areas of
earnings per share and return on common equity. Each goal is designed with a
minimum or threshold level and a series of five levels above the threshold with
each level having a multiplier which increases as the performance requirement
under the goal increases. The threshold level for earnings per share was $2.39
per share with a multiplier of .25; the maximum level was $2.55 per share with a
1.00 multiplier. In 2000, IDACORP earned $3.72 per share. The threshold level
for return on common equity was 11.65 percent with a multiplier of .25 with the
highest level at 12.33 percent with a 1.00 multiplier. In 2000, IDACORP's return
on common equity was 17.04 percent. The award opportunities vary by position as
a percentage of base salary with the award opportunities for the officers
ranging from a minimum of 7.5 percent to a maximum of 50 percent. The Executive
Incentive Plan does not permit the payment of awards if there is no payment of
awards under the Employee Incentive Plan. The performance levels within each
goal were established based upon the performance in previous years with the
higher levels requiring achieving goals in excess of performance in previous
years in each goal. In 2000, IDACORP achieved the maximum level of performance
for each goal, and as a result, Executive Officers received the maximum award
under the Incentive Plan. Awards under the Executive Incentive Plan are
reflected in the bonus column of the Summary Compensation table.
26
LONG-TERM INCENTIVE COMPENSATION
Long-term incentive awards are intended to develop and retain strong
management through share ownership and incentive awards that recognize future
performance and maximize stockholder value. Restricted Stock was the primary
long-term incentive granted to executive officers and senior managers in 2000.
With the adoption by shareholders of the IDACORP 2000 Long-Term Incentive and
Compensation Plan at the May 2000 Annual Meeting, the Committee now has the
ability to grant stock options.
When awarding long-term incentives, the Committee considers an executive's
level of responsibility, prior experience, individual performance criteria, as
well as the compensation practices of the peer group of companies used to
evaluate total compensation. The relative weight given to each of these factors
varies among individuals at the Committee's discretion.
1. Restricted Stock Plan
The 1994 Restricted Stock Plan ("Plan"), approved by shareholders at the
May 1994 Annual Meeting, was implemented in January 1995 as an equity-based
long-term incentive plan. A new grant under the Plan was made in January 2000,
with a three-year restricted period beginning January 1, 2000 and ending
December 31, 2002, with a single financial performance goal of Cumulative
Earnings Per Share ("CEPS"). In January of 1998, a grant was made under the Plan
for a three year restricted period through December 31, 2000, with a target CEPS
of $6.90. The total CEPS for the three year restricted period was $8.52
resulting in awards earned for 2000 at the maximum level for all named
executives. To receive a final share award each officer must be employed, as an
officer, during the entire
19
restricted period (with certain exceptions), and IDACORP must achieve the CEPS
performance goal established by the Board of Directors. The restricted stock
grant percentage (a percentage of base salary converted into shares of stock
based upon the closing stock price for a share of IDACORP common stock on
December 31 of the year preceding the grant) varied by position with the
percentages for the Chief Executive Officer ranging from a minimum of 18 percent
to a maximum of 53 percent. For all other Executive Officers, the percentage
ranged from a minimum of 10 percent to a maximum of 45 percent. The target grant
percentages for new grants are reviewed annually as part of the annual Executive
Officer compensation review referenced above and the 2000 grants were at a level
below the median target levels among the comparison group.
2. Stock Options
The IDACORP 2000 Long-Term Incentive and Compensation Plan, approved by
shareholders at the May 2000 Annual Meeting was implemented in July 2000. In
July of 2000, stock options with an exercise price set at fair market value on
the date of grant were made to four executive officers, including the Chief
Executive Officer. Because the exercise price of these options is equal to the
fair market value of IDACORP's common stock on the date of grant, the options
have value only if the stock price appreciates from the value on the date the
options were granted. The options vest ratably over five years (20% per year).
The size of each award was determined based on the criteria for awarding
long-term incentives stated above and ranged from 40,000 options each for the
three Senior Vice-Presidents to 100,000 options for the CEO.
27
The 2000 compensation paid to IDACORP and Idaho Power executive officers
qualified as fully deductible under federal tax laws. The Committee continues to
review the impact of federal tax laws on executive compensation, including
Section 162(m) of the Internal Revenue Code.
INCENTIVE COMPENSATION PLANS --- GOALS
Since 1995, the Committee has been adjusting executive compensation to
place a higher percentage of total executive compensation at risk with the at
risk portion tied to corporate financial performance. This adjustment has been
accomplished by aligning the short-term and long-term incentive plans with
certain financial goals and making the plans a larger percentage of the
executive's total compensation. To date, the Committee feels this approach has
proven successful and has presented high performance expectations to management
in the past and for 2001 and beyond. The Committee believes that a brief review
of the goals under the short-term and long-term incentive plans is appropriate
in this Report.
1. Short Term Incentive Compensation
In January 1998, the Committee adopted a new Executive Incentive Plan which
is described in the Short- TermShort-Term Incentive Compensation section of this Report.
The 1998 Plan had purely financial goals and for the year 2000 was limited to
earnings per share and return on common equity. Since adopting the Plan, the
maximum goal for earnings per share has gone from $2.34 in 1998 to $2.55 for
2000 and for return on common equity, from 12.1 percent in 1998 to 12.33 percent
in 2000. The Committee has continued to increase the target percentage of base
salary and the financial goals in connection with awards under the Executive
Incentive Plan.
2. Long-Term Incentive Compensation
a. Restricted Stock
The 1994 Restricted Stock Plan is a long-term equity based incentive plan
with a single financial
20
performance goal of cumulative earnings per share (CEPS) over a three year
restricted period. Since implementing the plan, the CEPS goal has gone from a
target of $6.00 for the 1995-1997 restricted period to $6.90 for the 1998-2000
restricted period. The Committee has continued to increase the grant percentage
(a percentage of base salary converted into shares of stock) and the financial
goal (CEPS) in connection with grants under the Restricted Stock Plan.
b. Stock Options
The IDACORP 2000 Long-Term Incentive and Compensation Plan was implemented
in July of 2000 with grants to four executive officers with an exercise price of
$35.8125 which was the fair market value of IDACORP's common stock on the date
of the grant.
28
CEO SALARY - 2000
In January of 2000, Mr. Packwood was granted a salary increase of 10.7
percent. The competitiveness of Mr. Packwood's salary was reviewed based upon
comparisons with salaries of chief executive officers of comparable utilities
with annual revenues ranging from $500 million to $1 billion. The competitive
point for Mr. Packwood's salary is targeted near the median of this comparison.
The actual 2000 salary adjustment for Mr. Packwood placed him below the median
of salary levels for chief executive officers of the comparison utility group
and is based on the level of his responsibilities, the depth of his experience,
his job performance and the overall competitive level of his current
compensation based on the annual Executive Officer compensation review
referenced above. The Committee considered each of these factors but did not
assign a formal weighting for each factor.
Mr. Packwood is a participant in the Executive Incentive Plan with a 2000
award opportunity ranging from a minimum of 6.5 percent to a maximum of 50
percent of base salary. This award level was established based upon the
Executive Officer compensation review referenced above. In 2000, the Company
achieved the maximum level of performance for each goal area, and as a result,
Mr. Packwood will receive an award under the Executive Incentive Plan of 50
percent of his base salary. Mr. Packwood is a participant in the Restricted
Stock Plan as discussed above. In January of 1998, a grant was made to Mr.
Packwood under the Restricted Stock Plan for a three year restricted period
through December 31, 2000. The Company achieved the maximum level of performance
for the three year restricted period and as a result, Mr. Packwood will receive
an award at the maximum level of 45 percent in 2000. Mr. Packwood received a
restricted stock grant at the target level of 35 percent in 2000 and will
receive a final share award after the restricted period ends in December 2002 if
he remains employed by the Company as an officer during the entire restricted
period (with certain exceptions) and IDACORP achieves its CEPS performance goal
established by the Board of Directors. In addition, in July he received a stock
option grant of 100,000 shares under the IDACORP 2000 Long-Term Incentive and
Compensation Plan with an exercise price set at fair market value vesting
ratably over a five year period (20% per year) contingent upon Mr. Packwood's
continued employment with the Corporation. The incentive awards were intended to
place a greater portion of Mr. Packwood's total compensation for 2000 "at risk".
John B. Carley, Chairman
Evelyn Loveless
Peter T. Johnson
Peter S. O'Neill
2921
IDACORP AND IDAHO POWER
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------ ----------------------
AWARDS
----------------------------------- ---------------------------
RESTRICTED SECURITIES
STOCK SECURITIESUNDERLYING ALL OTHER
NAME AND SALARY BONUS AWARD(S)(1) UNDERLYINGSTOCK OPTION/ COMPENSATION(2)
PRINCIPAL POSITION YEAR ($) ($) ($) STOCK OPTION/SARsSARS (#) ($)
(#)
- --------------------------------------------------------------------------------- ---------------------------------------------------------------- ----- --------- --------- -------- -------------- ----------
Jan B. Packwood ................. 2000 415,000 207,500 145,250 100,000 6,800
President and 1999 343,269 112,500 90,000 6,400
Chief Executive Officer, 1998 250,000 75,000 75,000 6,400
IDACORP and Idaho Power
J. LaMont Keen .................. 2000 250,000 100,000 75,000 40,000 6,270
Sr. Vice President - 1999 215,692 65,400 61,800 6,400
Administration & Chief 1998 200,000 60,000 60,000 6,400
Financial Officer,
IDACORP and Idaho Power
James C. Miller ................. 2000 170,000 68,000 51,000 40,000 -0-0
Sr. Vice President - 1999 146,923 42,000 35,000 4,867
Delivery, Idaho Power 1998 128,000 38,400 32,000 4,095
Richard Riazzi .................. 2000 250,000 100,000 75,000 40,000 6,800
Sr. Vice President - 1999 226,692 68,700 54,250 5,686
Generation &and Marketing 1998 210,000 60,202 52,500 4,543
IDACORP and Idaho Power
Robert W. Stahman ............... 2000 165,000 49,500 41,250 --- 6,800
Vice President, General 1999 155,000 46,500 38,750 6,400
Counsel and Secretary 1998 150,000 45,000 37,500 6,400
IDACORP and Idaho Power
__________________- ------------------
(1) The aggregate restricted stock holdings as of December 31, 2000 are as
follows: Mr. Packwood held 9,897 ($485,567) shares of restricted stock; Mr.
Keen held 6,100 ($299,278) shares of restricted stock; Mr. Miller held
3,719 ($182,462) shares of restricted stock; Mr. Riazzi held 5,691
($279,212) shares of restricted stock; Mr. Stahman held 3,606 shares of
restricted stock ($176,918). Dividends are paid on restricted stock when
and as paid on the IDACORP Common Stock.
(2) Represents the Company's contribution to the Employee Savings Plan (401-k
plan).
3022
OPTIONS / SAR GRANTS IN FISCAL YEAR 2000
NUMBER OF % of Total
Number of Securities Options / SARs
Underlying Granted to Exercise or
Options / SARs Employees in Base Price Grant Date Value
Name Granted(1)OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE GRANT DATE VALUE
NAME GRANTED(1) # FiscalFISCAL 2000 ($/ Share) Expiration DateSHARE) EXPIRATION DATE ($)(2)
------ --------- ---------- ----------- -------------- ---------------
Jan B. Packwood .................... 100,000 45.5% $35.8125 July 18, 2010 $842,000
J. LaMont Keen ...................... 40,000 18.2% $35.8125 July 18, 2010 $336,800
James C. Miller ..................... 40,000 18.2% $35.8125 July 18, 2010 $336,800
Richard Riazzi ...................... 40,000 18.2% $35.8125 July 18, 2010 $336,800
Robert W. Stahman - - - -.................... -- -- -- -- --
-
__________________------------------
(1) Options were granted pursuant to the 2000 Long-Term Incentive and
Compensation Plan. The options vest 20% per year and accelerate upon a
change in control.
(2) The grant date values were calculated on the basis of the Binomial
option-pricing model. Options were assumed to be exercised 7 years after
the date of grant. A risk-free interest rate of 6.15%, stock price
volatility of 27% and a dividend yield of 5.19% were used in the
calculation of the July option grants to Messrs. Packwood, Keen, Miller and
Riazzi. The actual value of the options will depend on the market value of
the Company's Common Stock on the dates the options are exercised. No
realization of value from the options is possible without an increase in
the price of the Company's Common Stock, which would benefit all
stockholders commensurately.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of
Shares securities underlying Value of unexercised, in-the
acquired Value unexercised options money options
on exercise realized at fiscal year-end(1) at fiscal year-endNUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
ACQUIRED ON VALUE UNEXERCISED OPTIONS MONEY OPTIONS
EXERCISE REALIZED AT FISCAL YEAR-END(1) AT FISCAL YEAR-END
(#) ($) (#) ($)
Exercisable Unexercisable Exercisable Unexercisable--------- ------------- --------------------------- -------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Jan B. Packwood .............. 100,000 $1,081,250$1,324,750
J. LaMont Keen ............... 40,000 $ 432,520529,900
James C. Miller .............. 40,000 $ 432,520529,900
Richard Riazzi ............... 40,000 $ 432,520529,900
Robert W. Stahman -............ -- --
-
__________________------------------
(1) Vesting is accelerated upon a change in control.
3123
DIRECTOR COMPENSATION
During 2000, each Director who was not an employee of IDACORP or Idaho
Power received $800 for each Board meeting and for each committee meeting
attended. Non-employee Directors who are chairman of Board committees received
$1,840 per month; other non-employee Directors received $1,670 per month. In
addition, each Director received an annual stock grant under the Director Stock
Grant Program of IDACORP, Inc., common stock equal to $8,000, or 228 shares, in
June of 2000. Mr. Miller was elected non-executive Chairman of the Board of
IDACORP and Idaho Power effective June 1, 1999. His compensation consists of a
monthly retainer of $3,000 per month and the annual stock grant under the
Director Stock Grant Program of $8,000, or 228 shares, in 2000. Mr. Miller does
not receive meeting fees for either Board or committee meetings. Directors may
defer all or a portion of any retainers and meeting fees under a deferred
compensation plan. Under the plan, at retirement Directors may elect to receive
one lump-sum payment of all amounts deferred with interest, or a series of up to
10 equal annual payments, depending upon the specific deferral arrangement. A
special account is maintained on the books showing the amounts deferred and the
interest accrued thereon. The Directors participate in a non-qualified deferred
compensation plan (a non-qualified defined benefit plan for Directors) that is
financed by life insurance on the participants and provides, upon retirement
from the Idaho Power Board, for the payment of $17,500 per year for a period of
15 years.
Since each director serves on both the IDACORP and Idaho Power Boards and
on the same committees of each Board, the monthly retainer applies to service on
both Boards as do the meeting fees for the Board meetings and for each committee
which has a corresponding committee at both companies. The practice generally is
that meetings of the IDACORP and Idaho Power Boards and the corresponding
committees are held in conjunction with each other and a single meeting fee is
paid to each director for each set of meetings. Separate meeting fees will be
paid in the event a Board or committee meeting is not held in conjunction with a
meeting of the corresponding Board or committee and for those committee meetings
which do not have a corresponding committee.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committees for 2000 were John B. Carley,
Peter T. Johnson, Evelyn Loveless and Peter S. O'Neill. O'Neill Enterprises, of
which Mr. O'Neill is President, is the developer of the Surprise Valley
Partnership which is developing a residential community in southeast Boise. In
May of 1995, Idaho Power entered into an agreement leasing approximately 48.21
acres to Surprise Valley Partnership for 10 years at a monthly rate of
$1,118.75. The lease payments were based on an 8 percent return on fair market
value with the fair market value of the leased land determined by independent
appraisers. Idaho Power's appraisal was provided by Nelson & Hastings, Real
Estate Appraisers and Consultants, with Brad Janoush Appraisal M.A.I. providing
the appraisal for Surprise Valley Partnership.
32
EMPLOYMENT CONTRACTS AND
CHANGE OF CONTROL AGREEMENTS
Idaho Power entered into an employment agreement in 1997 with Richard
Riazzi, Vice President - Marketing and Sales, for a three-year term ending
December 1999, with automatic one year extensions thereafter unless the parties
agree to terminate. The agreement provides for a minimum base salary of $191,000
per year subject to annual review, a phantom stock award made in 1997, plus
annual and long-term incentive compensation opportunities. In the event of
termination of employment following a change of control, which is defined as the
acquisition of beneficial ownership of 20% of voting power,
24
certain changes in the Board, or approval by the shareholders of the
liquidation, of certain merger or consolidations or of certain transfers of
assets, Mr. Riazzi will receive 18 months base salary plus the greater of two
times the most recent annual bonus or two times the average annual bonus for the
three previous years, subject to any limitations provided by Section 280G of the
Internal Revenue Code.
IDACORP entered into Change of Control Agreements with the Named Officers
in September 1999, which become effective for a three-year period upon a change
of control of IDACORP. If a change of control occurs, the Agreements provide
that specified payments and benefits would be paid in the event of termination
of the Executive's employment (i) by IDACORP, other than for cause, death or
disability, or (ii) by the Executive for constructive discharge or retirement,
at any time when the Agreements are in effect. In such event, each of the Named
Officers would receive payment of an amount equal to two and one-half times his
annual compensation, which shall be the highest combined amount of base salary
and bonus received by the Named Officer in any one of the five years preceding
termination. In addition, under these Agreements, each of the Named Officers
would receive (i) the immediate vesting of restricted stock granted prior to the
change in control; (ii) outplacement services for 12 months not to exceed
$12,000; and (iii) all benefits for a period of 24 months under the welfare
benefit plans.
For these purposes "cause" means the Executive's fraud or dishonesty which
has resulted or is likely to result in material economic damage to IDACORP or a
subsidiary of IDACORP, as determined in good faith by a vote of at least
two-thirds of the non-employee directors of IDACORP at a meeting of the Board at
which the Executive is provided an opportunity to be heard. "Constructive
discharge" includes material failure by IDACORP to comply with the Agreement,
relocation, and certain reduction in compensation or benefits.
A "change of control" is defined as (i) the acquisition by a party or
certain related parties of 20% or more of IDACORP's voting securities; (ii) a
purchase by a person of 20% or more of the outstanding stock pursuant to a
tender or exchange offer; (iii) shareholder approval of a merger or similar
transaction after which IDACORP's shareholders will hold 50% or less of the
voting securities of the surviving entity or (iv) a change in a majority of the
Board of Directors within a 24-month period without the approval of two-thirds
of the members of the Board.
3325
PERFORMANCE GRAPH
Source: Bloomberg and Edison Electric Institute
Comparison of Cumulative Total ReturnSOURCE: BLOOMBERG AND EDISON ELECTRIC INSTITUTE
COMPARISON OF CUMULATIVE TOTAL RETURN
$100 Invested DecemberINVESTED DECEMBER 31, 1995
[GRAPHIC OMITTED][PERFORMANCE GRAPH]
The table shows a Comparison of Five-Year Cumulative Total Shareholder ReturnCOMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN for IDACORP Common Stock, the S&P 500 Index and the Edison Electric
Institute (EEI) 100 Electric Utilities Index. The data assumes that $100 was
invested on December 31, 1995, with beginning-of-period weighting of the peer
group indices (based on market capitalization) and monthly compounding of
returns. As of October 1, 1998, all outstanding shares of Idaho Power common
stock were exchanged on a share-for-share basis for IDACORP common stock.
EEI 100
IDACORP S & P 500 Electric UtilitiesELECTRIC UTILITIES
1995 $100.00 $100.00 $100.00$ 100.00 $ 100.00 $ 100.00
1996 110.37 122.96 101.20
1997 141.64 163.98 128.90
1998 143.88 210.84 146.80
1999 113.13 255.21 119.50
2000 217.08 231.98 176.82
26
RETIREMENT BENEFITS
The following table sets forth the estimated annual retirement benefits
payable under the Idaho Power Retirement Plan (a qualified defined benefit
pension plan for all regular employees) and under the Idaho Power Security Plan
for Senior Management Employees (a non-qualified defined benefit plan for senior
management employees). The plans cover employees of IDACORP and Idaho Power.
34
PENSION PLAN TABLE
REMUNERATION YEARS OF SERVICE
- --------------------------------------------------------------------------------------------------------------------------
15 20 25 30 35 40------------------ -------------------------------------------------------------------------------------------------
15 20 25 30 35 40
$ 75,000 $45,000 $48,750 $52,500 $56,250 $56,250 $56,250
$100,000 $60,000 $65,000 $70,000 $75,000 $75,000 $75,000
$125,000 $75,000 $81,250 $87,500 $93,750 $93,750 $93,750
$150,000 $90,000 $97,500$ 45,000 $ 48,750 $ 52,500 $ 56,250 $ 56,250 $ 56,250
$ 100,000 $ 60,000 $ 65,000 $ 70,000 $ 75,000 $ 75,000 $ 75,000
$ 125,000 $ 75,000 $ 81,250 $ 87,500 $ 93,750 $ 93,750 $ 93,750
$ 150,000 $ 90,000 $ 97,500 $105,000 $112,500 $112,500 $112,500
$175,000$ 175,000 $105,000 $113,750 $122,500 $131,250 $131,250 $131,250
$200,000$ 200,000 $120,000 $130,000 $140,000 $150,000 $150,000 $150,000
$225,000$ 225,000 $135,000 $146,250 $157,500 $168,750 $168,750 $168,750
$250,000$ 250,000 $150,000 $162,500 $175,000 $187,500 $187,500 $187,500
$275,000$ 275,000 $165,000 $178,750 $192,500 $206,250 $206,250 $206,250
$300,000$ 300,000 $180,000 $195,000 $210,000 $225,000 $225,000 $225,000
$325,000$ 325,000 $195,000 $211,250 $227,500 $243,750 $243,750 $243,750
$350,000$ 350,000 $210,000 $227,500 $245,000 $262,500 $262,500 $262,500
$375,000$ 375,000 $225,000 $243,750 $262,500 $281,250 $281,250 $281,250
$400,000$ 400,000 $240,000 $260,000 $280,000 $300,000 $300,000 $300,000
$450,000$ 450,000 $270,000 $292,500 $315,000 $337,500 $337,500 $337,500
$500,000$ 500,000 $300,000 $325,000 $350,000 $375,000 $375,000 $375,000
Benefits under the Retirement Plan for senior management employees at
normal retirement age are calculated on years of credited service using the
average of the highest five consecutive years' salary plus bonus (as reported in
the Summary Compensation Table) in the last 10 years before retirement. Benefits
under the Security Plan for Senior Management Employees are based upon a similar
average of the highest five consecutive years of salary plus bonus in the last
10 years before retirement, a normal retirement age of 62 years, years of
participation as a senior management employee, and are payable over the
participant's lifetime. Generally, total retirement benefits from the Retirement
Plan and Security Plan for Senior Management Employees will range from 60
percent to 75 percent of the participant's average salary plus bonus in the
highest five consecutive years in the last 10 years of employment. The Security
Plan is financed by life insurance on the participants and is designed so that
if assumptions made as to mortality expectation, policy dividends and other
factors are realized, Idaho Power will recover the cost of this plan. Effective
August 1, 1996, Idaho Power terminated its Supplemental Employee Retirement Plan
(a non-qualified plan that provided benefits that would otherwise have been
denied participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits). Benefits payable from the Retirement Plan and the
Security Plan are included in the table above. Benefits shown above are not
subject to any deduction for Social Security benefits or other offset amounts.
As of December 31, 2000, the final five-year average salary plus bonus
under the retirement plans as referred to above for the Executive Officers named
in the Summary Compensation Table are: Mr. Packwood, $330,943; Mr. Keen,
$241,816; Mr. Riazzi, $254,783; Mr. Miller, $153,949; and Mr. Stahman, $180,584.
Years of credited service under the Retirement Plan and years of participation
as a senior management employee are, respectively: Mr. Packwood, 30, 24; Mr.
Keen, 27, 18; Mr. Miller 24, 13; and Mr. Stahman 23, 18. Mr. Riazzi has four
years of credited service, but has not vested in the plan.
3527
ANNUAL REPORT
IDACORP's 2000 annual report to shareholders, including financial
statements for 1998, 1999 and 2000, was mailed on or about April 6, 2001, to all
shareholders of record. Idaho Power financial statements for 1998, 1999 and 2000
included in the joint Annual Report on Form 10-K were mailed to Idaho Power
shareholders of record on or about April 6, 2001.
IDACORP hereby undertakes to deliver promptly, upon written or oral
request, a separate copy of the annual report to shareholders, or proxy
statement, as applicable, to an IDACORP shareholder at a shared address to which
a single copy of the document was delivered. Idaho Power hereby undertakes to
deliver promptly, upon written or oral request, a separate copy of the Idaho
Power financial statements, or proxy statement, as applicable, to an Idaho Power
shareholder at a shared address to which a single copy of the document was
delivered. Requests should be addressed to Corporate Secretary,Shareowner Services, 1221 West Idaho
Street, Boise, IDIdaho 83702, 208-388-2200.telephone 1-800-635-5406.
2001 JOINT ANNUAL MEETING OF SHAREHOLDERS
Nominations for Director may be made only by the Board of Directors or by a
shareholder entitled to vote who has delivered written notice to the Secretary
of IDACORP or Idaho Power, as the case may be, not earlier than 90 days, and not
later than 60 days, prior to the first anniversary of this annual meeting.
Rule 14a-4 of the Securities and Exchange Commission's proxy rules allows a
company to use discretionary voting authority to vote on matters coming before
an annual meeting of shareholders, if the company does not have notice of the
matter at least 45 days before the date corresponding to the date on which the
company first mailed its proxy materials for prior year's annual meeting of
shareholders or the date specified by an advance notice provision in the
company's bylaws. The Bylaws of IDACORP and Idaho Power contain such an advance
notice provision. Under the Bylaws, no business may be brought before an annual
meeting of the shareholders except as specified in the notice of the meeting or
as otherwise properly brought before the meeting by or at the direction of the
Board or by a shareholder entitled to vote who has delivered written notice to
the Secretary of IDACORP or Idaho Power, as the case may be, not earlier than 90
days, and not later than 60 days, prior to the first anniversary of this annual
meeting.
For the 2002 Joint Annual Meeting of Shareholders, expected to be held on
May 16, 2002, IDACORP and Idaho Power shareholders must submit such nominations
or proposals to the Secretary of IDACORP or Idaho Power, as the case may be, no
earlier than February 14, 2002 and no later than March 18, 2002.
The requirements referred to above are separate and apart from the
Securities and Exchange Commission's requirements that a shareholder must meet
in order to have a shareholder proposal included in the proxy statement under
Rule 14a-8. For the 2002 Joint Annual Meeting of Shareholders expected to be
held on May 16, 2002, any shareholder who wishes to submit a proposal for
inclusion in the joint proxy materials pursuant to Rule 14a-8 must submit such
proposal to the Secretary of IDACORP or Idaho Power, as the case may be, on or
before December 7, 2001.
36IT IS REQUESTED THAT EACH SHAREHOLDER WHO CANNOT ATTEND THE MEETING VOTE
HIS OR HER PROXY OR PROXIES WITHOUT DELAY.
28
It is requested that each shareholder who cannot attend the meeting send in his
or her proxy or proxies without delay.
37
ExhibitEXHIBIT A
IDACORP, INC. 2000 LONG-TERM
INCENTIVE AND COMPENSATION PLAN
ArticleARTICLE 1. Establishment, Purpose and DurationESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan.ESTABLISHMENT OF THE PLAN. IDACORP, Inc., an Idaho corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive and
compensation plan for officers, key employees and directors, to be known as the
"IDACORP, Inc. 2000 Long-Term Incentive and Compensation Plan" (hereinafter
referred to as the "Plan"Plan"), as set forth in this document. The Plan permits the
grant of nonqualified stock options (NQSO), incentive stock options (ISO), stock
appreciation rights (SAR), restricted stock, restricted stock units, performance
units, performance shares and other awards.
The Plan shall become effective when approved by the shareholders at the
2000 Annual Meeting of Shareholders (the "Effective Date") and shall remain in
effect as provided in Section 1.3 herein.
1.2 Purpose of the Plan.PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success
and enhance the value of the Company by linking the personal interests of
Participants to those of Company shareholders and customers.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract and retain the services of Participants upon whose
judgment, interest and special effort the successful conduct of its operations
is largely dependent.
1.3 Duration of the Plan.DURATION OF THE PLAN. The Plan shall commence on the Effective Date, as
described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 15 herein, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions.
ArticleARTICLE 2. DefinitionsDEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when such meaning is intended, the initial letter of the word
is capitalized:
2.1 AwardAWARD means, individually or collectively, a grant under the Plan of
NQSOs, ISOs, SARs, Restricted Stock, Restricted Stock Units, Performance Units,
Performance Shares or any other type of award permitted under Article 10 of the
Plan.
2.2 Award AgreementAWARD AGREEMENT means an agreement entered into by each Participant and
the Company, setting forth the terms and provisions applicable to an Award
granted to a Participant under the Plan.
1
2.3 Base ValueBASE VALUE of an SAR shall have the meaning set forth in Section 7.1
herein.
2.4 BoardBOARD or Board of DirectorsBOARD OF DIRECTORS means the Board of Directors of the
Company.
2.5 Change in ControlCHANGE IN CONTROL means the earliest of the following to occur:
(a) the public announcement by the Company 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
Exchange Act) of such Person, shall be the beneficial owner of twenty
percent (20%) or more of the voting stock then outstanding;
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(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;
(c) the announcement of any transaction relating to the Company
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 such that,
during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or nomination
for election by the shareholders of the Company 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 at the beginning of the period;
(e) the Company enters into an agreement of merger, consolidation,
share exchange or similar transaction with any other corporation other than
a transaction which would result in the Company'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 of the combined
voting power of the Company's or such surviving entity's outstanding voting
stock immediately after such transaction;
(f) the Board approves a plan of liquidation or dissolution of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets to a person or entity which is not an affiliate of the
Company other than a transaction(s) for the purpose of dividing the
Company's assets into separate distribution, transmission or generation
entities or such other entities as the Company may determine; or
(g) any other event which shall be deemed by a majority of the
Executive Committee of the Board to constitute a "Change in Control."
2
2.6 CodeCODE means the Internal Revenue Code of 1986, as amended from time to
time.
2.7 CommitteeCOMMITTEE means the committee, as specified in Article 3, appointed by
the Board to administer the Plan with respect to Awards.
2.8 CompanyCOMPANY means IDACORP, Inc., an Idaho corporation, or any successor
thereto as provided in Article 17 herein.
2.9 Covered EmployeeCOVERED EMPLOYEE means any Participant who would be considered a
"covered employee" for purposes of Section 162(m) of the Code.
2.10 DirectorDIRECTOR means any individual who is a member of the Board of
Directors of the Company.
2.11 DisabilityDISABILITY means the continuous inability of an Employee because of
illness or injury to engage in any occupation or employment for wage or profit
with the Company or any other employer (including self-employment) for which he
is reasonably qualified by education, training or experience. An Employee will
not be considered disabled during any period unless he is under the regular care
and attendance of a duly qualified physician.
2.12 Dividend EquivalentDIVIDEND EQUIVALENT means, with respect to Shares subject to an Award,
a right to be paid an amount equal to dividends declared on an equal number of
outstanding Shares.
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2.13 Eligible PersonELIGIBLE PERSON means a Person who is eligible to participate in the
Plan, as set forth in Section 5.1 herein.
2.14 EmployeeEMPLOYEE means an individual who is paid on the payroll of the Company
or of the Company's Subsidiaries, who is not covered by any collective
bargaining agreement to which the Company or any of its Subsidiaries is a party,
and is classified in the payroll system as a regular full-time, part-time or
temporary employee. For purposes of the Plan, transfer of employment of a
Participant between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.
2.15 Exchange ActEXCHANGE ACT means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.16 Exercise PeriodEXERCISE PERIOD means the period during which an SAR or Option is
exercisable, as set forth in the related Award Agreement.
2.17 Fair Market ValueFAIR MARKET VALUE means the average of the high and low sale prices as
reported in the consolidated transaction reporting system, or, if there was no
such sale on the relevant date, then on the last previous day on which a sale
was reported.
2.18 FreestandingFREESTANDING SAR means an SAR that is not a Tandem SAR.
3
2.19 Incentive Stock OptionINCENTIVE STOCK OPTION or ISO means an option to purchase Shares,
granted under Article 6 herein, which is designated as an Incentive Stock Option
and satisfies the requirements of Section 422 of the Code.
2.20 Nonqualified Stock OptionNONQUALIFIED STOCK OPTION or NQSO means an option to purchase Shares,
granted under Article 6 herein, which is not intended to be an Incentive Stock
Option under Section 422 of the Code.
2.21 OptionOPTION means an Incentive Stock Option or a Nonqualified Stock Option.
2.22 Option Exercise PriceOPTION EXERCISE PRICE means the price at which a Share may be
purchased by a Participant pursuant to an Option, as determined by the Committee
and set forth in the Option Award Agreement.
2.23 ParticipantPARTICIPANT means an Eligible Person who has outstanding an Award
granted under the Plan.
2.24 Performance GoalsPERFORMANCE GOALS means the performance goals established by the
Committee, which shall be based on one or more of the following measures: sales
or revenues, earnings per share, shareholder return and/or value, funds from
operations, operating income, gross income, net income, cash flow, return on
equity, return on capital, earnings before interest, operating ratios, stock
price, customer satisfaction, accomplishment of mergers, acquisitions,
dispositions or similar extraordinary business transactions, profit returns and
margins, financial return ratios and/or market performance. Performance goals
may be measured solely on a corporate, subsidiary or business unit basis, or a
combination thereof. Performance goals may reflect absolute entity performance
or a relative comparison of entity performance to the performance of a peer
group of entities or other external measure.
2.25 Performance PeriodPERFORMANCE PERIOD means the time period during which Performance
Unit/Performance Share Performance Goals must be met.
2.26 Performance SharePERFORMANCE SHARE means an Award described in Article 9 herein.
2.27 Performance UnitPERFORMANCE UNIT means an Award described in Article 9 herein.
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2.28 Period of RestrictionPERIOD OF RESTRICTION means the period during which the transfer of
Restricted Stock is limited in some way, as provided in Article 8 herein.
2.29 PersonPERSON shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act, as used in Sections 13(d) and 14(d) thereof, including
usage in the definition of a "group" in Section 13(d) thereof.
2.30 PlanPLAN means the IDACORP, Inc. 2000 Long-Term Incentive and Compensation
Plan.
4
2.31 Qualified Restricted StockQUALIFIED RESTRICTED STOCK means an Award of Restricted Stock
designated as Qualified Restricted Stock by the Committee at the time of grant
and intended to qualify for the exemption from the limitation on deductibility
imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C).
2.32 Qualified Restricted Stock UnitQUALIFIED RESTRICTED STOCK UNIT means an Award of Restricted Stock
Units designated as Qualified Restricted Stock Units by the Committee at the
time of grant and intended to qualify for the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C).
2.33 Restricted StockRESTRICTED STOCK means an Award described in Article 8 herein.
2.34 Restricted Stock UnitRESTRICTED STOCK UNIT means an Award described in Article 8 herein.
2.35 RetirementRETIREMENT means a Participant's termination from employment with the
Company or a Subsidiary at the Participant's Early or Normal Retirement Date, as
applicable.
(a) Early Retirement DateEARLY RETIREMENT DATE -- shall mean the date on which a
Participant terminates employment, if such termination date
occurs on or after Participant's attainment of age fifty-five
(55) but prior to Participant's Normal Retirement Date.
(b) Normal Retirement DateNORMAL RETIREMENT DATE -- shall mean the date on which the
Participant terminates employment, if such termination date
occurs on or after the Participant attains age sixty-two (62).
2.36 Securities ActSECURITIES ACT means the Securities Act of 1933, as amended.
2.37 SharesSHARES means the shares of common stock, no par value, of the Company.
2.38 Stock Appreciation RightSTOCK APPRECIATION RIGHT or SAR means a right, granted alone or in
connection with a related Option, designated as an SAR, to receive a payment on
the day the right is exercised, pursuant to the terms of Article 7 herein. Each
SAR shall be denominated in terms of one Share.
2.39 SubsidiarySUBSIDIARY means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
2.40 TandemTANDEM SAR means an SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
a Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall be similarly canceled).
5
ArticleARTICLE 3. AdministrationADMINISTRATION
3.1 The Committee.THE COMMITTEE. The Plan shall be administered by the Compensation
Committee or such
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other committee (the "Committee") as the Board of Directors shall select
consisting solely of two or more members of the Board. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors.
3.2 Authority of the Committee.AUTHORITY OF THE COMMITTEE. The Committee shall have full power except
as limited by law, the Articles of Incorporation or the Bylaws of the Company,
subject to such other restricting limitations or directions as may be imposed by
the Board and subject to the provisions herein, to determine the Eligible
Persons to receive Awards; to determine the size and types of Awards; to
determine the terms and conditions of such Awards; to construe and interpret the
Plan and any agreement or instrument entered into under the Plan; to establish,
amend or waive rules and regulations for the Plan's administration; and (subject
to the provisions of Article 15 herein) to amend the terms and conditions of any
outstanding Award. Further, the Committee shall make all other determinations
which may be necessary or advisable for the administration of the Plan. As
permitted by law, the Committee may delegate its authorities as identified
hereunder.
3.3 Restrictions on Distribution of Shares and Share Transferability.RESTRICTIONS ON DISTRIBUTION OF SHARES AND SHARE TRANSFERABILITY.
Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any Shares or benefits under the Plan unless such delivery
would comply with all applicable laws (including, without limitation, the
Securities Act) and applicable requirements of any securities exchange or
similar entity and unless the Participant's tax obligations have been satisfied
as set forth in Article 16. The Committee may impose such restrictions on any
Shares acquired pursuant to Awards under the Plan as it may deem advisable,
including, without limitation, restrictions to comply with applicable Federal
securities laws, with the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded and with any blue sky or state
securities laws applicable to such Shares.
3.4 Decisions Binding.DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Eligible Persons, Employees,
Participants and their estates and beneficiaries.
3.5 Costs.COSTS. The Company shall pay all costs of administration of the Plan.
ArticleARTICLE 4. Shares Subject to the PlanSHARES SUBJECT TO THE PLAN
4.1 Number of Shares.NUMBER OF SHARES. Subject to Section 4.2 herein, the maximum number of
Shares available for grant under the Plan shall be 2,050,000. Shares underlying
lapsed or forfeited Awards, or Awards that are not paid in Shares, may be reused
for other Awards; if the Option Exercise Price is satisfied by tendering Shares,
only the number of Shares issued net of the Shares tendered shall be deemed
issued under the Plan. Shares granted pursuant to the Plan may be (i) authorized
but unissued Shares of common stock, (ii) treasury shares or (iii) Shares
purchased on the open market.
6
4.2 Adjustments in Authorized Shares and Awards.ADJUSTMENTS IN AUTHORIZED SHARES AND AWARDS. In the event of any
merger, reorganization, consolidation, recapitalization, liquidation, stock
dividend, split-up, spin-off, stock split, reverse stock split, share
combination, share exchange or other change in the corporate structure of the
Company affecting the Shares, such adjustment shall be made in the outstanding
Awards, the number and class of Shares which may be delivered under the Plan,
and in the number and class of and/or price of Shares subject to outstanding
Awards granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights. Notwithstanding the foregoing, (i) each such adjustment
with respect to an Incentive Stock Option shall comply with the rules of Section
424(a) of the Code and (ii) in no event shall any adjustment be made which would
render any Incentive Stock Option granted hereunder to be other than an
incentive stock option for purposes of Section 422 of the Code. In no event
shall the Committee have the right to amend an outstanding Option Award for the
sole purpose of reducing the exercise price thereof.
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4.3 Individual Limitations.INDIVIDUAL LIMITATIONS. Subject to Section 4.2 above, (i) the total
number of Shares with respect to which Options or SARs may be granted in any
calendar year to any Covered Employee shall not exceed 250,000 Shares; (ii) the
total number of Qualified Restricted Stock Shares or Qualified Restricted Stock
Units that may be granted in any calendar year to any Covered Employee shall not
exceed 250,000 Shares or Units, as the case may be; (iii) the total number of
Performance Shares or Performance Units that may be granted in any calendar year
to any Covered Employee shall not exceed 250,000 Shares or Units, as the case
may be; (iv) the total number of Shares that are intended to qualify for
deduction under Section 162(m) of the Code granted pursuant to Article 10 herein
in any calendar year to any Covered Employee shall not exceed 250,000 Shares;
(v) the total cash Award that is intended to qualify for deduction under Section
162(m) of the Code that may be paid pursuant to Article 10 herein in any
calendar year to any Covered Employee shall not exceed $500,000; and (vi) the
aggregate number of Dividend Equivalents that are intended to qualify for
deduction under Section 162(m) of the Code that a Covered Employee may receive
in any calendar year shall not exceed 1,000,000.
ArticleARTICLE 5. Eligibility and ParticipationELIGIBILITY AND PARTICIPATION
5.1 Eligibility.ELIGIBILITY. Persons eligible to participate in the Plan ("Eligible
Persons") include all officers, key employees and directors of the Company and
its Subsidiaries, as determined by the Committee.
5.2 Actual Participation.ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all Eligible Persons those to whom
Awards shall be granted.
ArticleARTICLE 6. Stock OptionsSTOCK OPTIONS
6.1 Grant of Options.GRANT OF OPTIONS. Subject to the terms and conditions of the Plan,
Options may be granted to an Eligible Person at any time and from time to time,
as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Shares subject to Options granted to each Eligible Person (subject to Article 4
herein) and, consistent with the 7
provisions of the Plan, in determining the
terms and conditions pertaining to such Options. The Committee may grant ISOs,
NQSOs or a combination thereof.
6.2 Option Award Agreement.OPTION AWARD AGREEMENT. Each Option grant shall be evidenced by an
Option Award Agreement that shall specify the Option Exercise Price, the term of
the Option, the number of Shares to which the Option pertains, the Exercise
Period and such other provisions as the Committee shall determine, including but
not limited to any rights to Dividend Equivalents. The Option Award Agreement
shall also specify whether the Option is intended to be an ISO or a NQSO.
6.3 Exercise of and Payment for Options.EXERCISE OF AND PAYMENT FOR OPTIONS. Options granted under the Plan
shall be exercisable at such times and shall be subject to such restrictions and
conditions as the Committee shall in each instance approve.
A Participant may exercise an Option at any time during the Exercise
Period. Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by provision for full payment
for the Shares.
The Option Exercise Price shall be payable: (a) in cash or its equivalent,
(b) by tendering previously acquired Shares having an aggregate Fair Market
Value at the time of exercise equal to the total Option Exercise Price, (c) by
broker-assisted cashless exercise or (d) by a combination of (a), (b) and/or
(c).
6.4 Termination.TERMINATION. Each Option Award Agreement shall set forth the extent to
which the Participant
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shall have the right to exercise the Option following termination of the
Participant's employment with or service on the Board of the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee (subject to applicable law), shall be included in the Option Award
Agreement entered into with Participants, need not be uniform among all Options
granted pursuant to the Plan or among Participants and may reflect distinctions
based on the reasons for termination.
6.5 Transferability of Options.TRANSFERABILITY OF OPTIONS. Except as otherwise determined by the
Committee, all Options granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant, and no Option
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution. ISOs are not transferable other than by will or by the laws of
descent and distribution.
ArticleARTICLE 7. Stock Appreciation RightsSTOCK APPRECIATION RIGHTS
7.1 Grant of SARs.GRANT OF SARS. Subject to the terms and conditions of the Plan, an SAR
may be granted to an Eligible Person at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs or any combination of these forms of SARs.
8
The Committee shall have complete discretion in determining the number of
SARs granted to each Eligible Person (subject to Article 4 herein) and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.
The Base Value of a Freestanding SAR shall equal the Fair Market Value of a
Share on the date of grant of the SAR. The Base Value of Tandem SARs shall equal
the Option Exercise Price of the related Option.
7.2 SAR Award Agreement.AWARD AGREEMENT. Each SAR grant shall be evidenced by an SAR Award
Agreement that shall specify the number of SARs granted, the Base Value, the
term of the SAR, the Exercise Period and such other provisions as the Committee
shall determine.
7.3 Exercise and Payment of SARs.EXERCISE AND PAYMENT OF SARS. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of the Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Exercise Price of the
underlying ISO and the Fair Market Value of the Shares subject to the underlying
ISO at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be
exercised only when the Fair Market Value of the Shares subject to the ISO
exceeds the Option Exercise Price of the ISO.
Freestanding SARs may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes upon them.
A Participant may exercise an SAR at any time during the Exercise Period.
SARs shall be exercised by the delivery of a written notice of exercise to the
Company, setting forth the number of SARs being exercised. Upon exercise of an
SAR, a Participant shall be entitled to receive payment from the Company in an
amount equal to the product of:
i. the excess of (i) the Fair Market Value of a Share on the date of
exercise over (ii) the Base Value multiplied by
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ii. the number of Shares with respect to which the SAR is exercised.
At the sole discretion of the Committee, the payment to the Participant
upon SAR exercise may be in cash, in Shares of equivalent value or in some
combination thereof.
7.4 Termination.TERMINATION. Each SAR Award Agreement shall set forth the extent to
which the Participant shall have the right to exercise the SAR following
termination of the Participant's employment with or service on the Board of the
Company and its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the SAR Award 9
Agreement
entered into with Participants, need not be uniform among all SARs granted
pursuant to the Plan or among Participants and may reflect distinctions based on
the reasons for termination.
7.5 Transferability of SARs.TRANSFERABILITY OF SARS. Except as otherwise determined by the
Committee, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant or his or her legal
representative, and no SAR granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution.
ArticleARTICLE 8. Restricted Stock and Restricted Stock UnitsRESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1 Grant of Restricted Stock and Restricted Stock Units.GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. Subject to the
terms and conditions of the Plan, Restricted Stock and/or Restricted Stock Units
may be granted to an Eligible Person at any time and from time to time, as shall
be determined by the Committee.
The Committee shall have complete discretion in determining the number of
shares of Restricted Stock and/or Restricted Stock Units granted to each
Eligible Person (subject to Article 4 herein) and, consistent with the
provisions of the Plan, in determining the terms and conditions pertaining to
such Awards.
In addition, the Committee may, prior to or at the time of grant, designate
an Award of Restricted Stock or Restricted Stock Units as Qualified Restricted
Stock or Qualified Restricted Stock Units, as the case may be, in which event it
will condition the grant or vesting, as applicable, of such Qualified Restricted
Stock or Qualified Restricted Stock Units, as the case may be, upon the
attainment of the Performance Goals selected by the Committee.
8.2 Restricted Stock/Restricted Stock Unit Award Agreement.RESTRICTED STOCK/RESTRICTED STOCK UNIT AWARD AGREEMENT. Each grant of
Restricted Stock and/or Restricted Stock Units grant shall be evidenced by a
Restricted Stock and/or Restricted Stock Unit Award Agreement that shall specify
the number of shares of Restricted Stock and/or Restricted Stock Units granted,
the initial value (if applicable), the Period or Periods of Restriction, and
such other provisions as the Committee shall determine.
8.3 Transferability.TRANSFERABILITY. Restricted Stock and Restricted Stock Units granted
hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Award Agreement. During the
applicable Period of Restriction, all rights with respect to the Restricted
Stock and Restricted Stock Units granted to a Participant under the Plan shall
be available during his or her lifetime only to such Participant or his or her
legal representative.
8.4 Certificates.CERTIFICATES. No certificates representing Stock shall be issued until
such time as all restrictions applicable to such Shares have been satisfied.
8.5 Removal of Restrictions.REMOVAL OF RESTRICTIONS. Restricted Stock shall become freely
transferable by the Participant after the last day of the Period of Restriction
applicable thereto. Once Restricted Stock is released from the restrictions, the
Participant shall be entitled to receive a certificate. Payment 10
of Restricted
Stock Units shall be made after the last day of the Period of Restriction
applicable thereto. The Committee, in
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its sole discretion, may pay Restricted Stock Units in cash or in Shares (or in
a combination thereof), which have an aggregate Fair Market Value equal to the
value of the Restricted Stock Units.
8.6 Voting Rights.VOTING RIGHTS. During the Period of Restriction, Participants may
exercise full voting rights with respect to the Restricted Stock.
8.7 Dividends and Other Distributions.DIVIDENDS AND OTHER DISTRIBUTIONS. Subject to the Committee's right to
determine otherwise at the time of grant, during the Period of Restriction,
Participants shall receive all regular cash dividends paid with respect to the
Shares while they are so held. All other distributions paid with respect to such
Restricted Stock shall be credited to Participants subject to the same
restrictions on transferability and forfeitability as the Restricted Stock with
respect to which they were paid and shall be paid to the Participant promptly
after the full vesting of the Restricted Stock with respect to which such
distributions were made.
Rights, if any, to Dividend Equivalents on Restricted Stock Units shall be
established by the Committee at the time of grant and set forth in the Award
Agreement.
8.8 Termination.TERMINATION. Each Restricted Stock/Restricted Stock Unit Award
Agreement shall set forth the extent to which the Participant shall have the
right to receive Restricted Stock and/or a Restricted Stock Unit payment
following termination of the Participant's employment with or service on the
Board of the Company and its Subsidiaries. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with Participants, need not be uniform among all grants
of Restricted Stock/Restricted Stock Units or among Participants and may reflect
distinctions based on the reasons for termination.
ArticleARTICLE 9. Performance Units and Performance SharesPERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 Grant of Performance Units and Performance Shares.GRANT OF PERFORMANCE UNITS AND PERFORMANCE SHARES. Subject to the terms
and conditions of the Plan, Performance Units and/or Performance Shares may be
granted to an Eligible Person at any time and from time to time, as shall be
determined by the Committee.
The Committee shall have complete discretion in determining the number of
Performance Units and/or Performance Shares granted to each Eligible Person
(subject to Article 4 herein) and, consistent with the provisions of the Plan,
in determining the terms and conditions pertaining to such Awards.
9.2 Performance Unit/Performance Share Award Agreement.PERFORMANCE UNIT/PERFORMANCE SHARE AWARD AGREEMENT. Each grant of
Performance Units and/or Performance Shares shall be evidenced by a Performance
Unit and/or Performance Share Award Agreement that shall specify the number of
Performance Units and/or Performance Shares granted, the initial value (if
applicable), the Performance Period, the Performance Goals and such other
provisions as the Committee shall determine, including but not limited to any
rights to Dividend Equivalents.
11
9.3 Value of Performance Units/Performance Shares.VALUE OF PERFORMANCE UNITS/PERFORMANCE SHARES. Each Performance Unit
shall have an initial value that is established by the Committee at the time of
grant. The value of a Performance Share shall be equal to the Fair Market Value
of a Share. The Committee shall set Performance Goals in its discretion which,
depending on the extent to which they are met, will determine the number and/or
value of Performance Units/Performance Shares that will be paid out to the
Participants.
9.4 Earning of Performance Units/Performance Shares.EARNING OF PERFORMANCE UNITS/PERFORMANCE SHARES. After the applicable
Performance Period has ended, the Participant shall be entitled to receive a
payout with respect to the Performance Units/Performance Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding Performance Goals have been achieved.
A9
9.5 Form and Timing of Payment of Performance Units/Performance Shares.FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/PERFORMANCE SHARES.
Payment of earned Performance Units/Performance Shares shall be made following
the close of the applicable Performance Period. The Committee, in its sole
discretion, may pay earned Performance Units/Shares in cash or in Shares (or in
a combination thereof), which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions
deemed appropriate by the Committee.
9.6 Termination.TERMINATION. Each Performance Unit/Performance Share Award Agreement
shall set forth the extent to which the Participant shall have the right to
receive a Performance Unit/Performance Share payment following termination of
the Participant's employment with or service on the Board of the Company and its
Subsidiaries during a Performance Period. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all grants of
Performance Units/Performance Shares or among Participants and may reflect
distinctions based on reasons for termination.
9.7 Transferability.TRANSFERABILITY. Except as otherwise determined by the Committee, a
Participant's rights with respect to Performance Units/Performance Shares
granted under the Plan shall be available during the Participant's lifetime only
to such Participant or the Participant's legal representative and Performance
Units/Performance Shares may not be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution.
ArticleARTICLE 10. Other AwardsOTHER AWARDS
The Committee shall have the right to grant other Awards which may include,
without limitation, the grant of Shares based on attainment of Performance Goals
established by the Committee, the payment of Shares in lieu of cash or cash
based on attainment of Performance Goals established by the Committee, and the
payment of Shares in lieu of cash under other Company incentive or bonus
programs. Payment under or settlement of any such Awards shall be made in such
manner and at such times as the Committee may determine.
12
ArticleARTICLE 11. Beneficiary DesignationBENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of the Participant's death
before the Participant receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Company and will be effective only when filed by
the Participant in writing with the Company during the Participant's lifetime.
In the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
The spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of beneficiary or beneficiaries other
than the spouse.
ArticleARTICLE 12. DeferralsDEFERRALS
The Committee may permit a Participant to defer the Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant under the Plan. If any such deferral election is permitted, the
Committee shall, in its sole discretion, establish rules and procedures for such
payment deferrals.
ArticleARTICLE 13. Rights of ParticipantsRIGHTS OF PARTICIPANTS
13.1 Termination.TERMINATION. Nothing in the Plan shall interfere with or limit in any
way the right of the Company
A10
or any Subsidiary to terminate any Participant's employment or other
relationship with the Company or any Subsidiary at any time, for any reason or
no reason in the Company's or the Subsidiary's sole discretion, nor confer upon
any Participant any right to continue in the employ of, or otherwise in any
relationship with, the Company or any Subsidiary.
13.2 Participation.PARTICIPATION. No Eligible Person shall have the right to be selected
to receive an Award under the Plan, or, having been so selected, to be selected
to receive a future Award.
13.3 Limitation of Implied Rights.LIMITATION OF IMPLIED RIGHTS. Neither a Participant nor any other
Person shall, by reason of the Plan, acquire any right in or title to any
assets, funds or property of the Company or any Subsidiary whatsoever,
including, without limitation, any specific funds, assets or other property
which the Company or any Subsidiary, in their sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a
contractual right to the Shares or amounts, if any, payable under the Plan,
unsecured by any assets of the Company or any Subsidiary. Nothing contained in
the Plan shall constitute a guarantee that the assets of such companies shall be
sufficient to pay any benefits to any Person.
Except as otherwise provided in the Plan, no Award under the Plan shall
confer upon the holder thereof any right as a shareholder of the Company prior
to the date on which the individual fulfills all conditions for receipt of such
rights.
13
ArticleARTICLE 14. Change in ControlCHANGE IN CONTROL
The terms of this Article 14 shall immediately become operative, without
further action or consent by any person or entity, upon a Change in Control, and
once operative shall supersede and take control over any other provisions of
this Plan.
Upon a Change in Control
(a) Any and all Options and SARs granted hereunder shall become
immediately vested and exercisable;
(b) Any restriction periods and restrictions imposed on Restricted
Stock, Restricted Stock Units, Qualified Restricted Stock or
Qualified Restricted Stock Units shall be deemed to have expired;
any Performance Goals shall be deemed to have been met at the
target level; such Restricted Stock and Qualified Restricted
Stock shall become immediately vested in full, and such
Restricted Stock Units and Qualified Restricted Stock Units shall
be paid out in cash; and
(c) The target payout opportunity attainable under all outstanding
Awards of Performance Units and Performance Shares and any other
Awards shall be deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of the Change in
Control. All Awards shall become immediately vested. All
Performance Shares and other Awards denominated in Shares shall
be paid out in Shares, and all Performance Units and other Awards
shall be paid out in cash.
ArticleARTICLE 15. Amendment, Modification and TerminationAMENDMENT, MODIFICATION AND TERMINATION
15.1 Amendment, Modification and Termination.AMENDMENT, MODIFICATION AND TERMINATION. The Board may, at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part.
15.2 Awards Previously Granted.AWARDS PREVIOUSLY GRANTED. No termination, amendment or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan without the written consent of the Participant holding
such Award, unless such termination, modification or amendment is required by
applicable law and except as otherwise provided herein.
ArticleA11
ARTICLE 16. WithholdingWITHHOLDING
16.1 Tax Withholding.TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
(including any Shares withheld as provided below) sufficient to satisfy Federal,
state and local taxes (including the Participant's FICA obligation) required by
law to be withheld with respect to an Award made under the Plan.
16.2 Share Withholding.SHARE WITHHOLDING. With respect to tax withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable
14
event arising out of or as a result of Awards granted
hereunder, Participants may elect to satisfy the withholding requirement, in
whole or in part, by tendering Shares held by the Participant or by having the
Company withhold Shares having a Fair Market Value equal to the minimum
statutory total tax which could be imposed on the transaction. All elections
shall be irrevocable, made in writing and signed by the Participant.
ArticleARTICLE 17. SuccessorsSUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise of all or substantially all of the business
and/or assets of the Company.
ArticleARTICLE 18. Legal ConstructionLEGAL CONSTRUCTION
18.1 Gender and Number.GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
18.2 Severability.SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
18.3 Requirements of Law.REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
18.4 Governing Law.GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with, and
governed by, the laws of the State of Idaho.
Adopted by the Board on January 20, 1999
Approved by the Shareholders May 11, 2000
Amended by the Board January 18, 2001
Approved by the Shareholders on ________________
15A12
ExhibitEXHIBIT B
AUDIT COMMITTEE CHARTER
ForFOR IDACORP, Inc. and Idaho Power CompanyINC. AND IDAHO POWER COMPANY
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the
financial information provided to the shareholders and others, the systems of
internal controls and compliance programs that management and the Board have
established, the audit process and services provided by the independent
auditors, and the Internal Auditing Department activities.
II. COMPOSITION
The Audit Committee shall be composed of three or four Directors, one of
whom shall serve as Chairperson, who have no relationship to the Company that
may interfere with the exercise of their independence from management and the
Corporation. Each member of the Audit Committee shall be financially literate,
as such qualification is interpreted by the Board of Directors. At least one
member of the Audit Committee must have accounting or related financial
management expertise, as the Board of Directors interprets such qualification in
its business judgement. Any further requirements as to members, as established
by the New York Stock Exchange, Inc., shall apply. The Committee and the
Chairperson shall be nominated by the Executive Committee and elected at the
Board's regularly scheduled July meeting.
1
III. DUTIES AND RESPONSIBILITIES
A. Financial ReportingFINANCIAL REPORTING
Review, prior to the release to shareholders and the Securities
and Exchange Commission (SEC), with management and the independent
auditors the financial statements contained in the annual report to
shareholders and Form 10-K. Regarding quarterly financial reports,
the Committee, prior to release to shareholders and the SEC, shall
review the financial statements and be made aware of any item which
materially affects the quarterly financial results. The Chair of the
Committee or its designee may represent the entire Committee for
purposes of this review.
Review with management any accounting and financial reporting
changes proposed and/or adopted by the Financial Accounting Standards
Board, the American Institute of Certified Public Accountants and the
Internal Revenue Service.
B. Independent AuditorsINDEPENDENT AUDITORS
Review and recommend to the Board of Directors the selection of
the independent auditors to be ratified by shareholders to audit the
financial reports of the Company and its subsidiaries. The
independent auditors for the Corporation are ultimately accountable
to the Board of Directors and the Audit Committee. The Audit
Committee and the Board of Directors have the ultimate authority and
responsibility to select, evaluate and, where appropriate, replace
the independent auditors and/or nominate the independent auditors to
be proposed for shareholder approval in any proxy statement. The
Committee's review of the independent auditors shall include the
annual audit process including the scope, fees and audit procedures
B1
to be utilized, the results of the annual audit including financial
statements and related footnotes, significant changes in the scope of
the audit or audit procedures, difficulties encountered with
management and conduct of the audit under generally accepted
accounting principles, and the independence of the independent
auditor. The Audit
2
Committee is responsible for ensuring that the
independent auditors submit on an annual basis to the Audit Committee
a formal written statement delineating all relationships between the
independent auditors and the Company, consistent with Independence
Standards Board Standard No. 1. The Audit Committee is responsible
for actively engaging in a dialogue with the independent auditors
with respect to any disclosed relationships or services that may
impact the objectivity and independence of the independent auditors
and for recommending that the Board of Directors take appropriate
action in response to the independent auditors' report to satisfy
itself of the independent auditors' independence.
C. Internal ControlsINTERNAL CONTROLS
Review the adequacy and effectiveness of the Corporation's system
of internal controls regarding finance, accounting, information
systems, legal compliance, ethics and the safeguarding of assets with
the independent auditors and internal audit. The Committee's review
of the system of internal controls shall include annual reports from
internal audit and the independent auditor concerning significant
findings and recommendations and management's response thereto.
D. Legal and Regulatory ComplianceLEGAL AND REGULATORY COMPLIANCE
Review Corporate compliance policies and programs and related
legal and regulatory matters. Review with the Corporation's General
Counsel material litigation and other legal matters as appropriate.
E. Internal AuditINTERNAL AUDIT
Annually review the Corporate Internal Audit Department function
including its organization and qualifications, the proposed audit
plan for the coming year and the Internal Audit Department
coordination efforts with the independent auditors. 3
The Committee's
on-goingongoing review of internal audit activities shall include significant
findings during the year, any difficulties experienced including
access restriction, changes in the audit plan and the independence of
internal audit. The Committee shall review and concur in the
appointment or removal of the manager of internal audit.
F. Business Ethics and Conduct GuideBUSINESS ETHICS AND CONDUCT GUIDE
Review the Corporation's Business Ethics and Conduct Guide
(Guide) and monitor with the Manager of Internal Audit the
Corporation's compliance efforts under the Guide. The Committee's
review shall include a report on inquiries made and investigations
conducted under the terms of the Guide and executive perquisites and
expense accounts.
G. Other Duties and ResponsibilitiesOTHER DUTIES AND RESPONSIBILITIES
The Committee shall:
-o Review and assess the adequacy of the Committee's charter
annually;
-o Provide an open avenue of communications between the
internal auditors, independent auditors and the Board of
Directors;
-B2
o Inquire about the existence and substance of any significant
accounting accrual, reserves, estimates, or contingent
liabilities made by management that had a material impact on
the financial statements;
-o Review significant findings of regulatory authorities or
agencies in the areas of tax or accounting matters;
-o Meet with the manager of internal auditing, the independent
auditor and management in separate individual executive
sessions to discuss any matters that the Committee or these
groups believe should be discussed privately with the Audit
Committee;
4
-o Conduct or authorize investigations into any matters within
the Committee's scope of responsibilities. The Committee
shall be empowered to retain independent counsel,
accountants or others to assist it in the conduct of any
investigation;
-o Prepare the Audit Committee Report, as required by Item 306
of Reg. S-K;
-o Perform such other functions as assigned by law, the
Company's charter or by-laws, or the Board of Directors.
IV. PROCEDURES
A. MeetingsMEETINGS
The Committee shall review and approve the annual report to
shareholders in February and shall meet four times per year in
conjunction with the regular Board meetings and otherwise from time
to time at the call of its Chairperson. The Committee shall meet in
separate executive sessions with the independent auditor and with the
manager of internal auditing at the March meeting, and separately at
other times, if in the opinion of the Committee, separate meetings
are deemed necessary. Meetings may, at the discretion of the Audit
Committee, include members of management, independent auditors and
such other persons as the Committee shall determine. The Committee
may meet privately for advice and counsel in discharging its
responsibilities with independent auditors, counsel or with any other
person, including associates of the Company, knowledgeable in the
matters under consideration by the Committee.
5
B. ActionACTION
A majority of the members of the Committee shall constitute a
quorum. The Committee shall act on the affirmative vote of a majority
of members present at a meeting at which a quorum is present. Without
a meeting, the Committee may act by unanimous written consent of all
members.
C. RulesRULES
The Committee shall determine its own rules and procedures,
including designation of a Chairperson pro tem, in the absence of a
Chairperson and designation of a Secretary.
D. Chairperson ResponsibilitiesCHAIRPERSON RESPONSIBILITIES
The Chairperson of the Committee shall report to the Board on
matters set forth in this Charter at the Board's next regularly
scheduled meeting.
B3
E. Committee Secretary ResponsibilitiesCOMMITTEE SECRETARY RESPONSIBILITIES
The Secretary shall be designated by the Committee and need not
be a member of the Committee. The Secretary shall attend meetings and
draft minutes.
F. FeesFEES
For each meeting attended, each member shall be paid the fee set
by the Board of Directors. The Chairperson and Committee members
shall receive a retainer set by the Board.
Approved
--------------------------------
Audit CommitteeB4
[LOGO of IDAHO POWER]
ANNUAL MEETING OF SHAREHOLDERS
Thursday, May 17, 2001
10:00 a.m. Local Time
Idaho Power Corporate Headquarters
1221 West Idaho Street
Boise, Idaho 83707
INSTRUCTIONS FOR VOTING YOUR PROXY
We are now offering shareholders three alternative ways of voting this proxy:
o BY TELEPHONE (using a touch-tone telephone)
o THROUGH THE INTERNET (using a browser)
o BY MAIL (traditional method)
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you had returned your proxy card. We encourage you to
use these cost effective and convenient ways of voting, 24 hours a day, 7 days a
week.
TELEPHONE VOTING Available until 5:00 p.m. Eastern time on May 16, 2001
o This method of voting is available for residents of the U.S. and
Canada
o On a touch-tone telephone, call TOLL FREE 1-800-849-5629, 24 hours a
day, 7 days a week
o You will be asked to enter ONLY the CONTROL NUMBER shown below
o Have your proxy card ready, then follow the prerecorded instructions
o Your vote will be confirmed and cast as you directed
INTERNET VOTING Available until 5:00 p.m. Eastern time on May 16, 2001
o Visit the Internet voting Website at HTTP://PROXY.GEORGESON.COM
o Enter the COMPANY NUMBER AND CONTROL NUMBER shown below and follow the
instructions on your screen
o You will incur only your usual internet charges
VOTING BY MAIL
o Simply mark, sign and date your proxy card and return it in the
postage-paid envelope
o If you are voting by telephone or the Internet, please do not mail
your proxy card
The Company has been advised by counsel that the procedures for Internet and
Telephonic voting are consistent with the requirements of applicable laws.
COMPANY NUMBER CONTROL NUMBER
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
PLEASE MARK VOTES AS IN THIS EXAMPLE.
[X] THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2
1. ELECTION OF DIRECTORS: Nominees:
01 Rotchford L. Barker 02 Jon H. Miller
03 Robert A. Tinstman
FOR ALL NOMINEES LISTED (EXCEPT AS INDICATED TO THE CONTRARY)
[ ]
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
[ ]
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) in the space provided below.
_________________________________
2. To ratify the selection of Deloitte & Touche LLP as independent auditor for
the fiscal year ending December 31, 2001
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
DATE: _______________________________
_____________________________________
Signature(s) in Box
_____________________________________
Signature of Joint Owner
April 6, 2001
Dear Shareholders of Idaho Power Company:
It is our pleasure to invite you to attend the upcoming 2001 joint annual
meeting of Shareholders of Idaho Power Company and IDACORP, Inc. to be held on
May 17, 2001, at 10:00 A.M., local time, at the Idaho Power Corporate
Headquarters, 1221 West Idaho Street, Boise, Idaho. Your Board of Directors and
management look forward to personally greeting those shareholders able to
attend.
Information about the business of the meeting and the nominees for election as
members of the Board of Directors is set forth in the Notice of Meeting and the
Joint Proxy Statement on the following pages. This year Idaho Power Company is
asking you to elect three Directors and to ratify the appointment of an
independent auditor for the fiscal year ending December 31, 2001.
Your Company is undergoing change and we will continue to rebuild our
organization to meet the challenges of a competitive future. Anticipating and
responding to the competitive future is critical to our continued success in
increasing the value of your investment. We will again share with you changes in
the utility industry and the rebuilding of our organization.
YOUR VOTE IS IMPORTANT. YOU CAN BE SURE YOUR SHARES ARE REPRESENTED AT THE
MEETING BY PROMPTLY RETURNING YOUR COMPLETED PROXY IN THE ENCLOSED ENVELOPE. You
may revoke your proxy prior to or at the meeting and may vote in person if you
wish.
/s/ Jon H. Miller /s/ Jan B. Packwood
Jon H. Miller Jan B. Packwood
Chairman --------------------------------
Date
6
of the Board President and
Chief Executive Officer
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
P
R
O
X
Y
IDAHO POWER COMPANY
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 17, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROPERLY EXECUTED PROXIES WILL BE VOTED AS MARKED AND, IF NOT MARKED, PROXIES
RECEIVED WILL BE VOTED "FOR" PROPOSAL (1), TO ELECT THREE DIRECTORS AND "FOR"
PROPOSAL (2), TO RATIFY THE APPOINTMENT OF AN INDEPENDENT AUDITOR FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2001.
The undersigned hereby appoints Jan B. Packwood and Robert W. Stahman, and each
of them, proxies with full power of substitution to vote for the undersigned at
the Joint Annual Meeting of Shareholders of Idaho Power Company and IDACORP,
Inc. and at any adjournment thereof, on the matters set forth in the Proxy
Statement and such other matters as may come before the meeting; and hereby
directs that this proxy be voted in accordance with the instructions herein.
PLEASE DATE, SIGN AND PROMPTLY MAIL IN THE SELF-ADDRESSED RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. PLEASE SO INDICATE FOLLOWING
YOUR SIGNATURE IF YOU ARE SIGNING IN A REPRESENTATIVE CAPACITY. IF SHARES ARE
HELD JOINTLY, BOTH OWNERS SHOULD SIGN.
SEE REVERSE SIDE