SEC Info - Pinnacle West Capital Corp, et al. - ‘10-K’ for 12/31/18

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Pinnacle West Capital Corp, et al. – ‘10-K’ for 12/31/18 – ‘EX-10.4.3’

On: Friday, 2/22/19, at 8:37am ET · For: 12/31/18 · Accession #: 764622-19-19 · File #s: 1-04473, 1-08962

  As Of               Filer                 Filing    For·On·As Docs:Size

 2/22/19  Pinnacle West Capital Corp        10-K       12/31/18  140:29M
          Arizona Public Service Co

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   4.29M 
 5: EX-10.11.1  Material Contract                                   HTML    376K 
 2: EX-10.4.2   Material Contract                                   HTML     52K 
 3: EX-10.4.3   Material Contract                                   HTML     54K 
 4: EX-10.6.4   Material Contract                                   HTML     41K 
 6: EX-21.1     Subsidiaries List                                   HTML     36K 
 7: EX-23.1     Consent of Experts or Counsel                       HTML     37K 
 8: EX-23.2     Consent of Experts or Counsel                       HTML     37K 
 9: EX-31.1     Certification -- §302 - SOA'02                      HTML     46K 
10: EX-31.2     Certification -- §302 - SOA'02                      HTML     46K 
11: EX-31.3     Certification -- §302 - SOA'02                      HTML     46K 
12: EX-31.4     Certification -- §302 - SOA'02                      HTML     45K 
13: EX-32.1     Certification -- §906 - SOA'02                      HTML     42K 
14: EX-32.2     Certification -- §906 - SOA'02                      HTML     42K 
21: R1          Document and Entity Information                     HTML     78K 
22: R2          Consolidated Statements of Income                   HTML    130K 
23: R3          Consolidated Statements of Comprehensive Income     HTML     73K 
24: R4          Consolidated Statements of Comprehensive Income     HTML     48K 
                (Parenthetical)                                                  
25: R5          Consolidated Balance Sheets                         HTML    252K 
26: R6          Consolidated Balance Sheets (Parenthetical)         HTML     59K 
27: R7          Consolidated Statements of Cash Flows               HTML    194K 
28: R8          Consolidated Statements of Changes in Equity        HTML    118K 
29: R9          Consolidated Statements of Changes in Equity        HTML     39K 
                (Parenthetical)                                                  
30: R10         Summary of Significant Accounting Policies          HTML    125K 
31: R11         New Accounting Standards                            HTML     65K 
32: R12         Regulatory Matters                                  HTML    279K 
33: R13         Income Taxes                                        HTML    296K 
34: R14         Lines of Credit and Short-Term Borrowings           HTML     69K 
35: R15         Long-Term Debt and Liquidity Matters                HTML    135K 
36: R16         Retirement Plans and Other Benefits                 HTML    424K 
37: R17         Leases                                              HTML     58K 
38: R18         Jointly-Owned Facilities                            HTML    117K 
39: R19         Commitments and Contingencies                       HTML    128K 
40: R20         Asset Retirement Obligations                        HTML     54K 
41: R21         Selected Quarterly Financial Data (Unaudited)       HTML    151K 
42: R22         Fair Value Measurements                             HTML    304K 
43: R23         Earnings Per Share                                  HTML     59K 
44: R24         Stock-Based Compensation                            HTML     94K 
45: R25         Derivative Accounting                               HTML    168K 
46: R26         Other Income and Other Expense                      HTML     90K 
47: R27         Palo Verde Sale Leaseback Variable Interest         HTML     50K 
                Entities                                                         
48: R28         Investments in Nuclear Decommissioning Trusts and   HTML    135K 
                Other Special Use Funds                                          
49: R29         Revenue                                             HTML     53K 
50: R30         Changes in Accumulated Other Comprehensive Loss     HTML     70K 
51: R31         Schedule I - Condensed Financial Information of     HTML    188K 
                Registrant                                                       
52: R32         Schedule Ii - Reserve for Uncollectibles            HTML     87K 
53: R33         Summary of Significant Accounting Policies          HTML    165K 
                (Policies)                                                       
54: R34         Summary of Significant Accounting Policies          HTML     77K 
                (Tables)                                                         
55: R35         Regulatory Matters (Tables)                         HTML    177K 
56: R36         Income Taxes (Tables)                               HTML    293K 
57: R37         Lines of Credit and Short-Term Borrowings (Tables)  HTML     61K 
58: R38         Long-Term Debt and Liquidity Matters (Tables)       HTML    134K 
59: R39         Retirement Plans and Other Benefits (Tables)        HTML    421K 
60: R40         Leases (Tables)                                     HTML     52K 
61: R41         Jointly-Owned Facilities (Tables)                   HTML    117K 
62: R42         Commitments and Contingencies (Tables)              HTML     58K 
63: R43         Asset Retirement Obligations (Tables)               HTML     51K 
64: R44         Selected Quarterly Financial Data (Unaudited)       HTML    150K 
                (Tables)                                                         
65: R45         Fair Value Measurements (Tables)                    HTML    286K 
66: R46         Earnings Per Share (Tables)                         HTML     59K 
67: R47         Stock-Based Compensation (Tables)                   HTML    116K 
68: R48         Derivative Accounting (Tables)                      HTML    246K 
69: R49         Other Income and Other Expense (Tables)             HTML     89K 
70: R50         Palo Verde Sale Leaseback Variable Interest         HTML     48K 
                Entities (Tables)                                                
71: R51         Investments in Nuclear Decommissioning Trusts and   HTML    132K 
                Other Special Use Funds (Tables)                                 
72: R52         Revenue (Tables)                                    HTML     46K 
73: R53         Changes in Accumulated Other Comprehensive Loss     HTML     70K 
                (Tables)                                                         
74: R54         Summary of Significant Accounting Policies -        HTML    125K 
                Narrative (Details)                                              
75: R55         Summary of Significant Accounting Policies -        HTML     72K 
                Summary of Property, Plant and Equipment (Details)               
76: R56         Summary of Significant Accounting Policies -        HTML     55K 
                Supplemental Cash Flow Information (Details)                     
77: R57         New Accounting Standards (Details)                  HTML     69K 
78: R58         Regulatory Matters - Retail Rate Case Filing        HTML     79K 
                (Details)                                                        
79: R59         Regulatory Matters - Narrative (Details)            HTML    251K 
80: R60         Regulatory Matters - Deferred Fuel and Purchased    HTML     50K 
                Power Regulatory Asset (Details)                                 
81: R61         Regulatory Matters - Four Corners, Cholla and       HTML     66K 
                Navajo Plant (Details)                                           
82: R62         Regulatory Matters - Schedule of Regulatory Assets  HTML     89K 
                (Details)                                                        
83: R63         Regulatory Matters - Schedule of Regulatory         HTML     81K 
                Liabilities (Details)                                            
84: R64         Income Taxes (Details)                              HTML     66K 
85: R65         Income Taxes - Reconciliation of Unrecognized Tax   HTML     60K 
                Benefits (Details)                                               
86: R66         Income Taxes - Summary of Unrecognized Tax          HTML     47K 
                Benefits (Details)                                               
87: R67         Income Taxes - Components of Income Tax Expense     HTML     72K 
                (Details)                                                        
88: R68         Income Taxes - Effective Tax Rate Reconciliation    HTML     80K 
                (Details)                                                        
89: R69         Income Taxes - Components of Deferred Income Tax    HTML    109K 
                Liability (Details)                                              
90: R70         Lines of Credit and Short-Term Borrowings -         HTML     57K 
                Schedule of Credit Facilities (Details)                          
91: R71         Lines of Credit and Short-Term Borrowings           HTML    119K 
                (Details)                                                        
92: R72         Long-Term Debt and Liquidity Matters (Details)      HTML     84K 
93: R73         Long-Term Debt and Liquidity Matters - Components   HTML     96K 
                of Long-Term Debt (Details)                                      
94: R74         Long-Term Debt and Liquidity Matters - Future       HTML     63K 
                Principal Payments (Details)                                     
95: R75         Long-Term Debt and Liquidity Matters - Fair Value   HTML     46K 
                of Long-Term Debt (Details)                                      
96: R76         Retirement Plans and Other Benefits Retirement      HTML     74K 
                Plans and Other Benefits - Additional Information                
                (Details)                                                        
97: R77         Retirement Plans and Other Benefits - Net Periodic  HTML     65K 
                Benefit Costs and Portion including Portion                      
                Charged to Expense (Details)                                     
98: R78         Retirement Plans and Other Benefits - Changes       HTML     82K 
                Benefit Obligations and Funded Status (Details)                  
99: R79         Retirement Plans and Other Benefits - Projected     HTML     47K 
                Benefit Obligation for Pension Plans (Details)                   
100: R80         Retirement Plans and Other Benefits - Amounts       HTML     58K  
                Recognized on the Consolidated Balance Sheets                    
                (Details)                                                        
101: R81         Retirement Plans and Other Benefits - Impact to     HTML     67K  
                Accumulated Other Comprehensive Loss (Details)                   
102: R82         Retirement Plans and Other Benefits -               HTML     93K  
                Weighted-Average Assumptions for Pensions and                    
                Other Benefits (Details)                                         
103: R83         Retirement Plans and Other Benefits - Asset         HTML     61K  
                Allocation (Details)                                             
104: R84         Retirement Plans and Other Benefits - Fair Value    HTML    119K  
                of Pinnacle West's Pension Plan (Details)                        
105: R85         Retirement Plans and Other Benefits - Estimated     HTML     56K  
                Future Benefit Payments (Details)                                
106: R86         Leases (Details)                                    HTML     74K  
107: R87         Jointly-Owned Facilities (Details)                  HTML    106K  
108: R88         Commitments and Contingencies - Palo Verde Nuclear  HTML    116K  
                Generating Station and Contractual Obligations                   
                (Details)                                                        
109: R89         Commitments and Contingencies - Superfund-Related   HTML     45K  
                Matters and Southwest Power Outage (Details)                     
110: R90         Commitments and Contingencies - Environmental       HTML    113K  
                Matters and Financial Assurances (Details)                       
111: R91         Asset Retirement Obligations (Details)              HTML     72K  
112: R92         Selected Quarterly Financial Data (Unaudited)       HTML     80K  
                (Details)                                                        
113: R93         Fair Value Measurements - Fair Value of Assets and  HTML    121K  
                Liabilities (Details)                                            
114: R94         Fair Value Measurements - Level 3 Quantitative      HTML     64K  
                Information (Details)                                            
115: R95         Fair Value Measurements - Changes in Fair Value of  HTML     61K  
                Risk Management Assets and Liabilities (Details)                 
116: R96         Fair Value Measurements - Additional Information    HTML     43K  
                (Details)                                                        
117: R97         Earnings Per Share (Details)                        HTML     65K  
118: R98         Stock-Based Compensation (Details)                  HTML    124K  
119: R99         Stock-Based Compensation - Summary of Restricted    HTML     49K  
                Stock, Stock Grants, Stock Units and Performance                 
                Shares (Details)                                                 
120: R100        Stock-Based Compensation - Status of Nonvested      HTML     80K  
                Restricted Stock, Stock Grants, Stock Units and                  
                Performance Shares (Details)                                     
121: R101        Derivative Accounting (Details)                     HTML     53K  
122: R102        Derivative Accounting - Outstanding Gross Notional  HTML     40K  
                Amounts Outstanding (Details)                                    
123: R103        Derivative Accounting - Gains and Losses from       HTML     62K  
                Derivative Instruments (Details)                                 
124: R104        Derivative Accounting - Derivative Instruments in   HTML    103K  
                the Balance Sheet (Details)                                      
125: R105        Derivative Accounting - Credit Risk and Related     HTML     45K  
                Contingent Features (Details)                                    
126: R106        Other Income and Other Expense (Details)            HTML     63K  
127: R107        Palo Verde Sale Leaseback Variable Interest         HTML     74K  
                Entities (Details)                                               
128: R108        Palo Verde Leaseback Variable Interest Entities -   HTML     48K  
                Schedule of VIEs (Details)                                       
129: R109        Investments in Nuclear Decommissioning Trusts and   HTML    122K  
                Other Special Use Funds (Details)                                
130: R110        Revenue (Details)                                   HTML     44K  
131: R111        Revenue - Sources of Revenue (Details)              HTML     51K  
132: R112        Changes in Accumulated Other Comprehensive Loss     HTML     71K  
                (Details)                                                        
133: R113        SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF     HTML     87K  
                REGISTRANT - Comprehensive Income (Details)                      
134: R114        SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF     HTML    142K  
                REGISTRANT - Balance Sheets (Details)                            
135: R115        SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF     HTML    141K  
                REGISTRANT - Cash Flows (Details)                                
136: R116        Schedule Ii - Reserve for Uncollectibles (Details)  HTML     53K  
138: XML         IDEA XML File -- Filing Summary                      XML    255K  
20: XML         XBRL Instance -- pnw2018123110-k_htm                 XML   7.91M 
137: EXCEL       IDEA Workbook of Financial Reports                  XLSX    209K  
16: EX-101.CAL  XBRL Calculations -- pnw-20181231_cal                XML    490K 
17: EX-101.DEF  XBRL Definitions -- pnw-20181231_def                 XML   2.24M 
18: EX-101.LAB  XBRL Labels -- pnw-20181231_lab                      XML   3.81M 
19: EX-101.PRE  XBRL Presentations -- pnw-20181231_pre               XML   2.49M 
15: EX-101.SCH  XBRL Schema -- pnw-20181231                          XSD    427K 
139: JSON        XBRL Instance as JSON Data -- MetaLinks              700±  1.12M  
140: ZIP         XBRL Zipped Folder -- 0000764622-19-000019-xbrl      Zip    929K

‘EX-10.4.3’ — Material Contract

This Exhibit is an HTML Document rendered as filed. [ Alternative Formats ]

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Exhibit

DISCRETIONARY CREDIT AWARD AGREEMENT

This Discretionary Credit Award Agreement (the “Agreement”) is entered into by and between Arizona Public Service Company (“APS”) and Robert Bement (“Employee”).

1.Background. The Company and Employee previously entered into a Retention Agreement dated December 19, 2008 (the “2008 Agreement”), which continues to remain in effect.

2. Purpose. Section 3.9 of the Deferred Compensation Plan of 2005 for Employees of Pinnacle West Capital Corporation and Affiliates (the “Deferred Compensation Plan”) allows APS to award Discretionary Credits in such amounts and subject to such terms and conditions as APS deems appropriate. The purpose of this Agreement is to award Discretionary Credits to Employee subject to the terms and conditions set forth below.

3. Definitions. A number of key terms, with specialized meanings, are used throughout this Agreement. These key terms are identified by the capitalization of the initial letter of each word or phrase even when the word or phrase does not begin a sentence. Each of these key terms will be given the meaning ascribed to it in the Deferred Compensation Plan unless the term is defined in this Agreement. Whenever these key terms are used, they will be given the defined meaning unless a clearly different meaning is required by the context.

4. Discretionary Credits. Four Discretionary Credits in the aggregate amount of $300,000 will be allocated to a Discretionary Credit Account established for the benefit of Employee pursuant to Section 3.9 of the Deferred Compensation Plan. The Discretionary Credit Account shall be credited with: (i) $75,000 on January 1, 2015; (ii) $75,000 on January 1, 2016; (iii) $75,000 on January 1, 2017; and (iv) $75,000 on January 1, 2018 provided that the Employee remains employed with APS on each such crediting date and demonstrates sustained competent performance of his assigned job responsibilities.

5. Interest. The Discretionary Credit Account shall be credited with interest in accordance with Section 3.5 of the Deferred Compensation Plan.

6. Modification of 2008 Agreement. Effective retroactive to January 1, 2014, the “Company Credits” credited to Employee pursuant to the 2008 Agreement shall be credited with interest calculated in accordance with Section 3.5 of the Deferred Compensation Plan. All other terms and conditions of the 2008 Agreement shall continue in full force and effect.

7. Vesting. The Discretionary Credit Account vests on December 31, 2018. If Employee Separates from Service prior to December 31, 2018, the amounts allocated to the Discretionary Credit Account will be forfeited; provided, however, that if Employee’s employment with APS is involuntarily terminated by APS without Cause, Employee dies or Employee becomes Disabled prior to December 31, 2018, all amounts previously credited to the Discretionary Credit Account will be fully vested as of the date of the termination by APS without Cause, death or Disability as applicable. For purposes of this document, “Disability” shall have the meaning ascribed to it in the Pinnacle West Capital Corporation Long-Term Disability Plan. For purposes of this document, “Cause” means any act or omission that could result in disciplinary action pursuant to

applicable laws or APS policies and procedures, as determined in the sole discretion of APS. The determination of whether “Cause” exists shall be made by APS, in its sole and absolute discretion, in accordance with its personnel policies and procedures.

8. Payment of Discretionary Credits.

(a) General Rule. Except as otherwise provided below in this Section 8, Employee’s vested interest in his Discretionary Credit Account will be paid to Employee in substantially equal installments over a period of approximately five years following Employee’s Separation from Service with the first installment payment to made within 30 days following Employee’s Separation from Service and each subsequent installment payment shall be made on the next four anniversaries of the first payment date, unless Employee is a Specified Employee on the date of his Separation from Service. If Employee is a Specified Employee on the date of his Separation from Service, the first installment payment shall be paid within 30 days following the first day of the seventh month following Employee’s Separation from Service and each subsequent installment payment shall be made on the next four anniversaries of the first payment date. The Discretionary Credit Account may not be distributed as a Short‑Term Payout or due to an Unforeseeable Financial Emergency.

(b) Disability. If Employee becomes Disabled prior to his Separation from Service and if such Disability occurs prior to December 31, 2018, Employee shall receive a single lump sum payment of Employee’s vested interest in his Discretionary Credit Account on the first business day following December 31, 2018 as long as the Disability constitutes a “disability” as defined in Section 409A of the Code. If the Disability does not constitute a “disability” as defined in Section 409A of the Code, the general rule set forth in Section 8(a) will apply, unless Employee incurs a Separation from Service before December 31, 2018, in which case Employee shall receive a single lump sum payment of Employee’s vested interest in his Discretionary Credit Account within 30 days following Employee’s Separation from Service, unless Employee is a Specified Employee on the date of his Separation from Service. If Employee is a Specified Employee on the date of his Separation from Service, Employee’s vested interest in his Discretionary Credit Account shall be paid within 30 days following the first day of the seventh month following Employee’s Separation from Service.

(c) Death. If Employee dies while employed by the Company, or after the commencement of installment payments as described in Section 8(a) but before all such payments have been made in full, the Beneficiary designated by Employee pursuant to the Deferred Compensation Plan shall receive a single lump sum payment of Employee’s vested interest in his Discretionary Credit Account within sixty days of Employee’s death.

(d) Termination without Cause. If Employee’s employment is terminated by the Company without cause and if, as a result of such termination, Employee incurs a Separation from Service before December 31, 2018, Employee shall receive a single lump sum payment of Employee’s vested interest in his Discretionary Credit Account within 30 days following Employee’s Separation from Service, unless Employee is a Specified Employee on the date of his Separation from Service. If Employee is a Specified Employee on the date of his Separation from Service,

Employee’s vested interest in his Discretionary Credit Account shall be paid within 30 days following the first day of the seventh month following Employee’s Separation from Service.

9. Employee’s Plan Status. Regardless of whether Employee makes an Annual Deferral pursuant to the terms of the Deferred Compensation Plan for the relevant Plan Year, Employee shall be deemed to be a Participant in the Deferred Compensation Plan and to have elected to participate in the Deferred Compensation Plan for the limited purpose of receiving the Discretionary Credits described in this Agreement. This Agreement shall be deemed to be Employee’s Election Form for purposes of Section 2.2 and Section 3.3 of the Deferred Compensation Plan.

10. Relationship to Other Benefits. The Discretionary Credits allocated to Employee pursuant to this Agreement shall not be taken into account as compensation or for purposes of determining any benefits due to Employee pursuant to the terms of any pension, retirement, savings, profit sharing, incentive, group insurance or other tax qualified or nonqualified benefit plan sponsored by APS, Pinnacle West Capital Corporation or any affiliate of either. In addition, the amounts payable to Employee attributable to the Discretionary Credit Account established for Employee pursuant to the Deferred Compensation Plan shall be disregarded for purposes of the benefit plans referred to in the preceding sentence.

11. Plan Document. As provided above, this Agreement is entered into pursuant to the provisions of Section 3.9 of the Deferred Compensation Plan. Accordingly, except as otherwise set forth in this Agreement, the provisions of the Deferred Compensation Plan shall apply in determining the rights of Employee as well as the administration of Employee’s Discretionary Credit Account. In cases of conflict, this Agreement controls over any conflicting provisions of the Deferred Compensation Plan, except as may be required by Section 409A of the Internal Revenue Code or the provisions of any other applicable law or regulation.

12. Amendments. This Agreement may not be modified, altered or changed except by a written agreement signed by APS and Employee.

13. Confidentiality. Employee shall hold the existence and terms of this Agreement in confidence. Employee shall not publicly or privately discuss or disclose the nature or content of this Agreement. However, Employee may disclose the terms of this Agreement if required by federal or state law, and Employee may disclose the terms of this Agreement to Employee’s accountant, attorney, consultant and spouse. In addition, APS and Employee may disclose this Agreement as necessary to enforce its provisions.

14. Reporting to Federal and State Agencies. Nothing in this Agreement shall be construed to prohibit Employee from reporting or disclosing any suspected instance of illegal activity of any nature, any nuclear safety concerns, any workplace safety concerns, or any public safety concerns to the Nuclear Regulatory Commission (“NRC”), the United States Department of Labor (“DOL”), or any other federal, state, or local government agency or court. This Agreement shall not be construed to prohibit Employee from providing information to the NRC, DOL, Equal Employment Opportunity Commission, United States Securities and Exchange Commission, Occupational Safety and Health Administration, or Arizona Division of Occupational Safety and

Health, or testifying in any civil or criminal proceedings, even if such information or testimony being provided relates to the claims or matters covered by this Agreement. This Agreement shall not be construed as a waiver or withdrawal of any safety concerns which Employee has or may have reported to the NRC or DOL, or withdrawal of any participation by Employee in any NRC proceedings. In this regard, the parties to this Agreement understand that this Agreement shall be interpreted in a manner consistent with 10 CFR § 50.7(f). Notwithstanding anything to the contrary in this paragraph, Employee hereby waives and releases any right to receive any relief as a result of the Employee's participation in any investigation or proceeding of the NRC, DOL, or any federal, state, or local government agency or court.

15. Entire Agreement. APS and Employee acknowledge and agree that this Agreement and the Deferred Compensation Plan constitute the entire agreement between APS and Employee with respect to the subject matter hereof.

16. Severability. If any provision of this Agreement is held to be invalid, the remaining provisions shall remain in full force and effect.

IN WITNESS WHEREOF, APS and Employee have executed this Agreement on the dates set forth below.



ARIZONA PUBLIC SERVICE COMPANY	EMPLOYEE

By: /s/ *Donald E. Brandt*	By: /s/ *Robert Bement*
Donald E. Brandt	Robert Bement
Chairman and Chief Executive Officer

Date: 9/15/2014	Date: 10/20/2014

Dates Referenced Herein and Documents Incorporated by Reference

This ‘10-K’ Filing	Date	Other Filings

Filed on:	2/22/19	4, 8-K
For Period end:	12/31/18	11-K
	1/1/18
	1/1/17
	1/1/16
	1/1/15
	1/1/14
	12/19/08	8-K
		List all Filings

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Filing Submission 0000764622-19-000019 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)