EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated the 24th day of
November, 2004, is by and between IDACORP, Inc., an Idaho corporation with its
principal place of business at 0000 Xxxx Xxxxx Xxxxxx, Xxxxx, Xxxxx (the
"Company") and XXXX X. XxXXXXXX, an individual residing in Boise, Idaho (the
"Executive").
WITNESSETH
WHEREAS, the Company desires to retain the services of Executive as
the Vice President of Human Resources, and Executive desires to perform such
services for the Company on the terms and conditions set forth herein;
WHEREAS, Executive represents and Company acknowledges that Executive
is fully qualified, without the benefit of any further training or experience,
to perform the responsibilities and duties, with commensurate authorities, of
the position of Vice President of Human Resources of the Company; and
WHEREAS, Executive agrees to devote her full time and business effort,
attention and energies to the diligent performance of her duties hereunder;
NOW, THEREFORE, Company and Executive, intending to be legally bound,
covenant and agree as follows:
1. TERMS OF EMPLOYMENT
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(a) Subject to satisfactory completion of pre-employment drug testing, the
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve the Company, on the terms and conditions set forth herein.
(b) The employment of the Executive by the Company shall be for a three (3)
year term for the period commencing on December 6, 2004 ("Date of Hire") and
continuing through
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December 6, 2007 (the "Term") unless sooner terminated as provided in Section 4
of this Agreement. Following the completion of the Term, this Agreement shall
expire and Executive shall thereafter have the status of an "at will" employee
subject to termination of her employment by the Company at any time, with or
without cause and with or without prior notice of such termination. As an "at
will" employee following expiration of this Agreement, Executive shall have the
right to terminate her employment with the Company at any time, with or without
cause and with or without prior notice to the Company regarding such termination
of employment by Executive.
(c) The duties of Executive shall be as determined by the Board of
Directors, by executive management, including the President and Chief Executive
Officer and the Senior Vice President - Administration of the Company and in
accordance with this Agreement. Without limiting the generality of the
foregoing, Executive shall report to and advise the Senior Vice President -
Administration regarding the human resources matters (federal, state and local)
of the Company. Executive agrees to devote her full time business efforts,
attention and energies to the diligent performance of her duties hereunder and
will not, during the term hereof, accept employment from any other person, firm,
corporation, governmental agency or other entity, provided, however, Executive
may devote reasonable amounts of time to activities of a public service, civic,
or not-for-profit nature. The Executive shall perform and discharge, faithfully,
diligently, and to the best of her ability her duties and responsibilities as
Vice President of Human Resources for the Company. The Executive shall adhere to
all policies and working rules of the Company and applicable policies of the
Company's Affiliates.
(d) Executive acknowledges and agrees that Executive owes a fiduciary duty
of loyalty, fidelity and allegiance to and shall act at all times in the best
interest of the Company and shall do no act which would injure the Company's
business, its interests, or its reputation. It
EMPLOYMENT AGREEMENT - 2
is agreed that any direct or indirect interest in, connection with or benefit
from any outside activities, particularly commercial or legislative activities,
which interest might in any way adversely affect the Company, or any of its
Affiliates, involves a possible conflict of interest. In keeping with
Executive's fiduciary duties to the Company, Executive agrees that Executive
shall not knowingly become involved in a conflict of interest with the Company,
or its Affiliates, and upon discovery of any such conflict, shall not allow such
a conflict to continue. Moreover, Executive agrees that Executive shall disclose
to the Company's General Counsel any facts which might involve such a conflict
of interest. The Company and Executive recognize that it is impossible to
provide an exhaustive list of actions or interests which constitute a "conflict
of interest", including the definition set forth in the Company's Code of
Business Conduct and Ethics. Moreover, the Company and Executive recognize there
are many borderline situations. In some instances, full disclosure of facts by
Executive to the Company's General Counsel may be all that is necessary to
enable the Company or its Affiliates to protect their interests. In others, if
no improper motivation appears to exist and the interests of the Company, or its
Affiliates have not suffered, prompt elimination of the outside interest will
suffice. In still others, it may be necessary for the Company to terminate the
employment relationship with Executive. The Company and Executive agree that the
Company's determination as to whether a conflict of interest exists shall be
conclusive. The Company reserves the right to take such action as, in its
judgment, it deems necessary to end the conflict of interest.
2. COMPENSATION, EXPENSES AND OTHER PAYMENTS
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Company shall pay, or provide, and Executive shall accept as full
consideration for her services to be rendered hereunder, and as a reimbursement
or provision for expenses incurred by her, the following:
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(a) Base Salary
An annual salary of $150,000.00, payable in twenty-six (26) equal
payments during each year of this Agreement, except during the year 2004 when
the Base Salary shall be prorated, provided, however, that effective January 1
of each year beginning in 2006, Executive's annual compensation may be increased
in accordance with the provisions for salary increases set forth in subsection
b. below. Executive's minimum total compensation shall be the earned portion of
Executive's annual salary at the rate of compensation received by Executive at
the time of Executive's termination.
(b) Annual Adjustments - Base Salary
Annual performance reviews will determine annual salary increases to
which Executive may be entitled effective January 1, 2006, based upon Company's
then current Executive Compensation programs as approved by the Compensation
Committee of the Board of Directors.
(c) Incentive Compensation - Annual
During the term of this Agreement, unless sooner terminated in
accordance with this Agreement, Executive shall be entitled to participate in
the Company's Executive Annual Incentive Plan in accordance with the terms
thereof. Executive shall participate in the 2004 Executive Annual Incentive
Plan. The Target Incentive percentage is 30 percent of Executive's Base Salary
with a potential maximum of 60 percent. Because Executive will not have worked
for the entire calendar year 2004, Executive's award determination under the
2004 Executive Annual Incentive Plan will be made on a pro-rata basis.
(d) Incentive Compensation - Long Term
Effective January 1, 2005 and during the remaining term of this
Agreement, unless sooner terminated in accordance with this Agreement, Executive
shall be entitled to
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participate in the Company's Long Term Incentive Compensation Plan in accordance
with the terms thereof. The Plan, which is subject to change by the Board of
Directors, currently includes Restricted Stock, Performance Shares and Stock
Options. Executive's participation in the Plan shall be at a level determined
appropriate by the Compensation Committee of the Board of Directors.
(e) Expenses
Company agrees to reimburse Executive for ordinary and necessary
expenses incurred by her in performing services for Company pursuant to the
provisions of this Agreement and in accordance with established Company
policies.
3. OTHER BENEFIT MATTERS
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(a) Flexible Time Off
Flexible Time Off (FTO) hours are accrued each bi-weekly pay period.
These hours provide compensated time off for vacation, personal illness, illness
of a family member or other personal business. The accrual rate is based on
length of service. Executive shall, beginning on the Date of Hire, accrue FTO at
the rate of 4.62 hours per bi-weekly pay period (120 hours per year). In
addition, beginning on the Date of Hire and on each of the first four
anniversaries of the Date of Hire thereafter, Executive shall be front loaded
one additional week of FTO. The combined front loaded and accrued FTO shall
equal four weeks annually (160 hours per year).
(b) Retirement Benefits
Annual retirement benefits for officers are payable under the
Company Retirement Plan (a qualified defined benefit pension plan for all
regular employees) and under the Idaho Power Company Security Plan for Senior
Management Employees ("Security Plan") (a non-qualified defined benefit plan for
senior management employees). The principal element in
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the retirement benefits for Company officers is the Security Plan. Eligibility
for participation in the Security Plan is limited to key employees that are
designated by the Company. The Company shall designate Executive as a
participant in the Security Plan upon the Date of Hire. Under the Security Plan,
the participation percentage equals six percent of Executive's Final Average Pay
for each year of the first ten years of Executive's employment with the Company
and one percent for each year of employment thereafter with a maximum retirement
percentage of 75 percent.
(c) Nothing contained herein shall affect the Company's ability to alter,
amend, modify, add to, delete or terminate any of the Company's employee benefit
plans, policies or programs; provided, however, that the Company may take no
such action which would have the effect of reducing or eliminating any benefit,
right or feature which the Executive shall have as of the time of such action
unless the Company's action applies equally to all Company officers
participating in such plan, policy or program.
4. TERMINATION OF EMPLOYMENT
-------------------------
Unless terminated in accordance with the following provisions of this
Section 4, the Company shall continue to employ Executive and Executive shall
continue to work for the Company, during the Term of this Agreement.
(a) Death or Disability
Executive's employment shall terminate automatically upon Executive's
death during the Term of this Agreement. The Company shall be entitled to
terminate Executive's employment because of Executive's Disability during the
Term of this Agreement as "Disability" is defined in the Company's Long-Term
Disability Plan as in effect immediately prior to the Date of Termination
("Disability").
EMPLOYMENT AGREEMENT - 6
(b) By the Company
(i) The Company may terminate Executive's employment during the Term
of this Agreement for Cause or without Cause.
(ii) Cause shall mean (A) a material default or other material breach
by Executive of her obligations under this Agreement, (B) failure by Executive
diligently and competently to perform Executive's duties under this Agreement,
or as prescribed by the Company, (C) misconduct, dishonesty, insubordination,
(D) any act by Executive detrimental to the good will of the Company or damaging
to the Company's relationships with its customers, suppliers or employees, (E)
Executive's final conviction of a felony or of a misdemeanor involving moral
turpitude, or (F) Executive's involvement in a conflict of interest as
referenced in Subsection 1(d) for which the Company makes a determination to
terminate Executive's employment.
(c) By Executive
(i) Executive may terminate employment upon thirty (30) days prior
written notice to the Company.
(d) Termination Procedures.
-----------------------
(i) Notice of Termination. Any purported termination of Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Subsection 11(a) hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
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Termination for Cause. A Notice of Termination for Cause shall specify
in reasonable detail the specific provision(s) in this Agreement and the
event(s) and/or performance matters relied upon as the basis for such
termination.
(ii) Date of Termination. The "Date of Termination," with respect to
any purported termination of Executive's employment during the Term of this
Agreement, shall mean (A) if Executive's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
Executive shall not have returned to the full-time performance of Executive's
duties during such thirty (30) day period), and (B) if Executive's employment is
terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company for other than Cause, shall
not be less than thirty (30) days and, in the case of a termination by Executive
shall not be less than thirty (30) days, from the date such Notice of
Termination is given).
(iii) No Waiver. The failure to set forth any fact or circumstance in
a Notice of Termination shall not constitute a waiver of the right to assert,
and shall not preclude the party giving notice from asserting, such fact or
circumstance in an attempt to enforce any right under or provision of this
Agreement.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION
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(a) By the Company other than for Cause, Death or Disability.
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If, during the Term of this Agreement, the Company terminates
Executive's employment other than for Cause, death, or Disability,
(i) the Company shall continue to pay or provide to Executive
commencing with the month in which the Date of Termination shall have occurred
and ending on the last day of the Term of the Agreement (the "Severance Period")
(paid in the same form and at the same time as would have been paid had
Executive's employment not been terminated), (A) Executive's
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Annual Base Salary (at the same level that was being paid to Executive on the
Date of Termination) and (B) Annual Incentive Compensation equal to the highest
earned by Executive during any year of employment with the Company preceding the
Date of Termination.
(ii) the Company shall pay to Executive any accrued but unpaid FTO.
The Company shall have no further obligation under this Agreement except as
specified in Section 6 below.
(b) Death or Disability.
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If Executive's employment is terminated by reason of Executive's death
or Disability during the Term of this Agreement, the Company shall pay to
Executive or, in the case of Executive's death, to Executive's designated
beneficiaries (or, if there is no such beneficiary, to Executive's estate or
legal representative) as soon as permitted under the terms of the respective
Company plans or programs the following amounts:
(i) any portion of Executive's Annual Base Salary earned through the
Date of Termination that has not yet been paid;
(ii) an amount representing the Annual Incentive Compensation for the
year that would otherwise vest and/or become payable with respect to the year in
which the Date of Termination occurs, computed by assuming that the amount of
all such Incentive Compensation would be equal to the amount of such Incentive
Compensation that Executive would have been eligible to earn for the year, and
multiplying that amount by a fraction, the numerator of which is the number of
days in such period through the Date of Termination, and the denominator of
which is the total number of days in the year; and
(iii) any accrued but unpaid FTO.
In addition to the payments described above, any Restricted Shares,
Performance Shares or Stock Options issued under the Company's Long Term
Incentive Plan will vest, if at
EMPLOYMENT AGREEMENT - 9
all, in accordance with the provisions of the respective plans and the
corresponding grant agreements.
The Company shall have no further obligations under this Agreement,
except as specified in Section 6 below.
(c) By the Company for Cause or by Executive. If Executive's employment is
terminated by the Company for Cause or if Executive voluntarily terminates
employment during the Term of this Agreement, the Company shall pay Executive,
within thirty (30) days after the Date of Termination, the Annual Base Salary
through the Date of Termination to the extent not yet paid, and the Company
shall have no further obligations under this Agreement, except as specified in
Section 6 below.
(d) Notwithstanding any provision herein to the contrary, the Company shall
not have any obligation to pay any amount or provide any benefit under this
Section 5 unless and until the Executive executes a release (if able to do so)
of the Company, its affiliates and related parties, in such form as the Company
may reasonably request, of all claims against the Company, its Affiliates and
related parties relating to the Executive's employment and termination thereof.
(e) Company and Executive have entered into a Change In Control Agreement
which is attached to this Agreement as Exhibit A. To the extent there is a
termination of employment that entitles the Executive to severance benefits
under the Change In Control Agreement, the provisions of said Change In Control
Agreement shall supersede the provisions of this Agreement and the Executive
shall receive severance benefits pursuant to the terms of the Change In Control
Agreement and the Company shall have no obligations under the terms of this
Agreement.
EMPLOYMENT AGREEMENT - 10
6. NON-EXCLUSIVITY OF RIGHTS
-------------------------
Except as provided in Sections 1 and 3 of this Agreement, nothing in this
Agreement shall prevent or limit Executive's continuing or future participation
in any plan, program, policy or practice provided by the Company or any of its
Affiliates for which Executive may qualify, nor shall anything in this Agreement
limit or otherwise affect such rights as Executive may have under any contract
or agreement with the Company or any of its Affiliates. Vested benefits and
other amounts that Executive is otherwise entitled to receive under any other
plan, policy, practice, or program of, or any contract or agreement with, the
Company or any of its Affiliates on or after the Date of Termination shall be
payable in accordance with the terms of each such plan, policy, practice,
program, contract, or agreement, as the case may be, except as explicitly
modified by this Agreement.
7. NON-COMPETITION PROVISION AND CONFIDENTIAL INFORMATION
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(a) Without prior written consent of the Company, during the period of
Executive's employment with the Company and for 12 months thereafter, Executive
shall not, as a shareholder, officer, director, partner, consultant, or
otherwise, engage directly or indirectly in any business or enterprise which is
"in competition" with the Company or its successors or assigns or Affiliates or
undertake any action which would be injurious to the Company or its Affiliates
or assist the Company's or its Affiliates' competitors; provided, however, that
Executive's ownership of less than five percent of the issued and outstanding
voting securities of a publicly traded company shall not be deemed to constitute
such competition. A business or enterprise is deemed to be "in competition" if
it is engaged in any material business in which the Company or any of its
Affiliates engage in any state of the United States during the "applicable
time." "Applicable time" means (i) the period of Executive's employment
hereunder; and (ii) for the period of 12 months following the Date of
Termination.
EMPLOYMENT AGREEMENT - 11
(b) Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its Affiliates and their respective businesses that
Executive obtains during Executive's employment by the Company or any of its
Affiliates and that is not public knowledge (other than as a result of
Executive's violation of this Section 7) ("Confidential Information"). Executive
shall not communicate, divulge, or disseminate Confidential Information at any
time during or after Executive's employment with the Company, except with the
prior written consent of the Company or as otherwise required by law or legal
process.
(c) (i) Executive acknowledges that if Executive shall breach or threaten
to breach any provision of this Section 7, the damages to the Company and its
Affiliates may be substantial, although difficult to ascertain, and money
damages will not afford the Company and its Affiliates an adequate remedy.
Therefore, if the provisions of this Section 7 are violated, in whole or in
part, the Company and its Affiliates shall be entitled to specific performance
and injunctive relief, without prejudice to other remedies the Company and/or
its Affiliates may have at law or in equity.
(ii) If any term or provision of this Section 7, or the application
thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Section 7, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Section 7 shall be valid and enforceable to the fullest extent
permitted by law. Moreover, if a court of competent jurisdiction deems any
provision hereof to be too broad in time, scope, or area, it is expressly agreed
that such provision shall be reformed only to the extent necessary to render it
enforceable.
EMPLOYMENT AGREEMENT - 12
8. SUCCESSORS; BINDING AGREEMENT
-----------------------------
The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform. As used in this Agreement, the "Company"
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
9. ARBITRATION
------------
Any dispute or controversy between the parties relating to this
Agreement (except any dispute relating to Section 7 hereof) or relating to or
arising out of Executive's employment with the Company, shall be settled by
binding arbitration in the City of Boise, State of Idaho, pursuant to the
governing rules of the American Arbitration Association and shall be subject to
the provisions of the Uniform Arbitration Act, Idaho Code, Sections 7-901, et.
seq. Judgment upon the award may be entered in any court of competent
jurisdiction. Notwithstanding anything herein to the contrary, if any dispute
arises between the parties under Section 7 hereof, the Company shall not be
required to arbitrate such dispute or claim but shall have the right to
institute judicial proceedings in any court of competent jurisdiction with
respect to such dispute or claim. If such judicial proceedings are instituted,
the parties agree that such proceedings shall not be stayed or delayed pending
the outcome of any arbitration proceedings hereunder.
10. MISCELLANEOUS
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(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and delivered personally
or sent by certified mail, postage prepaid, addressed as follows:
EMPLOYMENT AGREEMENT - 13
If to the Company: Xxxxxx X. Xxxxxxxx
Senior Vice President - Administration
IDACORP, Inc.
P. O. Xxx 00 Xxxxx, Xxxxx
00000-0000
If to Executive: Xxxx X. XxXxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxx, Xxxxx 00000-0000
or to such other address as either party may designate by written notice to the
other, and shall be deemed to have been given upon receipt.
(b) Other than the Change In Control Agreement attached as Exhibit A, this
Agreement constitutes the entire agreement between the parties hereto with
respect to Executive's employment by the Company, and supersedes and is in full
substitution for any and all prior understandings or agreements with respect to
Executive's employment with the Company.
(c) This Agreement may be amended only by an instrument in writing signed
by the parties hereto, and any provision hereof may be waived only by an
instrument in writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either party hereto at any
time to require the performance by the other party hereto of any provision
hereof shall in no way affect the full right to require such performance at any
time thereafter, nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any succeeding breach of
such provision or a waiver of the provision itself or a waiver of any other
provision of this Agreement.
(d) This Agreement is binding on and is for the benefit of the parties
hereto and their respective successors, heirs, executors, administrators and
other legal representatives.
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Neither this Agreement nor any right or obligation hereunder may be assigned by
the Company (except to an Affiliate) or by Executive.
(e) If any provision of this Agreement, or portion thereof, is so broad, in
scope or duration, so as to be unenforceable, such provision or portion thereof
shall be interpreted to be only so broad as is enforceable.
(f) This Agreement shall be governed by and construed in accordance with
the laws of the State of Idaho.
(g) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
(h) Executive represents and warrants that Executive is not party to any
agreement which would prohibit Executive from entering into this Agreement or
performing fully Executive's obligations hereunder.
(i) The obligations of Executive set forth in Section 7 represent
independent covenants by which Executive is and will remain bound
notwithstanding any breach by the Company, and shall survive the termination of
this Agreement.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the date first written above.
IDACORP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Senior Vice President - Administration
EXECUTIVE
/s/ Xxxx X. XxXxxxxx
EMPLOYMENT AGREEMENT - 15
