UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 16, 2007
| |
|
|
|
|
| |
|
Exact Name of Registrant as Specified |
|
|
| |
|
in Charter; State of Incorporation; |
|
IRS Employer |
| Commission File Number |
|
Address and Telephone Number |
|
Identification Number |
1-8962
|
|
Pinnacle West Capital Corporation
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000
|
|
86-0512431 |
1-4473
|
|
Arizona Public Service Company
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000
|
|
86-0011170 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
This combined Form 8-K is separately filed by Pinnacle West Capital Corporation and Arizona Public
Service Company. Each registrant is filing on its own behalf all of the information contained in
this Form 8-K that relates to such registrant or, where required, its subsidiaries. Except as
stated in the preceding sentence, neither registrant is filing any information that does not relate
to such registrant, and therefore makes no representation as to any such information.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers; Compensatory Arrangements of Certain Officers.
Director Conditional Resignations
Pinnacle West Capital Corporation (the “Company”) announced that it will seek shareholder
approval at its 2007 Annual Meeting of Shareholders to declassify its Board of Directors and
provide for the annual election of directors. Currently, directors are elected to staggered,
three-year terms.
The Company’s 2007 Proxy Statement will include a proposal, unanimously recommended by the
Board, to amend the Company’s Articles of Incorporation to provide for the annual election of each
director. Passage of this amendment will require the approval of 66 2/3% of the total number of
outstanding shares of common stock. If the shareholders do not approve the amendment, one-third of the Board (the Company’s
“Class I” directors) will stand for election to a three-year term and the remaining directors will
continue in their existing terms.
In light of the proposed amendment, each of the Company’s “Class II” and “Class III” directors
submitted a resignation letter on January 17, 2007 conditioned solely upon, and effective without
further act immediately upon, the effectiveness of the amendment following shareholder approval of
the amendment at the 2007 Annual Meeting. The Company’s Class II directors consist of Edward N.
Basha, Jr., Michael L. Gallagher, Bruce J. Nordstrom, and William J. Post, and the Company’s Class
III directors consist of Jack E. Davis, Pamela Grant, Martha O. Hesse, and William S. Jamieson, Jr.
2007 Incentive Plans
On January 16, 2007, the Human Resources Committee (the “Committee”) of the Company’s Board of
Directors approved the portion of the 2007 Pinnacle West Employee Variable Incentive Plan (the
“Pinnacle West Incentive Plan”) that provides for an incentive award opportunity for the Company’s
Chairman of the Board and CEO, William J. Post. Mr. Post’s award opportunity is based on 2007
Company earnings, excluding the non-fuel impacts from the pending Arizona Corporation Commission
(“ACC”) general rate case. The Committee will evaluate impacts from prior period-related
adjustments on actual earnings. Once a specified Company earnings threshold is met, the achievement
of the level of earnings generally determines what award, if any, Mr. Post receives. However, the
amount of the award, if any, to Mr. Post is in the sole discretion of the Committee. Accordingly,
the Committee may consider factors other than 2007 Company earnings to measure Mr. Post’s
performance.
On January 17, 2007, the Company’s Board of Directors, acting on the recommendation of the
Committee, approved the 2007 APS Employee Variable Incentive Plan (the “APS Incentive Plan”). In
addition to Mr. Post, the following “named executive officers” from the Company’s proxy statement
relating to its May 17, 2006 annual meeting are eligible to participate in the APS Incentive Plan:
| |
• |
|
Jack E. Davis, President of the Company and Chief Executive Officer of APS; |
| |
| |
• |
|
Donald E. Brandt, Executive Vice President and Chief Financial Officer of the
Company and President and Chief Financial Officer of APS; and |
| |
| |
• |
|
Steven M. Wheeler, Executive Vice President, Customer Service and Regulation of APS. |
The award opportunity for Mr. Davis and Mr. Brandt under the APS Incentive Plan is based on
APS’ 2007 earnings. Mr. Wheeler’s award opportunity is based on APS’ 2007 earnings and the
achievement of specified business unit results. For this purpose, APS’ 2007 earnings exclude the
non-fuel impacts from the pending ACC general rate case. The Committee will evaluate impacts from
prior period-related adjustments on actual earnings. Once a specified APS earnings threshold is
met, the achievement of the level of earnings (and in the case of Mr. Wheeler, business unit
results) generally determines what award, if any, the APS Incentive Plan participant receives.
However, the amount of the award, if any, to each participant is in the sole discretion of the
Committee. Accordingly, the Committee may consider factors other than APS earnings and the
achievement of business unit results to measure performance.
Subject to the foregoing, award opportunities (expressed as a percentage of the officer’s base
salary) for the officers listed below will be based on the following performance measures (weighted
according to the indicated percentages):
| |
|
|
|
|
| Officer |
|
Performance Measure(s) |
|
Award Opportunity |
William J. Post
|
|
Company Earnings
|
|
Threshold (50%)
Midpoint (100%)
Maximum (150%) |
|
|
|
|
|
Donald E. Brandt
|
|
APS Earnings
|
|
Threshold (37.5%)
Midpoint (75%)
Maximum (150%) |
|
|
|
|
|
Jack E. Davis
|
|
APS Earnings
|
|
Threshold (37.5%)
Midpoint (75%)
Maximum (150%) |
|
|
|
|
|
Steven M. Wheeler
|
|
APS Earnings
|
|
APS Earnings: |
|
|
|
|
Threshold (0%)
Midpoint (25%)
Maximum (50%) |
|
|
|
|
|
|
|
Delivery Unit Business Results—
safety performance (up
to 10%); customer experience
survey (up to 9%); business
performance trends (up to 13%);
customer reliability (up to
12%); and environmental
performance (up to 6%)
|
|
Delivery Business
Unit
Results (up to 50%) |