<SEC-DOCUMENT>0000764622-18-000082.txt : 20181221
<SEC-HEADER>0000764622-18-000082.hdr.sgml : 20181221
<ACCEPTANCE-DATETIME>20181221164243
ACCESSION NUMBER:		0000764622-18-000082
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20181218
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
FILED AS OF DATE:		20181221
DATE AS OF CHANGE:		20181221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PINNACLE WEST CAPITAL CORP
		CENTRAL INDEX KEY:			0000764622
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				860512431
		STATE OF INCORPORATION:			AZ
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08962
		FILM NUMBER:		181250110

	BUSINESS ADDRESS:	
		STREET 1:		400 NORTH FIFTH STREET
		STREET 2:		MS8695
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004
		BUSINESS PHONE:		602 250 1000

	MAIL ADDRESS:	
		STREET 1:		400 NORTH FIFTH STREET
		STREET 2:		MS8695
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AZP GROUP INC
		DATE OF NAME CHANGE:	19870506

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARIZONA PUBLIC SERVICE CO
		CENTRAL INDEX KEY:			0000007286
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC & OTHER SERVICES COMBINED [4931]
		IRS NUMBER:				860011170
		STATE OF INCORPORATION:			AZ
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04473
		FILM NUMBER:		181250111

	BUSINESS ADDRESS:	
		STREET 1:		400 N FIFTH ST
		STREET 2:		P O BOX 53999
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85004
		BUSINESS PHONE:		6022501000
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a8-kfor2019incentiveplanan.htm
<DESCRIPTION>8-K
<TEXT>
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<div><a name="sD0A8BDEF59355697BB99F57DB7EE9E13"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">UNITED STATES</font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Washington, D.C. 20549</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:15.0390625%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td style="width:100%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-bottom:1px solid #00000a;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">FORM 8-K</font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">CURRENT REPORT</font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">Pursuant to Section 13 or 15(d) of the</font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">Securities Exchange Act of 1934</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Date of report (Date of earliest event reported):&#160;&#160;&#160;&#160;December 18, 2018</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;font-size:11.5pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:96.09375%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td style="width:28%;"></td><td style="width:44%;"></td><td style="width:28%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-bottom:1px solid #000000;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Commission File Number</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-bottom:1px solid #000000;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Exact Name of Registrant as Specified in Charter; State of Incorporation;</font></div><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Address and Telephone Number</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-bottom:1px solid #000000;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">IRS Employer</font></div><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Identification Number</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">1-8962</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Pinnacle West Capital Corporation</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">(an Arizona corporation)</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">400 North Fifth Street, P.O. Box 53999</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Phoenix, AZ 85072-3999</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">(602) 250-1000</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">86-0512431</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">1-4473</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Arizona Public Service Company</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">(an Arizona corporation)</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">400 North Fifth Street, P.O. Box 53999</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Phoenix, AZ 85072-3999</font></div><div style="font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">(602) 250-1000</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">86-0011170</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;"></font><font style="font-family:inherit;font-size:11.5pt;">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:</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"></font><font style="font-family:Wingdings;font-size:11.5pt;">&#168; </font><font style="font-family:inherit;font-size:11.5pt;">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"></font><font style="font-family:Wingdings;font-size:11.5pt;">&#168; </font><font style="font-family:inherit;font-size:11.5pt;">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"></font><font style="font-family:Wingdings;font-size:11.5pt;">&#168; </font><font style="font-family:inherit;font-size:11.5pt;">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"></font><font style="font-family:Wingdings;font-size:11.5pt;">&#168; </font><font style="font-family:inherit;font-size:11.5pt;">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (&#167;230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (&#167;240.12b-2 of this chapter). Emerging growth company&#160;</font><font style="font-family:Wingdings;font-size:11.5pt;">&#168;</font></div><div style="line-height:120%;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&#160;</font><font style="font-family:Wingdings;font-size:11.5pt;">&#168;</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">This combined Form 8-K is separately filed or furnished by Pinnacle West Capital Corporation and Arizona Public Service Company.  Each registrant is filing or furnishing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries.  Except as stated in the preceding sentence, neither registrant is filing or furnishing any information that does not relate to such registrant, and therefore makes no representation as to any such information.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><hr style="page-break-after:always"><div><a name="s0E1CF55953AF5CA3B44917CAF7FD5C47"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">Item 1.01.&#160; Entry into a Material Definitive Agreement.&#160;</font></div><div style="line-height:120%;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">On December 21, 2018, Pinnacle West Capital Corporation (&#8220;Pinnacle West&#8221; or the &#8220;Company&#8221;) entered into a $150 million unsecured term loan with KeyBank National Association, as Agent, PNC Bank, National Association and Wells Fargo Bank, National Association, as Co-Syndication Agents, and such institutions comprising the lenders party thereto (the &#8220;Term Loan&#8221;).&#160; The obligations under the Term Loan will mature and become due and payable on December 21, 2020.&#160; Pinnacle West will use the proceeds of the Term Loan for general corporate purposes.&#160;Borrowings under the Term Loan will bear interest at 60 basis points above the London interbank offered rate.&#160;</font></div><div style="line-height:120%;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">The Term Loan includes customary covenants, including requirements that Pinnacle West maintain ownership of a specified percentage of the outstanding capital stock of Arizona Public Service Company ("APS"), maintain a consolidated debt-to-capitalization ratio not to exceed a prescribed maximum level and comply with certain lien restrictions.&#160; The Term Loan also includes customary events of default, including a cross default provision and a change of control provision.&#160; If an event of default occurs, lenders holding a specified percentage of the outstanding loans, or the Agent with such lenders&#8217; consent, may declare the obligations outstanding under the Term Loan to be due and payable.&#160;Pinnacle West and its affiliates maintain normal banking and other relationships with the Agent/lenders in the Term Loan.</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;font-weight:bold;">Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</font></div><div style="line-height:120%;text-align:left;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">&#160;</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">On December&#160;18, 2018, the Human Resources Committee (the &#8220;Committee&#8221;) of the Pinnacle West Board of Directors (the &#8220;Board&#8221;) approved the Pinnacle West 2019 CEO Annual Incentive Award Plan (the &#8220;PNW Plan&#8221;), which provides an incentive award opportunity for Donald E. Brandt, the Chairman of the Board, President, and Chief Executive Officer of Pinnacle West and the Chairman of the Board and Chief Executive Officer of APS.&#160; On December&#160;19, 2018, the Board, acting on the recommendation of the Committee, approved the APS 2019 Annual Incentive Award Plan (the &#8220;APS Plan&#8221;), which includes an incentive award opportunity for James R. Hatfield, Executive Vice President and Chief Financial Officer of Pinnacle West and APS and the APS 2019 Annual Incentive Award Plan for Palo Verde Employees (the &#8220;Palo Verde Plan&#8221;), which includes an incentive award opportunity for Robert S. Bement, Executive Vice President and Chief Nuclear Officer of APS.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">No incentive payments will be awarded under the PNW Plan or the APS Plan unless Pinnacle West, with respect to Mr.&#160;Brandt, or APS, with respect to Mr.&#160;Hatfield, each achieves a specified threshold earnings level.&#160; The Committee will evaluate the impacts of unusual or nonrecurring adjustments to earnings in determining whether any earnings level has been met for purposes of the PNW Plan and may make adjustments to reflect such impacts.  Earnings impacts of actions of the Arizona Corporation Commission ("ACC") in the PNW Plan year are excluded.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">&#160; Mr. Brandt&#8217;s incentive award opportunity is based 62.5% on Pinnacle West&#8217;s 2019 earnings, and 37.5% on the achievement of performance goals established for all business units of APS. Mr.&#160;Brandt has an award opportunity of 50% of his base salary if the threshold earnings level is met. If Pinnacle West&#8217;s 2019 earnings exceed the threshold level, Mr. Brandt&#8217;s award opportunity increases proportionately by up to an additional 75% of his base salary. To the extent certain business unit performance goals are met, Mr. Brandt has a further award opportunity of up to 75% of base salary.  The business unit performance indicators for Mr.&#160;Brandt are in the functional areas of customer service, transmission and distribution, fossil generation, corporate resources and performance of the Palo Verde Generating Station.  In no event may Mr.&#160;Brandt&#8217;s award exceed 200% of his base salary.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">The award opportunities for Mr.&#160;Hatfield under the APS Plan are based on the achievement of specified 2019 APS earnings levels and specified business unit performance goals.&#160; Mr. Hatfield has a target award opportunity of up to 75% of his base salary.&#160; Mr.&#160;Hatfield may earn less or more than the target amount, up to a maximum award opportunity of 150% of base salary, depending on the achievement of the earnings and business unit performance goals separately or in combination, and before adjustment for individual performance.&#160; The business unit performance indicators that will be considered for Mr.&#160;Hatfield are derived from the APS critical areas of focus, as provided in its &#8220;Core&#8221; strategic framework, in the functional areas of&#160;employees, operational excellence, and shareholder value.&#160; The Committee may adjust targets under the APS Plan to reflect unanticipated events or unusual or nonrecurring adjustments to earnings that arise in the APS Plan year, including ACC rate-related impacts on earnings.</font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;"><br></font></div><div style="line-height:120%;text-indent:48px;font-size:11.5pt;"><font style="font-family:inherit;font-size:11.5pt;">The award opportunity for Mr.&#160;Bement under the Palo Verde Plan is based on the achievement of specified 2019 APS earnings levels and specified business unit performance goals. 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