PERFORMANCE CASH AWARD AGREEMENT

THIS AWARD AGREEMENT is made and entered into as of May 10, 2017, by and between Pinnacle West Capital Corporation (the “Company”), and Donald E. Brandt (“Employee”).

 

achievement of the S/D Goals by the Award Determination Date. The ROE condition, the 2017 Earnings Threshold, the 2018 Earnings Threshold, the Year 1 Milestones and the S/D Goals are collectively referred to below as the “Award Conditions.”

$2,000,000; provided, however, that if at the Award Determination Date, the HRC determines that the S/D Goals have been less than fully satisfied, then the Performance Cash Award may, in the HRC’s discretion, be adjusted to reflect such partial achievement of the S/D Goals.

the Employee shall receive a Performance Cash Award of $2,000,000 subject to a determination by the HRC that the ROE Condition has been met. Between March 1, 2018 and the Award Payment Date, if the Employee’s employment as Chief Executive Officer of the Company is terminated by the Board without Cause, then the Employee shall receive a Performance Cash Award of $4,000,000 subject to a determination by the HRC that the ROE Condition has been met.

commencement of the payment of any such payments or benefits hereunder to the date that is six months and one day following the Employee’s Termination of Employment with the Company (or the earliest date as is permitted under Section 409A of the Code). If a payment is delayed as a result of Employee being a Specified Employee, such payment owed shall earn interest at the same rate as the market interest rate determined in accordance with Item 402(c)(2)(viii) of Regulation S-K under the United States Securities Act of 1933 for the Deferred Compensation Plan of 2005 for Employees of Pinnacle West Capital Corporation and Affiliates from the time the payment would have been made had the Employee not been a Specified Employee until such payment is made in accordance with this Section 6(d).

Payment of the Award shall be accelerated in accordance with Treas. Reg. § 1.409A‑3(j)(4)(vi) to the limited extent necessary to provide Employee with the funds necessary to pay employment taxes that may become due prior to the payment dates described in Section 6 as well as the related income tax withholding amounts. The total payments under this acceleration provision, however, may not exceed the aggregate of the employment taxes and the income tax withholding related to the employment taxes.

law; provided, however, that in the event disclosure is required by applicable law, Employee shall provide the Company with prompt notice of such requirement so that it may seek an appropriate protective order.

Employee agrees that all Confidential Information of the Company and its Affiliates (whether now or hereafter existing) conceived, discovered or made by him during employment exclusively belongs to the Company or its Affiliates (and not to Employee). Employee will promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership. For purposes of this Section 9, the term “Confidential Information” shall mean and include any information disclosed to Employee any time during Employee’s employment with the Company or its Affiliates or thereafter which is not generally known to the public, including, but not limited to, information concerning the Company’s or its Affiliates’ assets and valuations, business plans, methods of operation, management, information systems, procedures, processes, practices, policies, plans, programs, personnel and/or reports or other information prepared by appraisers, consultants, advisors, bankers or attorneys.

investigatory or enforcement agencies, such as the Nuclear Regulatory Commission, Department of Labor, Equal Employment Opportunity Commission (or its state equivalent), National Labor Relations Board, the Occupational Safety and Health Administration (or its state equivalent) or the Securities and Exchange Commission. This Agreement also does not limit Employee’s ability to communicate with any government agency regarding matters within the agency’s jurisdiction or otherwise participate in any investigation or proceedings that may be conducted by such agency, including providing documents or other information without notice to the Company. Nothing in this Agreement shall prevent Employee from the disclosure of Confidential Information or trade secrets that: (i) is made: (a) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is permitted to be made, and is made, under seal. In the event that Employee files a lawsuit alleging retaliation by Company for reporting a suspected violation of law, Employee may disclose Confidential Information or trade secrets related to the suspected violation of law or alleged retaliation to Employee’s attorney and use the Confidential Information or trade secrets in the court proceeding if Employee or Employee’s attorney: (i) files any document containing Confidential Information or trade secrets, under seal if permitted; and (ii) does not disclose the Confidential Information or trade secrets, except pursuant to or in accordance with a court order. The Company provides this notice in compliance with federal law, including the Defend Trade Secrets Act of 2016.

IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed, as of the Date of Grant, by an authorized representative of the Company and this Award Agreement has been executed by Employee.