Form of Change of Control Agreement between the Company and its Executive Directors

Whenever used in the Plan, the following terms shall have the meanings set forth below.

(or any successor program) as in effect for the fiscal year in which the Change of Control occurs.

For purposes of this provision, no act or failure to act, on the part of the Participant, shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company. The cessation of employment of the Participant shall not be deemed to be for Cause unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Participant and the Participant is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Participant is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

“Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (z) any acquisition by any corporation pursuant to a transaction which complies with clauses (x), (y) and (z) of subsection (iii) of this Section 1; or

respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (z) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

from the Participant; provided, however, that a change in title or reporting relationship alone shall not constitute Good Reason;

Good Reason shall exist only if (i) Participant provides notice to the Company of the existence of a condition described in (1) through (5) above within 90 days of the initial existence of the condition, (ii) upon the notice of which the Company shall be provided a period of 30 days during which it may remedy the condition, and (iii) if the Company does not timely remedy such condition, Participant terminates employment after the end of such remedial period and in all events no later than 90 days following the end of such remedial period.

 

 

During the Employment Period, and excluding any periods of vacation and sick leave to which the Participant is entitled, the Participant agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Participant, to use the Participant’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Participant to (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions and (c) manage personal investments, so long as, in the Company’s determination, such activities do not significantly interfere with the performance of the Participant’s responsibilities as an employee of the Company. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Participant prior to the Change of Control, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Change of Control shall not thereafter be deemed to interfere with the performance of the Participant’s responsibilities to the Company.

obligation to the Participant under this Plan. Annual Base Compensation shall not be reduced during the Employment Period after any such increase and the term Annual Base Compensation as utilized in this Plan shall refer to Annual Base Compensation as so increased.

premiums with respect to applicable Company plans that Participant pays during the 60-day period immediately following his or her termination of employment with the Company, such premiums shall be eligible for reimbursement following such sixtieth (60th) day and such 60-day period shall count against the maximum period of Company reimbursement obligation pursuant to Section A(3) above. Notwithstanding anything in this Section 1(B) to the contrary, if the Participant shall die following a termination described in Section A above but prior to the date he or she returns the Release and Non-Solicitation Agreement, the Participant shall not be required to execute the Release and Non-Solicitation Agreement in order for the Participant’s successors to receive the benefits described in Sections A(1)-(3) above.

In the event that the benefits provided for in this Plan or otherwise with respect to a Participant constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this Article VI be subject to the excise tax imposed by Section 4999 of the Code (the “Excise

Tax”), then such Participant’s compensation and benefits under Article V or otherwise that constitute such parachute payments shall be either:

whichever of the foregoing amounts, taking into account the applicable federal, state and local taxes and the Excise Tax, results in the receipt by the Participant on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company otherwise agrees in writing, all determinations required to be made under this Article, including the manner and amount of any reduction in the Participant’s benefits under Article IV or otherwise, and the assumptions to be utilized in arriving at such determinations, shall be made in writing in good faith by the accounting firm serving as the Company’s independent public accountants immediately prior to the event giving rise to such payment (the “Accountants”). If such of the Participant’s compensation and benefits are delivered to a lesser extent in accordance with clause (B), then the Participant’s aggregate compensation and benefits as constitute parachute payments shall be reduced in the following order until no portion of such remaining compensation and benefits is subject to the Excise Tax: (i) cash severance pay that is exempt from Section 409A of the Code, (ii) any other cash severance pay (reduced on a pro rata basis without otherwise changing the time or form of payments), (iii) reimbursement payments under Article IV.B.5., above, that are exempt from Section 409A of the Code, (iv) any other reimbursement payments under Article IV.B.5., above, (reduced on a pro rata basis without otherwise changing the time or form of payments), (v) any restricted stock units that are exempt from Section 409A of the Code, (vi) any other restricted stock units (reduced on a pro rata basis without otherwise changing the time or form of payments), (vii) any equity awards (other than restricted stock units and stock options) that are exempt from Section 409A of the Code, (viii) any other equity awards (other than restricted stock units and stock options) (reduced on a pro rata basis without otherwise changing the time or form of payments), (ix) stock options that are exempt from Section 409A, (x) any other stock options (reduced on a pro rata basis without otherwise changing the time or form of payments), (xi) any remaining compensation and benefits exempt from Section 409A of the Code, and (xii) any other remaining compensation and benefits (reduced on a pro rata basis without otherwise changing the time or form of payments). For purposes of making the calculations required by this Article VI, the Accountants may make reasonable assumptions and approximations concerning the application of Sections 280G and 4999 of the Code. The Company and the Participant shall furnish to the Accountants such information and documents as the Accountants may reasonably request to make a determination under this Article. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Article.

Benefits and any administrative expenses arising in connection with the Plan shall be paid as needed solely from the general assets of the Company. No contributions are required from any Participant. This Plan shall not be construed to require the Company to fund any of the benefits provided hereunder nor to establish a trust or other funding vehicle or mechanism for such purpose. Participants’ rights against the Company with respect to severance and other benefits provided under this Plan shall be those of general unsecured creditors. No Participant has an interest in his or her severance or other benefits under this Plan until the Participant actually receives a payment.

In the event any claim for benefits is denied, in whole or in part, the Company shall notify the claimant of such denial in writing and shall advise the claimant of his or her right to appeal the denial. Such written notice shall set forth the specific reasons for the denial and shall be given to the claimant within ninety (90) days after the Company receives his or her claim. However, if special circumstances require an extension of the period of time for processing a claim, the Company may extend the determination period for up to an additional ninety (90) days by notifying the claimant of the extension before expiration of the initial ninety (90) day determination period, the reason why the extension is necessary, and the date by which the Company expects to render the claim determination. If a claim is denied in whole or in part, the written notice shall set forth, in a manner calculated to be understood by the claimant, the specific reason(s) for the denial, reference to the specific provision(s) of the Plan upon which the determination was based, a description of any additional material or information necessary to perfect the claim and explanation of the need for such material or information, a description of the Plan’s review procedures and the time limits applicable to such procedures, and a reference stating the claimant’s right to bring a civil action under Section 502(a) of ERISA.

E Mission Avenue, Spokane, WA 99202.” A request for review shall set forth all of the grounds upon which it is based, all facts and support thereof and any other matters that the claimant deems pertinent. The claimant will have the opportunity to submit written comments, documents, records, and other information relating to the claim, irrespective of whether these were submitted or considered in the initial claim determination, and to obtain access to and copies of documents, records and other information relevant to the claim upon request and free of charge.

 

be withheld under Federal, state or local law, or the applicable laws of any non-U.S. taxing authority as interpreted by the Company.

Duration, Amendment and Termination. The Board may amend or terminate this Plan at any time, in its sole discretion. Any termination of the Plan, or amendment of the Plan which materially diminishes the value or protections of the Plan to participants will take effect twelve (12) months after the action of the Board to terminate or amend the Plan. Subject to the other provisions of this Article XII, prior to the occurrence of a Change of Control, the Board reserves the right to amend the Plan at any time, provided that no such amendment may be adverse to the Participant with respect to eligibility or amount of payments or benefits hereunder. Notwithstanding the preceding, commencing on the date of a Change of Control, no amendment or termination of the Plan shall reduce the payments or benefits payable to any Participant who terminates employment within twenty-four (24) months after the Change of Control (unless the affected Participant consents in writing to such amendment or termination). Any action of the Company in amending or terminating the Plan will be taken in a non-fiduciary capacity. A termination of this Plan pursuant to the preceding sentences shall be effective for all purposes, except that such termination shall not affect the payment or provision of compensation or benefits earned by a Participant prior to the termination of this Plan.

General. Notices and all other communications contemplated by this Plan shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered

or certified mail, return receipt requested and postage prepaid. In the case of the Participant, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its General Counsel.

to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and that is not otherwise exempt from Section 409A of the Code and the Participant is determined to be a “specified employee” within the meaning of Section 409A of the Code, then such payment or benefit shall not be paid until the first regular Company payroll date to occur following the six-month anniversary of such separation from service or, if earlier, on the Participant’s death (such payroll date, the “Specified Employee Date”). All payments that would otherwise have been paid to the Participant before the Specified Employee Date shall be paid to the Participant in a lump sum, without interest, on the Specified Employee Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.

assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this subsection shall be void.

Avista Corporation

1411 E Mission Avenue

Spokane, WA 99202

509 ###-###-####

General Counsel

Avista Corporation

1411 E Mission Avenue

Spokane, WA 99202

AVISTA CORPORATION EXECUTIVE CHANGE OF CONTROL PLAN

NOTICE OF PARTICIPATION

To:

Date:

The Board has designated you as a Participant in the Avista Corporation Executive Change of Control Plan, as amended from time to time (the “Plan”), subject to your timely execution of this Notice of Participation and its return to the Company. A copy of the Plan is attached hereto.

The terms and conditions of your participation in the Plan are as set forth in the Plan and in this Notice of Participation. As a condition to participating in the Plan you agree to maintain in complete confidence your participation in the Plan as well as the contents and terms of the Plan and of this Notice of Participation. As a condition to receiving severance benefits under Article V, Section A(1)-(3) of the Plan, you agree to, following termination of your employment with the Company, timely sign, return to the Company and not revoke a general release and waiver agreement, substantially in the form attached to the Plan as Exhibit B. You will immediately cease to be a Participant in the Plan if you terminate employment under circumstances that do not entitle you to benefits under the Plan. Also, the Board may, in its sole discretion, choose to end your participation in this Plan. If that happens, your participation will end on the earlier of (i) the first anniversary of the Company giving you written notice that the Board has decided to end your participation or (ii) the date your employment with the Company terminates.

If you enter into a separate agreement with the Company which provides benefits relating to a Change of Control and that agreement specifically states that such provisions shall supersede the provisions in the Plan, then you shall not be considered a Participant in the Plan so long as those alternative contractual benefits are in effect.

By signature below, you acknowledge that, effective immediately prior to your commencement of participation in the Plan, (i) the Plan and this Notice of Participation supersede any and all predecessor plans and agreements with respect to a Change of Control or similar event or transaction with respect to the Company and any notices or similar participation documents provided under such predecessor plans and agreements in which you participated or to which you were a party (collectively, the “Prior Agreements”) and (ii) the Prior Agreements no longer have any force or effect. You also acknowledge that the Company makes no commitment or guarantee as to the federal, state, local or other tax consequences for you with respect to the Plan superseding the Prior Agreements and assumes no liability or responsibility whatsoever with respect thereto.

[You acknowledge that among the Prior Agreements that will be superseded, effective December 31, 2019, by the Plan and this Notice of Participation is that certain Change of Control Agreement by and between you and the Company, dated [DATE]¹, as the same may have been amended (“Old

¹Include applicable execution date of Old CIC Agreement for the officer in question.

CIC Agreement”). In exchange for your timely execution and return to the Company of this Notice

of Participation, the Company will pay to you a lump sum payment in cash in the amount of seventy-five thousand dollars ($75,000) (the “Cancellation Consideration”), payable no later than March 15, 2020, and subject to applicable tax and other withholdings. You acknowledge that if you participate in the Plan, the Old CIC Agreement, along with all other Prior Agreements, will automatically terminate and cease to be of force and effect on December 31, 2019. If you do not timely execute and return the Notice of Participation to the Company, the Old CIC Agreement will remain in effect and you will not be entitled to Cancellation Consideration or to participate in the Plan.]²  

If you agree to participate in the Plan on these terms and conditions, please acknowledge your acceptance by signing below. Please return the signed copy of this Notice of Participation no later than [DATE]³ to:

Avista Corporation

Attn: General Counsel

1411 E Mission Avenue

Spokane, WA 99202

Your failure to timely remit this signed Notice of Participation will result in you not being eligible to participate in the Plan. Please retain a copy of this Notice of Participation, along with the Plan, for your records.

² To be used only for officers with existing CIC agreements that are to be terminated prior to participation in the Plan.

³ Since officers holding current CIC agreements are to be given 30 days to consider and this notice will also serve to terminate those agreements, the 10-day return period was too short.

This General Release and Waiver Agreement (“Agreement”) is made by and between Avista Corporation (the “Company”) and (“Participant”).

WHEREAS, Participant was employed by the Company;

WHEREAS, Participant is a participant in the Company’s Executive Change of Control Plan effective January 1, 2020, as amended from time to time (the “Plan”); and

WHEREAS, Participant warrants and represents that Participant has not assigned, transferred, or subrogated any portion of any claim that Participant could assert against the Released Parties (defined below) and Participant has full authority to enter into this Agreement.

NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Participant (collectively referred to as the “Parties”) hereby agree as follows:

may possess arising from any omissions, acts or facts that have occurred up until and including the time that Participant signs this Agreement including, without limitation,

Participant agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. The released claims do not include any claims that Participant cannot lawfully release.

⁴ Applicable time period under ADEA, as amended by OWBPA, to be utilized per individual circumstances.

(c) Participant has seven (7) days following the execution of this Agreement by Participant to revoke the Agreement; and (d) this Agreement shall not be effective until the revocation period has expired. Employee must return the signed Agreement to Name at E-mail] or [physical address], by [date that is at least 22/46 days from receipt of Agreement by Participant]. Any revocation should be in writing and delivered to the General Counsel at Avista Corporation, 1411 E Mission Avenue, Spokane, WA 99202, by close of business on the seventh day from the date that Participant signs this Agreement.

Participant from testifying at a hearing, deposition, or in court in response to a lawful subpoena. This Agreement does not limit Participant’s ability to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agency, including providing documents or other information, without notice to the Company. This Agreement does not limit Participant’s right to receive an award from a government agency for information provided to any government agency. Notwithstanding the foregoing, Participant agrees that Participant has waived—where such rights can be lawfully waived—any right to recover monetary damages or other personal relief from the Released Parties in any action filed by Participant or by anyone else on Participant’s behalf.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

AVISTA CORPORATION

PARTICIPANT