UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
----------
IDACORP, Inc.
(Name of Registrant as Specified in its Charter)
----------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO]IDACORP(R)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 18, 2006, AT BOISE, IDAHO
April 10, 2006
TO THE SHAREHOLDERS OF IDACORP, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of IDACORP,
Inc. ("IDACORP") will be held on May 18, 2006 at 10:00 a.m. local time at the
Idaho Power Company Corporate Headquarters Building, 1221 West Idaho Street,
Boise, Idaho, for the following purposes:
1. to elect three Directors of IDACORP for a three year term;
2. to ratify the selection of Deloitte & Touche LLP as independent
registered public accounting firm for IDACORP for the fiscal year
ending December 31, 2006; and
3. to transact such other business that may properly come before the
meeting and any adjournment or adjournments thereof.
Common shareholders of record of IDACORP at the close of business on March
30, 2006, are entitled to vote at the meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. Shareholders interested in attending in person must make a reservation
by calling (800) 635-5406. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE VOTE YOUR
PROXY PROMPTLY. It is important that your shares be represented at the meeting.
Please vote your proxy, regardless of the size of your holdings, as promptly as
possible. Any shareholder voting a proxy who attends the meeting may vote in
person by revoking that proxy prior to or at the meeting.
By Order of the Board of Directors
Thomas R. Saldin
Corporate Secretary
TO SHAREHOLDERS WHO RECEIVE MULTIPLE PROXIES
IF YOU OWN IDACORP COMMON STOCK OTHER THAN THE SHARES SHOWN ON THE ENCLOSED
PROXY, YOU WILL RECEIVE A PROXY IN A SEPARATE ENVELOPE FOR EACH SUCH HOLDING.
PLEASE VOTE EACH PROXY RECEIVED.
TABLE OF CONTENTS
Page
----
Notice of Annual Meeting of Shareholders ........................................... 1
Proxy Statement .................................................................... 3
General Information ............................................................... 3
Cost and Method of Solicitation ................................................... 3
Matters to be Voted Upon .......................................................... 3
Record Date ....................................................................... 3
Outstanding Voting Securities ..................................................... 3
Voting ............................................................................ 3
Secret Ballot ..................................................................... 4
Election of Directors ............................................................. 4
The Board of Directors and Committees ............................................. 7
Corporate Governance .............................................................. 9
Ratification of Appointment of Independent Registered Public Accounting Firm ...... 11
Report of the Audit Committee of the Board of Directors ........................... 12
Independent Accountant Billings ................................................... 13
Other Business .................................................................... 13
Security Ownership of Directors and Executive Officers ............................ 14
Section 16(a) Beneficial Ownership Reporting Compliance ........................... 15
Compensation of Directors and Executive Officers .................................. 16
Report of the Compensation Committee of the Board of Directors
on Executive Compensation ...................................................... 16
Summary Compensation Table ...................................................... 21
Option/SAR Grants in Fiscal Year 2005 ........................................... 22
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values .............................................. 22
Director Compensation ........................................................... 23
Employment Contracts and Change of Control Agreements ........................... 23
Performance Graph ............................................................... 25
Retirement Benefits ............................................................. 26
Annual Report ..................................................................... 27
Shared Address Shareholders ....................................................... 27
2007 Annual Meeting of Shareholders ............................................... 27
Exhibits
Exhibit A Independence Standards - Excerpt from Corporate Governance Guidelines .. A-1
Exhibit B Audit Committee Policy For Pre-Approval of Independent Auditor Services B-1
Exhibit C IDACORP Audit Committee Charter ........................................ C-1
PROXY STATEMENT
IDACORP, Inc.
1221 West Idaho Street
P. O. Box 70
Boise, Idaho 83707
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy will first be sent
to shareholders on or about April 10, 2006 and are provided to the shareholders
of IDACORP in connection with the solicitation of proxies on behalf of the
Board of Directors of IDACORP for use at the 2006 Annual Meeting of
Shareholders (the "Annual Meeting") and any adjournment or adjournments
thereof. The Annual Meeting is scheduled to be held on May 18, 2006, at 10:00
a.m., local time, at the Idaho Power Company Corporate Headquarters Building,
1221 West Idaho Street, Boise, Idaho.
COST AND METHOD OF SOLICITATION
The cost of soliciting proxies will be paid by IDACORP. In order to be
assured that a quorum of outstanding shares will be represented at the meeting,
proxies may be solicited by officers and employees of IDACORP, personally or by
telephone, telegraph, fax, mail or other electronic means, without extra
compensation. In addition, the solicitation of proxies from brokers, banks,
nominees and institutional investors will be made by Georgeson Shareholder
Communications, Inc. at a cost of approximately $4,500 plus out-of-pocket
expenses. IDACORP will reimburse banks, brokerage firms and other custodians,
nominees and fiduciaries for their expenses in sending proxy materials to
beneficial owners.
MATTERS TO BE VOTED UPON
As of April 10, 2006, the only known business to be presented at the
Annual Meeting is as follows: (1) the election of three Directors and (2) the
ratification of the appointment of Deloitte & Touche LLP as independent
registered public accounting firm for 2006.
RECORD DATE
The Board of Directors has fixed March 30, 2006 as the date for the
determination of shareholders of IDACORP entitled to notice of and to vote at
the Annual Meeting. Only shareholders of record at the close of business on
March 30, 2006 will be entitled to vote at the Annual Meeting.
OUTSTANDING VOTING SECURITIES
The outstanding voting securities of IDACORP as of the record date for the
Annual Meeting are 42,790,242 shares of common stock, without par value, each
share being entitled to one vote.
VOTING
Shareholders of record may vote their proxies by telephone, through the
Internet or by marking, signing, dating and returning the proxy card in the
enclosed postage-prepaid envelope.
Shareholders whose shares are held by a bank or broker may be able to vote
by telephone or through the Internet. Follow the instructions you receive from
your bank or broker.
Shareholders voting through the Internet should understand that there may
be costs associated with electronic access, such as usage charges from Internet
service providers and telephone companies; such charges must be paid by the
shareholder.
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IDACORP has been advised by counsel that the procedures for Internet and
telephone voting are consistent with the requirements of applicable law.
Under the Idaho Business Corporation Act, a majority of the votes entitled
to be cast on a matter constitutes a quorum for action on that matter. Assuming
a quorum is present, the following votes are required for approval of each
proposal at the Annual Meeting:
(i) Proposal No. 1 - Directors of IDACORP are elected by the affirmative
vote of a plurality of the votes cast by the shares entitled to vote in the
election of directors. Votes may be cast in favor or withheld; votes that are
withheld will have no effect on the results.
(ii) Proposal No. 2 - the ratification of the selection of an
independent registered public accounting firm for IDACORP for 2006 is approved
if the votes cast in favor exceed the votes cast opposing ratification.
If no direction is given by a shareholder, properly executed proxies
received will be voted FOR Proposal No. 1, election of the nominees for
Directors, and FOR Proposal No. 2, ratification of the selection of Deloitte &
Touche LLP as independent registered public accounting firm for 2006.
A proxy may be revoked at any time before it is voted at the meeting. Any
shareholder who attends the meeting and wishes to vote in person may revoke his
or her proxy by oral notice at that time. Otherwise, revocation of a proxy must
be mailed to the Secretary of IDACORP at 1221 West Idaho Street, Boise, Idaho
83702-5610, and received prior to the meeting.
SECRET BALLOT
It is the policy of IDACORP that all proxies received for the Annual
Meeting that identify shareholders, including employees, are to be kept secret,
and no such document shall be available for examination nor shall the identity
and vote of any shareholder be disclosed to IDACORP representatives or to any
third party. Proxies received are returned to the independent tabulator who
receives, inspects and tabulates the proxies. Individual voted proxies and
ballots are not seen by or reported to IDACORP except (i) as necessary to meet
applicable legal requirements, (ii) to allow the independent election
inspectors to certify the results of the shareholder vote, (iii) in the event
of a matter of significance where there is a proxy solicitation in opposition
to the Board of Directors, based upon an opposition proxy statement filed with
the Securities and Exchange Commission or (iv) to respond to shareholders who
have written comments on their proxies.
1. ELECTION OF DIRECTORS
IDACORP's Board of Directors consists of 11 members. IDACORP's Articles of
Incorporation, as amended, provide that Directors are elected for three-year
terms, with approximately one-third of the Board of Directors elected at each
annual meeting of shareholders. The three Directors standing for election for
the IDACORP Board of Directors at the Annual Meeting are identified below as
nominees for election with terms to expire in the year 2009. All nominees are
currently Directors of IDACORP.
Jan B. Packwood, President and Chief Executive Officer of IDACORP, has
announced his retirement, effective July 1, 2006. The Corporate Governance
Guidelines require the Chief Executive Officer to tender his resignation as a
director when he tenders a resignation or retirement notice to the Board, or
leaves that position for any other reason. On March 16, 2006, Mr. Packwood
tendered his resignation as a director to the Board. The Board of Directors
determined not to accept Mr. Packwood's resignation, preferring instead to
request that he continue to serve as a director. Mr. Packwood expressed a
willingness to do so, and he will therefore stand for re-election to the Board
at this meeting.
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Unless otherwise instructed, proxies received will be voted in favor of
the election of the Director nominees. While it is not expected that any of the
nominees will be unable to qualify for or accept office, if for any reason one
or more should be unable to do so, the proxies will be voted for nominees
selected by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED BELOW.
NOMINEES FOR ELECTION - TERMS EXPIRE 2009
GARY G. MICHAEL .......... Former Chairman of the Board and Chief Executive Officer (1991-2001)
of Albertson's, Inc. (food-drug retailer); director of The Clorox Company
(manufacturer and marketer of household products) (since 2001); Office
Max (distributor of business and retail office products, including office
supplies, paper, technology products and services, and furniture) (since
2004); Harrah's Entertainment, Inc. (casino entertainment) (since 2001);
Questar Corporation (integrated natural gas company) (since 1994);
Questar Gas (provider of retail natural gas-distribution services) (since
1994); Questar Pipeline (interstate gas transportation and storage)
(since 2002); Graham Packaging Company (designer and manufacturer
of customized plastic containers) (Advisory Board) (since 2002); director
of the following IDACORP subsidiaries: Idaho Power Company since
2001; director of IDACORP since 2001. Age 65
PETER S. O'NEILL ......... Former Chairman of O'Neill Enterprises L.L.C. (developer of planned
communities) (1990-2004); director of Building Materials Holding
Corporation (provider of construction services, manufactured building
components and materials to professional residential builders and
contractors) (since 1993); director of the following IDACORP subsidiaries:
Idaho Power Company since 1995 and IDACORP Financial Services, Inc.
since 1999; director of IDACORP since 1998. Age 69
JAN B. PACKWOOD .......... President and Chief Executive Officer of IDACORP (since 1999);
formerly Chief Executive Officer of Idaho Power Company (2002-2005);
President and Chief Executive Officer (1999-2002); President and Chief
Operating Officer (1997-1999); Executive Vice President (1996-1997)
and Vice President - Bulk Power (1989-1996); director of the following
IDACORP subsidiaries: Idaho Power Company since 1997, Idaho
Energy Resources Company since 1990, IDACORP Financial Services,
Inc. since 1997, Ida-West Energy Company since 1999, IDACOMM
since 2002, IDACORP Technologies, Inc. since 1999; director of
IDACORP since 1998. Age 63
CONTINUING DIRECTORS - TERMS EXPIRE 2008
JACK K. LEMLEY ........... Director of Lemley & Associates, Inc. (management consulting
company) (since 1987); Chairman of London 2012 Olympic Delivery
Authority (since 2005); formerly Chairman of the Board and Chief
Executive Officer and a director of American Ecology Corporation
(provider of environmental services to producers and handlers of
hazardous, toxic and radioactive wastes) (1995-2001); director of the
following IDACORP subsidiaries: Idaho Power Company since 1995 and
IDACORP Technologies, Inc. since 2000; director of IDACORP since
1998. Age 71
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RICHARD G. REITEN ........... Former Chairman of the Board of Northwest Natural Gas Company
(provider of natural gas in Oregon and southwest Washington) (2000-
2005), President and Chief Executive Officer (1997-2003), President
and Chief Operating Officer (1995-1997); former President and Chief
Operating Officer of Portland General Electric (electric public utility)
(1992-1995); former President of Portland General Corp. (1989-1992);
director of Northwest Natural Gas Company (since 2000); U.S. Bancorp
(banking services) (since 1998); Building Materials Holding Corp.
(provider of construction services, manufactured building components
and materials to professional residential builders and contractors) (since
2001) and National Fuel Gas Company (diversified energy company
providing interstate natural gas transmission and storage) (since 2004);
director of the following IDACORP subsidiaries: Idaho Power Company
since 2004 and IDACORP Technologies, Inc. since 2004; director of
IDACORP since 2004. Age 66
JOAN H. SMITH ............... Self-employed consultant (consulting on regulatory strategy and
telecommunications) (since 2003); former Oregon Public Utility
Commissioner (1990-2003); affiliate director with Wilk & Associates/
LECG LLP (public consulting organization) (since 2003); director of the
following IDACORP subsidiaries: Idaho Power Company since 2004 and
IDACOMM since 2004; director of IDACORP since 2004. Age 63
THOMAS J. WILFORD ........... President of Alscott, Inc. (real estate development and other investments)
(since 1993); Chief Executive Officer of J.A. and Kathryn Albertson
Foundation, Inc. (family foundation committed and striving to be a catalyst
for positive educational change) (since 2003) and formerly President
(1995-2003); director of the following IDACORP subsidiaries: Idaho
Power Company since 2004; director of IDACORP since 2004. Age 63
CONTINUING DIRECTORS - TERMS EXPIRE 2007
ROTCHFORD L. BARKER ......... Private Investor; Director, American Ecology Corporation (provider of
environmental services to producers and handlers of hazardous, toxic
and radioactive wastes) (since 1996); Member and former director
Chicago Board of Trade (since 1964); director of the following IDACORP
subsidiaries: Idaho Power Company since 1999; director of IDACORP
since 1999. Age 69
J. LaMONT KEEN .............. Executive Vice President, IDACORP, Inc. (since 2002); President and
Chief Executive Officer, Idaho Power Company (since 2005); formerly
President and Chief Operating Officer, Idaho Power Company (2002-
2005); Senior Vice President - Administration and Chief Financial Officer
(1999-2002); Senior Vice President - Administration, Chief Financial
Officer and Treasurer (1999); Vice President, Chief Financial Officer and
Treasurer (1996-1999); Vice President and Chief Financial Officer
(1991-1996); Controller (1988-1991); director of the following IDACORP
subsidiaries: Idaho Power Company since 2004, IDACORP Technologies, Inc.
since 2004 and Idaho Energy Resources Company since 1991; director of
IDACORP since 2004. Age 53
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JON H. MILLER .............. Chairman of the Board of IDACORP since 1999; Private Investor;
formerly President and Chief Operating Officer (1978-1990) and a
director (1977-1990) of Boise Cascade Corporation (distributor of office
products and building materials and an integrated manufacturer and
distributor of paper, packaging and wood products); director of Farmers
& Merchants State Bank (banking services) (since 1998); director of the
following IDACORP subsidiaries: Idaho Power Company since 1988;
director of IDACORP since 1998. Age 68
ROBERT A. TINSTMAN ......... Executive Chairman of James Construction Group (construction
services) (since 2002); former President and Chief Executive Officer
(1995-1999) and director (1995-1999) of Morrison Knudsen Corporation
(general contractor providing global mining, engineering and
construction services); former Chairman of Contractorhub.com (e-marketplace
for contractors, subcontractors and suppliers) (2000-2001);
director of the Home Federal Bancorp, Inc. (banking services) (since
1999); CNA Surety Corporation (surety company offering contract and
commercial surety bonds) (since 2004); director of the following
IDACORP subsidiaries: Idaho Power Company and IDACORP Technologies, Inc.
since 1999; director of IDACORP since 1999. Age 59
THE BOARD OF DIRECTORS AND COMMITTEES
The IDACORP Board of Directors held six meetings in 2005. The average
attendance during 2005 at all meetings of the Board and all meetings of the
committees of the Board was approximately 97 percent.
Independence
IDACORP currently has 11 members on its Board of Directors. All are
non-employees, except for Jan B. Packwood, President and Chief Executive
Officer and J. LaMont Keen, Executive Vice President. Rotchford L. Barker, Jack
K. Lemley, Gary G. Michael, Jon H. Miller, Peter S. O'Neill, Richard G. Reiten,
Joan H. Smith, Robert A. Tinstman and Thomas J. Wilford have been determined by
the Board of Directors to be "independent" based on all relevant facts and
circumstances and under the New York Stock Exchange listing standards and the
Corporate Governance Guidelines, which contain the policy and categorical
standards on director independence. The independence standards used by the
Board of Directors to determine whether members are independent are set forth
in IDACORP's Corporate Governance Guidelines and are included as Exhibit A to
this Proxy Statement. The office of the Chairman of the Board and the Chief
Executive Officer has been separated since June 1999. The non-management
directors have held meetings separate from management since 1998. Mr. Miller,
the independent Chairman of the Board, presides at Board meetings and
regularly-scheduled executive sessions of non-management directors.
Committees
The standing committees of the Board are the Executive Committee, the
Audit Committee, the Compensation Committee and the Corporate Governance
Committee. Board committees, their membership during 2005 and a brief statement
of their principal responsibilities are presented below.
Executive Committee
The Executive Committee acts on behalf of the Board of Directors when the
Board is not in session, except on those matters which require action of the
full Board. Members of the Committee are Jan B. Packwood (Chairman), Gary G.
Michael, Jon H. Miller, Peter S. O'Neill and Robert A. Tinstman. During 2005,
the Executive Committee met two times.
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Audit Committee
The Audit Committee was established as a separately-designated standing
committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act
of 1934, as amended, and is comprised of three independent directors, as that
term is defined in the listing standards of the New York Stock Exchange.
Members of the Audit Committee are Gary G. Michael (Chairman), Rotchford L.
Barker and Thomas J. Wilford. All members are "financially literate" as the
Board of Directors interprets that term, and have been determined by the Board
of Directors to be "audit committee financial experts."
Mr. Michael serves on the audit committee of three other publicly
registered companies in addition to IDACORP. The Board of Directors of IDACORP
has determined that such service does not impair Mr. Michael's ability to serve
on the Audit Committee.
The Audit Committee assists the Board of Directors in the oversight of the
integrity of the IDACORP financial statements; compliance with legal and
regulatory requirements; the qualifications, independence and performance of
the independent registered public accounting firm; and the performance of the
internal audit department. The Committee also prepares the Audit Committee
Report as required by the Securities and Exchange Commission to be included in
the proxy statement for the annual meeting of shareholders. During 2005, the
Audit Committee met ten times.
Compensation Committee
The Compensation Committee has direct responsibility to review and approve
corporate goals and objectives relevant to Chief Executive Officer
compensation, evaluate the Chief Executive Officer's performance in light of
those goals and objectives, and, either as a committee or together with the
other independent directors (as directed by the Board), determine and approve
the Chief Executive Officer's compensation level based on this evaluation. The
Compensation Committee also makes recommendations to the Board with respect to
executive officer compensation, and incentive-compensation plans and
equity-based plans that are subject to Board approval; produces the
Compensation Committee report on executive compensation as required by the
Securities and Exchange Commission to be included in the proxy statement for
the annual meeting of shareholders; and oversees the compensation and employee
benefit plans and practices. Members of the Compensation Committee are Robert
A. Tinstman (Chairman), Jack K. Lemley, Peter S. O'Neill and Richard G. Reiten.
Each member is independent as that term is defined in the applicable New York
Stock Exchange listing standards. During 2005, the Compensation Committee met
seven times.
Corporate Governance Committee
The Corporate Governance Committee, which is also the nominating
committee, identifies individuals qualified to become directors, consistent
with criteria approved by the Board, and selects, or recommends that the Board
select, the candidates for all directorships to be filled by the Board or by
the shareholders; develops and recommends to the Board a set of corporate
governance guidelines applicable to IDACORP; oversees the evaluation of the
Board and management; reviews the compliance programs including the Code of
Business Conduct and Ethics for officers and employees of IDACORP and its
subsidiaries and the Code of Business Conduct and Ethics for Directors; and
takes a leadership role in shaping the corporate governance of IDACORP. Members
of the Corporate Governance Committee are Peter S. O'Neill (Chairman), Jon H.
Miller and Joan H. Smith. Each member is independent as that term is defined in
the applicable New York Stock Exchange listing standards. During 2005, the
Corporate Governance Committee met four times.
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Attendance at Annual Meetings
Pursuant to the Corporate Governance Guidelines, all Directors are
expected to attend the annual meeting of shareholders and be available, when
requested by the chair, to answer any questions shareholders may have. All
members of the Board of Directors attended the 2005 annual meeting.
CORPORATE GOVERNANCE
Background
IDACORP has adopted corporate governance and disclosure requirements under
the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission's rules
interpreting and implementing the Sarbanes-Oxley Act, the listing standards of
the New York Stock Exchange and Securities and Exchange Commission disclosure
requirements on expanded nominating committee processes. This includes (1)
written charters for the Audit Committee, Corporate Governance Committee and
Compensation Committee and (2) Corporate Governance Guidelines, which address
issues including the responsibilities, qualifications and compensation of the
Board of Directors, as well as Board leadership, Board committees and
self-evaluation. The written committee charters and the Corporate
Governance Guidelines of IDACORP are available on IDACORP's website
and may be accessed by following the hypertext links listed at
http://www.idacorpinc.com/corpgov/default.cfm. Printed copies may be obtained
without charge by writing to the Secretary, IDACORP at 1221 West Idaho Street,
Boise, Idaho 83702-5610.
Code of Ethics
IDACORP's principal subsidiary, Idaho Power Company, had for many years a
Code of Business Conduct and Ethics, which applied to all directors, officers
and employees of Idaho Power Company, including the principal executive officer
and senior financial and accounting officers. IDACORP adopted a new Code of
Business Conduct and Ethics in July 2003, which applied to all directors,
officers, including the chief executive officer and principal financial and
accounting officers, and employees of IDACORP and its subsidiaries. In
September 2005, IDACORP revised the Code of Business Conduct and Ethics and
adopted a separate Code of Business Conduct and Ethics for Directors. These
Codes of Business Conduct and Ethics may be accessed at the IDACORP website
referred to above. Printed copies may be obtained without charge by writing to
the Secretary, IDACORP, 1221 West Idaho Street, Boise, Idaho 83702-5610.
Amendments to the Codes or waivers of the Codes as required by Regulation
S-K, Item 406 or the New York Stock Exchange listing standards will be posted
on the IDACORP website referred to above.
Process for Shareholders to Recommend Nominees for Directors
IDACORP has processes in place which permit shareholders to recommend
directors in accordance with the Bylaws and Corporate Governance Guidelines.
Shareholders wishing to recommend a candidate to be considered by the Corporate
Governance Committee for nomination as a Director must submit recommendations
in writing to the Secretary of IDACORP no later than 120 days prior to the
first anniversary of the date on which IDACORP first mailed proxy materials for
the preceding year. In the event of a special meeting of shareholders to elect
one or more directors, recommendations must be submitted in writing no later
than the close of business on the tenth day after the day of the public
announcement of such meeting and of director nominees proposed by the Board of
Directors. The written recommendations must include all information with
respect to the candidate required to be disclosed in the solicitation of
proxies pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended, and the rules thereunder, including the recommended candidate's
consent. The shareholder submitting the recommendations must provide his or her
name, address and number of shares of voting stock owned beneficially and of
record including a statement as to how long the shareholder has held such
stock. The Secretary of IDACORP will review all written recommendations and
send those conforming to these requirements to the Corporate Governance
Committee.
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Board Membership Criteria
Directors should possess the highest personal and professional ethics,
integrity and values, and be committed to representing the long-term interests
of the shareholders. They must also have an inquisitive and objective
perspective, practical wisdom and mature judgment. IDACORP endeavors to have a
Board of Directors representing diverse experience at policy-making levels in
business, finance and accounting and in areas that are relevant to the
company's activities. At least one Director shall meet the requirements of the
definition of an "audit committee financial expert" as that term is defined in
Item 401(h) of Regulation S-K. Directors are required to retire upon reaching
age 72.
Non-management directors should be independent under the New York Stock
Exchange listing standards.
Process for Determining Director Nominees
The Corporate Governance Committee follows the procedures set forth below
when identifying new Director nominees, including any recommendations submitted
by shareholders in compliance with the Bylaws and the policies set forth
herein:
o the Corporate Governance Committee identifies the need to fill a
vacancy on the Board or, if approved by the Board, to add new Board
member(s);
o the Chairman of the Corporate Governance Committee initiates the
search,
- soliciting advice from the Chairman of the Board, the lead
independent director, the Chief Executive Officer, other
directors, management and any other persons he or she deems
appropriate,
- reviewing any candidates submitted by shareholders in compliance
with the Bylaws and the policies set forth herein, and
- hiring a search firm, if he or she chooses;
o an initial group of candidates is identified and presented to the
Corporate Governance Committee;
o the Corporate Governance Committee gathers any additional information
it deems appropriate, including information necessary to determine if
the candidate(s)
- are "independent" under applicable laws, regulations and rules,
- do not violate any requirements applicable to IDACORP or any
federal or state laws, rules or regulations, including federal
and state regulatory agencies, the New York Stock Exchange, the
Securities and Exchange Commission and the Sarbanes-Oxley Act of
2002, and
- meet all requirements under the Corporate Governance Guidelines,
committee charters, the Bylaws, the Codes and any other
applicable corporate document or policy;
o the Corporate Governance Committee evaluates any potential conflicts,
including financial or business relationships;
o the Corporate Governance Committee evaluates whether the candidates
would likely represent a special interest or single issue;
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o the Corporate Governance Committee meets to narrow the list of
candidates;
o the Chairman of the Board, the Corporate Governance Committee and the
Chief Executive Officer interview any or all of the candidates, if
they deem it appropriate;
o the Corporate Governance Committee meets to consider and approve the
final candidate(s);
o the Corporate Governance Committee seeks full Board approval of the
selected candidate(s).
The Chairman keeps the full Board informed of the Committee's progress.
Jack K. Lemley retired from the Board of Directors on January 2, 2005,
having reached the mandatory retirement age of 70. On January 20, 2005, IDACORP
amended its Bylaws to raise the mandatory retirement age to 72, and the
Corporate Governance Committee recommended the re-appointment of Mr. Lemley.
The Corporate Governance Committee did not retain a search firm to identify or
evaluate any additional nominees.
How to Contact the Board and the Audit Committee
The Board of Directors has developed a process by which shareholders and
other interested parties can send communications to members of the Board. If
you have a concern that you believe warrants the attention of the Board of
Directors, including the Chairman of the Board or non-management directors as a
group, you may call a toll-free helpline at 1-866-384-4277. If your concern is
of an ethical nature, you may log on to www.ethicspoint.com, and follow the
instructions for filing a report. All reports will be routed to the General
Counsel who then forwards the report directly to the Chairman of the Board. Any
report regarding questionable accounting practices, internal accounting
controls or auditing matters will be routed by the General Counsel to the
Chairman of the Board and the Chairman of the Audit Committee.
2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
At the Annual Meeting, the shareholders will be asked to ratify the
selection by the Audit Committee of Deloitte & Touche LLP as the firm of
independent registered public accountants to audit the financial statements of
IDACORP for the fiscal year 2006. This firm has conducted consolidated annual
audits of IDACORP since its formation in 1998 and is one of the world's largest
firms of independent certified public accountants. A representative of Deloitte
& Touche LLP is expected to be present at the meeting and will have an
opportunity to make a statement and to respond to appropriate questions.
The shareholders' ratification vote will not have any effect on the
appointment or retention of Deloitte & Touche LLP as IDACORP's independent
registered public accounting firm for the fiscal year 2006. However, the Audit
Committee will consider the shareholders' vote as a factor in determining its
appointment of IDACORP's independent registered public accounting firm for
2007. The Audit Committee reserves the right, in its sole discretion, to change
the appointment of the independent registered public accounting firm at any
time during a fiscal year if it determines that such a change would be in the
best interests of IDACORP and its shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" DELOITTE &
TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF IDACORP FOR 2006.
The ratification of the selection of the independent registered public
accounting firm for IDACORP is approved if the votes cast in favor exceed the
votes cast opposing ratification.
11
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee of the IDACORP Board of Directors is composed of three
directors, who are independent as defined in the applicable NYSE listing
standards. The Committee has a written charter adopted by the Board of
Directors. The charter is posted on the IDACORP website and may be accessed by
following the hypertext link listed at
http://www.idacorpinc.com/corpgov/default.cfm.
The Committee has reviewed and discussed the audited consolidated
financial statements of IDACORP with management and the independent registered
public accountants. The Committee discussed with the independent registered
public accountants the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees), as modified or
supplemented.
The independent registered public accountants also provided to the
Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), as modified or supplemented, and the Committee discussed with the
independent registered public accountants that firm's independence.
Based on the Committee's review and discussions referred to above, the
Committee recommended to the Board of Directors that the audited consolidated
financial statements of IDACORP be included in its Annual Report on Form 10-K
for the year ended December 31, 2005 for filing with the Securities and
Exchange Commission.
Gary G. Michael (Chairman)
Rotchford L. Barker
Thomas J. Wilford
12
INDEPENDENT ACCOUNTANT BILLINGS
Aggregate fees billed to IDACORP for the fiscal years ended December 31,
2005 and 2004 by IDACORP's principal independent registered public accounting
firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and
their respective affiliates (collectively, the "Deloitte Entities") are:
Fees Billed 2005 2004
----------- ---------- ----------
Audit Fees ...................... $1,022,945 $1,047,623
Audit-Related Fees (1) .......... 264,753 162,890
Tax Fees (2) .................... 56,503 229,183
All Other Fees .................. -0- -0-
---------- ----------
Total Fees: ..................... $1,344,201 $1,439,696
========== ==========
------------
(1) Includes fees for audits of IDACORP's benefit plans, stand alone audits of
subsidiaries, Sarbanes-Oxley Section 404 readiness assistance and work in
connection with regulatory inquiries.
(2) Includes fees for tax compliance and tax consulting in connection with
Internal Revenue Service account analysis.
Policy on Audit Committee Pre-Approval. IDACORP and the Audit Committee
are committed to ensuring the independence of the independent registered public
accounting firm, both in fact and in appearance. In this regard, the Audit
Committee has established a pre-approval policy in accordance with applicable
securities rules. The Audit Committee's Policy for the Pre-Approval of
Independent Auditor Services is included as Exhibit B to this Proxy Statement.
All fees were pre-approved by the Audit Committee in 2005.
OTHER BUSINESS
Neither the Board of Directors nor management intends to bring before the
meeting any business other than the matters referred to in the Notice of Annual
Meeting and this Proxy Statement. In addition, they have not been informed that
any other matter will be presented to the meeting by others. If any other
business should properly come before the meeting, or any adjournment thereof,
the persons named in the proxy will vote on such matters according to their
best judgment.
13
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND FIVE PERCENT SHAREHOLDERS
The following table sets forth the number of shares of IDACORP common
stock beneficially owned on March 1, 2006, by the Directors and nominees, by
those Executive Officers named in the Summary Compensation Table and by the
Directors and Executive Officers of IDACORP as a group:
Amount and
Nature of
Beneficial Stock Percent
Title of Class Name of Beneficial Owner Ownership(1) Options(2) Of Class
-------------- ------------------------ ------------ ---------- --------
Common Stock ......... Rotchford L. Barker 20,730 4,950 *
Common Stock ......... J. LaMont Keen (3) 196,974 155,291 *
Common Stock ......... Jack K. Lemley (4) 12,230 4,950 *
Common Stock ......... Gary G. Michael 13,321 4,950 *
Common Stock ......... Jon H. Miller 11,230 4,950 *
Common Stock ......... Peter S. O'Neill 12,742 4,950 *
Common Stock ......... Jan B. Packwood 430,707 336,992 1%
Common Stock ......... Richard G. Reiten 5,399 1,200 *
Common Stock ......... Joan H. Smith 4,799 600 *
Common Stock ......... Robert A. Tinstman 13,730 4,950 *
Common Stock ......... Thomas J. Wilford 5,099 1,200 *
Common Stock ......... Darrel T. Anderson 48,550 36,096 *
Common Stock ......... James C. Miller (5) 120,014 111,128 *
Common Stock ......... Thomas R. Saldin 7,596 1,600 *
Common Stock ......... All Directors and Executive 956,843 706,238 2.2%
Officers of IDACORP as a
group (19 persons)
------------
* Less than 1 percent.
(1) Includes shares of common stock subject to forfeiture and restrictions on
transfer granted pursuant to the 1994 Restricted Stock Plan or the 2000
Long-Term Incentive and Compensation Plan. Also includes shares of common
stock that the beneficial owner has the right to acquire within 60 days
upon exercise of stock options.
(2) Exercisable within 60 days and included in the amount of beneficial
ownership column.
(3) Mr. Keen disclaims all beneficial ownership of the 205 shares owned by his
wife.
(4) Mr. Lemley disclaims all beneficial ownership of the 2,500 shares owned by
his wife.
(5) Mr. Miller disclaims all beneficial ownership of the 5 shares owned by his
wife through the Employee Savings Plan.
Except as indicated above, all Directors and Executive Officers have sole
voting and investment power for the shares held by them including shares owned
through the Employee Savings Plan and the Dividend Reinvestment and Stock
Purchase Plan.
14
The following table sets forth certain information with respect to each
person who is known by IDACORP to be the beneficial owner of more than five
percent of IDACORP common stock as of March 1, 2006.
Name and Address Amount and Nature of Percent Of
Title of Class of Beneficial Owner Beneficial Ownership Class
-------------- ---------------------------------- ---------------------- ----------
Common Stock ......... American Century Companies, Inc. 3,573,130(1) 8.4%
4500 Main Street, 9th Floor
Kansas City, MO 64111
------------
(1) Based on a Schedule 13G, dated February 14, 2006, jointly filed by American
Century Companies, Inc., American Century Investment Management, Inc. and
American Century Capital Portfolios, Inc. American Century Companies, Inc.
reported sole voting power with respect to 3,544,630 shares and sole
dispositive power with respect to 3,573,130 shares, its wholly-owned
subsidiary American Century Investment Management, Inc. reported sole
voting power with respect to 3,544,630 shares and sole dispositive power
with respect to 3,573,130 shares and American Century Capital Portfolios,
Inc., a registered investment company managed by American Century
Investment Management, Inc., reported sole voting power with respect to
3,044,657 shares and sole dispositive power with respect to 3,044,657
shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
IDACORP's directors and executive officers are required to file initial
reports of ownership and reports of changes of ownership of IDACORP common
stock with the Securities and Exchange Commission. Based solely upon a review
of these filings furnished to IDACORP for 2005 or written representations from
IDACORP directors and executive officers that no Form 5 was required, IDACORP
believes that all required filings were timely made in 2005.
15
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
GENERAL
The Compensation Committee (the "Committee") of IDACORP (the "Company")
established all components of 2005 compensation for the Chief Executive Officer
and the executive officers of the Company. J. LaMont Keen, Darrel T. Anderson
and Thomas R. Saldin also serve as executive officers of Idaho Power Company,
the Company's primary subsidiary. Compensation paid to the executive officers
and discussed here is for their services to the Company and all subsidiaries.
The Committee is composed of four non-employee Directors who qualify as
independent under the listing standards of the New York Stock Exchange. The
Committee operates under a written charter which is posted at the Company's
website at www.idacorpinc.com.
As part of its function, the Committee discharges the responsibilities of
the Board of Directors relating to compensation of the Chief Executive Officer
and the executive officers and oversight of the Company's compensation and
employee benefit plans and practices. The Committee has the direct
responsibility to (1) review and approve corporate goals and objectives
relevant to Chief Executive Officer compensation, (2) evaluate the Chief
Executive Officer's performance in light of those goals and objectives, (3)
either as a committee or together with the other independent directors (as
directed by the Board), determine and approve the Chief Executive Officer's
compensation level based on this evaluation, (4) make recommendations to the
Board with respect to executive officer compensation, and
incentive-compensation plans and equity-based plans that are subject to Board
approval, (5) produce the Compensation Committee report on executive officer
compensation as required by the Securities and Exchange Commission to be
included in the Company's proxy statement for the annual meeting of
shareholders and (6) oversee the Company's compensation and employee benefit
plans and practices. Following the development of recommendations by the
Committee, all issues related to executive compensation are submitted to the
other independent directors of the Board of Directors for approval. The
independent directors approved, without modification, all executive
compensation recommendations of the Committee for 2005. The Committee retains
an outside consultant specializing in executive compensation to provide
expertise on the Committee's various responsibilities and other matters coming
before the Committee. The outside consultant does not do other work for the
Company.
COMPENSATION PHILOSOPHY
The Company's compensation philosophy is designed to:
1. manage employee compensation as an investment with the expectation that
employees will contribute to the Company's overall success;
2. be competitive with respect to those companies in the markets in which the
Company competes for employees, allowing the Company to successfully
attract and retain the qualified employees necessary for long-term success;
3. recognize individuals for their demonstrated ability to perform their
responsibilities and create long-term shareholder value; and
4. balance total compensation with the Company's ability to pay.
16
COMPENSATION MARKET FOR 2005
As required by its charter, the Committee reviewed the Company's executive
compensation program for 2005, including the goals and objectives of the
program, general and utility industry compensation surveys and compensation
levels at the peer group of companies used for comparison purposes. The
previous peer group of companies was comprised of twelve electric utility
holding companies with similar business lines and average annual revenues of
$1.2 billion. After review, the Committee determined that a modification to the
peer group of companies would better reflect the size and complexity of the
Company. In January 2005, the Committee removed two companies and added one new
company to the peer group, which is now comprised of eleven electric utility
holding companies with median annual revenues of $1.1 billion. While this group
is different from the EEI 100 Electric Utilities Index used in the performance
graph, the Committee believes this group is representative of the Company's
size, complexity and diversity and is appropriate for compensation purposes.
2005 BASE SALARIES
The Committee reviews base salaries for the Chief Executive Officer and
the executive officers annually, using salary comparisons for similar positions
in general and utility industry compensation surveys and in the eleven
comparable electric utility holding companies referred to above. The
competitive point for executive compensation for 2005 was targeted near the
median of the salary levels for the Chief Executive Officer and the executive
officers of the comparison companies. Actual compensation of individual
executive officers is based upon their levels of responsibility, experience in
their positions, prior experience, breadth of knowledge and job performance. In
January 2005, the Committee recommended increases to the base salaries for the
Chief Executive Officer and the executive officers averaging 10.3 percent (7.9
percent for those executive officers named in the Summary Compensation Table),
to move them nearer the median of the comparison group. The Committee
considered each of the factors discussed above but did not assign a formal
weighting for each factor. The Committee also considered the fact that base
salaries for the executive officers including the Chief Executive Officer had
not been increased in 2003 or 2004 due to difficult financial years which
included a dividend reduction and continuing drought conditions.
SHORT-TERM INCENTIVE COMPENSATION
The Executive Incentive Plan ties a portion of the annual compensation of
the Chief Executive Officer and each executive officer to achieving a series of
specified goals. The terms of the Executive Incentive Plan provide for annual
cash incentive award opportunities based upon Company and subsidiary
performance measures. The amount of the incentive is calculated by multiplying
base salary by the product of the approved incentive percentage and the
qualifying multiplier. For 2005, the established goals were (i) operational and
customer service goals for Idaho Power Company (weighted 40 percent), (ii) net
income for Idaho Power Company (weighted 30 percent) and (iii) consolidated net
income for the Company (weighted 30 percent). The operational and customer
service goals had two components: (i) customer satisfaction ("CRI") and (ii)
total non-fuel operation and maintenance (O&M) expense (excluding pension
expense and the third party transmission expense) and capital expenditures.
Achievement of the customer satisfaction component was measured by the customer
relationship index at threshold, target and maximum levels with a multiplier of
10, 20 and 40 percent, respectively. Achievement of the total O&M and capital
expenditure component was measured against established expenditure amounts at
threshold, target and maximum levels with multipliers of 10, 20 and 40 percent,
respectively. Achievement of the net income goals for Idaho Power Company and
the Company were measured against established net income amounts at target and
maximum levels with multipliers of 30 and 60 percent, respectively.
The award opportunities varied by position as a percentage of base salary
with the award opportunities for executive officers including the Chief
Executive Officer ranging from a threshold of 10 percent to a target of 50
percent to a maximum of 100 percent. The Executive Incentive Plan does not
17
permit the payment of awards if there is no payment of awards under the
Employee Incentive Plan or IDACORP does not have net income sufficient to pay
dividends on its common stock. The performance levels for the CRI goal were
established based upon performance in previous years; the performance levels
for the financial goals including the total O&M and capital expenditure goal
were based upon forecasted performance. Based upon 2005 results, executive
officers received an award equal to 80 percent of their target award
opportunity. Awards under the Executive Incentive Plan are reflected in the
bonus column of the Summary Compensation Table.
LONG-TERM INCENTIVE COMPENSATION
Long-term incentive grants are intended to develop and retain strong
management through share ownership, recognize future performance and maximize
shareholder value. Restricted stock, performance shares and stock options were
granted to the Chief Executive Officer and the other executive officers in
2005.
The value of each grant is set by the Committee based on a comparison by
position with general and utility industry compensation surveys and
compensation levels at the comparison group and is targeted near the median
level.
1. Restricted Stock Plan
a. 2003 Performance Share Grant
In January 2003, a grant of performance shares was made to the executive
officers including the Chief Executive Officer under the 1994 Restricted Stock
Plan. That grant was for a three year restricted period through December 31,
2005, with a target Cumulative Earnings Per Share ("CEPS") of $6.30. The total
CEPS for the three-year restricted period was $4.63 resulting in these shares
being forfeited.
b. 2005 Restricted Stock/Performance Share Grants
(i) Restricted Stock (Time Vesting)
In January 2005, a grant of restricted stock (time vesting) under the
IDACORP 2000 Long-Term Incentive and Compensation Plan was made. These shares
vest on January 1, 2009. To receive a final share award, the Chief Executive
Officer and each executive officer must remain employed with the Company during
the entire restricted period, except that participants will receive a prorated
number of shares if they retire, die or become disabled during the restricted
period based on the number of full months they were employed. If employment is
terminated for other reasons, the shares are forfeited. Dividends are paid on
the shares during the restricted period and are not subject to forfeiture.
(ii) Restricted Stock (Performance Vesting)
A grant of restricted stock (performance vesting) under the IDACORP 2000
Long-Term Incentive and Compensation Plan was made in January 2005, with a
three-year restricted period from January 1, 2005 through December 31, 2007,
with a single financial performance goal of cumulative earnings per share
("CEPS"). Awards can be earned at the threshold, target or maximum level. To
receive a final share award, the Chief Executive Officer and each executive
officer must remain employed during the entire restricted period and IDACORP
must achieve the CEPS performance goal established by the Committee, except
that participants will receive a prorated number of shares if they retire, die
or become disabled during the restricted period, based on the number of full
months they were employed. Awards that are not earned are forfeited. If
employment is terminated for other reasons, the shares are forfeited. Dividends
are paid on the performance shares at the target level during the restricted
period and are not subject to forfeiture.
18
Both restricted stock grants varied by position. The restricted stock
(time vesting) percentage for the Chief Executive Officer is targeted at 45
percent. For all other executive officers, the target percentages range from 15
percent to 37 percent. The restricted stock (performance vesting) percentages
for the Chief Executive Officer range from 23 percent if CEPS are earned at the
threshold level to 68 percent if CEPS are earned at the maximum level. For all
other executive officers, the percentages range from a threshold level of 8
percent to a maximum of 55 percent. The Committee established the grant
percentages as part of its annual executive compensation review, and the 2005
grants when combined with other forms of long-term incentive were at a level
slightly above the median target levels among the comparison group.
2. Stock Options
In January 2005, stock options were granted to the Chief Executive Officer
and the executive officers under the IDACORP 2000 Long-Term Incentive and
Compensation Plan. The exercise price of these options is equal to the fair
market value of IDACORP's common stock on the date of grant. The options vest
ratably over five years (20% per year). The size of each award was determined
based on the criteria for awarding long-term incentives discussed above and
ranged from 3,720 to 8,640 options for each of the Vice Presidents and Senior
Vice Presidents, to 22,253 options for the Executive Vice President to 45,360
options for the Chief Executive Officer.
The 2005 compensation paid to IDACORP executive officers qualified as
fully deductible under federal tax laws. The Committee continues to review the
impact of federal tax laws on executive compensation, including Section 162(m)
of the Internal Revenue Code.
CHIEF EXECUTIVE OFFICER COMPENSATION - 2005
In January 2005, the Committee reviewed Mr. Packwood's compensation
package. His 2005 total compensation package (base salary and the opportunity
at the target level in the short-term and long-term incentive compensation
components) was approximately 4.5 percent below the median level of the total
compensation packages for Chief Executive Officers for the new comparison
group. The Committee determined that, based upon Mr. Packwood's experience in
the Chief Executive Officer position and successfully transitioning the Company
from a trading environment back to a vertically integrated utility, merited a
total compensation package at a level near the median in the comparison group.
The Compensation Committee believes that Mr. Packwood's total compensation is
reasonable and not excessive.
1. Base salary
Mr. Packwood was granted a salary increase of 8.6 percent.
2. Executive Incentive Plan
Mr. Packwood is a participant in the Executive Incentive Plan with a 2005
award opportunity that ranged from a threshold level of 10 percent to a target
of 50 percent to a maximum of 100 percent of base salary. This award level was
established based upon the executive officer compensation review referenced
above. Based upon 2005 results, the Company achieved 80 percent of its target
award opportunity and, as a result, Mr. Packwood received an award under the
Executive Incentive Plan of 40 percent of his base salary. This award is
reflected in the bonus column of the Summary Compensation Table.
3. Long Term Incentive
a. 2003 Restricted Stock (Performance Vesting) Grant
19
In January 2003, a target grant of 8,176 restricted shares was made to
Mr. Packwood under the Restricted Stock Plan for a three-year restricted period
through December 31, 2005. As discussed above, the Company did not achieve the
minimum level of performance for the three-year restricted period and, as a
result, those shares were forfeited.
b. 2005 Restricted Stock Grants
(i) Restricted Stock (Time Vesting)
Mr. Packwood received a grant of restricted stock (time vesting) equal
to 45 percent of his base salary in 2005. These shares vest on January 1, 2009
if he remains continuously employed with the Company during the entire
restricted period. Mr. Packwood will receive a prorated number of shares if he
retires, dies or becomes disabled during the restricted period based on the
number of full months he was employed. If his employment is terminated for
other reasons, the shares will be forfeited. Dividends are paid on the shares
during the restricted period and are not subject to forfeiture.
In addition, under the Idaho Power Company Retirement Plan (a qualified
defined benefit pension plan for all regular employees) and the Idaho Power
Company Security Plan for Senior Management Employees (a non-qualified defined
benefit plan for senior management employees), the normal retirement age is 62.
Mr. Packwood reached age 62 in April 2005. To encourage Mr. Packwood to remain
in his existing positions with the Company and Idaho Power Company for one or
two years beyond the normal retirement age of 62, the Committee, in January
2005, approved a grant of 16,000 shares of restricted stock (time vesting) with
8,000 shares vesting on April 15, 2006 and 8,000 shares vesting on April 15,
2007, subject to continued employment. Mr. Packwood will receive a prorated
number of shares if he were to die or become disabled during the restricted
period, based on the number of full months he was employed.
(ii) Restricted Stock (Performance Vesting)
Mr. Packwood received a grant of restricted stock (performance vesting)
at the target level of 45 percent of his base salary in 2005 and will receive a
final share award after the restricted period ends in December 2007 if he
remains employed by the Company during the entire restricted period (with
certain exceptions) and the Company achieves its CEPS performance goal
established by the Committee. Mr. Packwood will receive a prorated number of
shares if he retires, dies or becomes disabled during the restricted period
based on the number of full months he was employed. If his employment is
terminated for other reasons, the shares will be forfeited. The performance
share percentages for Mr. Packwood range from a threshold level of 23 percent
to a maximum of 68 percent. Dividends are paid on the performance shares at the
target level during the restricted period and are not subject to forfeiture.
c. 2005 Stock Options
Mr. Packwood received a grant of 45,360 stock options in January 2005
under the IDACORP 2000 Long-Term Incentive and Compensation Plan with an
exercise price set at fair market value on the date of grant. The stock options
vest ratably over a five-year period (20% per year) contingent upon Mr.
Packwood's continued employment with the Company.
Robert A. Tinstman, Chairman
Jack K. Lemley
Peter S. O'Neill
Richard G. Reiten
20
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
--------------------- --------------------------------
AWARDS
--------------------------------
SECURITIES
RESTRICTED UNDERLYING
STOCK STOCK ALL OTHER
NAME AND SALARY BONUS AWARD(S) OPTIONS/SARs COMPENSATION (2)
PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
------------------ ------ -------- -------- --------------- ------------ ----------------
Jan B. Packwood ............. 2005 630,000 252,000 1,042,976(1) 45,360 73,116
President and 2004 580,000 566,138 522,000 33,800 40,612
Chief Executive Officer 2003 580,000 -0- 203,000 136,000 8,000
- IDACORP
J. LaMont Keen .............. 2005 381,500 122,354 278,160(1) 22,253 35,745
Executive Vice President 2004 350,000 273,315 256,200 16,600 24,634
IDACORP and President 2003 350,000 -0- 105,000 65,000 8,000
and Chief Executive
Officer - Idaho Power
Darrel T. Anderson .......... 2005 240,000 67,200 96,000(1) 7,680 21,531
Senior Vice President 2004 210,000 163,989 153,800 9,900 17,016
- Administrative 2003 185,000 -0- 55,500 35,000 7186
Services and Chief
Financial Officer
- IDACORP and
Idaho Power
James C. Miller ............. 2005 270,000 75,600 108,000(1) 8,640 20,341
Senior Vice President 2004 250,000 170,825 100,000 6,540 17,832
- Power Supply 2003 250,000 -0- 62,500 20,000 17,287
- Idaho Power
Thomas R. Saldin(3) ......... 2005 250,000 70,000 100,000(1) 8,000 5,873
Senior Vice President, 2004 53,800 48,806 0 0 0
General Counsel 2003
and Secretary
- IDACORP and
Idaho Power
------------
(1) Includes restricted stock that vests on January 1, 2009 and performance
shares at target level with a three-year performance period. Mr. Packwood's
2005 award included a retention grant of 16,000 shares of restricted stock
that vests 50% on April 15, 2006, and 50% April 15, 2007. Dividends are
paid on the restricted stock and on the performance shares at target level
when and as paid on the IDACORP common stock and are included in the "All
Other Compensation" column. The aggregate restricted stock holdings as of
December 31, 2005 are as follows: Mr. Packwood - 60,680 ($1,777,924); Mr.
Keen - 22,141 ($648,731); Mr. Anderson - 10,601 ($310,609); Mr. Miller -
9,489 ($278,028) and Mr. Saldin - 3,362 ($98,507).
(2) Represents the Company's contribution to the Employee Savings Plan (401-k
plan) and dividends paid on restricted stock and performance shares, as
follows:
401-k Dividends
------- ----------
Mr. Packwood 8,400 64,716
Mr. Keen 8,400 27,345
Mr. Anderson 8,400 13,131
Mr. Miller 8,400 11,941
Mr. Saldin 1,839 4,034
(3) Hired effective October 1, 2004.
21
OPTION / SAR GRANTS IN FISCAL YEAR 2005
Number of % of Total
Securities Options / SARs
Underlying Granted to Exercise or Grant Date
Options / SARs Employees in Base Price Present Value
Name Granted (#)(1) Fiscal Year 2005 ($ / Share) Expiration Date ($)(2)
---- -------------- ---------------- ----------- ---------------- -------------
Jan B. Packwood ............ 45,360 26.2 29.75 January 19, 2015 283,500
J. LaMont Keen ............. 22,253 12.8 29.75 January 19, 2015 139,080
Darrel T. Anderson ......... 7,680 4.4 29.75 January 19, 2015 48,000
James C. Miller ............ 8,640 5.0 29.75 January 19, 2015 54,000
Thomas R. Saldin ........... 8,000 4.6 29.75 January 19, 2015 50,000
------------
(1) Options were granted pursuant to the 2000 Long-Term Incentive and
Compensation Plan. The options vest 20% per year and accelerate upon a
change in control.
(2) The grant date values were calculated using a binomial option-pricing
model. Options were assumed to be exercised seven years after the date of
grant. A risk-free interest rate of 4.16%, stock price volatility of 23%
and a dividend yield of 4.03% were used in the calculation of the fair
value of the option grant. The actual value of the options will depend on
the market value of the Company's common stock on the dates the options are
exercised. No realization of value from the options is possible without an
increase in the price of the Company's common stock, which would benefit
all shareholders commensurately.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number Of Securities Underlying Value Of Unexercised
Unexercised Options/SARs At In-The-Money Options/SARs
Fiscal Year-End (1) At Fiscal Year-End
------------------------------- --------------------------
Shares
Acquired On Value (#) (#) ($) ($)
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Jan B. Packwood ............ - - 263,760 202,400 347,072 520,608
J. LaMont Keen ............. - - 119,720 98,133 165,880 248,820
Darrel T. Anderson ......... - - 23,380 40,200 89,320 133,980
James C. Miller ............ - - 91,900 44,240 51,040 76,560
Thomas R. Saldin ........... - - -0- 8,000 -0- -0-
------------
(1) Vesting is accelerated upon a change in control.
22
DIRECTOR COMPENSATION
All directors of IDACORP also serve as directors of Idaho Power Company.
The compensation discussed in this section is for service on both boards.
During 2005, each Director who was not an employee of IDACORP received $1,250
for each Board meeting and for each committee meeting attended. Non-employee
Directors who are chairmen of Board committees received monthly retainers in
excess of other non-employee directors. The Chairman of the Audit Committee
received $3,125 per month. The Chairman of the Compensation Committee received
$2,916 per month, and the Chairman of the Corporate Governance Committee
received $2,583 per month; other non-employee Directors received $2,083 per
month. In addition, each non-employee Director, including the non-executive
Chairman, received an annual stock grant under the Non-Employee Director
Compensation Plan of IDACORP common stock equal to approximately $40,000, or
1,325 shares, in February of 2005. Mr. Miller, as non-executive Chairman of the
Board, received a monthly retainer of $7,000. Mr. Miller does not receive
meeting fees for either Board or committee meetings.
Some of the IDACORP Directors serve on subsidiary boards. During 2005,
each Director on a subsidiary board (other than Idaho Power) who was not an
employee of IDACORP or any of its subsidiaries received meeting fees and a
monthly retainer. Messrs. Lemley, Reiten and Tinstman serve on the IDACORP
Technologies, Inc. board of directors. During 2005, they received $600 for each
board meeting attended and a monthly retainer of $750. IDACORP Technologies,
Inc. held three meetings in 2005. Mr. O'Neill serves on the IDACORP Financial
Services board of directors. During 2005, he received $600 for each board
meeting attended and a monthly retainer of $750. IDACORP Financial Services
held five meetings in 2005. Ms. Smith serves on the IDACOMM, Inc. board of
directors. During 2005, she received $600 for each board meeting attended and a
monthly retainer of $750. IDACOMM, Inc. held six meetings in 2005.
Directors may defer all or a portion of any retainers and meeting fees
under a deferred compensation plan. Under the plan, at retirement, Directors
may elect to receive one lump-sum payment of all amounts deferred with interest
(the interest rate is equal to the Moody's Long-Term Corporate Bond Yield
Average rate, plus three percent), or a series of up to 10 equal annual
payments, depending upon the specific deferral arrangement. A special account
is maintained on the books showing the amounts deferred and the interest
accrued thereon.
The Board adopted stock ownership guidelines for non-employee Directors in
January 2006. Each non-employee Director is expected to own IDACORP common
stock equal in value to two times the current base annual retainer fee. A
Director is allowed three years to meet these requirements.
EMPLOYMENT CONTRACTS AND
CHANGE OF CONTROL AGREEMENTS
IDACORP has entered into Change of Control Agreements with the Named
Executive Officers. The Agreements become effective for a three-year period
upon a change of control of IDACORP. If a change of control occurs, the
Agreements provide that specified payments and benefits would be paid in the
event of termination of the Executive's employment (i) by IDACORP, other than
for cause, death or disability, or (ii) by the Executive for constructive
discharge or retirement, at any time when the Agreements are in effect. In such
event, each of the Named Executive Officers would receive payment of an amount
equal to two and one-half times his or her annual compensation, which shall be
the highest combined amount of base salary and bonus received by the Named
Executive Officer in any one of the five years preceding termination. In
addition, under these Agreements, each of the Named Executive Officers would
receive (i) the immediate vesting of restricted stock granted prior to the
change in control; (ii) outplacement services for 12 months not to exceed
$12,000 and (iii) all benefits for a period of 24 months under the welfare
benefit plans.
23
For these purposes "cause" means the Executive's fraud or dishonesty which
has resulted or is likely to result in material economic damage to IDACORP or a
subsidiary of IDACORP, as determined in good faith by a vote of at least
two-thirds of the non-employee directors of IDACORP at a meeting of the Board
at which the executive is provided an opportunity to be heard. "Constructive
discharge" includes material failure by IDACORP to comply with the Agreement,
relocation and certain reductions in compensation.
A "change of control" is defined as (i) the acquisition by a party or
certain related parties of 20% or more of IDACORP's voting securities; (ii) a
purchase by a person of 20% or more of the outstanding stock pursuant to a
tender or exchange offer; (iii) shareholder approval of a merger or similar
transaction after which IDACORP's shareholders will hold 50% or less of the
voting securities of the surviving entity or (iv) a change in a majority of the
Board of Directors within a 24-month period without the approval of two-thirds
of the members of the Board.
24
PERFORMANCE GRAPH
Source: Bloomberg and Edison Electric Institute
Comparison of Cumulative Total Return
$100 Invested December 31, 2000
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
The table shows a Comparison of Five-Year Cumulative Total Shareholder
Return for IDACORP Common Stock, the S&P 500 Index and the Edison Electric
Institute (EEI) 100 Electric Utilities Index. The data assumes that $100 was
invested on December 31, 2000, with beginning-of-period weighting of the peer
group indices (based on market capitalization) and monthly compounding of
returns.
EEI 100
IDACORP S & P 500 Electric Utilities
------- --------- ------------------
2000 ......... $100.00 $100.00 $100.00
2001 ......... 86.87 88.12 91.21
2002 ......... 56.48 68.66 77.77
2003 ......... 72.78 88.34 96.04
2004 ......... 77.44 97.94 117.97
2005 ......... 77.33 102.74 136.91
25
RETIREMENT BENEFITS
The following table sets forth the estimated annual retirement benefits
payable under the Idaho Power 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 (a non-qualified defined
benefit plan for senior management employees). The plans cover employees of
IDACORP.
PENSION PLAN TABLE
REMUNERATION YEARS OF SERVICE
-----------------------------------------------------------------------------------------------------
10 15 20 25 30 35
-------- -------- -------- -------- -------- --------
$250,000........... $150,000 $162,500 $175,000 $187,500 $187,500 $187,500
$300,000........... $180,000 $195,000 $210,000 $225,000 $225,000 $225,000
$350,000........... $210,000 $227,500 $245,000 $262,500 $262,500 $262,500
$400,000........... $240,000 $260,000 $280,000 $300,000 $300,000 $300,000
$450,000........... $270,000 $292,500 $315,000 $337,500 $337,500 $337,500
$500,000........... $300,000 $325,000 $350,000 $375,000 $375,000 $375,000
$600,000........... $360,000 $390,000 $420,000 $450,000 $450,000 $450,000
$700,000........... $420,000 $455,000 $490,000 $525,000 $525,000 $525,000
$800,000........... $480,000 $520,000 $560,000 $600,000 $600,000 $600,000
$900,000........... $540,000 $585,000 $630,000 $675,000 $675,000 $675,000
$1,000,000......... $600,000 $650,000 $700,000 $750,000 $750,000 $750,000
Benefits under the Retirement Plan for Executive Management at normal
retirement age are calculated on years of credited service using the average of
the highest five consecutive years' salary plus bonus (as reported in the
Summary Compensation Table) in the last 10 years before retirement. Benefits
under the Security Plan for Senior Management Employees are based upon a
similar average of the highest five consecutive years of salary plus bonus in
the last 10 years before retirement, using a normal retirement age of 62 years,
years of participation as a senior management employee, and are payable over
the participant's lifetime. Generally, total retirement benefits from the
Retirement Plan and Security Plan for Senior Management Employees will range
from 60 percent to 75 percent of the participant's average salary plus bonus in
the highest five consecutive years in the last 10 years of employment. Idaho
Power Company has established a trust which is made up of trust-owned life
insurance, stocks and fixed income securities, the value of which is sufficient
to cover the liabilities of the Security Plan. Effective August 1, 1996, Idaho
Power Company terminated its Supplemental Employee Retirement Plan (a
non-qualified plan that provided benefits that would otherwise have been denied
to participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits). Benefits payable from the Retirement Plan and the
Security Plan are included in the table above. Benefits shown above are not
subject to any deduction for Social Security benefits or other offset amounts.
As of December 31, 2005, the final five-year average salary plus bonus
under the retirement plans as referred to above for the Executive Officers
named in the Summary Compensation Table are: Mr. Packwood, $828,728; Mr. Keen,
$468,971; Mr. Anderson, $254,641; Mr. Miller, $327,366; and Mr. Saldin,
$298,806. Years of credited service under the Retirement Plan and years of
participation as a senior management employee are, respectively: Mr. Packwood,
36, 29, Mr. Keen, 32, 23; Mr. Anderson 9, 10; Mr. Miller 29, 18; and Mr. Saldin
1, 1.
26
ANNUAL REPORT
The IDACORP 2005 annual report to shareholders, which includes the
combined Annual Report on Form 10-K for the year ended December 31, 2005 of
IDACORP and Idaho Power Company, was mailed along with this Proxy Statement on
or about April 10, 2006 to all shareholders of record.
SHARED ADDRESS SHAREHOLDERS
In accordance with a notice sent to eligible shareholders who share a
single address, IDACORP is sending only one annual report to shareholders and
proxy statement to that address unless IDACORP received instructions to the
contrary from any shareholder at that address. This practice, known as
"householding," is designed to reduce IDACORP's printing and postage costs.
However, if a shareholder of record residing at such address wishes to receive
a separate annual report to shareholders or proxy statement in the future, he
or she may contact Investor Relations, 1221 West Idaho Street, Boise, Idaho
83702-5610, telephone 1-800-635-5406. Eligible shareholders of record receiving
multiple copies of IDACORP's annual report to shareholders and proxy statement
can request householding by contacting IDACORP in the same manner. Shareholders
who own shares through a bank, broker or other nominee can request householding
by contacting the nominee.
IDACORP hereby undertakes to deliver promptly, upon written or oral
request, a separate copy of the annual report to shareholders, or proxy
statement, as applicable, to a shareholder at a shared address to which a
single copy of the document was delivered. Requests should be addressed to
Investor Relations at the address set forth above.
2007 ANNUAL MEETING OF SHAREHOLDERS
Nominations for Director may be made only by the Board of Directors or by
a shareholder entitled to vote who has delivered written notice to the
Secretary of IDACORP not later than 120 days prior to the first anniversary of
the date on which IDACORP first mailed its proxy materials for the preceding
year's annual meeting. The notice must contain certain information specified in
the Bylaws, a copy of which may be obtained by writing to the Secretary.
Rule 14a-4 of the Securities and Exchange Commission's proxy rules allows
a company to use discretionary voting authority to vote on matters coming
before an annual meeting of shareholders, if the company does not have notice
of the matter at least 45 days before the date corresponding to the date on
which the company first mailed its proxy materials for prior year's annual
meeting of shareholders or the date specified by an advance notice provision in
the company's bylaws. The Bylaws of IDACORP contain such an advance notice
provision. Under the Bylaws, no business may be brought before an annual
meeting of the shareholders except as specified in the notice of the meeting or
as otherwise properly brought before the meeting by or at the direction of the
Board or by a shareholder entitled to vote who has delivered written notice to
the Secretary of IDACORP not later than 120 days prior to the first anniversary
of the date on which IDACORP first mailed its proxy materials for the preceding
year's annual meeting. The notice must contain certain information specified in
the Bylaws, a copy of which may be obtained by writing to the Secretary.
For the 2007 Annual Meeting of Shareholders, expected to be held on May
17, 2007, IDACORP shareholders must submit such nominations or proposals to the
Secretary of IDACORP no later than December 11, 2006.
27
The requirements referred to above are separate and apart from the
Securities and Exchange Commission's requirements that a shareholder must meet
in order to have a shareholder proposal included in the proxy statement under
Rule 14a-8. For the 2007 Annual Meeting of Shareholders, expected to be held on
May 17, 2007, any shareholder who wishes to submit a proposal for inclusion in
the proxy materials pursuant to Rule 14a-8 must submit such proposal to the
Secretary of IDACORP on or before December 11, 2006.
It is requested that each shareholder who cannot attend the meeting vote
his or her proxy or proxies without delay.
A copy of IDACORP's Annual Report on Form 10-K (excluding exhibits),
including the financial statements and the financial statement schedules, for
the year ended December 31, 2005, which is required to be filed with the
Securities and Exchange Commission pursuant to Rule 13a-1 under the Securities
Exchange Act of 1934, as amended, will be made available to shareholders to
whom this Proxy Statement is mailed, without charge, upon written or oral
request to Lawrence F. Spencer, Director of Investor Relations, IDACORP, Inc.,
1221 West Idaho Street, Boise, Idaho 83702, Telephone Number: (208) 388-2200.
IDACORP's Annual Report on Form 10-K also may be accessed through IDACORP's
website at www.idacorpinc.com.
28
EXHIBIT A
INDEPENDENCE STANDARDS
IDACORP, INC. BOARD OF DIRECTORS
EXCERPT FROM CORPORATE GOVERNANCE GUIDELINES
II. SELECTION AND COMPOSITION
B. Independence of the Board
The Board shall be comprised of a majority of directors who qualify as
independent directors ("Independent Directors") under the listing standards
of the New York Stock Exchange ("NYSE") and meet the applicable
requirements of the Sarbanes-Oxley Act of 2002 ("SOX Act") and any
applicable Securities and Exchange Commission ("SEC") rules and
regulations. References in this Section II.B. to the "Company" include any
parent or subsidiary in a consolidated group with the Company.
The Board shall review annually the relationships that each director has
with the Company (either directly or as a partner, shareholder or officer
of an organization that has a relationship with the Company). Following
such annual review, only those directors who the Board affirmatively
determines have no material relationship with the Company (either directly
or as a partner, shareholder or officer of an organization that has a
relationship with the Company) will be considered Independent Directors,
subject to additional qualifications prescribed under the listing standards
of the NYSE and under applicable law, including the SOX Act.
To be considered independent, the Board must affirmatively determine that a
director does not have any direct or indirect material relationship with
the Company. A director is not independent if:
1. The director is, or has been within the last three years, an employee of
the Company, or an immediate family member is, or has been within the last
three years, an executive officer(1) of the Company; provided, however,
that a director's employment as an interim Chairman or Chief Executive
Officer or other executive officer shall not disqualify the director from
being considered independent following such employment.
"Immediate family member" includes a person's spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers
and sisters-in-law, and anyone (other than domestic employees) who shares
such person's home. When applying the three-year look back provisions in
subsections (1) through (5) of this Section II.B., the Board need not
consider individuals who are no longer immediate family members as a result
of legal separation or divorce or those who have died or become
incapacitated.
2. The director has received, or has an immediate family member who has
received, during any twelve-month period within the last three years, more
than $100,000 in direct compensation from the Company, other than director
and committee fees and pension or other forms of deferred compensation for
prior service (provided such compensation is not contingent in any way on
continued service); provided, however, that compensation received by a
director for former service as an interim Chairman or interim Chief
Executive Officer or other executive officer and compensation
------------
(1) The term "executive officer" has the same meaning specified for the term
"officer" in Rule 16a-1(f) under the Securities Exchange Act of 1934 and
means the Company's president, principal financial officer, principal
accounting officer (or, if there is no such accounting officer, the
controller), any vice-president of the Company in charge of a principal
business unit, division or function (such as sales, administration or
finance), any other officer who performs a policy-making function, or any
other person who performs similar policy-making functions for the Company.
Officers of the Company's subsidiaries shall be deemed executive officers
of the Company if they perform such policy-making functions for the
Company.
A-1
received by an immediate family member for service as an employee of the
Company (other than an executive officer) need not be considered by the
Board in making this determination.
3. (A) The director or an immediate family member is a current partner of a
firm that is the Company's internal or external auditor; (B) the director
is a current employee of such a firm; (C) the director has an immediate
family member who is a current employee of such a firm and who participates
in the firm's audit, assurance or tax compliance (but not tax planning)
practice; or (D) the director or an immediate family member was within the
last three years (but is no longer) a partner or employee of such a firm
and personally worked on the Company's audit within that time.
4. The director or an immediate family member is, or has been within the
last three years, employed as an executive officer of another company where
any of the Company's present executive officers at the same time serves or
served on that company's compensation committee.
5. The director is a current employee, or an immediate family member is a
current executive officer, of a company that has made payments to, or
received payments from, the Company for property or services (except where
the payments are for electrical energy purchased or sold under a purchase
or sale arrangement that is approved by a state or federal regulatory
agency) in an amount which, in any of the last three fiscal years, exceeds
the greater of $1 million, or 2% of such other company's consolidated gross
revenues.
In addition, the Board has established the following guidelines to
assist it in determining director independence:
(i) For purposes of subsection (5) above, both the payments and the
consolidated gross revenues to be measured shall be those
reported in the last completed fiscal year. The look-back
provision for this test applies solely to the financial
relationship between the Company and the director or immediate
family member's current employer; the Board need not consider
former employment of the director or immediate family member.
(ii) For purposes of subsection (5) above, contributions to tax
exempt organizations shall not be considered "payments,"
provided, however, that, as required by the NYSE Rules, the
Company will disclose in its annual proxy statement any such
contributions made by the Company to any tax exempt organization
in which any independent director serves as an executive officer
if, within the preceding three years, contributions in any
single fiscal year from the Company to the organization exceeded
the greater of $1 million, or 2% of such tax exempt
organization's consolidated gross revenues.
(iii) The following tax exempt relationships will not be considered to
be material relationships that would impair a director's
independence: if a Company director serves as an officer,
director or trustee of a tax exempt organization, and the
Company's annual tax exempt contributions to the organization
are less than one percent of that organization's total annual
tax exempt receipts. The Board will annually review all tax
exempt relationships of directors.
(iv) A transaction shall not be deemed material if it, together with
all related transactions with the same director, does not
involve more than $10,000 or involves only the reimbursement of
expenses reasonably incurred by the director in connection with
his or her services as a director of the Company.
(v) For relationships not covered by the guidelines above, the
determination of whether the relationship is material or not,
and therefore whether the director would be independent or not,
shall be made by the Board. The Board shall explain in the next
proxy statement the
A-2
basis for any Board determination that a relationship was not A
material, identify the independent directors and explain the
basis for the determination of independence.
(vi) To facilitate implementation of the foregoing, each director
shall provide to the Chairman of the Board a brief description
of each relationship or transaction between such director and
the Company. Relationships include, but are not limited to,
commercial, industrial, banking, consulting, legal, accounting,
charitable and familial relationships.
A-3
EXHIBIT B
IDACORP, Inc.
Audit Committee
Policy For Pre-Approval of Independent Auditor Services
Adopted February 4, 2004
BACKGROUND:
-----------
The Sarbanes-Oxley Act of 2002, Section 10A(i) of the Securities Exchange
Act of 1934, as amended, Regulation S-X Section 2-01(c) (7) and the Company's
Audit Committee Charter require the Audit Committee to pre-approve all audit
and permitted non-audit services provided to the Company by the independent
auditor.
In order to comply with these requirements, and to ensure both the
appearance and certainty of independence on behalf of the independent auditors,
the Audit Committee hereby establishes the following policies:
POLICY:
-------
I. STATEMENT OF PRINCIPLES
In addition to the audits of the Company's consolidated financial
statements, the independent auditor may be engaged to provide Audit-Related
Services, Tax Services and All Other Services. The Audit Committee is required
to pre-approve all services performed by the independent auditor in order to
assure that the provision of such services does not impair the auditor's
independence. Unless a type of service to be provided by the independent
auditor has received general pre-approval, it will require specific
pre-approval by the Audit Committee. Any proposed services exceeding
pre-approved cost levels will require specific pre-approval by the Audit
Committee.
Any request to engage the independent auditor to provide a service which
has not received general pre-approval shall be submitted as a written proposal
to the Chief Financial Officer (CFO) with a copy to the General Counsel. Such
request shall include a detailed description of the service to be provided, the
proposed fee and the business reasons for engaging the independent auditor to
provide the service. Upon approval by the CFO, the General Counsel and the
independent auditor that the proposed engagement complies with the terms of
this Policy and the applicable rules and regulations, the request shall be
presented to the Committee or the Committee Chairman, as the case may be, for
pre-approval.
In determining whether to pre-approve the engagement of the independent
auditor, the Committee or the Committee Chairman, as the case may be, shall
consider, among other things, this Policy, applicable rules and regulations and
whether the nature of the engagement and the related fees are consistent with
the following principles, as stated in the SEC's adopting release for the rules
on auditor independence:
o the independent auditor cannot function in the role of management of
the Company;
o the independent auditor cannot audit its own work;
o the independent auditor cannot serve in an advocacy role on behalf of
the Company.
The appendices to this Policy describe the Audit, Audit-Related, Tax and
All Other Services that have the general pre-approval of the Audit Committee.
The term of any pre-approval is 12 months from the date of pre-approval, unless
the Audit Committee specifically provides for a different period. The Audit
Committee will periodically revise the list of pre-approved services, based on
subsequent determinations.
II. DELEGATION
The Audit Committee may delegate pre-approval authority to one or more of
its members. The Audit Committee hereby delegates to the Chairman of the
Committee pre-approval authority for proposed audit and audit-related services.
The Chairman shall report any pre-approval decisions to the Audit Committee at
its next scheduled meeting.
III. DEFINITIONS
Audit Services: those services which only the independent auditor can
reasonably provide, including tax services and accounting consultation
necessary to perform an audit of the consolidated financial statements of the
Company; services in connection with statutory and regulatory filings or
engagements; statutory audits or financial audits for subsidiaries or
affiliates; attest services, including attestation of management's report on
internal controls; services associated with registration statements, periodic
reports and other documents filed with or furnished to the Securities and
Exchange Commission, including comfort letters, consents and assistance in
responding to SEC comment letters; and consultations by the Company as to the
accounting or disclosure treatment of transactions or events and/or the actual
or potential impact of final or proposed rules, standards or interpretations by
the SEC, FASB, or other regulatory or standard setting bodies (other than
services which are Audit-Related Services and have been separately
pre-approved).
Audit-Related Services: assurances and related services that are
reasonably related to the performance of the audit or review of the Company's
financial statements and that are traditionally performed by the independent
auditor including employee benefit plan audits; due diligence related to
mergers, acquisitions or dispositions; accounting consultations and audits in
connection with acquisitions or dispositions; internal control reviews and
assistance with internal control reporting requirements; attest services
related to financial reporting that are not required by statute or regulation;
consultations concerning financial accounting and reporting standards and
consultations by the Company's management as to the accounting or disclosure
treatment of transactions or events and/or the actual or potential impact of
final or proposed rules, standards or interpretations by the SEC, FASB, or
other regulatory or standard setting bodies (other than services that are Audit
Services and have been separately pre-approved); statutory, subsidiary or
equity investee audits incremental to the audit of the consolidated financial
statements; general assistance with the implementation of the requirements of
Sarbanes-Oxley, SEC rules and NYSE listing standards; and agreed-upon or
expanded audit procedures relating to accounting and/or billing records
required to respond to or comply with financial, accounting or regulatory
reporting matters.
Tax Services: tax compliance (preparation of original and amended tax
returns, claims for refund and tax payment planning services); other tax advice
(assistance with tax audits and appeals, tax advice related to mergers and
acquisitions, employee benefit plans and requests for rulings or technical
advice from taxing authorities); tax planning.
All Other Services: any other work that is not an Audit Service,
Audit-Related Service or a Tax Service.
IV. AUDIT SERVICES
The annual Audit Services engagement terms and fees will be subject to the
specific pre-approval of the Audit Committee. The Audit Committee will approve,
if necessary, any changes in terms, conditions and fees resulting from changes
in audit scope, Company structure or other matters.
In addition to the annual Audit Services engagement approved by the Audit
Committee, the Audit Committee may grant pre-approval for other Audit Services.
The Audit Committee has pre-approved the
B-2
Audit Services listed in Appendix A. All Audit Services not listed in Appendix
A must be separately pre-approved by the Audit Committee.
V. AUDIT-RELATED SERVICES
The Audit Committee believes that the provision of Audit-Related Services
does not impair the independence of the auditor and has pre- approved the
Audit-Related Services listed in Appendix B. All Audit-Related Services not
listed in Appendix B must be separately pre-approved by the Audit Committee.
VI. TAX SERVICES
The Audit Committee believes that the independent auditor can provide
certain Tax Services to the Company without impairing the auditor's
independence. The Audit Committee has pre-approved the Tax Services listed in
Appendix C. All Tax Services not listed in Appendix C must be separately
pre-approved by the Audit Committee.
VII. ALL OTHER SERVICES
The Audit Committee may grant pre-approval to those permissible non-audit
services classified as All Other Services that it believes are routine and
recurring services and would not impair the independence of the auditor. The
Audit Committee has pre-approved the All Other Services listed in Appendix D.
Permissible All Other Services not listed in Appendix D must be separately
pre-approved by the Audit Committee.
A list of the SEC's prohibited non-audit services is attached to this
policy as Exhibit I. The SEC's rules and relevant guidance should be consulted
to determine the precise definitions of these services and the applicability of
exceptions to certain of the prohibitions.
VIII. FEE LEVEL REVIEW
A fee level review for all services to be provided by the independent
auditor will be periodically performed by the Audit Committee.
IX. SUPPORTING DOCUMENTATION
With respect to each proposed service, the independent auditor will
provide detailed back-up documentation regarding the specific services to be
provided. This documentation will be provided to the Audit Committee,
X. PROCEDURES
Requests or applications to provide services that require separate approval by
the Audit Committee will be submitted to the Audit Committee by the independent
auditor, the Chief Financial Officer and the General Counsel, and must include
a joint statement as to whether, in their view, the request or application is
consistent with the SEC's rules on auditor independence.
B-3
EXHIBIT I
Prohibited Non-Audit Services
-----------------------------
o Bookkeeping or other services related to the accounting records or
financial statements of the Company
o Financial information systems design and implementation
o Appraisal or valuation services, fairness opinions or
contribution-in-kind reports
o Actuarial services
o Internal audit outsourcing services
o Management functions
o Human resources
o Broker-dealer, investment adviser or investment banking services
o Legal services
o Expert services unrelated to the audit
EXHIBIT C
CHARTER OF THE
AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF IDACORP, INC.
ADOPTED AS OF JULY 17, 2003
AND AMENDED AS OF NOVEMBER 20, 2003, NOVEMBER 18, 2004,
NOVEMBER 17, 2005 AND MARCH 16, 2006
I. PURPOSE OF THE COMMITTEE
The purpose of the Audit Committee (the "Committee") of the Board of
Directors (the "Board") of IDACORP, Inc. (the "Company") shall be to assist the
Board in the oversight of the integrity of the Company's financial statements;
compliance with legal and regulatory requirements; the qualifications,
independence and performance of the independent auditors; and the performance
of the internal audit department. The Committee shall also prepare the Audit
Committee report as required by the Securities and Exchange Commission ("SEC")
to be included in the Company's proxy statement for the annual meeting of
shareholders. The Committee shall report regularly to the Board.
II. COMPOSITION OF THE COMMITTEE
The Committee shall be comprised of no fewer than three Directors. The
Directors on the Committee shall meet the independence and other requirements
of the New York Stock Exchange ("NYSE"), the Sarbanes-Oxley Act of 2002 ("SOX
Act") and the rules promulgated by the SEC pursuant to the SOX Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Each Director
meeting these requirements shall be referred to as an "Independent Director."
Each member of the Committee must be "financially literate," as such
qualification is interpreted by the Board in its business judgment, or must
become financially literate within a reasonable period of time after his or her
appointment to the Committee. In addition, at least one member of the Committee
must have "accounting or related financial management expertise," as the Board
interprets such qualification in its business judgment. One member of the
Committee shall be an "audit committee financial expert" as that term is
defined in the rules and regulations promulgated by the SEC pursuant to the SOX
Act. No Director may serve as a member of the Committee if such Director serves
on the audit committees of more than two other public companies, unless the
Board expressly determines that such service would not impair said Director's
ability to serve effectively on the Committee and such determination is
disclosed in the Company's annual proxy statement.
The members of the Committee shall be appointed annually to one-year terms
by majority vote of the Board at the first meeting of the Board following the
annual meeting of shareholders. Vacancies on the Committee shall be filled by
majority vote of the Board at the next meeting of the Board following the
occurrence of the vacancy or by unanimous written consent of the Board. No
member of the Committee shall be removed from the Committee except by majority
vote of the Independent Directors then in office or by unanimous written
consent of the Board.
III. MEETINGS AND PROCEDURES OF THE COMMITTEE
The Committee shall meet at least five times per year or more frequently
as circumstances require. The Board shall designate one member of the Committee
as its Chairperson on an annual basis. The Chairperson of the Committee or a
majority of the members of the Committee may also call a special meeting of the
Committee. A majority of the members of the Committee present in person or by
means of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can hear each other shall
constitute a quorum. The Committee shall act on the affirmative
C-1
vote of a majority of members present at a meeting at which a quorum is
present. Without a meeting, the Committee may act by unanimous written consent
of all members.
The Committee may request that any Director, officer or employee of the
Company, or other person whose advice and counsel is sought by the Committee,
attend meetings of the Committee to provide such pertinent information as the
Committee requests.
The Committee shall deliver a report of each meeting to the Board,
including a description of all actions taken by the Committee at the meeting.
The Committee shall keep written minutes of its meetings, which minutes shall
be maintained with the books and records of the Company.
The Committee may delegate certain of its functions to one or more members
of the Committee if permitted by law. Such member(s) shall report on all
actions taken no later than at the next meeting of the Committee. The
Committee's functions are the sole responsibility of the Committee and may not
be allocated to a different committee.
IV. DUTIES OF THE COMMITTEE
The Committee shall have the following duties and responsibilities:
A. Financial Reporting
1. The Committee shall meet to review and discuss with management, the
Company's independent auditors and the director of internal audit the
following:
(a) the Company's earnings press releases (with particular attention
to any use of "pro forma," or "adjusted" non-GAAP, information),
as well as financial information and earnings guidance provided
by the Company to analysts and rating agencies. This discussion
may be done generally (i.e., discussion of the types of
information to be disclosed and the type of presentation to be
made).
(b) the Company's annual audited financial statements and quarterly
financial statements, including reviewing the specific
disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and any major
issues related thereto, and recommend to the Board whether the
audited financial statements should be included in the Company's
Annual Report on Form 10-K.
(c) the critical accounting policies and such other accounting
policies of the Company as are deemed appropriate for review by
the Committee prior to any interim or year-end filings with the
SEC or other regulatory body, including any financial reporting
issues which could have a material impact on the Company's
financial statements.
(d) the development, selection and disclosure of critical accounting
estimates included in the "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
(e) any major issues regarding accounting principles and financial
statement presentations, including any significant changes in the
selection or application of accounting principles.
(f) any analyses prepared by management and/or the independent
auditors setting forth significant financial reporting issues and
judgments made in connection with the preparation of the
financial statements.
C-2
(g) all alternative treatments of financial information within GAAP
that have been discussed by the independent auditors and
management, ramifications of the use of such alternatives and the
treatment preferred by the independent auditors.
(h) all material written communications between the independent
auditors and management including but not limited to any
management letter, schedule of unadjusted differences or
management representation letter.
(i) the effect of regulatory, tax, accounting and financial reporting
initiatives or developments, as well as off-balance sheet
structures, on the financial statements of the Company, including
those proposed and/or adopted by the Financial Accounting
Standards Board, the Public Company Accounting Oversight Board,
the American Institute of Certified Public Accountants or the
Internal Revenue Service that may have a bearing on the Company.
(j) the Chief Executive Officer and Chief Financial Officer periodic
report certifications and disclosure required under the SOX Act
and the rules promulgated by the SEC pursuant thereto.
2. The Committee shall meet periodically with the Disclosure Committee to
discuss any matters of concern arising from the Disclosure Committee's
quarterly process to assist the Chief Executive Officer and Chief
Financial Officer in their SOX Act Section 302 and 906 certifications.
3. The Committee shall prepare the Audit Committee Report, as required by
Item 306 of Regulation S-K for inclusion in the Company's annual proxy
statement.
4. The Committee shall review with the full Board any issues that arise
with respect to the quality or integrity of the Company's financial
statements.
B. Independent Auditors
1. The Committee shall be directly responsible for the appointment
(subject to shareholder ratification), compensation, retention, and
oversight of the work of any independent auditors engaged by the
Company (including resolution of disagreements between management and
the independent auditors regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work or
performing other audit, review or attest services for the Company, and
the independent auditors shall report directly to the Committee.
2. The Committee shall review and have sole authority to approve the
independent auditors' engagement plan, including the audit plan,
scope, procedures and the engagement letter, including the proposed
fees and terms contained therein, and monitor such plan's progress and
results during the year.
3. The Committee shall review and have sole authority to pre-approve all
audit and, as provided in the SOX Act, all permitted non-audit
engagements between the Company and the independent auditors and
monitor such engagements' progress and results during the year.
(a) The Committee may establish pre-approval policies and procedures
for the engagement of the independent auditors.
(b) The Committee may delegate to one or more designated members the
authority to grant the pre-approvals required by this subsection.
The decisions of any member to whom authority is delegated to
pre-approve an activity shall be presented to the full Committee
at the next meeting of the Committee to occur after the grant of
such approval.
C-3
(c) The Committee shall request from the independent auditors written
assurance that each non-audit service they are to provide to the
Company is not a prohibited activity as described in Section
10A(g) of the Exchange Act, Rule 2-01(c)(4) of Regulation S-X or
rules promulgated by the Public Company Accounting Oversight
Board.
4. The Committee shall obtain and review at least annually a report from
the independent auditors describing:
(a) the independent auditors' internal quality-control procedures.
(b) any material issues raised by the most recent internal quality
control review, or peer review, of the independent auditors, or
by any inquiry or investigation by any governmental or
professional authority, within the preceding five years,
respecting independent audits carried out by the independent
auditors, and any steps taken to deal with any such issues.
(c) all relationships between the independent auditors and the
Company, including a description of each category of services
provided by the independent auditors to the Company and a list of
the fees billed for each such category.
5. The Committee shall evaluate annually the independent auditors'
qualifications, performance and independence. In this evaluation, the
Committee shall take into account the opinions of management and the
internal auditors. The Committee shall review and evaluate the lead
partner of the independent auditors. The Committee shall present its
conclusions to the Board.
6. The Committee shall oversee the independence of the independent
auditors by, among other things:
(a) actively engaging in a dialogue with the independent auditors
with respect to any disclosed relationships or services that may
affect the objectivity and independence of the independent
auditors, and taking appropriate action to satisfy itself of the
auditors' independence.
(b) monitoring the rotation of audit partners to ensure that the
independent auditors are considered independent under applicable
rules and regulations.
(c) setting clear hiring policies for employees or former employees
of the independent auditors to ensure that the independent
auditors are considered independent under applicable rules and
regulations.
(d) considering whether there should be a regular rotation of the
independent auditors.
(e) monitoring whether any improper influence is being asserted on
the independent auditors engaged in the performance of the audit
by officers or Directors of the Company, or any person acting
under their direction.
7. The Committee shall instruct the independent auditors that they are
ultimately accountable to the Committee and the Board.
8. The Committee shall review and discuss on a regular basis with the
independent auditors the matters required to be discussed by Statement
on Auditing Standards No. 61 relating to the conduct of the audit,
including any problems or difficulties the independent auditors
encountered in the course of any audit work, and management's response
with respect thereto, any restrictions on the scope of the independent
auditors' activities or on access to requested information, and any
significant disagreements with management. In connection therewith,
the Committee should review with the independent auditors the
following:
C-4
(a) any accounting adjustments that were noted or proposed by the
independent auditors but were rejected by management (as
immaterial or otherwise).
(b) any communications between the audit team and the independent
auditors' national office regarding auditing or accounting issues
presented by the engagement.
(c) any "management" or "internal control" letters issued, or
proposed to be issued, by the independent auditors.
9. The Committee shall review and discuss with the independent auditors
the matters required to be discussed by Statement of Auditing
Standards No. 100 relating to quarterly financial statements.
10. The Committee shall obtain from the independent auditors their annual
report and any other information pursuant to Section 10A of the
Exchange Act.
11. The Committee shall review with the full Board any issues that arise
with respect to the performance and independence of the independent
auditors.
C. Internal Controls
1. The Committee shall review with the independent auditors, corporate
compliance, internal audit and risk management, as applicable, the
adequacy and effectiveness of the Company's internal controls
pertaining to (i) the effectiveness and efficiency of operations, (ii)
reliability of financial reporting and (iii) compliance with
applicable law and regulations. The Committee's review of the
Company's internal controls shall include a review of management's
annual report on the Company's internal control over financial
reporting, as well as the independent auditors' attestation report on
management's assessment of the Company's internal control over
financial reporting included in management's report, prior to the
inclusion of such reports in the Company's annual report on Form 10-K.
2. The Committee shall review with management the Company's internal
controls, including major issues as to the adequacy of the Company's
internal controls and any special audit steps adopted in light of the
discovery of material control deficiencies, and evaluate whether the
Company is operating in accordance with its prescribed policies,
procedures and codes of conduct.
3. The Committee shall review periodically with the Chief Executive
Officer, Chief Financial Officer, the independent auditors and the
internal auditor, the following:
(a) all significant deficiencies and material weaknesses in the
design or operation of the Company's internal control over
financial reporting which are reasonably likely to adversely
affect the Company's ability to record, process, summarize and
report financial information.
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's
internal control over financial reporting.
(c) any change in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over
financial reporting.
C-5
D. Legal and Regulatory Compliance
The Committee shall:
(a) periodically review with the Board issues that arise with respect
to the Company's compliance with legal or regulatory
requirements.
(b) periodically review the Code of Business Conduct and Ethics for
officers and employees and the code of Conduct for Directors
(collectively the "Codes") to ensure they properly address
accounting and auditing matters.
(c) periodically review the training of employees, officers and
directors on the Codes and the communication and support channels
available to address compliance related to accounting and
auditing matters.
(d) establish criteria for immediate reports to the Chairperson of
the Committee and receive summary reports of violations of the
Codes and actions taken related to accounting and auditing
matters.
E. Risk Management
The Committee shall:
(a) review and discuss with management guidelines and policies to
govern the process by which management assesses and manages the
Company's exposure to risk, as well as the Company's major
financial risk exposures and the steps management has taken to
monitor and control such risk.
(b) review and concur in the appointment or removal of the Chief Risk
Officer.
F. Internal Audit
1. The Committee shall:
(a) annually review the Company's internal audit department including
its organization and qualifications, the proposed audit plan for
the coming year, the internal audit department's coordination
efforts with the independent auditors, significant findings
during the year, any difficulties experienced including access
restrictions, changes in the audit plan and the independence of
internal audit.
(b) review and concur in the appointment or removal of the director
of internal audit.
2. The Committee shall review with the full Board any issues that arise
with respect to the performance of the internal audit department.
3. The Committee shall discuss with the independent auditors the
responsibilities, budget and staffing of the Company's internal audit
department.
C-6
G. Other Duties and Responsibilities
The Committee shall:
(a) provide for an open avenue of communications between the Board,
the Committee, the internal auditors and the independent
auditors, including periodic meetings with the director of
internal audit, the independent auditors, the Chief Financial
Officer and other members of management in separate executive
sessions to discuss any matters that the Committee, these groups
or individuals believe should be discussed privately with the
Committee.
(b) establish procedures for (i) the receipt, retention and treatment
of complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and (ii) the
confidential, anonymous submission by employees of the Company of
concerns regarding questionable accounting or auditing matters.
(c) perform such other functions as assigned to the Committee by law,
the Company's Charter or By-laws, or the Board.
(d) periodically review with the Chief Executive Officer, the Chief
Financial Officer, the Disclosure Committee, and the internal
auditor, the adequacy and effectiveness of the Company's
disclosure controls and procedures.
H. Funding
Appropriate funding, as determined by the Committee, shall be provided by
the Company for payment of compensation to the independent auditors employed by
the Company for the purposes of preparing or issuing an audit report or
performing other audit, permitted non-audit, review or attest services for the
Company, and for ordinary administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties.
V. EVALUATION OF THE COMMITTEE
The Committee shall, on an annual basis, evaluate its performance under
this Charter. In conducting this review, the Committee shall evaluate whether
this Charter appropriately addresses the matters that are or should be within
its scope. The Committee shall address all matters that the Committee considers
relevant to its performance including but not limited to the following: the
adequacy, appropriateness and quality of the information and recommendations
presented by the Committee to the Board, the manner in which they were
discussed or debated, and whether the number and length of meetings of the
Committee were adequate for the Committee to complete its work in a thorough
and thoughtful manner.
The Committee shall report to the Board the results of its evaluation,
including any recommended amendment to this Charter and any recommended change
to the Company's or the Board's policies or procedures.
VI. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISORS
The Committee may conduct or authorize investigations into or studies of
matters within the Committee's scope of responsibilities, and may engage and
obtain the advice and assistance from outside legal, accounting or other
advisors as the Committee deems necessary to carry out its duties. The
Committee may retain and compensate these advisors without seeking Board
approval. Appropriate funding, as determined by the Committee, shall be
provided by the Company for payment of compensation to any outside legal,
accounting or other advisors employed by the Committee.
C-7
VII. GENERAL
While the Committee has the duties and responsibilities set forth in this
Charter, the Committee is not responsible for planning or conducting the audit
or for determining whether the Company's financial statements are complete and
accurate and in accordance with GAAP.
In fulfilling their responsibilities hereunder, it is recognized that
members of the Committee are not full-time employees of the Company and that it
is not the duty or responsibility of the Committee or its members to conduct
"field work" or other types of auditing or accounting reviews or procedures or
to set auditor independence standards. Each member of the Committee shall be
entitled to rely on (i) the integrity of those persons and organizations within
and outside the Company from which the member receives information, (ii) the
accuracy of the financial and other information provided to the Committee
absent actual knowledge to the contrary (which shall be promptly reported to
the Board) and (iii) statements made by management or third parties as to any
information technology, internal audit and other non-audit services provided by
the independent auditors to the Company.
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[LOGO: IDACORP(R)] Annual Meeting of Shareholders
Thursday, May 18, 2006
10:00 a.m. Local Time
Idaho Power Corporate Headquarters
1221 West Idaho Street
Boise, Idaho 83707
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THERE ARE THREE WAYS TO VOTE YOUR PROXY
TELEPHONE VOTING INTERNET VOTING VOTING BY MAIL
This method of voting is available Visit the Internet voting website at Simply mark, sign and date your proxy
for residents of the U.S. and http://proxy.georgeson.com. Have your card and return it in the postage-paid
Canada. On a touch tone telephone, proxy card ready and follow the envelope. If you are voting by telephone
call TOLL FREE 1-877-260-0389, 24 instructions on your screen. You will or the Internet, please do not mail your
hours a day, 7 days a week. Have incur only your usual Internet charges. proxy card.
your proxy card ready, then follow Available until 5:00 pm Eastern Time on
the prerecorded instructions. Your May 17, 2006.
vote will be confirmed and cast as
you directed. Available until 5:00
pm Eastern Time on May 17, 2006.
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TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
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Please mark votes
|X| as in this example.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 and 2
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1. ELECTION OF DIRECTORS: Nominees:
FOR all nominees listed WITHHOLD 2. To ratify the selection of FOR AGAINST ABSTAIN
01 Gary G. Michael (except as indicated to authority to vote Deloitte & Touche LLP as [_] [_] [_]
02 Peter S. O'Neill the contrary) for all nominees independent registered public
03 Jan B. Packwood accounting firm for the fiscal
[_] [_] year ending December 31, 2006.
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) in the space provided below.
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DATE: _____________________________
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Signature(s) in Box
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Signature of Joint Owner
[LOGO: IDACORP(R)]
April 10, 2006
Dear Shareholders of IDACORP, Inc.:
It is our pleasure to invite you to attend the upcoming 2006 Annual Meeting of
Shareholders of IDACORP, Inc. to be held on May 18, 2006, at 10:00 a.m., local
time, at the Idaho Power Corporate Headquarters, 1221 West Idaho Street, Boise,
Idaho. Your Board of Directors and management look forward to personally
greeting those shareholders able to attend.
Information about the business of the meeting and the nominees for election as
members of the Board of Directors is set forth in the Notice of Meeting and the
Proxy Statement on the following pages. This year IDACORP, Inc. is asking you to
elect three Directors and to ratify the selection of an independent registered
public accounting firm for the fiscal year ending December 31, 2006.
YOUR VOTE IS IMPORTANT. YOU CAN BE SURE YOUR SHARES ARE REPRESENTED AT THE
MEETING BY PROMPTLY RETURNING YOUR COMPLETED PROXY IN THE ENCLOSED ENVELOPE. You
may revoke your proxy prior to or at the meeting and may vote in person if you
wish.
/s/ Jon H. Miller /s/ Jan B. Packwood
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Jon H. Miller Jan B. Packwood
Chairman of the Board President and Chief Executive Officer
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
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IDACORP, Inc.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 18, 2006
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O
X Properly executed proxies will be voted as marked and, if not marked,
Y proxies received will be voted "For" proposal (1), to elect three
Directors and "For" proposal (2), to ratify the selection of an
independent registered public accounting firm for the fiscal year
ending December 31, 2006.
The undersigned hereby appoints Jan B. Packwood and Thomas R. Saldin,
and each of them, proxies with full power of substitution to vote
for the undersigned at the Annual Meeting of Shareholders of IDACORP,
Inc. and at any adjournment thereof, on the matters set forth in the
Proxy Statement and such other matters as may properly come before the
meeting; and hereby directs that this proxy be voted in accordance
with the instructions herein and in the proxies' discretion on any
other matters that may properly come before the meeting.
Please date, sign and promptly mail in the self-addressed return
envelope, which requires no postage if mailed in the United States.
Please so indicate following your signature if you are signing in a
representative capacity. If shares are held jointly, both owners
should sign.
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| SEE REVERSE SIDE |
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