SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 24, 2004
Exact name of registrants
as specified in their charters,
Commission address of principal executive offices IRS Employer
File Number and registrants' telephone number Identification Number
--------------- -------------------------------------- ---------------------
--------------- -------------------------------------- ---------------------
1-14465 IDACORP, Inc. 82-0505802
1-3198 Idaho Power Company 82-0130980
1221 W. Idaho Street
Boise, ID 83702-5627
(208) 388-2200
State or Other Jurisdiction of Incorporation: Idaho
None
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Former name or former address, if changed since last report.
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
IDACORP, Inc.
IDAHO POWER COMPANY
Form 8-K
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 24, 2004, IDACORP, Inc. entered into an Employment Agreement with
Luci K. McDonald, the newly appointed Vice President of Human Resources of
IDACORP and Idaho Power Company. Ms. McDonald's employment will commence on
December 6, 2004 and continue through December 6, 2007 unless terminated earlier
pursuant to the provisions of the agreement. After that, Ms. McDonald will be an
"at will" employee. The agreement provides for an annual base salary of
$150,000. Effective January 1, 2006, Ms. McDonald will be entitled to annual
salary increases based upon then-current executive compensation programs as
approved by the Compensation Committee of the Board of Directors. The agreement
provides for annual incentive compensation, with the target percentage for 2004
set at 30% of base salary, with a potential maximum of 60%, prorated for the
time worked in 2004. Effective January 1, 2005, Ms. McDonald will be entitled to
participate in the Long-Term Incentive and Compensation Plan at a level to be
determined by the Compensation Committee. The agreement also provides for
flexible time off ("FTO") benefits equal to four weeks annually, retirement
benefits and other benefits similar to those provided to other executives.
If IDACORP terminates Ms. McDonald's employment without cause, starting with the
month in which the date of termination occurred and ending on December 6, 2007,
IDACORP will continue to pay the annual base salary at the same level that was
being paid on the date of termination, annual incentive compensation equal to
the highest earned by Ms. McDonald during any year of employment preceding the
date of termination, and any accrued but unpaid FTO.
If Ms. McDonald dies or becomes disabled during the term of the agreement, Ms.
McDonald (or, in the case of her death, Ms. McDonald's estate) will receive any
portion of the annual base salary, earned through date of termination, that has
not yet been paid, the pro rata portion of annual incentive compensation for the
year that would otherwise vest or become payable and any accrued but unpaid FTO.
Awards issued under the Restricted Stock Plan or the Long-Term Incentive and
Compensation Plan will vest, if at all, in accordance with the provisions of the
plans and the award agreements.
If IDACORP terminates Ms. McDonald's employment with cause or if Ms. McDonald
voluntarily terminates employment during the term of the agreement, IDACORP will
pay Ms. McDonald that portion of her annual base salary earned through the date
of termination to the extent not yet paid.
Upon a change of control of the Company, Ms. McDonald will be entitled to the
benefits described in the change of control agreement attached to the employment
agreement.
The agreement contains a non-competition provision in which Ms. McDonald
promises not to engage directly or indirectly in any business or enterprise
which is in competition with IDACORP or its affiliates during, and for 12 months
after, her employment. In addition, Ms.
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McDonald agrees not to disclose certain confidential information relating to the
company except with IDACORP's prior written consent or as otherwise required by
law or legal process.
ITEM 8.01 OTHER EVENTS
Standard & Poor's Lowers Ratings of IDACORP and IPC
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On November 29, 2004, Standard & Poor's Ratings Services (Standard & Poor's)
announced that it has lowered the corporate credit ratings and long-term ratings
of IDACORP, Inc. (IDACORP) and Idaho Power Company (IPC). The companies'
commercial paper rating was affirmed at A-2. These downgrades are expected to
increase the cost of new debt and other issued securities going forward.
Standard & Poor's stated that its decision reflects weakened financial ratios
that have resulted from a combination of 1) sustained drought conditions on the
Snake River that have depressed IPC's hydro production and increased deferred
power costs; 2) a disappointing general rate case ruling by the Idaho Public
Utilities Commission (IPUC) partly mitigated by the approval of a settlement
agreement on September 29, 2004, which granted IPC's position on income tax
issues; and 3) more than $600 million of expected capital requirements by IPC.
Standard & Poor's stated that these pressures resulted in a financial profile
that is weak even for the current 'BBB+' corporate credit rating. Further,
Standard & Poor's stated that two key issues that would determine future ratings
movement were water flows in the Snake River and future rate case rulings by the
IPUC.
The following outlines the former and current Standard & Poor's ratings of IPC's
and IDACORP's securities:
---------------------------- ---------------------------- --------------------
IPC IDACORP
---------------------------- ---------------------------- --------------------
Former Current Former Current
---------------------------- -------------- ------------- ------------ -------
Corporate Credit Rating A- BBB+ A- BBB+
---------------------------- -------------- ------------- ------------ -------
Senior Secured Debt A A- None None
---------------------------- -------------- ------------- ------------ -------
Senior Unsecured Debt BBB+ BBB BBB+ BBB
---------------------------- -------------- ------------- ------------ -------
Preferred Stock BBB BBB- None None
---------------------------- -------------- ------------- ------------ -------
Trust Preferred Stock None None BBB BBB-
---------------------------- -------------- ------------- ------------ -------
Short-Term Tax-Exempt Debt BBB+/A-2 BBB/A-2 None None
---------------------------- -------------- ------------- ------------ -------
Commercial Paper A-2 A-2 A-2 A-2
---------------------------- -------------- ------------- ------------ -------
Rating Outlook Negative Stable Negative Stable
---------------------------- -------------- ------------- ------------ -------
The following outlines the current Standard & Poor's, Moody's Investors Service
(Moody's) and Fitch Inc. (Fitch) ratings of IPC's and IDACORP's securities, with
the ratings currently under review by Moody's and Fitch marked with an asterisk:
----------------- --------------- --------------- ---------------------
Standard
and Poor's Moody's Fitch
----------------- --------------- --------------- ---------------------
IPC IDACORP IPC IDACORP IPC IDACORP
----------------- ------- -------- ------- --------- -------- ------------
Corporate Credit BBB+ BBB+ A3* Baa1* None None
Rating
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----------------- ------- -------- ------- --------- -------- ------------
Senior Secured A- None A2* None A* None
Debt
----------------- ------- -------- ------- --------- -------- ------------
Senior Unsecured BBB BBB A3* Baa1* A-* BBB+*
Debt
----------------- ------- -------- ------- --------- -------- ------------
Preferred Stock BBB- None Baa2* None BBB+* None
----------------- ------- -------- ------- --------- -------- ------------
Trust Preferred None BBB- None Baa2* None BBB*
Stock
----------------- ------- -------- ------- --------- -------- ------------
Short-Term BBB/A-2 None A3/ None None None
Tax-Exempt Debt VMIG-1*
----------------- ------- -------- ------- --------- -------- ------------
Commercial Paper A-2 A-2 P-1* P-2 F-1* F-2
----------------- ------- -------- ------- --------- -------- ------------
Rating Outlook Stable Stable Negative Negative Negative Negative
----------------- ------- -------- -------- ----------- -------- ------------
These security ratings reflect the views of the rating agencies. An explanation
of the significance of these ratings may be obtained from each rating agency.
Such ratings are not a recommendation to buy, sell or hold securities. Any
rating can be revised upward or downward or withdrawn at any time by a rating
agency if it decides that the circumstances warrant the change. Each rating
should be evaluated independently of any other rating.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Number Description
Exhibit 10 Employment Agreement, dated November 24, 2004, by
and between IDACORP, Inc. and Luci K. McDonald.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
Dated: November 30, 2004
IDACORP, Inc.
By:/s/Darrel T. Anderson
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Darrel T. Anderson
Senior Vice President -
Administrative Services
and Chief Financial Officer
IDAHO POWER COMPANY
By:/s/Darrel T. Anderson
------------------
Darrel T. Anderson
Senior Vice President -
Administrative Services
and Chief Financial Officer
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INDEX TO EXHIBITS
Number Description
Exhibit 10 Employment Agreement, dated November 24, 2004, by and
between IDACORP, Inc. and Luci K. McDonald.
6