Exhibit 10.55

IDACORP Financial Services, Inc.

 

 

                                                                                               
[Date], 2008

 

 

[Name]

[Address]

 

 

 

 

Re:       Section 409A Modifications to your Deferred Compensation
Agreement with IDACORP Financial Services, Inc.            

 

This letter agreement will serve as an amendment to your Deferred Compensation
Agreement and is intended to reflect recent changes in the interest rate on
deferred compensation and to bring your Deferred Compensation Agreement into
documentary compliance with Section 409A of the Internal Revenue Code.  Please
read this letter and the attachments carefully and if you agree to the
amendments reflected in Annex B, please sign where indicated and return to me as
soon as possible, but in no event later than December 31, 2008. 

 

Dear [    ]:

 

As part of our review of the Company’s compensation plans for compliance with
Section 409A of the Internal Revenue Code, we have reviewed the director
deferred compensation agreements and determined that they should be amended to
help ensure they comply with Section 409A.  A copy of your deferred compensation
agreement and any amendments thereto is attached hereto as Annex A (the
“Deferral Agreement”).

 

Section 409A imposes significant, adverse taxes on individuals whose
compensation is deferred (including accelerated income tax recognition and
imposition of a 20% additional tax and interest) if the terms of the governing
deferred compensation plan or agreement do not comply with Section 409A and
related regulations by the end of 2008.

 

 

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            In addition, the Compensation Committee of the Board of Directors
(the “Board”) of the Company recently approved changes to how interest will be
credited under the Deferral Agreement.  Any cash director fees that you deferred
before 2009 for your service as a member of the Board will continue to be
credited with the preceding month’s average Moody’s Long-Term Corporate Bond
Yield for utilities (the “Moody’s Rate”) plus three percent, as stated in the
Deferral Agreement, until January 1, 2019 when the interest rate will change to
the Moody’s Rate.  All cash fees that you defer for service as a member of the
Board beginning January 1, 2009 will be credited with interest at the Moody’s
Rate, rather than at the Moody’s Rate plus three percent.  Interest is
calculated on a pro rata basis each month using a 360-day year and the average
Moody’s Rate for the preceding month.

 

Description of Amendments

 

Following are the amendments that will be made to your Deferral Agreement,
together with an explanation of why the amendments are necessary.

 

•                     “Separation from Service.”  Under Section 409A, deferred
compensation generally must be paid on a specified date or dates or on a payment
event listed in Section 409A.  A “separation from service,” as that term is used
in Section 409A, is a permissible payment event.

Sections 3(a) and 3(b) of your Deferral Agreement provide that payments will be
made (or annual installments will commence) after “Director ceases to be a
member of the Board.”  Section 3(a) is hereby amended to read instead “Director
experiences a separation from service, as that term is used in Section
409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (“Separation
from Service”), with the Company.”  Section 3(b) is hereby amended to read
instead “Director experiences a Separation from Service with the Company.”

It is possible for a director to cease being a member of the Board, but not have
a “separation from service,” as that term is used in Section 409A.  For example,
if a director were to provide substantial services to the company as a
consultant after ceasing to be a member of the Board, that may not constitute a
separation from service for purposes of Section 409A.  Making a payment to the
director in that case would violate Section 409A.

•                     Specifying a Payment Date.  As noted above, Section 409A
permits payment of deferred compensation on a specified date or dates or on a
payment event listed in Section 409A.  A date can be a pre-specified date (such
as January 1, 2012) or it can be a date that is tied to a permissible payment
event (such as the first anniversary of separation from service).  A specified
date can also be a period within one taxable year (such as the first 90 days of
2012 or the first 90 days of the calendar year following the year of separation
from service).

Lump Sum Payments.  Your Deferral Agreement allowed you to elect to receive your
payments either in a lump sum or in up to ten annual installments.  The lump sum
payment provision (Section 3(a)) states that payment will be made “as soon as
practicable” after the first business day of the calendar year following the
year the director ceases to be a member of the Board.  Because making payments
“as soon as practicable” after an event, without further limitation, may not
comply with Section 409A, this provision is hereby amended to add “(but not more
than 90 days)” after “as soon as practicable.”

 

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Installment Payments.  Your Deferral Agreement’s installment payment provision
(Section 3(b)) provides for annual cash installment payments to be made
commencing “on the first business day of the calendar year” following the year
in which you cease to be a member of the Board.  This provision is hereby
amended to state that each installment payment will be made on the first
business day of the calendar year.

Payment Following Death.  Your Deferral Agreement’s payment provision relating
to payment at death (Section 6) provides that payment will be made “as soon as
practicable after the death of Director.” Because providing for payment to be
made “as soon as practicable” after an event, without further limitation, may
not comply with Section 409A, this provision is hereby amended to add “(but not
later than 90 days)” after “as soon as practicable.”

Annex B hereto reflects Sections 3(a), 3(b) and 6, as amended hereby.

 

If you have any questions, please contact me at (208) 388-2878.

 

 

                                                                                               
Very truly yours,

 

 

                                                                                               
Patrick A. Harrington

                                                                                               
Corporate Secretary

 

AGREED:

 

 

____________________                                ____________________

[Name]                                                            Date

 

 

Attachments

 

 

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ANNEX A

 

 

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ANNEX B

 

Section 3(a), as amended, reads as follows:

 

(a)        ___      a payment of cash as soon as practicable (but not more than
90 days) after the first business day of the calendar year following the year in
which Director [ceases to be a member of the Board] experiences a separation
from service, as that term is used in Section 409A(a)(2)(A)(i) of the Internal
Revenue Code of 1986, as amended (“Separation from Service”), with the Company,
such amount equal to the credit balance of Director’s interest account as
provided in Section 4 below.

 

Section 3(b), as amended, reads as follows:

 

(b)        ___      in a series of ____ annual cash installment payments (not
more than 10) to be made [commencing] on the first business day of the calendar
year commencing with the calendar year following the year in which Director
[ceases to be a member of the Board] experiences a Separation from Service with
the Company.  The unpaid credit balance of the deferred Fees shall continue to
be adjusted, as provided in Section 4 of this Agreement, during the period that
Director or Director’s beneficiary is receiving such installment payments.

 

Section 6, as amended, reads as follows:

 

            6.         Payment of Deferred Fees in the Event of Death.  In the
event of the death of Director while a member of the Board or prior to the full
payment to Director of the Fees deferred under this Agreement then the credit
balance remaining in Director’s interest account shall be paid in a single lump
sum payment to Director’s designated beneficiary or beneficiaries.  Such single
sum payment shall be made as soon as practicable (but not later than 90 days)
after the death of Director.  If any dispute shall arise as to the entitlement
of any person to any portion of the deferred Fees, the Corporation’s obligations
under this Agreement will be satisfied if it makes payment to Director’s
estate.                         

 

 

[bracketed language in Annex B deleted]

           

 

 

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