Exhibit 10.24

 

LOGO [g257310ex10_24logo.jpg]

AVISTA CORPORATION

PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”) is made by and between Avista
Corporation, a Washington Corporation (the “Company”) and the individual named
in section 1 (the “Participant”) and selected by the Avista Corporation
Organization and Compensation Committee (the “Plan Administrator”).

WHEREAS, Performance Awards are granted under the May 13, 2010 amended and
restated Avista Corporation Long-Term Incentive Plan (the “Plan”). The terms and
conditions of the Performance Awards are set forth below and in the Plan, which
is incorporated into this Agreement by reference.

NOW, THEREFORE, in consideration of the premises contained herein and in the
Plan, it is agreed as follows:

1. Terms of Performance Awards. The terms of the Performance Awards are set
forth as follows:

 

  (a) The “Participant” is                    .

 

  (b) The “Grant Date” is February 3, 2011.

 

  (c) The number of eligible “Performance Awards” shall be units. “Performance
Awards” granted under this Agreement are units that will be reflected in a book
account maintained by the Company or a third party administrator during the
Performance Cycle, and that will be settled in cash or shares of Avista
Corporation Common Stock (“Common Stock”) to the extent provided in this
Agreement and the Plan.

 

  (d) The “Performance Cycle” is the period beginning on January 1, 2011 and
ending on December 31, 2013.

2. Grant. Subject to the terms of this Agreement and the Plan, the Participant
is hereby granted the number of Performance Awards as set forth in section 1.

3. Settlement of Performance Awards. The Company shall deliver to the
Participant one share of Common Stock (or cash equal to the Fair Market Value of
one share of Common Stock) for each Performance Award earned by the Participant,
as determined in accordance with the provisions of Exhibit 1, which is attached
to and forms a part of this Agreement. The earned Performance Award payable to
the Participant shall be paid in shares of Common Stock or in cash (based on the
Fair Market Value of the Common Stock as of the date the Plan Administrator
certifies the attainment of the performance goals), or in a combination of the
two, as determined by the Plan Administrator in its sole discretion, except that
cash may be distributed in lieu of any fractional share of Common Stock.

 

Page 1 of 8    03/18/11

--------------------------------------------------------------------------------

All Performance Awards and any Dividend Equivalents (as described in Section 5
below) earned by a Participant under this Agreement are subject to the
Recoupment Policy adopted by the Company’s Board of Directors as amended from
time to time (“Recoupment Policy”). If a Participant becomes subject to the
Recoupment Policy any Performance Award and associated Dividend Equivalent may
be forfeited in whole or in part and all or part of any distribution payable to
a Participant or his or her beneficiary under this Agreement may be recovered by
the Company pursuant to the Recoupment Policy.

4. Time of Payment. Except as otherwise provided in this Agreement, payment of
Performance Awards earned, will be delivered as soon as feasible after the end
of the Performance Cycle and after the Plan Administrator certifies the
attainment of the performance goals.

5. Dividend Equivalent Rights. Any Performance Awards may, in the Plan
Administrator’s discretion, earn Dividend Equivalent Rights. In respect of any
Performance Award that is outstanding on the dividend record date for Common
Stock, the Participant may be credited with an amount equal to the cash
distributions that would have been paid on the shares of Common Stock covered by
such Award had such covered shares been issued and outstanding on such dividend
record date. Dividend Equivalent Rights are to be paid in cash based on the
total number of Performance Awards earned at the end of the Performance Cycle
and delivered as soon as feasible after the Performance Cycle and after the Plan
Administrator certifies the attainment of the performance goals. Dividend
Equivalent Rights are subject to all applicable taxes, which are the
responsibility of the Participant.

6. Termination of Employment during Performance Cycle. Except as otherwise
provided in section 7, this section 6 shall apply, if the Participant’s
employment terminates during a Performance Cycle. If the Participant’s
employment with the Company and/or Subsidiaries terminates during the
Performance Cycle because of Retirement, Disability, or Death, the Participant
shall be entitled to a prorated value of the Performance Award earned in
accordance with Exhibit 1, determined at the end of the Performance Cycle, and
based on the ratio of the number of whole months the Participant was employed
during the Performance Cycle to the total number of months in the Performance
Cycle (36). If a Participant’s employment or services with the Company and/or
Subsidiaries terminate on or as of the last day of a performance period, such
Participant will be deemed to have terminated after the end of such performance
period. If the Participant’s employment with the Company and/or Subsidiaries
terminates during the Performance Cycle for any reason other than Retirement,
Disability, or Death, the Performance Award granted under this Agreement will be
forfeited on the Date of Termination (as defined in section 9(b)); provided,
however, that in such circumstances, the Plan Administrator, in its sole
discretion, may determine that the Participant will be entitled to receive a
prorated or other portion of the Performance Award. In case of termination for
Cause, the Performance Award granted shall automatically terminate upon first
notification to the Participant of such termination, unless the Plan
Administrator determines otherwise. If a Participant’s employment with the
Company is suspended pending an investigation of whether the Participant shall
be terminated for Cause, all the Participant’s rights under any Award likewise
shall be suspended during the period of investigation. The effect of a
Company-approved leave of absence on the terms and conditions of an Award shall
be determined by the Plan Administrator, in its sole discretion.

 

Page 2 of 8    03/18/11

--------------------------------------------------------------------------------

7. Change in Control. If a Change in Control occurs during the Performance
Cycle, and the Participant’s Date of Termination (as defined in section 9(b))
does not occur before the Change in Control date, the Participant shall be
entitled to a prorated value of the Performance Award that would have been
earned by the Participant in accordance with Exhibit 1, determined as of the
date of the Change in Control, prorated based on the ratio of the number of
whole months the Participant is employed during the Performance Cycle through
the date of the Change in Control, to the total number of months in the
Performance Cycle; provided, however, that a Payout Factor of at least 100% as
set forth in Exhibit 1 for the Performance Cycle shall be deemed to have been
achieved as of the date of the Change in Control. Notwithstanding the provisions
of sections 3 (with the exception of the application of the Recoupment Policy),
4, and 5, the value of the Performance Award, and any Dividend Equivalent Right,
earned in accordance with the foregoing provisions of this section shall be
delivered to the Participant in a lump sum cash payment as soon as feasible
after the occurrence of a Change in Control, with the value of a Performance
Award equal to the Fair Market Value of a share of Common Stock determined under
the provision of section 3 as of the date of the Change in Control.
Distributions to the Participant under sections 3 and 5 shall not be affected by
payments under this section, except that the number of Performance Awards and
Dividend Equivalent Rights earned by and payable to the Participant shall be
reduced by the number of Performance Awards and Dividend Equivalent Rights with
respect to which payment was made to the Participant under this section.

8. Taxes. The Participant is liable for any and all taxes, including withholding
taxes, arising out of the grant, vesting, payment or settlement of any
Performance Awards and Dividend Equivalent Rights. The Company shall have the
right to require the Participant to remit to the Company, or to withhold awarded
shares of Common Stock, or from any Dividend Equivalent Rights or other amounts
due to the Participant, as compensation or otherwise, an amount sufficient to
satisfy all federal, state and local withholding tax requirements.

9. Definitions. For purposes of this Agreement, the terms used in this Agreement
shall be subject to the following:

 

  (a) Change in Control. The term “Change in Control” is defined in section 2.4
of the amended and restated Avista Corp. Long Term Incentive Plan.

 

  (b) Date of Termination. The Participant’s “Date of Termination” shall be the
first day occurring on or after the Grant Date on which the Participant is not
employed by the Company or any Subsidiary, regardless of the reason for the
termination of employment; provided that a termination of employment shall not
be deemed to occur by reason of a transfer of the Participant between the
Company and a Subsidiary or between two Subsidiaries; and further provided that
the Participant’s employment shall not be considered terminated while the
Participant is on a leave of absence from the Company or a Subsidiary approved
by the Participant’s employer. If, as a result of a sale or other transaction,
the Participant’s employer ceases to be a Subsidiary (and the Participant’s
employer is or becomes an entity that is separate from the Company), and the
Participant is not, at the end of the 30-day period following the transaction,
employed by the Company or an entity that is then a Subsidiary, then the
occurrence of such transaction shall be treated as the Participant’s Date of
Termination caused by the Participant being discharged by the employer.

 

  (c) Disability. “Disability” means “disability” as that term is defined for
purposes of the Company’s Long Term Disability Plan or other similar successor
plan applicable to employees.

 

  (d) Retirement. “Retirement” of the Participant shall mean retirement as of
the individual’s retirement date under the Retirement Plan for Employees of
Avista Corporation or other similar successor plan applicable to employees.

 

Page 3 of 8    03/18/11

--------------------------------------------------------------------------------

10. Assignability. No Performance Award or Dividend Equivalent Right granted or
awarded under the Plan may be assigned or transferred by the Participant other
than by will or by the applicable laws of descent and distribution, and, during
the Participant’s lifetime, settlements of such Awards may be payable only to
the Participant or a permitted assignee or transferee of the Participant (as
provided below). Notwithstanding the foregoing, the Plan Administrator, in its
sole discretion, may permit such assignment or transfer and may permit a
Participant of such Performance Awards or Dividend Equivalent Rights to
designate a beneficiary who may receive compensation settlement under the Award
after the Participant’s death; provided, however, that any amount so assigned or
transferred shall be subject to all the same terms and conditions contained in
this Agreement.

11. General.

11.1 Award Agreements. Performance Awards granted under the Plan shall be
evidenced by a written agreement that shall contain such terms, conditions,
limitations and restrictions as the Plan Administrator shall deem advisable and
that are not inconsistent with the Plan.

11.2 Continued Employment or Services; Rights in Awards. Nothing contained in
this Agreement, the Plan, or any action of the Plan Administrator taken under
the Plan or this Agreement shall be construed as giving any Participant or
employee of the Company any right to be retained in the employ of the Company or
any Subsidiary or to limit the Company’s or any Subsidiary’s right to terminate
the employment or services of the Participant.

11.3 Registration. At the present time, the Company has an effective
registration statement with respect to the shares. The Company intends to
maintain this registration but has no obligation to do so. In the event that
such registration ceases to be effective, the Participant will not receive a
Performance Award settlement or payment unless exemptions from registration
under federal and state securities laws are available; such exemptions from
registration are very limited and might be unavailable. By accepting the
Agreement, the Participant hereby acknowledges that he/she has read the section
of the Plan and this Agreement entitled Registration.

11.4 No Rights as a Shareholder. No Award under this agreement shall entitle the
Participant to any dividends (except to the extent provided in an award of
Dividend Equivalent Rights), voting or any other right of a shareholder unless
and until the date of issuance under the Plan of the shares that are the subject
of such Performance Award, are free of all applicable restrictions.

11.5 Compliance with Laws and Regulations. Notwithstanding anything in the Plan
to the contrary, the Board of Directors, in its sole discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan to Participants who are officers or directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other Participants.

11.6 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity and enforceability of any other
provision of this Agreement. If any provision of the Agreement is determined to
be invalid, illegal or unenforceable in any jurisdiction, or as to any person,
or would disqualify any Performance Award under any law deemed applicable by the
Plan Administrator, such provision shall be construed or deemed amended by the
Plan Administrator to conform to applicable laws, or, if the Plan Administrator
determines that the provision cannot be so construed or deemed amended without
materially altering the intent of the Plan or the Performance Award, such
provision shall be stricken as to such jurisdiction, person or Performance
Award, and the remainder of the Agreement and any such Performance Award shall
remain in full force and effect.

 

Page 4 of 8    03/18/11

--------------------------------------------------------------------------------

12. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Plan Administrator, and
the Plan Administrator shall have all powers with respect to this Agreement as
it has with respect to the Plan. Any interpretation of the Agreement by the Plan
Administrator and any decision made by it with respect to the Agreement are
final and binding.

13. Construction. This Agreement is subject to and shall be construed in
accordance with the Plan, the terms of which are explicitly made applicable
hereto. Unless otherwise defined herein, capitalized terms in this Agreement
shall have the same definitions as set forth in the Plan. In the event of any
conflict between the provisions hereof and those of the Plan, the provisions of
the Plan shall govern.

14. Amendment. This Agreement may be amended by written agreement of the
Participant and the Company, without the consent of any other person.

15. Governing Law. The validity, construction, interpretation and enforceability
of this agreement shall be determined and governed by the laws of the State of
Washington without giving effect to the principles of conflicts of laws. For the
purpose of litigating any dispute that arises under this Agreement, the parties
hereby consent to exclusive jurisdiction in Washington State and agree that such
litigation shall be conducted in the courts of Spokane County, Washington or the
federal courts of the United States.

16. Successors. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company) to agree in
writing to assume the Company’s obligations under this Agreement and to perform
such obligations in the same manner and to the same extent that the Company is
required to perform them. As used in this Agreement, “Company” shall mean the
Company and any successor to its business and/or assets that assumes and agrees
to perform the Company’s obligations under the Agreement by operation of law or
otherwise.

IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company
has caused these presents to be executed in its name and on its behalf, all as
of the Grant Date.

 

AVISTA CORPORATION By:   Scott L. Morris  
Chairman of the Board, President and Chief Executive Officer

 

Page 5 of 8    03/18/11

--------------------------------------------------------------------------------

EXHIBIT 1

Performance Award Plan

Performance Measures and Goals

2011 - 2013 Performance Cycle

The following graph and table represent the relationship between the Company’s
relative three-year total shareholder return (TSR) commencing January 1, 2011
and ending December 31, 2013 and the award opportunity. The number of shares
delivered at the end of the three-year cycle will range from zero to 200% of the
grant. The actual payment depends on Avista’s three-year total shareholder
return compared to the returns reported in the S&P 400 Utilities Index. To
receive 100% of the Award, Avista must perform at the 55th percentile among the
S&P 400 Utilities Index. To receive 200% of the Award, Avista must perform at
the 100th percentile ranking. If Avista performs below the 45th percentile
ranking, no awards or dividend equivalents will be received. Dividend Equivalent
Rights are calculated and paid out in cash when and to the extent the
performance shares are paid. Awards are interpolated for performance results
between the figures shown.

 

LOGO [g257310ex10_24pg6.jpg]

 

3-year Relative

Total Shareholder Return

  

Payout Factor

(% of Target)

100th

   200%

85th

   150%

70th

   125%

55th

   100%

50th

   75%

45th

   50%

£ 45th

   0%

Total shareholder return reflects stock price appreciation and dividend
reinvestment over the three-year period. The calculation assumes that dividends
are reinvested on a daily basis. The source for stock price and dividend data is
Standard and Poor’s Research Insight.

From one year to the next, if S&P drops a company out of the index and adds
another, the new company will be included in the ranking and the dropped company
will be excluded. When a new company is added, they will be added to the ranking
as if they had been in the ranking from the beginning – provided that there is
pricing and dividend data at the beginning of the cycle. When a company is
dropped everything related to that company will be excluded from the ranking as
if the company was never part of the ranking.

 

Page 6 of 8    03/18/11

--------------------------------------------------------------------------------

Example Formula:

Assuming that the Shares granted were 3,000 and the Total Shareholder Return is
ranked at the 50th percentile after the three-year Performance Cycle, then the
Participant’s final award is 2,250 Shares of Stock plus Dividend Equivalents
Rights.

 

Payout Factor

(% of Target)

   X   

# of Performance Shares

Granted to Participant

   =   

Final # of Performance Shares

Awarded to Participant

75%

   X    3,000 shares    =    2,250 shares plus Dividends

Percentile Ranking Methodology:

The percentile rank is calculated using the PERCENTRANK function in MS Excel,
excluding Avista from the list and rounding all results to the nearest whole
percentile.

The calculation can be replicated by arranging the TSR data from highest to
lowest for all peers except Avista. A percentile ranking is calculated for each
data point assuming 100.0th %ile for the highest data point, 0.0 %ile for the
lowest data point, and the corresponding percentile for every other data point
with an equal difference in percentile ranking for each data point. The TSR for
Avista is calculated by determining Avista’s rank in the list and interpolating
between the percentile rankings for the companies immediately above and below
based on the differences in TSR. An example, based on sample data is as follows:

 

Company Ranking

  

TSR

   

Percentile Rank

 

1

     201.6 %      100.0 % 

2

     135.9 %      98.2 % 

47 (ABC Corp)

     20.3 %      17.8 % 

48 (XYZ Corp)

     16.0 %      16.0 % 

56

     -3.3 %      1.7 % 

57

     -10.5 %      0.0 % 

If a company’s TSR is 18.9%, the resulting percentile ranking would be 17%,
calculated as follows: 17% = 16.0% + [(18.9%—16.0%) / (20.3%—16.0%) *
(17.8%—16.0%)]

Total Shareholder Return (TSR) Methodology:

For purposes of this agreement, a methodology for calculating a total return to
shareholder with dividend reinvestment was established. Returns are calculated
daily based on stock price changes and dividend payments and then accumulated
over the measurement period. Below are additional assumptions used in Avista’s
calculation for total shareholder return.

General Assumptions:

The starting and ending prices are determined by averaging closing price on the
last trading day of November and the last trading day of December.

For example, the stock price for the start of the performance period for Avista
is $21.46, the average of $21.54 (12/31/2007) and $21.38 (11/30/2007).

Reinvest dividends on a daily basis.

Use ex-date dividends per share.

Returns will be calculated over the applicable performance period.

Example:

 

Date

   Closing
Price      Dividend      Daily
TSR  

11/23/2007

     21.08         0         NA   

11/26/2007

     20.90         0         (0.8539 %) 

11/27/2007

     21.09         0.15         1.6268 %* 

11/28/2007

     21.54         0         2.1337 % 

11/29/2007

     21.38         0         (.7428 %) 

11/30/2007

     21.38         0         0.00 % 

Cumulative TSR 11/23/2007 to 11/30/2007

  

     2.1347 % 

 

* [(21.09 + 0.15) / 20.90] -1

 

Page 7 of 8    03/18/11

--------------------------------------------------------------------------------

ACCEPTANCE AND ACKNOWLEDGMENT

I, a resident of the state of                     , accept the Performance Award
described in this Agreement and in the Plan, and acknowledge that I have
received a copy of this Agreement and the Plan. I have read and understand the
Plan, and I hereby make the representations, warranties and acknowledgments, and
undertake the indemnity and other obligations, therein specified.

 

Dated:                                  

 

           

 

Social Security Number       Signature of Employee      

 

      Printed Name

 

Page 8 of 8    03/18/11