**IDAHO POWER COMPANY**

 

**SECURITY PLAN FORSENIOR MANAGEMENT EMPLOYEES II**

 

 

 

 

 

 

 

 

 

 

 

** **

**Effective January 1, 2005**

**(Amended and RestatedNovember 20, 2008)**

 

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table of contents

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ARTICLE I......... PURPOSE; EFFECTIVE DATE..................................................................... 1

ARTICLE II........ DEFINITIONS............................................................................................... 1

2.1...... Actuarial Equivalent.............................................................................................. 1

2.2...... Administrative Committee..................................................................................... 1

2.3...... Affiliate................................................................................................................ 1

2.4...... Beneficiary........................................................................................................... 1

2.5...... Board.................................................................................................................. 2

2.6...... Change in Control................................................................................................ 2

2.7...... Change in Control Period..................................................................................... 3

2.8...... Code................................................................................................................... 3

2.9...... Company............................................................................................................. 3

2.10.... Compensation Committee.................................................................................... 3

2.11.... Compensation..................................................................................................... 3

2.12.... Disability.............................................................................................................. 3

2.13.... Early Retirement Date........................................................................................... 3

2.14.... Employer.............................................................................................................. 4

2.15.... Final Average Monthly Compensation................................................................... 4

2.16.... Normal Form of Benefit........................................................................................ 4

2.17.... Normal Retirement Date....................................................................................... 4

2.18.... Participant............................................................................................................ 4

2.19.... Plan Year............................................................................................................. 4

2.20.... Retirement................................................................ ........................................... 4

2.21.... Retirement Plan.................................................................................................... 4

2.22.... Security Plan Retirement Benefit........................................................................... 4

2.23.... Separation from Service....................................................................................... 4

2.24.... Target Retirement Percentage............................................................................... 4

2.25.... Termination Date.................................................................................................. 4

2.26.... Years of Participation........................................................................................... 4

ARTICLE III...... PARTICIPATION AND VESTING......................  ........................................ 5

3.1...... Eligibility.............................................................................................................. 5

3.2...... Vesting................................................................................................................ 5

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table ofcontents(Continued)

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3.3...... Change in Employment Status............................................................................... 5

3.4...... Non-Participating Affiliate..................................................................................... 5

ARTICLE IV...... SURVIVOR BENEFITS................................................................................. 5

4.1...... Pre-termination Survivor Benefits.......................................................................... 5

4.2...... Post-termination Survivor Benefit.......................................................................... 6

ARTICLE V........ SECURITY PLAN RETIREMENT BENEFITS.................... ........................ 7

5.1...... Normal Retirement Benefit.................................................................................... 7

5.2...... Early Retirement Benefit........................................................................................ 7

5.3...... Early Retirement Factor......................................................................................... 8

5.4...... Early Termination Benefits............................................................ ........................ 8

5.5...... Separation from Service After Change in Control...........................  .. ................... 9

5.6...... Form of Payment............................................................................. .................... 9

5.7...... Code Section 162(m) Delay............................................................................... 10

5.8...... Payment to Specified Employees........................................................................ 10

ARTICLE VI...... OTHER RETIREMENT PROVISIONS........................................ .............. 10

6.1...... Disability........................................................................................................... 10

6.2...... Withholding Payroll Taxes................................................................................. 10

6.3...... Payment to Guardian......................................................................................... 10

ARTICLE VII..... BENEFICIARY DESIGNATION...................................................  ........... 11

7.1...... Beneficiary Designation...................................................................................... 11

7.2...... Effect of Payment.............................................................................................. 11

ARTICLE VIII... ADMINISTRATION.................................................................................... 11

8.1...... Administrative Committee Duties........................................................................ 11

8.2...... Indemnity of Administrative Committee....................................................   ........ 12

ARTICLE iX...... CLAIMS PROCEDURE............................................................................... 12

9.1...... Claim................................................................................................................. 12

9.2...... Denial of Claim.................................................................................................. 12

9.3...... Review of Claim.................................................................................... ........... 12

9.4...... Final Decision................................................................................................... 13

ARTICLE X........ TERMINATION, SUSPENSION OR AMENDMENT.................... ......... 13

10.1.... Termination, Suspension or Amendment of Plan........................................ ........ 13

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table ofcontents(Continued)

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10.2.... Change in Control............................................................................................... 13

ARTICLE XI...... MISCELLANEOUS...................................................................................... 13

11.1.... Unfunded Plan.................................................................................................... 13

11.2.... Unsecured General Creditor............................................................................... 13

11.3.... Trust Fund.......................................................................................................... 14

11.4.... Nonassignability.................................................................................................. 14

11.5.... Not a Contract of Employment........................................................................... 14

11.6.... Governing Law................................................................................................... 14

11.7.... Validity............................................................................................................... 14

11.8.... Notice................................................................................................................. 14

11.9.... Successors........................................................................................................... 14

 

 

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**IDAHO POWER COMPANYSECURITY PLAN FOR SENIOR MANAGEMENT EMPLOYEES II**

**EFFECTIVE JANUARY 1, 2005**

**(Amended and Restated November 20, 2008)**

** **

ARTICLE IPURPOSE; EFFECTIVE DATE

The purpose of this SecurityPlan for Senior Management Employees II (the "Plan") is toprovide supplemental retirement benefits for certain key employees of IdahoPower Company, its subsidiaries and affiliates.  It is intended that the Planwill aid in attracting individuals of exceptional ability and retain thosecritical to the operation of the Company, by providing them with these benefits. The effective date of this Plan is January 1, 2005.  It is intended to be compliant with Section 409A of the Internal RevenueCode, which was added by the American Jobs Creation Act of 2004, effective January 1, 2005.  It continues the program of supplemental retirement benefitsprovided under the Security Plan for Senior Management Employees I, whichprovides benefits that are grandfathered under Section 409A of the InternalRevenue Code.

ARTICLE IIDEFINITIONS

As used in this Plan, thefollowing terms shall be defined as stated in this Article, as interpreted bythe Administrative Committee pursuant to its authority granted by Section 8.1of this Plan.

**2.1             ****Actuarial Equivalent**.  "Actuarial Equivalent" shall mean equivalence invalue between two (2) or more forms and/ortimes of payment based on a determination by an actuary chosen by the Companyusing generally accepted actuarial assumptions, methods and factors as used inthe Retirement Plan of Idaho Power Company which may be amended from time totime.

**2.2             ****Administrative Committee**.** **"AdministrativeCommittee" shall mean the Fiduciary Committee appointed by theCompensation Committee pursuant to Section 8.1 hereof and the ChiefExecutive Officer of the Company.

**2.3             ****Affiliate**.** **"Affiliate" shallmean a business entity that is affiliated in ownership with the Company or anEmployer and is recognized as an Affiliate by the Company for the purposes ofthis Plan.

**2.4             ****Beneficiary**.** **"Beneficiary"shall mean the person, persons or entity designated by the Participant pursuantto Article VII to receive any benefits payable under the Plan.  Each suchdesignation shall be made in a written instrument filed with the AdministrativeCommittee and shall become effective only when received, accepted andacknowledged in writing by the Administrative Committee or its designee.

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**2.5             ****Board**.** **"Board" shall mean theBoard of Directors of the Company.

**2.6             ****Change in Control**.** **"Change inControl" shall mean any of the following events:

2.6.1       any person (as such term is defined in Section 3(a)(9) of the SecuritiesExchange Act of 1934 (the "Exchange Act") and as used in Section13(d) of the Exchange Act, excluding (a) IDACORP, Inc. or any Subsidiary, (b) acorporation or other entity owned, directly or indirectly, by the stockholdersof IDACORP, Inc. immediately prior to the transaction in substantially the sameproportions as their ownership of stock of IDACORP, Inc., (c) an employeebenefit plan (or related trust) sponsored or maintained by IDACORP, Inc. or anySubsidiary or (d) an underwriter temporarily holding securities pursuant to anoffering of such securities ("Exchange Act Person")) is thebeneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of 20% or more of the combined voting power of the then outstandingvoting securities eligible to vote generally in the election of directors ofIDACORP, Inc.; provided, however, that no Change in Control will be deemed tohave occurred as a result of a change in ownership percentage resulting solelyfrom an acquisition of securities by IDACORP, Inc.;

2.6.2       consummation of a merger, consolidation, reorganization or shareexchange, or sale of all or substantially all of the assets, of IDACORP, Inc.or the Company (a "Qualifying Transaction"), unless, immediatelyfollowing such Qualifying Transaction, all of the following have occurred: (a)all or substantially all of the beneficial owners of IDACORP, Inc. immediatelyprior to such Qualifying Transaction beneficially own in substantially the sameproportions, directly or indirectly, more than 50% of the combined voting powerof the then outstanding voting securities entitled to vote generally in theelection of directors of the corporation or other entity resulting from suchQualifying Transaction (including, without limitation, a corporation or otherentity which, as a result of such transaction, owns IDACORP, Inc. or all orsubstantially all of IDACORP, Inc.'s assets either directly or through one ormore subsidiaries) (as the case may be, the "Successor Entity"), (b)no Exchange Act Person is the beneficial owner (as defined in Rule 13d-3 underthe Exchange Act), directly or indirectly, of 20% or more of the combinedvoting power of the then outstanding voting securities eligible to votegenerally in the election of directors of the Successor Entity and (c) at leasta majority of the members of the board of directors of the Successor Entity areIncumbent Directors;

2.6.3       a complete liquidation or dissolution of IDACORP,Inc. or the Company; or 

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2.6.4       within a 24-month period, individuals who were directors of the Board ofDirectors of IDACORP, Inc. (the "IDACORP Board of Directors")immediately before such period ("Incumbent Directors") cease toconstitute at least a majority of the directors of the IDACORP Board ofDirectors; provided, however, that any director who was not a director of theIDACORP Board of Directors at the beginning of such period shall be deemed tobe an Incumbent Director if the election or nomination for election of suchdirector was approved by the vote of at least two-thirds of the directors ofthe IDACORP Board of Directors then still in office (a) who were in office atthe beginning of the 24-month period or (b) whose election or nomination forelection was so approved, in each case, unless such individual was elected ornominated as a result of an actual or threatened election contest or as aresult of an actual or threatened solicitation of proxies or consents by or onbehalf of any Exchange Act Person other than the IDACORP Board of Directors.

Foravoidance of doubt, transactions for the purpose of dividing the Company's assets into separate distribution, transmission orgeneration entities or such other entities as IDACORP, Inc. or the Company maydetermine shall not constitute a Change in Control unless so determined by theIDACORP Board of Directors.  For purposes ofthis definition, the term "Subsidiary" shall mean any corporation ofwhich more than 50% of the outstanding stock having ordinary voting power toelect a majority of the board of directors of such corporation is now orhereafter owned, directly or indirectly, by IDACORP, Inc.

**2.7             ****Change in Control Period**.** **"Changein Control Period" shall mean the period beginning with a Change inControl, as defined in Section 2.6, and ending 24 months following theconsummation of a Change in Control.  

**2.8             ****Code**.  "Code" shall mean the InternalRevenue Code of 1986, as amended.

**2.9             ****Company**.** **"Company" shall meanthe Idaho Power Company, an Idaho corporation, its successors and assigns.

**2.10         ****Compensation Committee**.** **"CompensationCommittee" shall mean the Board committee assigned responsibility foradministering executive compensation.

**2.11         ****Compensation**.** **"Compensation"shall mean the base salary and annual bonus (not to exceed one (1) times basesalary for the year in which the bonus was paid) paid to a Participant andconsidered to be "wages" for purposes of federal income taxwithholding.  Compensation shall be calculated before reduction for any amountsdeferred by the Participant pursuant to any plan sponsored by the Employerwhich permits deferral of current compensation.  Compensation does not includelong-term incentive compensation in any form, expense reimbursements, or anyform of non-cash compensation or benefits.  A Participant who elects anaccelerated distribution under the Security Plan for Senior ManagementEmployees I, shall not be credited with any additional Compensation under thisPlan beginning on the effective date of the accelerated distribution.

**2.12         ****Disability**.** **"Disability"shall mean that a Participant is eligible to receive benefits under theLong-Term Disability Program maintained by the Employer.

**2.13         ****Early Retirement Date**.** **"EarlyRetirement Date" shall mean a Participant's Termination Date, if such TerminationDate occurs on or after such Participant's:

2.13.1   attainment of age fifty-five (55); or

2.13.2   completion of thirty (30) years of Credited Service under theRetirement Plan but prior to Participant's Normal Retirement Date.

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**2.14         ****Employer**.** **"Employer" shallmean the Company and any business affiliated with the Company that employspersons who are designated by the Board or the Administrative Committee forparticipation in this Plan.

**2.15         ****Final Average Monthly Compensation**.** **"FinalAverage Monthly Compensation" shall mean the Compensation received by theParticipant during any sixty (60) consecutive months (during the last ten (10)years of employment) for which the Participant's compensation was the highestdivided by sixty (60).  In determining Final Average Monthly Compensation,annual bonuses shall be allocated equally to the months in which they were paid. Final Average Monthly Compensation shall not include any Compensation payableto a Participant pursuant to a written severance agreement with the Employer.

**2.16         ****Normal Form of Benefit**.** **"NormalForm of Benefit" shall mean the normal form of monthly retirement benefitprovided under Section 3.01 of the Employer's Retirement Plan.

**2.17         ****Normal Retirement Date**.** **"NormalRetirement Date" shall mean a Participant's Termination Date if the TerminationDate occurs on or after the date the Participant attains age sixty-two (62).

**2.18         ****Participant**.** **"Participant"shall mean any individual who is participating in or has participated in thisPlan as provided in Article III.

**2.19         ****Plan Year**.** **"Plan Year" shallmean the calendar year.

**2.20         ****Retirement**.** **"Retirement"shall mean a Participant's Separation from Service at the Participant's EarlyRetirement Date or Normal Retirement Date, as applicable.

**2.21         ****Retirement Plan**.** **"Retirement Plan"shall mean The Retirement Plan of Idaho Power Company as may be amended fromtime to time.

**2.22         ****Security Plan Retirement Benefit**.** **"SecurityPlan Retirement Benefit" shall mean the benefit determined under Article Vof this Plan.

**2.23         ****Separation from Service**.  "Separation fromService" shall mean "separation from service," as that term isused in Section 409A(a)(2)(A)(i) of the Code.

**2.24         ****Target Retirement Percentage**.** **"TargetRetirement Percentage" shall equal six percent (6%) for each of thefirst ten (10) Years of Participation plus an additional one percent (1%)for each Year of Participation, exceeding ten (10).  The maximum TargetRetirement Percentage shall be seventy-five percent (75%).

**2.25         ****Termination Date**.  "Termination Date"shall mean the date the Participant experiences a Separation from Service (otherthan due to death) by resignation, discharge, Retirement or any other method.

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**2.26         ****Years of Participation**.  "Years ofParticipation" shall be twelve (12) month periods, and portionsthereof, which shall begin on the earlier of the date an individual, who hasbeen designated by the Employer, is approved by Administrative Committeepursuant to Section 3.1, or the date designated by the AdministrativeCommittee, and shall end on the earlier of a Participant's death, TerminationDate, or the date the Participant experiences a change in status, as providedin Sections 3.3 and 3.4.  Partial Years of Participation, if any, shall beused in determining benefits under this Plan.  Years of Participation under theSecurity Plan for Senior Management Employees I, if any, shall be includedin determining the total Years of Participation.  A Participant who elects anaccelerated distribution under the Security Plan for Senior ManagementEmployees I, shall cease to earn Years of Participation under this Plan on theeffective date of the accelerated distribution.

ARTICLE IIIPARTICIPATION AND VESTING

**3.1             ****Eligibility**.  Eligibility to participate in thePlan is limited to those key employees of the Employer who are designated, fromtime to time, by the Employer subject to approval of the AdministrativeCommittee.  Key employees who as of January 1, 2005 are participants in theSecurity Plan for Senior Management Employees I, shall be Participants in thisPlan on January 1, 2005, the effective date of this Plan.

**3.2             ****Vesting**.  A Participant shall be one hundredpercent (100%) immediately vested.

**3.3             ****Change in Employment Status**.  If the Employerdetermines that a Participant's employment performance or classification is nolonger at a level which deserves participation in this Plan, but theParticipant has not experienced a Separation from Service, participation hereinand eligibility to receive benefits hereunder shall be limited to theParticipant's accrued benefit as of the date of the change in employment status. In such an event, the benefits payable to the Participant shall be based solelyon the Participant's Years of Participation and Final Average MonthlyCompensation as of such date.  A Participant, who is not continuingparticipation in this Plan under this Section, will not have benefitsdetermined nor receive benefits under Article V until the first to occur of hisor her death or Termination Date.

**3.4             ****Non-Participating Affiliate**.  A Participant,who subsequently is transferred to an affiliated company that does not providefor participation in this Plan, may be allowed to continue participation underthe Plan subject to the approval of the Administrative Committee.  AParticipant, who is not allowed to continue participation in this Plan, willnot have benefits determined nor receive benefits under Article V until thefirst to occur of his or her death or Termination Date.

ARTICLE IV 

SURVIVOR BENEFITS

**4.1             ****Pre-termination Survivor Benefits**.  If aParticipant dies before his or her Termination Date, the Employer shall pay asurvivor benefit to such Participant's Beneficiary as follows:

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4.1.1       Amount.  The pre-termination survivor benefit shall be an ActuarialEquivalent amount (determined pursuant to Section 4.1.2) equal to sixty-six andtwo-thirds percent (66 2/3%) of the retirement benefit calculated under Section5.1 assuming retirement occurred at the later of age sixty-two (62) ordate of death.  Final Average Monthly Compensation and the Retirement Planbenefit shall be determined as of the date of the Participant's death.  Forpurposes of this Section 4.1.1, the Retirement Plan benefit shall be theaccrued benefit determined as of the date of death as defined in the RetirementPlan.

4.1.2       Payment.  The pre-termination survivor benefit shall be paid in a lumpsum to the spouse of the Participant or, if the Participant is unmarried on thedate of death, to the Participant's Beneficiary (other than the Participant'sspouse).  Payment shall be made as soon as practicable (butin all events within 90 days) after the Participant's death.  If thepayment is to the Participant's spouse, the lump sum payment shall be theActuarial Equivalent of the monthly payments that would have been made assumingthe spouse received the pre-termination survivor benefit for the life of thespouse beginning on the first day of the month coincident with or following thedate of death; provided, however, that if the spouse's date of birth is morethan ten (10) years after the Participant's date of birth, the assumed monthlybenefit shall be reduced using the Actuarial Equivalent factors to reflect thenumber of years over ten (10) the spouse is younger than the Participant.  Ifthe payment is to the Participant's Beneficiary (other than the Participant'sspouse), the lump sum payment shall be the Actuarial Equivalent of the monthlypayments that would have been made assuming an individual the same age as theParticipant had received the pre-termination survivor benefit for the life ofthe individual beginning on the first day of the month coincident with orfollowing the date of death.

**4.2             ****Post-termination Survivor Benefit**.

4.2.1       Death Prior to Commencement of Benefits.  If a Participant dies prior tocommencement of benefits but on or after his or her Termination Date:

(a)               Amount.  The amount of the post-termination survivor benefit shall be anActuarial Equivalent amount (determined pursuant to Section 4.2.1(b)) equal to sixty-sixand two thirds percent (66 2/3%) of the retirement benefit payable to theParticipant. 

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(b)              Payment.  The post-termination survivor benefit shall be paid in a lumpsum to the spouse of the Participant or, if the Participant is unmarried on thedate of death, to the Participant's Beneficiary (other than the Participant'sspouse).  Payment shall be made as soon as practicable (but in all eventswithin 90 days) after the Participant's death.  If the payment is to theParticipant's spouse, the lump sum payment shall be the Actuarial Equivalent ofthe monthly payments that would have been made assuming the spouse received thepost-termination survivor benefit for the life of the spouse beginning on thefirst day of the month coincident with or following the date of death;provided, however, that if the spouse's date of birth is more than ten (10)years after the Participant's date of birth, the assumed monthly benefit shallbe reduced using the Actuarial Equivalent factors to reflect the number ofyears over ten (10) the spouse is younger than the Participant.  If the paymentis to the Participant's Beneficiary (other than the Participant's spouse), thelump sum payment shall be the Actuarial Equivalent of the monthly payments thatwould have been made assuming an individual the same age as the Participant hadreceived the post-termination survivor benefit for the life of the individualbeginning on the first day of the month coincident with or following the dateof death.

4.2.2       Death After Commencement of Benefits.  If a Participant dies aftercommencement of benefits, a survivor benefit will be paid only if, and to theextent provided for, under the form of benefit elected by the Participantpursuant to Section 5.6.

ARTICLE VSECURITY PLAN RETIREMENT BENEFITS

**5.1             ****Normal Retirement Benefit**.  If a Participant's Separationfrom Service occurs at a Normal Retirement Date, the Employer shall pay to theParticipant a monthly Security Plan Retirement Benefit beginning the first dayof the month following the Normal Retirement Date.  Payment of this benefitcannot be deferred.  The monthly Security Plan Retirement Benefit shall equalthe Target Retirement Percentage multiplied by the Participant's Final AverageMonthly Compensation, less 

                        (a)        theParticipant's retirement benefit, if any, under the Retirement Plan, assumingsuch retirement benefit were paid as a single life annuity commencing whenpayments commence under this Plan (regardless of the form of benefit actuallyselected by the Participant and regardless of when benefits actually commenceunder the Retirement Plan) and

                        (b)        theParticipant's retirement benefit (before any adjustment due to an accelerateddistribution pursuant to Section 7.4 thereof), if any, under the Security Planfor Senior Management Employees I, assuming such retirement benefit werepaid as a single life annuity commencing when payments commence under this Plan(regardless of the form of benefit actually selected by the Participant andregardless of when benefits actually commence under the Security Plan forSenior Management Employees I).

**5.2             ****Early Retirement Benefit**.  If a Participant's Separationfrom Service occurs on or after an Early Retirement Date, the Employer shallpay to the Participant a monthly Security Plan Retirement Benefit beginning thefirst day of the month following the Early Retirement Date.  Payment of thisbenefit cannot be deferred.  The monthly Security Plan Retirement Benefit shallbe equal to the Target Retirement Percentage, multiplied by the EarlyRetirement Factor and by the Participant's Final Average Monthly Compensation, less

                        (a)        theParticipant's retirement benefit, if any, under the Retirement Plan, assumingsuch retirement benefit were paid as a single life annuity commencing whenpayments commence under this Plan (regardless of the form of benefit actuallyselected by the Participant and regardless of when benefits actually commenceunder the Retirement Plan) and

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                        (b)        theParticipant's retirement benefit (before any adjustment due to an accelerateddistribution pursuant to Section 7.4 thereof), if any, under the Security Planfor Senior Management Employees I, assuming such retirement benefit werepaid as a single life annuity commencing when payments commence under this Plan(regardless of the form of benefit actually selected by the Participant andregardless of when benefits actually commence under the Security Plan forSenior Management Employees I).

**5.3             ****Early Retirement Factor**.  If a Participant's Separationfrom Service occurs before the Participant's Normal Retirement Date, the TargetRetirement Percentage shall be multiplied by one (1) of the followingEarly Retirement Factors.  

| **Exact Age When Payments Begin** | **Early Retirement Factor** |
|-----------------------------------|-----------------------------|
| 62                                | 100%                        |
| 61                                | 96%                         |
| 60                                | 92%                         |
| 59                                | 87%                         |
| 58                                | 82%                         |
| 57                                | 77%                         |
| 56                                | 72%                         |
| 55                                | 67%                         |
| 54                                | 62%                         |
| 53                                | 57%                         |
| 52                                | 52%                         |
| 51                                | 47%                         |
| 50                                | 42%                         |
| 49                                | 38%                         |
| 48                                | 34%                         |

 

Early Retirement Factors will be prorated to reflectretirement based on completed months rather than exact age.

 

**5.4             ****Early Termination Benefits**.  If a Participant'sSeparation from Service occurs prior to his or her death, prior to his or herEarly Retirement Date, and not within a Change in Control Period, the Employershall pay to the Participant, commencing on the first day of the monthfollowing the Participant's fifty-fifth (55th) birthday, theSecurity Plan Retirement Benefit as determined under this section.  Payment of thisbenefit cannot be deferred.

5.4.1       The Target Retirement Percentage shall be calculated based upon the Participant'sYears of Participation and then multiplied by a fraction equal to theParticipant's Years of Participation divided by the Years of Participation theParticipant would have had at the Normal Retirement Date if the Participant hadcontinued to be employed by the Employer to age sixty-two (62).  Theadjusted Target Retirement Percentage shall be multiplied by the factordescribed in Section 5.3 for each month between the Participant's benefitscommencement date (age 55) and age sixty-two (62).

5.4.2       The Early Termination Benefit shall be reduced by

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                                    (a)        theParticipant's retirement benefit, if any, under the Retirement Plan, assumingsuch retirement benefit were paid as a single life annuity commencing whenpayments commence under this Plan (regardless of the form of benefit actuallyselected by the Participant and regardless of when benefits actually commenceunder the Retirement Plan) and

                                    (b)        theParticipant's retirement benefit (before any adjustment due to an accelerateddistribution pursuant to Section 7.4 thereof), if any, under the Security Planfor Senior Management Employees I, assuming such retirement benefit werepaid as a single life annuity commencing when payments commence under this Plan(regardless of the form of benefit actually selected by the Participant andregardless of when benefits actually commence under the Security Plan forSenior Management Employees I).

**5.5             ****Separation from Service After Change in Control**. If a Participant's Separation from Service occurs within the Change in ControlPeriod prior to his or her Normal Retirement Date, the Participant shallreceive the Early Retirement Benefit calculated with the Early Retirement Factorsset forth in 5.3.  If the Separation from Service occurs on or after anEarly Retirement Date, the Early Retirement Benefit shall commence on the firstday of the month following the Early Retirement Date.  If the Separationfrom Service occurs prior to an Early Retirement Date, the Early RetirementBenefit shall commence on the first day of the month following theParticipant's fifty-fifth (55th) birthday.  Payment of thisbenefit cannot be deferred.

**5.6             ****Form of Payment**.  The Security Plan RetirementBenefit shall be paid as a single life annuity for the lifetime of theParticipant.

5.6.1       The Participant may also elect to receive Actuarial Equivalent paymentsin one of the forms of benefit listed below:

(a)               A joint and survivor annuity with payments continued to the survivingspouse at an amount equal to two-thirds (2/3) of the Participant's benefit.

(b)              A joint and survivor annuity with payments continued to the survivingspouse at an amount equal to the Participant's benefit.

(c)               A single life annuity, if the Participant had previously elected one ofthe joint and survivor annuity options listed above.

5.6.2       If the Actuarial Equivalent of the Security Plan Retirement Benefit isless than $10,000 (or, if less, the then applicable dollar amount under Section402(g)(1)(B) of the Code), the Administrative Committee may direct that theParticipant's benefit be paid as a lump sum as soon as practicable (but in allevents within 90 days) after the Participant's Termination Date.

5.6.3       The election to receive benefits in a different form of payment may bemade at any time prior to commencement of payment.

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**5.7             ****Code Section 162(m) Delay**.  If theAdministrative Committee reasonably anticipates that the Company's deductionwith respect to a payment would be limited or eliminated by application of CodeSection 162(m) if the payment were made as scheduled, the AdministrativeCommittee may unilaterally delay the time of the making or commencement ofpayment, provided such payment will be made either during the first year inwhich the Administrative Committee reasonably anticipates (or should reasonablyanticipate) that if the payment is made during such year the deduction of thepayment will not be barred by application of Code Section 162(m) or during theperiod beginning with the date of the Participant's Separation from Service andending on the later of the last day of the Company’s tax year in which theSeparation from Service occurs or the 15th day of the third monthfollowing the date of the Separation from Service; provided, further, that theprovisions of this Section 5.7 shall be applied in accordance with the rulesrelating to delay of payments subject to Code Section 162(m) as contained inTreasury Regulation Section 1.409A-2(b)(7)(i).  No election may be provided tothe Participant with respect to the timing of a payment pursuant to thisSection 5.7.

**5.8       Payment toSpecified Employees**.  Notwithstanding anything to the contrarycontained herein, if a Participant is deemed on his or her Termination Date tobe a “specified employee” (as that term is used in Code Section 409A(a)(2)(B)),as determined under the Company's policy for determining specified employees,no payments shall be made under the Plan due to the Participant's Separationfrom Service before the date that is 6 months following the Participant'sSeparation from Service or, if earlier, the date of the Participant's death, andany amounts accumulated during such period shall be paid in a lump sum payment tothe Participant on the first business day following the date that is six monthsafter the Participant's Separation from Service or, if the Participant diesduring such six month period, to the Participant's Beneficiary within 60 daysafter the date of the Participant's death.  Any remaining payments and benefitsdue under the Plan shall be paid or provided in accordance with the normalpayment dates specified for them herein.

ARTICLE VIOTHER RETIREMENT PROVISIONS

**6.1             ****Disability**.  During a period of Disability, aParticipant will continue to accrue Years of Participation, and Compensationshall be credited to a Participant who is receiving Disability benefits at thefull time equivalent rate of pay that was being earned immediately prior tobecoming disabled.  

**6.2             ****Withholding Payroll Taxes**.  The Employer shallwithhold from payments made hereunder any taxes required to be withheld from aParticipant's wages under federal, state or local law.

**6.3             ****Payment to Guardian**.  If a Plan benefit ispayable to a minor or a person declared incompetent or to a person incapable ofhandling the disposition of property, the Administrative Committee may directpayment of such Plan benefit to the guardian, legal representative or personhaving the care and custody of the minor, incompetent or incapable person.  TheAdministrative Committee may require proof of incompetency, minority,incapacity or guardianship, as it may deem appropriate, prior to distributionof the Plan benefit.  The distribution shall completely discharge theAdministrative Committee and the Employer from all liability with respect tosuch benefit.

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ARTICLEVIIBENEFICIARY DESIGNATION

**7.1             ****Beneficiary Designation**.  If the Participant ismarried, the Beneficiary shall be the Participant's spouse.  Each unmarriedParticipant shall have the right, at any time, to designate any person orpersons as Beneficiary or Beneficiaries (both primary as well as contingent) towhom payment under this Plan shall be made in the event of the Participant'sdeath prior to the discharge of the Employer's obligation under this Plan.  

Any Beneficiary designationmay be changed by a Participant by the filing of a written form prescribed bythe Administrative Committee.  The filing of a new Beneficiary designation formwill cancel all Beneficiary designations previously filed.  Any finalizeddivorce or marriage (other than common law) of a Participant subsequent to thedate of filing of a Beneficiary designation form shall automatically revoke theprior designation.  If a Participant fails to designate a Beneficiary asprovided above, or if the Beneficiary designation is revoked by marriage ordivorce, without execution of a new designation, or if all designatedBeneficiaries predecease the Participant or die prior to complete distributionof the Participant's benefits, then Participant's designated Beneficiary shallbe deemed to be the person or persons surviving the Participant in the first ofthe following classes in which there is a survivor, share and share alike:

7.1.1       the Participant's surviving spouse;

7.1.2       the Participant's children, except that if any of the childrenpredecease the Participant but leave issue surviving, the issue shall take byright of representation;

7.1.3       the Participant's personal representative (executor or administrator).

**7.2             ****Effect of Payment**.  The payment to theBeneficiary shall completely discharge Employer's obligations under this Plan.

ARTICLE VIIIADMINISTRATION

**8.1             ****Administrative Committee Duties**.  This Planshall be administered by an Administrative Committee, which shall be the ChiefExecutive Officer of the Company and the Fiduciary Committee appointed by theCompensation Committee.  Members of the Administrative Committee may beParticipants under this Plan.  The Administrative Committee shall have theauthority to make, amend, interpret and enforce all appropriate rules andregulations for the administration of this Plan and decide or resolve any andall questions including interpretations of this Plan, as may arise inconnection with the Plan.  A majority vote of the Administrative Committeemembers shall control any decision.

In the administration of thisPlan, the Administrative Committee may, from time to time, employ agents anddelegate to them such administrative duties as it sees fit and may from time totime consult with counsel who may be counsel to the Employer.

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Subject to Article IX,the decision or action of the Administrative Committee in respect of anyquestions arising out of, or in connection with, the administration,interpretation and application of the Plan and the rules and regulationspromulgated hereunder shall be final and conclusive and binding upon allpersons having any interest in the Plan.

**8.2             ****Indemnity of Administrative Committee**.  To theextent permitted by applicable law, the Employer shall indemnify, hold harmlessand defend the Administrative Committee against any and all claims, loss,damage, expense or liability arising from any action or failure to act withrespect to this Plan, provided that the Administrative Committee was acting inaccordance with the applicable standard of care.  The indemnity provisions setforth in this Article shall not be deemed to restrict or diminish in any wayany other indemnity available to the Administrative Committee members inaccordance with the Articles or By-laws of the Company.

ARTICLE IXCLAIMS PROCEDURE

**9.1             ****Claim**.  Any person claiming a benefit,requesting an interpretation or ruling under the Plan, or requestinginformation under the Plan shall present the request in writing to theAdministrative Committee who shall respond in writing as soon as practicable.

**9.2             ****Denial of Claim**.  If the claim or request isdenied, the written notice of denial shall state:

9.2.1       the reason for denial, with specific reference to the Plan provisionswhere applicable on which the denial is based;

9.2.2       a description of any additional material or information required and anexplanation of why it is necessary; and

9.2.3       an explanation of the Plan's claims review procedure.

**9.3             ****Review of Claim**.  Any person whose claim orrequest is denied or who has not received a response within thirty (30)days may request a review by notice given in writing to the AdministrativeCommittee.  The claim or request shall be reviewed by the AdministrativeCommittee who may, but shall not be required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents,and submit issues and comments in writing.

**9.4             ****Final Decision**.  The decision on review shallnormally be made within sixty (60) days.  If an extension of time isrequired for a hearing or other special circumstances, the claimant shall benotified and the time limit shall be one hundred twenty (120) days.  Thedecision shall be in writing and shall state the reason and any relevant Planprovisions.  All decisions on review shall be final and bind all partiesconcerned.

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ARTICLEXTERMINATION, SUSPENSION OR AMENDMENT

**10.1         ****Termination, Suspension or Amendment of Plan**.  TheBoard may, in its sole discretion, terminate or suspend this Plan at any timeor from time to time, in whole or in part.  The Compensation Committee mayamend this Plan at any time or from time to time.  Any amendment may providedifferent benefits or amounts of benefits from those herein set forth.  However,no such termination, suspension or amendment or other action with respect tothe Plan shall adversely affect the benefits of Participants which have accruedprior to such action, the benefits of any Participant who has previouslyretired, or the benefits of any Beneficiary of a Participant who has previouslydied.  

**10.2         ****Change in Control**.  Notwithstanding Section 10.1above, during a Change in Control Period, neither the Board nor theAdministrative Committee may terminate this Plan with regard to accruedbenefits of current Participants.  No amendment may be made to the Plan duringa Change in Control Period which would adversely affect the accrued benefits ofcurrent Participants, the benefits of any Participant who has retired, or theBeneficiary of any Participant who has died.  The Plan shall continue tooperate and be effective with regard to all current or retired Participants andtheir Beneficiaries during any Change in Control Period.

ARTICLE XIMISCELLANEOUS

**11.1         ****Unfunded Plan**.  This Plan is intended to be anunfunded plan maintained primarily to provide deferred compensation benefitsfor a select group of "management or highly compensated employees"within the meaning of Sections 201, 301 and 401 of the Employee RetirementIncome Security Act of 1974, as amended ("ERISA"), and thereforeto be exempt from the provisions of Parts 2, 3 and 4 of Title I ofERISA.

**11.2         ****Unsecured General Creditor**.  Participants andtheir Beneficiaries, heirs, successors and assigns shall have no legal orequitable rights, interest or claims in any property or asset of the Employer,nor shall they be Beneficiaries of, or have any rights, claims or interests inany life insurance policies, annuity contracts or the proceeds therefrom ownedor which may be acquired by the Employer.  Except as may be provided in Section 11.3,such policies, annuity contracts or other assets of the Employer shall not beheld under any trust for the benefit of Participants, their Beneficiaries,heirs, successors or assigns, or held in any way as collateral security for thefulfilling of the obligation of the Employer under this Plan.  Any and all ofthe Employer's assets and policies shall be, and remain, the general,unpledged, unrestricted assets of the Employer.  The Employer's obligationunder the Plan shall be that of an unfunded and unsecured promise to pay moneyin the future.

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**11.3         ****Trust Fund**.  The Employer shall be responsiblefor the payment of all benefits provided under the Plan.  At its discretion,the Employer may establish one or more trusts, with such trustees as the Boardmay approve, for the purpose of providing for the payment of such benefits.  Suchtrust or trusts may be irrevocable, but the assets thereof shall be subject tothe claims of the Employer's creditors.  To the extent any benefits providedunder the Plan are actually paid from any such trust, the Employer shall haveno further obligation with respect thereto, but to the extent not so paid, suchbenefits shall remain the obligation of, and shall be paid by, the Employer.

**11.4         ****Nonassignability**.  Neither a Participant norany other person shall have any right to commute, sell, assign, transfer,pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate orconvey in advance of actual receipt the amounts, if any, payable hereunder, orany part thereof, which are, and all rights to which are, expressly declared tobe unassignable and nontransferable.  No part of the amount payable shall,prior to actual payment, be subject to seizure or sequestration for the paymentof any debts, judgments, alimony or separate maintenance owed by a Participantor any other person, nor be transferable by operation of law in the event ofParticipant's or any other person's bankruptcy or insolvency.

**11.5         ****Not a Contract of Employment**.  The terms andconditions of this Plan shall not be deemed to constitute a contract ofemployment between the Employer and the Participant, and the Participant (orParticipant's Beneficiary) shall have no rights against the Employer except asmay otherwise be specifically provided herein.  Moreover, nothing in this Planshall be deemed to give a Participant the right to be retained in the serviceof the Employer or to interfere with the right of the Employer to discipline ordischarge the Participant at any time.

**11.6         ****Governing Law**.  The provisions of this Planshall be construed, interpreted and governed in all respects in accordance withthe applicable federal law and, to the extent not preempted by such federallaw, in accordance with the laws of the State of Idaho without regard tothe principles of conflicts of laws.

**11.7         ****Validity**.  If any provision of this Plan shallbe held illegal or invalid for any reason, the remaining provisions shallnevertheless continue in full force and effect without being impaired orinvalidated in any way.

**11.8         ****Notice**.  Any notice or filing required orpermitted to be given under the Plan shall be sufficient if in writing and handdelivered, or sent by registered or certified mail or fax.  The notice shall bedeemed given as of the date of delivery or, if delivery is made by mail, as ofthe date shown on the postmark on the receipt for registration orcertification.

**11.9         ****Successors**.  Subject to Section 10.1, theprovisions of this Plan shall bind and inure to the benefit of the Employer andits successors and assigns.  The term successors as used herein shall includeany corporate or other business entity which shall, whether by merger,consolidation, purchase or otherwise acquire all or substantially all of thebusiness and assets of the Employer, and successors of any such corporation orother business entity.

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IDAHOPOWER COMPANY

 

 

By:                                                                             

Chief Executive Officer

 

By:                                                                             

Secretary

 

Dated:                                                                        

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adopted effective as of January 1, 2005

Amended by the Board July 20,2006

Amended by the Board November 20,2008

 

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