**TABLE OF CONTENTS**       PAGE ARTICLE ONE — PREAMBLE  1      ARTICLE TWO — CONSTRUCTION  3      ARTICLE THREE — ELIGIBILITY AND PARTICIPATION  3 (a) Officers  3 (b) SMG Participants  4 (c) Commencement of Participation  4 (d) Status Change  4 (e) Rehires  4      ARTICLE FOUR — BENEFITS  4 (a) Officer Benefits  4 (1) Group A Participants  4 (2) Group B Participants  5 (3) Group C Participants  6 (4) Compensation  7 (5) Promotion to Officer Status  8 (b) SMG Participants  8 (c) Average Monthly Compensation  9 (d) Disability Accrual  9 (e) Recognition of Benefits under Separate Agreements  9      ARTICLE FIVE — PAYMENT OF BENEFITS ON AND AFTER JANUARY 1, 2009  10 (a) Officer Traditional Benefits Described in Sections 4(a)(1) and 4(a)(2)(i)  10 (1) Time for Commencement  10 (2) Form of Payment  11 (3) Actuarial Adjustments  11 (b) Spouse’s Benefit with Respect to Officer Traditional Benefits Described inSections 4(a)(1) and 4(a)(2)(i)   12 (c) Officer Retirement Account Balance Benefits Described in Sections4(a)(2)(ii) and 4(a)(3)   13 (1) Time and Form of Payment  13 (2) Actuarial Adjustments  13 (3) Payment Upon Death  14 (d) SMG Traditional and Retirement Account Balance Benefits Described in Section 4(b)  15 (1) Form of Payment — Traditional Benefits  15 (2) Time of Payment — Traditional Benefits  15 (3) Form and Time of Payment — Retirement Account Balance Benefit  16 (4) Actuarial Adjustments  16 (5) Time and Form of Benefits Payable Upon Death  17 (e) Change in Time and Form of Payment  17 (f) Cash-Out Provisions  17 (g) Reemployment  18      ARTICLE SIX — PAYMENT OF BENEFITS BEFORE JANUARY 1, 2009  18 
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       PAGE ARTICLE SEVEN — SECTION 409A COMPLIANCE  19      ARTICLE EIGHT — FUNDING  20      ARTICLE NINE — ADMINISTRATION  20      ARTICLE TEN — AMENDMENT AND TERMINATION OF THE PLAN  20      ARTICLE ELEVEN — ASSIGNMENT  21      ARTICLE TWELVE — WITHHOLDING  21      ARTICLE THIRTEEN — OTHER BENEFIT PLANS OF THE COMPANY  21      ARTICLE FOURTEEN — SPOUSAL CONSENT AND BENEFICIARY DESIGNATIONS  22      ARTICLE FIFTEEN — MISCELLANEOUS  22      ARTICLE SIXTEEN — EFFECTIVE DATE  22 
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PINNACLE WEST CAPITAL CORPORATIONSUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN OF 2005ARTICLE ONE — PREAMBLE          Effective January 1, 1987, PINNACLE WEST CAPITAL CORPORATION (the “Company”) adopted thePINNACLE WEST CAPITAL CORPORATION SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN (the “Prior Plan”)for the purpose of paying retirement benefits to certain employees in excess of the benefitspermitted to be paid under the Pinnacle West Capital Corporation Retirement Plan (the “RetirementPlan”) by reason of Section 415 of the Internal Revenue Code (the “Code”). The Prior Plan wasthereafter amended several times to provide additional benefits, thereby changing the Prior Planfrom an “excess benefit plan” under the Employee Retirement Income Security Act of 1974, as amended(the “Act”), to a “top hat” plan under the Act.          Effective January 1, 1982, ARIZONA PUBLIC SERVICE COMPANY (“APS”) adopted the ARIZONA PUBLICSERVICE COMPANY SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN (the “APS Plan”) for the purpose ofpaying retirement benefits to certain employees in excess of the benefits permitted to be paidunder the Arizona Public Service Company Employees’ Retirement Plan (the “APS Retirement Plan”) byreason of Section 415 of the Code. The APS Plan was thereafter amended several times to provideadditional benefits, thereby changing the APS Plan from an “excess benefit plan” under the Act to a“top hat” plan under the Act.          Effective January 1, 2000, the Company and APS amended and restated the Prior Plan and the APSPlan to merge the APS Plan into the Prior Plan and to make other technical changes. The Prior Planwas amended several times thereafter.          Effective January 1, 2003, the Company amended the Prior Plan to add a new benefit structure.
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          Effective December 31, 2004, the Company amended the Prior Plan to “grandfather” from theapplication of Code Section 409A benefits with respect to only those participants who neitherearned nor became vested in a supplemental excess benefit after December 31, 2004. Only thebenefits of such participants are provided under the terms of the Prior Plan.          This Plan applies to the entire benefit of any participant who either earned or became vestedin all or any portion of his or her benefits on or after January 1, 2005.
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ARTICLE TWO