Document:

AVISTA CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 Exhibit 10.18 
 Execution Copy 
 Avista Corporation 

Supplemental Executive Retirement Plan 
 (2011 Component) 
 Effective February 4, 2011 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	 	  	Page	 
		
	 ARTICLE 1. PURPOSE AND INTENT OF PLAN
	  	 	1	  
		 	1.1	  	Purpose.	  	 	1	  
		 	1.2	  	Intent.	  	 	1	  
		
	 ARTICLE 2. DEFINITIONS
	  	 	1	  
		
	 ARTICLE 3. ELIGIBILITY
	  	 	5	  
		
	 ARTICLE 4. BENEFITS
	  	 	5	  
		 	4.1	  	Amount of Benefits.	  	 	5	  
		 	4.2	  	Reduction for Early Commencement of Benefits.	  	 	6	  
		 	4.3	  	Form of Benefit Payments.	  	 	6	  
		 	4.4	  	Time of Benefit Payments.	  	 	7	  
		 	4.5	  	Employee Election of Form and Time of Benefit Payments.	  	 	7	  
		 	4.6	  	Benefits Unfunded.	  	 	8	  
		
	 ARTICLE 5. ADMINISTRATION
	  	 	8	  
		 	5.1	  	Duties of Administrator.	  	 	8	  
		 	5.2	  	Administration Upon Change In Control.	  	 	8	  
		 	5.3	  	Finality of Decisions.	  	 	8	  
		 	5.4	  	Benefit Forfeiture Prior to a Change in Control.	  	 	9	  
		
	 ARTICLE 6. CLAIMS PROCEDURES
	  	 	9	  
		 	6.1	  	Presentation of Claim.	  	 	9	  
		 	6.2	  	Notification of Decision.	  	 	9	  
		 	6.3	  	Review of a Denied Claim.	  	 	10	  
		 	6.4	  	Decision on Review.	  	 	10	  
		 	6.5	  	Legal Action.	  	 	10	  
		
	 ARTICLE 7. AMENDMENT AND TERMINATION
	  	 	11	  
		 	7.1	  	Termination.	  	 	11	  
		 	7.2	  	Amendment.	  	 	11	  
		
	 ARTICLE 8. MISCELLANEOUS
	  	 	11	  
		 	8.1	  	Unsecured General Creditor.	  	 	11	  
		 	8.2	  	No Employment Rights.	  	 	11	  
		 	8.3	  	Assignment.	  	 	11	  
		 	8.4	  	Law Applicable.	  	 	12	  
		 	8.5	  	Terms.	  	 	12	  

 AVISTA CORPORATION 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 
 (2011 Component) 
 Effective February 4, 2011 

ARTICLE 1. 

Purpose and Intent of Plan 
  

	1.1	Purpose. This Avista Corporation Supplemental Executive Retirement Plan (2011 Component) is effective February 4, 2011 and is designed to provide
supplemental retirement benefits payable out of the general assets of any Company as provided in Section 4.1. This Plan shall be unfunded for tax purposes and purposes of Title I of ERISA. This Plan is a component of the Avista Corporation
Supplemental Executive Retirement Plan. 

  

	1.2	Intent. The intent of the Plan is to restore the benefit which would otherwise be payable under the Funded Pension Plan due to the limitations under
Code Sections 401(a)(17) and 415 and to restore the benefit which would otherwise be lost thereunder as a result of the Employee’s participation in the Deferred Compensation Plan. 

ARTICLE 2. 

Definitions 
 For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings: 

 

	2.1	“Actuarial Equivalent” shall mean an actuarial equivalent value of an amount payable in a different form or at a different date computed on the basis of the
following actuarial assumptions: 

  

			
	Mortality:	  	1983 Group Annuity
	Table Interest Rate:	  	7%

  

	2.2	“Administrator” shall mean, prior to a Change in Control, the Administrator appointed to administer the Funded Pension Plan, as appointed from time to time.
Upon and after a Change in Control, Administrator shall mean the person or entity appointed in accordance with Section 5.2. 

  
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	2.3	“Benefit Service” shall mean the periods of service which are counted for the purposes of determining the amount of benefit earned as defined in
Section 4.1 of the Funded Pension Plan, except as otherwise provided in an agreement between the Company and the Employee and approved by the Compensation & Organization Committee of the Board. 

 

	2.4	“Board” shall mean the Board of Directors of Avista Corporation. 

 

	2.5	“Change in Control” shall mean: 

  

	 	(a)	The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of either (i) the then outstanding shares of common stock
of Avista Corporation (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of Avista Corporation entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Avista Corporation,
(ii) any acquisition by Avista Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Avista Corporation or any corporation controlled by Avista Corporation or (iv) any
acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2.5; or 

 

	 	(b)	Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Avista Corporation’s shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors, or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

  
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	 	(c)	Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Avista Corporation (a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such
transaction owns Avista Corporation or all or substantially all of Avista Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or employee benefit plan (or related trust) of
Avista Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, twenty percent (20%) or more of, respectively, the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business
Combination; or 

  

	 	(d)	Approval by the shareholders of Avista Corporation of a complete liquidation or dissolution of Avista Corporation. 

 

	2.6	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 

 

	2.7	“Company” shall mean Avista Corporation, a Washington corporation, any Related Company that participates in the Plan, and any business which assumes the
obligations of a Company hereunder. 

  

	2.8	“Deferred Compensation Plan” shall mean the non-qualified deferred compensation plan sponsored by Avista Corporation known as the “Avista Corporation
Executive Deferral Plan”, which includes the Avista Corporation Executive Deferral Plan (2005 Component), the Avista Corporation Executive Deferral Plan (2011 Component), and any predecessor or successor plans thereof. 

  
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	2.9	“Eligible Dependent Children” shall mean the natural or adopted children of the Employee or the Employee’s Eligible Surviving Spouse who are dependents
of and have been dependents of such Employee or spouse throughout the 12 month period preceding the Employee’s death. 

  

	2.10	“Eligible Surviving Spouse” shall mean the person to whom the Employee was legally married on his benefit commencement date and at the time of his death has
been married for at least 12 months. 

  

	2.11	“Employee” shall mean an employee and executive officer of the Company who is a member in the Funded Pension Plan and who first becomes an executive officer
of the Company after February 3, 2011. 

  

	2.12	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. 

 

	2.13	“Final Average Earnings” shall for the purpose of calculating benefits under Section 4.1 have the same meaning as the definition in the Funded Pension
Plan with the exception that the calculation of the Employee’s annual earnings shall be made without regard to the dollar limitation under Code Section 401(a)(17) and shall include only the Employee’s base pay and short term cash
incentive payments paid annually to the Employee (including any such amounts deferred by the Employee under the Deferred Compensation Plan). 

  

	2.14	“Funded Pension Plan” shall mean the “Retirement Plan for Employees of Avista Corporation”, as outlined under the terms and provision of the plan
document as in effect at the time of the Employee’s Separation from Service. 

  

	2.15	“Minimum Survivor Annuity” shall mean an annuity for the life of the Employee’s Eligible Surviving Spouse equal to 50% of the amount that would have been
paid to the Employee had the Employee’s benefit been paid in the form of a joint and survivor annuity with a 50% continuance, and in an amount that is the Actuarial Equivalent of the Employee’s benefit determined under Sections 4.1
and 4.2, as applicable, payable in the form of a single life annuity. 

  

	2.16	“Plan” shall mean the component of the Avista Corporation Supplemental Executive Retirement Plan set forth in this plan document titled the “Avista
Corporation Supplemental Executive Retirement Plan (2011 Component)”, as amended from time to time and that governs benefits that accrue thereunder for Employees on and after February 4, 2011. 

 

	2.17	“Related Company” shall mean a corporation which is a member of the same controlled group of corporations (as defined in Code Section 414(b)) as Avista
Corporation and a trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with Avista Corporation. 

  
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	2.18	“Separation from Service” means that an Employee has died, retired or otherwise has incurred a termination of employment. An Employee will not incur a
Separation from Service while he is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment under an
applicable statute or contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services. Notwithstanding the foregoing, where a leave of absence is due
to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Employee to be unable to perform the
duties of his position of employment or any substantially similar position of employment, a 29 month period of absence is substituted for such six month period. 

 “Termination of employment” means that it is reasonably anticipated based on the facts and circumstances that an Employee will perform no further services after a certain date or that the level
of bona fide services he would perform after such date would permanently decrease to no more than 20 percent of the average level of bona fide services performed over the immediately preceding 36 month period (or the full period of services if the
Employee has been providing services for less than 36 months). An Employee shall incur a Separation from Service when the level of bona fide services performed decreases to a level equal to 20 percent or less of the average level of services
performed by him during the immediately preceding 36 month period. 
 ARTICLE 3. 

Eligibility 
 An
Employee who is entitled to receive benefits from the Funded Pension Plan shall be eligible to receive benefits under this Plan in accordance with Section 4.1. 
 ARTICLE 4. 
 Benefits 

 

	4.1	Amount of Benefits. The amount of the monthly benefit payable under the Plan shall be equal to the amount of monthly benefit which would be payable to or on
behalf of the Employee under the Funded Pension Plan if: (a) the benefit formula under the Funded Pension Plan were 1.2% of the Member’s Final Average Earnings multiplied by his years of Benefit Service; and (b) Article XI thereof
(which incorporates the Code Section 415 limitations) were not applied. The benefit described in the preceding sentence shall be reduced by the sum of the Employee’s monthly benefit that accrued under the Avista Corporation Supplemental
Manager Retirement Plan and the Employee’s “normal retirement benefit” as defined by the Funded Pension Plan. 

  
 5 

	4.2	Reduction for Early Commencement of Benefits. If payment of benefits under the Plan commences when the Employee is eligible to elect early retirement benefits
under the Funded Pension Plan, then the benefits under this Plan shall be reduced by five-twelfths (5/12ths) of 1% of such benefit for each month by which his benefit commencement date precedes his 62nd birthday. 

If payment of benefits under the Plan commences when the Employee is eligible to elect vested termination benefits under the Funded
Pension Plan, then the benefits under this Plan shall be paid in an annuity which is the Actuarial Equivalent of the Employee’s monthly benefit payable at his “normal retirement date”, as defined in the Funded Pension Plan, subject to
Section 4.5. 
  

	4.3	 Form of Benefit Payments. Unless otherwise elected by an Employee pursuant to Section 4.5, the benefits payable to or on behalf of an
Employee as determined in Section 4.1 shall be paid in the form of a single life annuity if the Employee is single upon his Separation from Service, or if the Employee is married upon his Separation from Service, in the form of a 66-2/3% joint
and survivor annuity with his Eligible Surviving Spouse as joint annuitant until such spouse is age 60, and a 50% joint and survivor annuity with such spouse as joint annuitant thereafter. In the event that the Employee’s age exceeds that of
his Eligible Surviving Spouse by more than five years, then the survivor’s benefit described in the preceding sentence shall be reduced by 2% of the Employee’s benefit for each year by which the Employee’s age exceeds that of his
Eligible Surviving Spouse plus five years, provided that the reduced benefit shall not be less than the Minimum Survivor Annuity. The last payment to the Eligible Surviving Spouse shall be the payment due on the first day of the month in which
occurs the death of the last to survive of the Employee and such spouse. Furthermore, if the Eligible Surviving Spouse dies, or if there is no Eligible Surviving Spouse, then the benefits which otherwise would have been paid to an Eligible Surviving
Spouse shall be divided equally among the Employee’s Eligible Dependent Children under the age of 19. The last such payment to each Eligible Dependent Child shall be the payment on the first day of the month in which occurs the earlier of his
19th birthday or his death. 

  
 6 

 Notwithstanding the preceding paragraph, the benefits payable to or on behalf of an Employee
as determined in Section 4.1 shall be paid in a single lump sum if the Actuarial Equivalent of the Employee’s monthly benefit payable in a lump sum is equal to or less than the dollar amount under Code Section 402(g)(1)(B) ($16,500
for 2011) and the payment results in the termination and liquidation of the entirety of the Employee’s interest under the Plan, including all other plans that are aggregated with the Plan under Code Section 409A. 

The lump sum amounts described above shall be calculated based on the Employee’s monthly benefit payable at his “normal
retirement” or “early retirement date”, as such terms are defined in the Funded Pension Plan, if applicable, and if the Employee is married, shall include the value of joint and survivor benefits. 

 

	4.4	Time of Benefit Payments. Unless otherwise elected by the Employee pursuant to Section 4.5, benefits due under the Plan shall be paid as soon as reasonably
practicable following the Employee’s Separation from Service, but in no event later than 90 days following the Employee’s Separation from Service. Notwithstanding the preceding sentence, payment of benefits to an Employee who is a
“specified person” shall not be paid or commence prior to a date that is six (6) months after the date of his Separation from Service for reasons other than death. An Employee is a “specified person” if he is a “key
employee” under Code Sections 416(i)(1)(A)(i), (ii) or (iii) at any time during the 12 month period ending on a “specified employee identification date.” If the Employee is a key employee on such a date, he will be treated
as a key employee for the entire 12 month period beginning on the “specified employee effective date.” For purposes of this Section 4.4, the “specified employee identification date” is December 31 and the
“specified employee effective date” is the following April 1. The accumulated value of deferred payments (exclusive of interest) will be paid to an Employee who is a specified person in a single sum at the beginning of the seventh
calendar month after the date of his Separation from Service. 

  

	4.5	Employee Election of Form and Time of Benefit Payments. An Employee may elect in the manner provided by the Administrator to delay receipt of his Plan benefit or
change the form of payment described above to a single lump sum or a single life annuity with a 10 year certain guarantee (calculated using the adjustment factors for such payment form set forth in the Funded Plan), provided that: (i) the
election is submitted at least one year prior to the date on which the first payment of benefits hereunder would have otherwise become payable; and (ii) the election will result in a delay of the Employee’s receipt of such benefit by at
least five additional full years. In the event that an Employee participates in this Plan and the Avista Corporation Supplemental Manager Retirement Plan (“SMRP”) (as such plan may be amended from time to time), then the payment election
in effect under the plan in which the Employee first participates shall govern payments under both the Plan and the SMRP. 

  
 7 

	4.6	Benefits Unfunded. The Employee shall have no right, title, or interest whatever in or to any investments which the Company may make to aid it in meeting its
obligations hereunder. To the extent that any person acquires a right to receive payments from the Company, such rights shall be no greater than the right of an unsecured creditor. 

ARTICLE 5. 

Administration 
  

	5.1	Duties of Administrator. The Plan shall be administered by the Administrator in accordance with its terms and purposes. The Administrator shall have the
discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan including, but not limited to, the amount and manner of payment of the benefits due to or on behalf of each
Employee under the Plan. 

  

	5.2	Administration Upon Change In Control. Upon and after the occurrence of a Change in Control, the Administrator shall be an independent third party selected by
the individual who, immediately prior to such event, was Avista Corporation’s Chief Executive Officer or, if not so identified, Avista Corporation’s highest ranking officer (the “Ex-CEO”). Upon and after the occurrence of a
Change in Control, Avista Corporation must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation,
attorney’s fees and expenses arising in connection with the performance of the duties of the Administrator hereunder; and (3) supply full and timely information to the Administrator or all matters relating to the Plan, the Employees and
their beneficiaries, the date or circumstances of the death or other Separation from Service of the Employees, their respective years of Benefit Service, age and Final Average Earnings, and such other pertinent information as the Administrator may
reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) only by the Ex-CEO. Upon and after a Change in Control, the Administrator may not be terminated by Avista Corporation.

  
 8 

	5.3	Finality of Decisions. Subject to Article 6 below, the decisions made by and the actions taken by the Administrator in the administration of the Plan shall
be final and conclusive on all persons. The Administrator shall not be subject to liability with respect to the administration of the Plan. 

  

	5.4	Benefit Forfeiture Prior to a Change in Control. Prior to a Change in Control, all benefits provided by this Plan may be forfeited by the Employee and the
Employee’s beneficiary if, in the judgment of the Administrator prior to a Change in Control, the Employee is responsible for acts or omission which subject the Company to public disrespect, scandal or ridicule or if the Employee is responsible
for acts of misconduct including, but not limited to, acts of theft, embezzlement, fraud or moral turpitude. Prior to a Change in Control, the Administrator’s determination as to the grounds for forfeiture shall be conclusive and binding on all
parties. Upon and after a Change in Control, no benefits may be forfeited for any reason under this Section 5.4 and this Section 5.4 shall be null and void. 

ARTICLE 6. 

Claims Procedures 
  

	6.1	Presentation of Claim. Any Employee or beneficiary of a deceased Employee (such Employee or beneficiary being referred to below as a “Claimant”) may
deliver to the Administrator a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60
days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the
Claimant. 

  

	6.2	Notification of Decision. The Administrator shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

  

	 	(a)	that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or 

 

	 	(b)	that the Administrator has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a
manner calculated to be understood by the Claimant: 

  

	 	(i)	the specific reason(s) for the denial of the claim, or any part of it; 

  
 9 

	 	(ii)	specific reference(s) to pertinent provisions of the Plan upon which such denial was based; 

 

	 	(iii)	a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is
necessary; and 

  

	 	(iv)	an explanation of the claim review procedure set forth in Section 6.3 below. 

 

	6.3	Review of a Denied Claim. Within 60 days after receiving a notice from the Administrator that a claim has been denied, in whole or in part, a Claimant (or the
Claimant’s duly authorized representative) may file with the Administrator a written request for a review of the denial of the claim. Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant’s
duly authorized representative): 

  

	 	(a)	may review pertinent documents; 

  

	 	(b)	may submit written comments or other documents; and/or 

  

	 	(c)	may request a hearing, which the Administrator, in its sole discretion, may grant. 

 

	6.4	Decision on Review. The Administrator shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review
of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Administrator’s decision must be rendered within 120 days after such date. Such decision must be written in a manner calculated to
be understood by the Claimant, and it must contain: 

  

	 	(a)	specific reasons for the decision; 

  

	 	(b)	specific reference(s) to the pertinent Plan provisions upon which the decision was based; and 

 

	 	(c)	such other matters as the Administrator deems relevant. 

  

	6.5	Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 6 is a mandatory prerequisite to a Claimant’s right to
commence any legal action with respect to any claim for benefits under this Plan. 

  
 10 

 ARTICLE 7. 
 Amendment and Termination 
  

	7.1	Termination. Avista Corporation reserves the right to terminate the Plan at any time by action of the Board. The termination of the Plan shall not adversely
affect any Employee or his or her beneficiary who has commenced receiving the payment of any benefits under the Plan as of the date of termination; provided, however, that the Company shall have the right to accelerate payments by paying the
Actuarial Equivalent value of such payments in accordance with Code Section 409A. For all other Employees, upon the termination of the Plan, the Actuarial Equivalent of an Employee’s benefit shall be paid out in a single lump sum.

  

	7.2	Amendment. Avista Corporation may, at any time, amend or modify the Plan in whole or in part by the action of the Board; provided, however, that (i) no
amendment or modification shall be effective to decrease or restrict an Employee’s then accrued benefit, determined on an Actuarial Equivalent basis and (ii) upon and after a Change in Control, no amendment of Section 5.2 above,
Section 5.4 above or this Section 7.2 shall be effective. 

 ARTICLE 8. 

Miscellaneous 
  

	8.1	Unsecured General Creditor. Employees and their beneficiaries shall have no legal or equitable rights, interests or claims in any property or assets of the
Company. Any and all of the Company’s assets shall be, and remain, the general, unpledged assets of the Company. The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

  

	8.2	No Employment Rights. Nothing contained in the Plan shall be construed as a contract of employment between the Company and an Employee, or as a right of any
Employee to be continued in the employment of the Company, or as a limitation of the right of the Company to discharge any of its employees, with or without cause. 

  
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	8.3	Assignment. No amount payable at any time hereunder shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person, and any attempt to so alienate or subject any such amount, whether then or thereafter payable, shall be void. If any person shall
attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge, or otherwise encumber any amount payable hereunder, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time, such amount would
be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Board, if it so elects, may direct that such amount be withheld and that the amount or any part thereof be paid or applied to or for the benefit of such
person, or his spouse, in such manner and proportion as said Board may deem proper. 

  

	8.4	Law Applicable. This Plan shall be governed by the laws of the State of Washington to the extent such laws are not preempted by ERISA. 

 

	8.5	Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply;
and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. 

Adopted and effective as of February 4, 2011. 

 

					
	AVISTA CORPORATION
		
	By:	 	  

		
	Title:	 	  

		
	Date:	 	  

  
 12AVISTA CORPORATION PERFORMANCE AWARD AGREEMENT

 Exhibit 10.24 

 
 

 
 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. 

  

			
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 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. 

 
 

 
  

			
	 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

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