Document:

exv4w1

Exhibit 4.1

THIRD AMENDED AND RESTATED PINNACLE WEST CAPITAL CORPORATION

INVESTORS ADVANTAGE PLAN

     Pinnacle West Capital Corporation, an Arizona corporation (the “Company”), hereby
amends and restates, as of November 25, 2008, the Pinnacle West Capital Corporation Investors
Advantage Plan (the “Plan”):

ARTICLE 1

DEFINITIONS

     The terms defined in this Article I shall, for all purposes of this Plan, have the
following respective meanings:

     Account

     The term “Account” shall mean, as to any Participant, the account maintained by the
Administrator evidencing (i) the shares (and/or fraction of a share) of Common Stock (a) purchased
through the Plan and/or (b) deposited by such Participant into the Plan pursuant to Section 4.1
hereof and credited to such Participant; (ii) any dividends in the form of shares of Common Stock
and any shares resulting from a Common Stock split on such shares, and (iii) cash held in the Plan
pending investment in Common Stock for such Participant.

     Account Shares

     The term “Account Shares” shall mean all shares (and/or fraction of a share) of
Common Stock credited to the Account of a Participant by the Administrator, which shall include
shares deposited into the Plan pursuant to Section 4.1 hereof.

     Administrator

     The term “Administrator” shall mean the individual (who may be an employee of the
Company), bank, trust company, or other entity (including the Company) appointed from time to time
by the Company to act as Administrator hereunder.

     Automatic Investment Form

     The term “Automatic Investment Form” shall mean documentation that the Administrator
shall require to be completed and received if Participant elects to make an initial cash
investment, or authorize automatic monthly investments, to be deducted directly from a U.S.
checking, savings, or credit union account which is a member of the Automated Clearing House
(“ACH”) network.

     Cash Investment Form

     The term “Cash Investment Form” shall mean documentation prepared by the
Administrator that may be utilized by a Participant when making an optional cash investment
pursuant to Section 2.4 hereof.

     Cash Investment Only option

     As defined in Subsection 2.2.3 hereof.

     Common Stock

     The Company’s Common Stock, no par value.

     Company

     As defined in the Preamble.

     Company Share Purchase Price

     The term “Company Share Purchase Price,” when used with respect to newly issued
shares of Common Stock, or shares of Common Stock held in the Company’s treasury, shall mean the
average of the high and low sales prices of Common Stock on a given Investment Date as reported on
the New York Stock Exchange Composite Tape and

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published in The Wall Street Journal, or, for any
day on which there is no such publication, as published in another
generally accepted publication for the applicable Investment Date. In the absence of knowledge of
inaccuracy, the Company may rely upon such prices as published in The Wall Street Journal or such
other publication. In the event no trading is so reported for a trading day, the Company Share
Purchase Price for such shares may be determined by the Company on the basis of such market
quotations as it deems appropriate.

     Direct Deposit Authorization Form

     The term “Direct Deposit Authorization Form” shall mean documentation that the
Administrator shall require to be completed and received if Participant elects to have Dividends
deposited directly to a financial institution which is a member of the ACH network.

     Dividend

     The term “Dividend” shall mean cash dividends paid on Reinvestment Eligible
Securities.

     Dividend Payment Date

     The term “Dividend Payment Date” shall mean a date on which a cash dividend on
shares of Common Stock is payable.

     Dividend Processing Period

     The term “Dividend Processing Period” shall mean a 2-3 business day period prior to
the Dividend Payment Date.

     Dividend Record Date

     The term “Dividend Record Date” shall mean the date fixed for the determination of
shareholders of record who will be entitled to receive a Dividend payable on a Dividend Payment
Date.

     Eligible Securities

     The term “Eligible Securities” shall mean those securities of the Company and its
subsidiaries, whether issued prior to, on, or after the date hereof, set forth in Section 6.1
hereof, and such other securities of the Company and its subsidiaries as the Company may designate,
in its sole discretion, pursuant to Section 6.2 hereof.

     Enrollment Forms

     The term “Enrollment Forms” shall mean the documentation that the Administrator
shall require to be completed and received (subject to Section 2.1 hereof with respect to automatic
enrollment of Plan Participants) prior to an investor’s enrollment in the Plan pursuant to
Section 2.1 hereof, a Participant’s changing the Participant’s options under the Plan pursuant to
Section 7.1 hereof, or, at the option of a Participant as described in Section 4.1 hereof, a
Participant’s depositing shares of Common Stock into the Plan pursuant to Section 4.1 hereof. An
Enrollment Form may also be used by the Administrator for other purposes as described herein or as
determined by the Administrator from time to time.

     Exchange Act

     The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

     Ex-Dividend Date

     The term “Ex-Dividend Date” shall mean a date, normally two business days prior to
the Dividend Record Date, based on industry regulations, necessary to allow for the settlement of
traded securities by the Dividend Record Date.

     Foreign Person

     The term “Foreign Person” shall mean a Person that is a citizen or resident of, or
is organized or incorporated under, or has its principal place of business in, a country other than
the United States, its territories, and possessions.

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     Full Dividend Reinvestment option

     As defined in Subsection 2.2.1 hereof.

     Independent Agent

     The term “Independent Agent” shall mean an agent independent of the Company who
satisfies applicable legal requirements (including without limitation the requirements of
Regulation M and Rule 10b-18 promulgated under the Exchange Act) and who has been selected by the
Company, pursuant to Section 10.6 hereof, to serve as an Independent Agent for purposes of making
purchases and sales of Common Stock under the Plan.

     Initial Enrollment Form

     The term “Initial Enrollment Form” shall mean the specific type of Enrollment Form
(defined above) required for all new investors in the Plan who are not existing shareholders of
record.

     Investment Date

     The term “Investment Date” shall mean the date on which the purchase price for all
shares of Common Stock to be purchased during an Investment Period has been determined. If shares
are purchased from the Company pursuant to Section 3.3 hereof, the Investment Date will be the
first business day of the relevant Investment Period. If shares are purchased on the open market
pursuant to Section 3.4 hereof, the Investment Date will be the last business day of the relevant
Investment Period. If the Investment Date would otherwise fall on a day on which the New York
Stock Exchange is not open, the first business day immediately succeeding such day on which the New
York Stock Exchange is open will be the Investment Date.

     Investment Period

     The term “Investment Period” shall mean the period during which Common Stock is
purchased. An Investment Period will occur approximately every 5 business days, except that an
Investment Period that would normally begin on a Dividend Record Date, will be postponed until the
second business day following the Dividend Record Date.

     Market Share Purchase Price

     The term “Market Share Purchase Price,” when used with respect to shares of Common
Stock purchased in the open market, shall mean the weighted average purchase price per share
(including brokerage commissions, any related service charges, and applicable taxes) of the
aggregate number of shares purchased in the open market for an Investment Date.

     Market Share Sales Price

     The term “Market Share Sales Price,” when used with respect to shares of Common
Stock sold under the Plan, shall mean the weighted average sales price per share (less brokerage
commissions, any related service charges, and applicable taxes) of the aggregate number of shares
sold in the open market for the period during which the sales are made.

     Maximum Amount

     As defined in Section 2.4 hereof.

     Partial Dividend Reinvestment option

     As defined in Subsection 2.2.2 hereof.

     Participant

     As defined in Section 2.1 hereof.

     Person

     The term “Person” shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust, estate, or
unincorporated organization.

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   Plan

   As defined in the Preamble.

   Plan Statement

     The term “Plan Statement” shall mean a written statement prepared by the
Administrator and sent to a Participant following the end of each calendar quarter in which the
Participant’s Account had purchase or investment activity, or otherwise as the Administrator shall
determine to be appropriate (and not objected to by the Company) or as provided in this Plan, which
statement reflects (i) the purchase price and number of Account Shares purchased for or credited to
the Participant’s Account for such calendar quarter, (ii) the total number of Account Shares in the
Participant’s Account at the date of such statement, and (iii) such additional information
regarding the Participant’s Account as the Administrator may determine to be pertinent to the
Participant. However, if the only activity for the quarter is the receipt of a cash dividend that
is not reinvested, the participant will not receive a Plan Statement.

     Reinvestment Eligible Securities

     The term “Reinvestment Eligible Securities” shall mean (i) those Eligible Securities
of which a Participant is the record or registered holder and (ii) a Participant’s Account Shares.

     Sale/Transfer Request Form

     The term “Sale/Transfer Request Form” shall mean the documentation that the
Administrator may require to be completed and received prior to a Participant’s (i) sale of Account
Shares pursuant to Section 5.1 hereof, (ii) gift or transfer of Account Shares pursuant to
Section 5.2 hereof, and (iii) termination of participation in the Plan pursuant to Section 7.2
hereof.

     A pronoun or adjective in the masculine gender includes the feminine gender, and the
singular includes the plural, unless the context clearly indicates otherwise.

ARTICLE II

PARTICIPATION

     Section 2.1 Participation. Any Person, whether or not a record holder of Common
Stock, may elect to participate in the Plan; provided, however, that if such Person is a Foreign
Person, the Person must provide evidence satisfactory to the Administrator that the Person’s
participation in the Plan would not violate local laws applicable to the Company, the Plan, or such
Foreign Person.

     An election by a Person to participate in the Plan shall be made by completing and
returning to the Administrator an Enrollment Form, or an Initial Enrollment Form, and, subject to
the last two paragraphs of this Section 2.1 below, (i) electing to have Dividends on Eligible
Securities of which such Person is the record holder invested in Common Stock pursuant to
Section 2.2 hereof, (ii) depositing certificates representing Common Stock of which such person is
the record holder into the Plan pursuant to Section 4.1 hereof, or (iii) making an initial cash
investment pursuant to Section 2.3 hereof.

     Any Person who has met such requirements and has made and not revoked such election
is herein referred to as a “Participant.” Notwithstanding the foregoing, each participant in the
Plan on the date of effectiveness hereof is automatically a Participant without submitting a new
Enrollment Form; provided, however, that any such Participant who wishes to change the
Participant’s current participation in any way must submit a new Enrollment Form to the
Administrator. A Participant may elect to participate in any or all of the forms of investment
provided in Sections 2.2 through 2.4 hereof and to utilize the Plan’s safekeeping services provided
in Section 4.1 hereof by submitting an Enrollment Form designating such election to the
Administrator; provided, however, that, alternatively, a Participant may elect to make optional
cash investments pursuant to Section 2.4 hereof by submitting to the Administrator a completed
optional Cash Investment Form in lieu of an Enrollment Form.

     The Company reserves the right to restrict participation in this Plan if it believes
that such participation may be contrary to the general intent of this Plan or in violation of
applicable law.

     Section 2.2 Dividend Reinvestment. A Participant may elect any of the Full Dividend
Reinvestment, Partial Dividend Reinvestment, and Cash Investment Only options described in
Subsections 2.2.1, 2.2.2, and 2.2.3 hereof.

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     Subsection 2.2.1 Full Dividend Reinvestment. Participants enrolling in the “Full
Dividend Reinvestment” option will have Dividends earned on all Common Stock, both in their Plan
Accounts and held of record by such
Participants, reinvested in shares (and/or a fraction of a share) of Common Stock to be credited to
their Accounts in lieu of receiving such Dividends directly.

     Subsection 2.2.2 Partial Dividend Reinvestment. Participants enrolling in the
“Partial Dividend Reinvestment” option will have Dividends on a designated number of shares of
Reinvestment Eligible Securities held of record or in their Plan Accounts paid directly to the
Participant in the manner otherwise associated with payment of Dividends, with the balance being
reinvested in shares (and/or a fraction of a share) of Common Stock to be credited to their
Accounts in lieu of receiving such Dividends directly.

     Subsection 2.2.3 Cash Investment Only. Participants enrolling in the “Cash
Investment Only” option may make cash investments pursuant to Sections 2.3 and 2.4 hereof.
Dividends on Eligible Securities held by such Participants of record or in their Plan Accounts will
not be reinvested. Such Dividends will be paid directly to Participant either by check or direct
deposit, at the election of the Participant. The completion of a Direct Deposit Authorization Form
may be required for any such direct deposit.

     Subsection 2.2.4 General Matters. (a) If Participants do not indicate a
participation option as described in Subsections 2.2.1, 2.2.2, and 2.2.3 hereof on their Enrollment
Forms, except as otherwise provided for Plan participants in Section 2.1 hereof, such Participants
will be deemed to have elected the Full Dividend Reinvestment option described in Subsection 2.2.1
hereof. Dividends will be reinvested as to all Account Shares except for Account Shares as to
which the participant has elected not to have Dividends reinvested and has notified the
Administrator by delivery of a completed Enrollment Form of such election. (b) Common Stock
purchased on or after a specific Ex-Dividend Date may not receive the next subsequent dividend.

     Section 2.3 Initial Cash Investment. A Person who is not already a Common Stock
shareholder of record may become a Participant by returning to the Administrator a completed
Initial Enrollment Form, accompanied by an initial cash payment of at least $50, by personal check,
payable through a U.S. bank or other U.S. financial institution, in U.S. dollars, to Pinnacle West
Capital Corporation, or via electronic funds transfer, to be invested in Common Stock pursuant to
Subsections 3.3.2 or 3.4.2 hereof. Initial cash investments may be made by electronic funds
transfer by completing and forwarding an Automatic Investment Form to the Administrator authorizing
the deduction of a set amount.

     Section 2.4 Optional Cash Investments. A Participant may elect to make cash payments
at any time or from time to time to the Plan, in any amount, by personal check, payable through a
U.S. bank or other U.S. financial institution, in U.S. dollars, to Pinnacle West Capital
Corporation, or via electronic funds transfer, for investment in Common Stock pursuant to
Subsections 3.3.2 or 3.4.2 hereof; provided, however, that a Participant may not invest more than
$150,000 in aggregate amount in any calendar year (the “Maximum Amount”) and provided further that
any such payment must be accompanied by a new Enrollment Form, Cash Investment Form or, for
electronic funds transfers, an Automatic Investment Form. For purposes of determining whether the
Maximum Amount has been reached, initial cash investments made pursuant to Section 2.3 hereof shall
be counted as optional cash investment, and Dividends reinvested pursuant to Section 2.2.1 or 2.2.2
shall not be counted as optional cash investments. Optional cash investments may be made by
electronic funds transfer by completing and forwarding an Automatic Investment Form to the
Administrator authorizing the deduction of a set amount. Other restrictions may be imposed from
time to time on amounts that may be invested in any transaction.

ARTICLE III

DIVIDEND REINVESTMENT AND STOCK PURCHASE

     Section 3.1 Dividend Reinvestment. Dividends as to which reinvestment has been
elected by a Participant shall be paid to the Administrator or its nominee on behalf of such
Participant. Dividends shall be reinvested, at the Company’s election, subject to Section 10.7
hereof, in either (i) newly issued shares of Common Stock or shares of Common Stock held in the
Company’s treasury purchased from the Company or (ii) shares of Common Stock purchased in the open
market.

     Section 3.2 Investment of Optional Cash Payments and Initial Cash Payments. Any
optional cash investments and initial cash investments may be made by either (a) personal check
received by the Administrator from a Participant and as to which no request for return has been
received at least two business days prior to the next scheduled Investment Period, or (b) via
electronic funds deduction. Recurring electronic funds deduction, regardless of when the
Participant completes and forwards the Participant’s Automatic Investment Form to the Company, will

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occur only once a month, on or about the 25th day of each month, or such other time or times as the
Company and the Administrator agree. Non-recurring electronic funds deductions will be made when
authorized. Such optional cash investments and initial cash investments will be invested during
the next Investment Period following the
receipt of the check or the electronic funds deduction, in either (i) newly issued shares of Common
Stock or shares of Common Stock held in the Company’s treasury purchased from the Company or
(ii) shares of Common Stock purchased in the open market. However, if the investments are not
received at least two business days prior to the beginning of such Investment Period, the
investment could be delayed to the next following Investment Period.

     Section 3.3 Investment and Reinvestment in Newly Issued or Treasury Shares. Dividend
reinvestment in newly issued shares of Common Stock or shares of Common Stock held in the Company’s
treasury shall be governed by Subsection 3.3.1 hereof. Any optional cash investments and/or initial
cash investments to be invested in either newly issued shares of Common Stock or shares of Common
Stock held in the Company’s treasury will be governed by Subsection 3.3.2 hereof.

     Subsection 3.3.1 Dividend Reinvestment. As soon as practicable following an
Investment Date with respect to which the Company elects to issue new shares of Common Stock or
sell shares of Common Stock held in the Company’s treasury to the Plan in order to effect the
reinvestment of Dividends, the Company shall issue to the Administrator upon the Company’s receipt
of the funds described in Subsection 3.3.3(a) below, for crediting by the Administrator to the
Account of a Participant as of such Investment Date, shares (and/or fraction of a share rounded to
three decimal places or other fraction determined from time to time by the Administrator) of Common
Stock as provided in Subsection 3.3.3 below. Such shares shall be issued or sold to, and registered
in the name of, the Administrator or its nominee as custodian for such Participant. No interest
shall be paid on Dividends held pending reinvestment pursuant to this Subsection 3.3.1.

     Subsection 3.3.2 Cash Investments. As soon as practicable following an Investment
Date with respect to which the Company elects to issue new shares of Common Stock or sell shares of
Common Stock held in the Company’s treasury to the Plan in order to effect the investment of
optional cash investments and/or initial cash investments, the Company shall issue to the
Administrator upon the Company’s receipt of the funds described in Subsection 3.3.3(b) below, for
crediting by the Administrator to the Account of a Participant as of such Investment Date, shares
(and/or fraction of a share rounded to three decimal places or other fraction determined from time
to time by the Administrator) of Common Stock as provided in Subsection 3.3.3 below. Such shares
shall be issued or sold to, and registered in the name of, the Administrator or its nominee as
custodian for such Participant. No interest shall be paid on cash investments held pending
investment pursuant to this Subsection 3.3.2.

     Subsection 3.3.3 Number of Shares to be Issued. If shares are to be issued or sold
pursuant to Subsections 3.3.1 or 3.3.2 above, the number of shares (and/or fraction of a share
rounded to three decimal places or other fraction determined from time to time by the
Administrator) of Common Stock that will be credited to the account of a Participant as of an
Investment Date will be equal to (a) the amount of any Dividends paid to the Administrator on
behalf of such Participant since the preceding Investment Date plus (b) the amount of any optional
cash investments and/or initial cash investment received by the Administrator from such Participant
and not previously invested, subject to the provisions of Section 3.2 and Section 3.6 hereof,
divided by (c) the Company Share Purchase Price on such Investment Date.

     Section 3.4 Investment and Reinvestment in Shares Purchased in the Open Market.
Dividend reinvestment in shares of Common Stock purchased in the open market shall be governed by
Subsection 3.4.1 hereof. Any optional cash investments and/or initial cash investments to be
invested in shares of Common Stock purchased in the open market shall be governed by Subsection
3.4.2 hereof.

     Subsection 3.4.1 Dividend Reinvestment. During an Investment Period with respect to
which the Company elects to effect reinvestment of Dividends in shares of Common Stock purchased in
the open market, the Administrator shall (if it is an Independent Agent), or shall cause an
Independent Agent to, apply the amount of any Dividends paid to the Administrator on behalf of a
Participant since the preceding Investment Date to the purchase of shares (and/or fraction of a
share rounded to three decimal places or other fraction determined from time to time by the
Administrator) of Common Stock in the open market as provided in Subsection 3.4.3 below. Such
shares shall be registered in the name of the Administrator or its nominee as custodian for such
Participant. No interest shall be paid on Dividends held pending reinvestment pursuant to this
Subsection 3.4.1.

     Subsection 3.4.2 Cash Investments. During an Investment Period with respect to which
the Company elects to effect the investment of optional cash investments and/or initial cash
investments in shares of Common Stock purchased in the open market, the Administrator shall (if it
is an Independent Agent), or shall cause an Independent Agent to, purchase for crediting by the
Administrator to the Account of a Participant a number of shares (and/or

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fraction of a share
rounded to three decimal places or other fraction determined from time to time by the
Administrator) of Common Stock in the open market as provided in Subsection 3.4.3 below. Such
shares shall be registered in the name of the Administrator or its nominee as custodian for such
Participant. No interest shall be paid on cash investments held pending investment pursuant to this
Subsection 3.4.2.

     Subsection 3.4.3 Number of Shares to be Purchased and Other Matters. Purchases in
the open market pursuant to Subsection 3.4.1 and Subsection 3.4.2 hereof may begin on the first day
of the applicable Investment Period and shall be completed no later than 30 days from such date,
unless completion at a later date is necessary or advisable under applicable law, including without
limitation any federal securities laws. Open market purchases pursuant to Subsection 3.4.1 and
Subsection 3.4.2 hereof may be made on any securities exchange on which the Common Stock is traded,
in the over-the-counter market or by negotiated transactions, and may be upon such terms and
subject to such conditions with respect to price and delivery to which the Independent Agent may
agree. With regard to open market purchases of shares of Common Stock pursuant to Subsection 3.4.1
and Subsection 3.4.2 hereof, none of the Company, the Administrator (unless it is the Independent
Agent), or any Participant shall have any authority or power to direct the time or price at which
shares of Common Stock may be purchased, the markets on which such shares are to be purchased
(including on any securities exchange, in the over the counter market, or in negotiated
transactions), or the selection of the broker or dealer (other than the Independent Agent) through
or from whom purchases may be made, except that the timing of such purchases must be made in
accordance with the terms and conditions of the Plan. For the purpose of making, or causing to be
made, purchases of shares of Common Stock pursuant to Subsection 3.4.1 and Subsection 3.4.2 hereof,
and sales of Account Shares pursuant to Section 5.1 hereof, the Administrator may authorize the
Independent Agent to commingle each Participant’s funds with those of all other Participants and to
offset purchases of shares of Common Stock against sales of shares of Common Stock to be made for
Participants, resulting in a net purchase or a net sale of shares. The number of shares (and/or
fraction of a share rounded to three decimal places or other fraction determined from time to time
by the Administrator) of Common Stock that shall be credited to a Participant’s Account with
respect to and as of an Investment Date pursuant to Subsection 3.4.1 and Subsection 3.4.2 shall be
equal to (a) the amount of any Dividends paid to the Administrator on behalf of such Participant
since the preceding Investment Date plus (b) the amount of any optional cash investments and/or
initial cash investment received by the Administrator from such Participant and not previously
invested, subject to the provisions of Section 3.2 and Section 3.6 hereof, divided by (c) the
Market Share Purchase Price with respect to such Investment Date.

     Section 3.5 Request to Stop Investment. If a written request to stop investment of
optional cash investments and/or an initial cash investment is received by the Administrator from a
Participant at least two business days prior to the next scheduled Investment Period during which
investment of such cash investments would be effected pursuant to the provisions of this Plan, such
optional cash investments and/or initial cash investment shall not be invested in Common Stock and
shall be returned to such Participant. If such a request is not received by the Administrator by
such time, such optional cash investments or initial cash investment shall be invested in shares of
Common Stock for such Participant’s Account.

     Section 3.6 Return of Uninvested Monies. Any Dividends to be reinvested in shares of
Common Stock pursuant to Subsection 3.3.1 or Subsection 3.4.1 hereof and not reinvested in shares
of Common Stock within 30 days of the applicable Dividend Payment Date shall be promptly returned
to the Participant at the Participant’s address of record by First Class Mail. Any optional cash
investments and initial cash investments to be invested in shares of Common Stock pursuant to
Subsection 3.3.2 or Subsection 3.4.2 hereof and not invested in shares of Common Stock within
35 days of receipt by the Administrator or the Company shall be promptly returned to the
Participant at the Participant’s address of record by First Class Mail.

     Section 3.7 Uncollectible Funds. If the Administrator does not receive credit for a
cash payment because of insufficient funds or incorrect ACH draft information, the requested
purchase will be deemed void. Any shares credited will be immediately removed from the
Participant’s Account. The Administrator will be entitled to sell those shares to satisfy any
uncollected amounts, and if the net proceeds of the sale of such shares are not sufficient to
satisfy the balance of such uncollected amounts, the Administrator may sell additional shares from
the Participant’s Account to satisfy the uncollected balance. In addition, an “insufficient funds”
fee of $20.00 will be charged to the Participant. The Administrator may place a hold on the Account
until this fee is paid, or may sell shares from the Account to pay this fee. The Company may
change the insufficient funds fee from time to time.

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ARTICLE IV

SAFEKEEPING SERVICES FOR DEPOSITED COMMON STOCK

     Section 4.1 Deposited Common Stock. A Participant may elect to have certificates
representing shares of Common Stock of which the Participant is the record holder deposited into
the Plan by delivering such certificates to the Administrator, along with either (i) an Enrollment
Form with the certificate safekeeping option checked thereon or (ii) a letter with respect to such
certificates directing the Administrator to deposit the shares represented by such certificates
into the Plan Account of the Participant. Shares of Common Stock so deposited shall be transferred
into the name of the Administrator or its nominee and credited to the depositing Participant’s
Account. Shares of
Common Stock deposited into the Plan pursuant to this Section 4.1 shall be treated as shares
purchased pursuant to the Plan.

     Section 4.2 Withdrawal of Common Stock Deposited Pursuant to Section 4.1. Shares of
Common Stock deposited pursuant to Section 4.1 hereof may be withdrawn from the Plan pursuant to
Section 8.1 hereof.

ARTICLE V

SALE OF ACCOUNT SHARES; GIFT OR TRANSFER OF ACCOUNT SHARES

     Section 5.1 Sale of Account Shares. A Participant may request, at any time, that all
or a portion of the Participant’s whole Account Shares be sold by delivering to the Administrator a
completed Sale/Transfer Request Form or other written instructions to that effect. The
Administrator shall forward such sale instructions to the Independent Agent as soon as practicable
after receipt thereof. Instructions received during the Dividend Processing Period may be delayed.
The Independent Agent shall make such sales as soon as practicable (in accordance with any
applicable stock transfer requirements and federal and state securities laws) after processing such
sale instructions. As soon as practicable following the receipt of proceeds from such sale, the
Administrator shall mail by First Class Mail to such Participant at the Participant’s address of
record a check in an amount equal to (a) the Market Share Sales Price multiplied by (b) the number
of the Participant’s Account Shares sold, minus a $10.00 service fee. The Company may change the
service fee from time to time. If the request to sell Plan shares is communicated via telephone or
online, the maximum value of shares which may be sold on any single day for each account is
$10,000. A request to sell shares is irrevocable after it is received by the Administrator.

     With regard to open market sales of Account Shares pursuant to this Section 5.1,
none of the Company, the Administrator (unless it is the Independent Agent) or any Participant
shall have any authority or power to direct the time or price at which shares of Common Stock may
be sold, the markets on which such shares are to be sold (including on any securities exchange, in
the over-the-counter market, or in negotiated transactions), or the selection of the broker or
dealer (other than the Independent Agent) through or from whom sales may be made, except that the
timing of such sales must be made in accordance with the terms and conditions of the Plan.

     Section 5.2 Gift or Transfer of Account Shares. A Participant may elect to transfer
(whether by gift, private sale, or otherwise) ownership of all or a portion of the Participant’s
Account Shares to the Account of another Participant or establish an Account for a Person not
already a Participant by delivering to the Administrator a completed Sale/Transfer Request Form to
that effect and a stock assignment (stock power) acceptable to the Administrator along with such
other documentation as may be required by the Administrator. If the transferee is not already a
Participant, the Administrator will require the completion and delivery of an Enrollment Form for
the transferee prior to the transfer. No fraction of a share of Common Stock credited to the
transferor’s Account shall be transferred unless the transferor’s entire Account is transferred.

     Account Shares transferred in accordance with the preceding paragraph shall continue
to be registered in the name of the Administrator as custodian and shall be credited to the
transferee’s Account. Unless otherwise requested by a transferee who is already a Participant on a
completed Enrollment Form, the reinvestment of Dividends on such transferred Account Shares in
shares of Common Stock under the Plan shall be made in proportion to the reinvestment level (i.e.,
full, partial or none) of the transferee’s other Account Shares. The Administrator shall deliver a
notice or advice of transfer to such transferee showing the transfer of such Account Shares into
the Participant’s Account.

     Section 5.3 Reinvestment of Dividends on Remaining Account Shares. If a Participant
has elected to have Dividends reinvested as to only a portion of a Participant’s Account Shares and
the Participant elects to (i) sell a portion of the Participant’s Account Shares pursuant to
Section 5.1 hereof, (ii) transfer a portion of the Participant’s Account Shares pursuant to
Section 5.2 hereof, or (iii) withdraw a portion of the Participant’s Account Shares pursuant to
Section 8.1 hereof, all of the Account Shares as to which Dividends are reinvested shall be sold,
transferred, or withdrawn, as the case may be, before any Account Shares as to which Dividends are
not reinvested are sold, transferred, or withdrawn unless the Participant gives specific
instructions to the contrary in connection with such sale, transfer, or withdrawal of Account
Shares.

8

 

ARTICLE VI

ELIGIBLE SECURITIES

     Section 6.1 Eligible Securities. The Common Stock of the Company and its
subsidiaries shall be Eligible Securities.

     Section 6.2 Additional Eligible Securities. The Company may from time to time or at
any time designate other securities of the Company and its subsidiaries as Eligible Securities by
notifying the Administrator in writing of the designation of such securities as Eligible
Securities.

ARTICLE VII

TREATMENT OF ACCOUNTS

     Section 7.1 Changing Plan Options. A Participant may elect to change the
Participant’s Plan options, including changing the reinvestment levels (i.e., Full Dividend
Reinvestment, Partial Dividend Reinvestment, or Cash Investment Only) of Dividends on Reinvestment
Eligible Securities by delivering to the Administrator a new Enrollment Form to that effect. To be
effective with respect to any Dividend Payment Date, the Enrollment Form with respect to such
Reinvestment Eligible Securities must be received and processed by the Administrator prior to the
Dividend Record Date relating to such Dividend Payment Date. If the Enrollment Form is not received
and processed by the Administrator by such time, such instructions shall not become effective until
after such Dividend Payment Date. The shares of Common Stock purchased from the reinvestment of
such Dividend shall be credited to the Participant’s Account. After the Administrator’s receipt of
effective option changing instructions, Dividends on Reinvestment Eligible Securities as to which
the reinvestment election has been revoked will be paid directly to the Participant in the manner
otherwise associated with the payment of Dividends.

     Section 7.2 Right of Termination of Participation. If a Participant’s Sale/Transfer
Request Form or other written instructions acceptable to the Administrator indicates the
Participant’s desire to terminate the Participant’s participation in the Plan, the terminating
participant’s shares will continue to be held in book entry form or through direct registration
unless and until the terminating participant requests that certificates be issued for such shares,
that such shares be sold or transferred, or that such shares be electronically transferred to a
brokerage account. Termination of participation may be delayed if a request is received during the
Dividend Processing Period.

     Section 7.3 Stock Splits, Stock Dividends and Rights Offerings. Any shares or other
securities representing stock splits or other noncash distributions on Account Shares shall be
credited to such Participant’s Account. Stock splits, combinations, recapitalizations and similar
events affecting the Common Stock shall, as to shares credited to Accounts of Participants, be
credited to such Accounts in accordance with the number of shares held in such Accounts.

     In the event of a rights offering, a Participant shall receive rights based upon the
total number of whole shares of Common Stock credited to the Participant’s Account.

     Section 7.4 Shareholder Materials; Voting Rights. The Administrator shall send or
forward to each Participant all applicable proxy solicitation materials and other shareholder
materials or consent solicitation materials. Participants shall have the exclusive right to
exercise all voting rights respecting Account Shares credited to their respective Accounts. A
Participant may vote all of the Participant’s Account Shares in person or by proxy. A Participant’s
proxy card shall include all the Participant’s Account Shares and shares of Common Stock of which
the Participant is the record holder. Account Shares shall not be voted unless a Participant or the
Participant’s proxy votes them. Fractions of shares of Common Stock shall be voted.

     Solicitation of the exercise of Participants’ voting rights by the management of the
Company and others under a proxy or consent provision applicable to all holders of Common Stock
shall be permitted. Solicitation of the exercise of Participants’ tender or exchange offer rights
by management of the Company and others shall also be permitted. The Administrator shall notify the
Participants of each occasion for the exercise of their voting rights or rights with respect to a
tender offer or exchange offer within a reasonable time before such rights are to be exercised.
Such notification shall include all information distributed to the shareholders of the Company by
the Company regarding the exercise of such rights.

     Section 7.5 Reports and Notices. As soon as practicable after the end of each
calendar quarter, the Administrator shall send a Plan Statement to each Participant for whom
Dividends were reinvested or shares of Common Stock were purchased or who deposited Common Stock
into the Plan pursuant to Section 4.1 hereof

9

 

during such calendar quarter. Additionally, the
Administrator shall send a notice or advise of transfer to each Participant following each purchase
and investment transaction and each sale, transfer, or withdrawal of Account Shares by a
Participant. With the consent of the Company, from time to time, the Plan Administrator may revise
the type, content, format and timing of notices and reports sent to Participants in the Plan.

ARTICLE VIII

CERTIFICATES AND FRACTIONS OF SHARES

     Section 8.1 Certificates. A Participant, at any time or from time to time, may
request in writing to receive a certificate for all or a portion of the Participant’s whole Account
Shares and the Administrator shall, as soon as practicable after receipt of such written request,
mail such certificate by First Class Mail to such Participant at the Participant’s address of
record; provided, however, that requests received during the Dividend Processing Period may be
delayed and provided further that upon the mailing of such certificate the shares
of Common Stock represented by such certificate shall no longer be Account Shares but elections as
to Dividend reinvestment with respect to such shares shall continue in effect (except to the extent
such Participant has elected not to have Dividends on such Account Shares reinvested in Common
Stock following the receipt of such certificate).

     Section 8.2 Fractional Share. Fractions of shares of Common Stock shall be credited
to Accounts as provided in Article III hereof; provided, however, that no certificate for a
fraction of a share shall be distributed to any Participant at any time; and provided, further,
that the Company shall issue and sell only whole shares of Common Stock to the Administrator in
respect of Dividends reinvested in, and purchases made by the Administrator hereunder of, newly
issued shares or shares of Common Stock held in the Company’s treasury.

ARTICLE IX

CONCERNING THE PLAN

     Section 9.1 Suspension, Modification, and Termination. The Company may at any time
and from time to time, at its sole option, suspend, modify, amend, or terminate the Plan, in whole,
in part or in respect of Participants in one or more jurisdictions; provided, however, no such
amendment shall decrease the Account of any Participant or result in a distribution to the Company
of any amount credited to the Account of any Participant. Upon complete termination of the Plan,
the Accounts of all Participants (or in the case of partial termination of the Plan, the Accounts
of all affected Participants) shall be treated as if each such Participant had elected to terminate
the Participant’s participation in the Plan pursuant to Section 7.2 hereof. The Administrator shall
send each affected Participant notice of such suspension, material modification or termination as
soon as practicable.

     Section 9.2 Rules and Regulations. The Company may from time to time adopt such
administrative rules and regulations concerning the Plan as it deems necessary or desirable for the
administration of the Plan. The Company shall have the power and authority to interpret the terms
and the provisions of the Plan and shall interpret and construe the Plan and reconcile any
inconsistency or supply any omitted detail in a manner consistent with the general terms of the
Plan and applicable law. Notwithstanding the particular enrollment, election and other forms and
procedures specified herein, unless objected to by the Company, other forms and procedures may be
used and implemented by the Administrator from time to time, including but not limited to online
forms and procedures. Without limitation of the foregoing, unless objected to by the Company,
whenever the Plan requires written instructions, requests or directions from a Participant, the
Administrator may allow such instructions, requests or directions to be communicated by telephone
or online, subject to such requirements as the Administrator shall impose.

     Section 9.3 Costs. All costs of administration of the Plan shall be paid by the
Company; provided, however, that any brokerage commissions, service charges, or applicable taxes
incurred in connection with open market purchases and sales of shares of Common Stock made under
the Plan shall be borne by the Participants. In addition, Participants will be responsible for a
$10.00 service fee on all sales transactions, as set forth in Section 5.1, and will be subject to
an insufficient funds fee as described in Section 3.7. The Company may change the fees charged
with respect to the Plan from time to time.

     Section 9.4 Termination of a Participant. If a Participant does not have at least
one whole Account Share or own or hold any other Common Stock of record for which Dividends are
designated for reinvestment pursuant to this Plan, the Participant’s participation in the Plan may
be terminated by the Company, in its sole discretion. The Administrator will provide notice to
such Participant of such action, which may be in the form of a Plan Statement or other notice or
advice hereunder. Additionally, the Company, in its sole discretion, may terminate any

10

 

Participant’s participation in the Plan after written notice mailed in advance to such Participant
at the Participant’s address of record, if the Company believes that such Participant’s
participation may be contrary to the general intent of the Plan or in violation of applicable law.
Upon such termination, the Account of such Participant shall be treated as if the Participant had
elected to terminate the Participant’s participation in the Plan pursuant to Section 7.2 hereof.

ARTICLE X

ADMINISTRATION OF THE PLAN

     Section 10.1 Selection of an Administrator. The Administrator shall be appointed by
the Company. The Administrator’s appointment to serve as such may be revoked by the Company at any
time. The Administrator may resign at any time upon reasonable notice to the Company. In the event
that no Administrator is appointed, the Company shall be deemed to be the Administrator for
purposes of the Plan. The Company shall be the initial Administrator.

     Section 10.2 Compensation. The officers of the Company shall make such arrangements
regarding compensation, reimbursement of expenses and indemnification of the Administrator and any
Independent Agent as they from time to time deem reasonable and appropriate.

     Section 10.3 Authority and Duties of Administrator. The Administrator shall have the
authority to undertake any act necessary to fulfill its duties as set forth in the various
provisions of the Plan. Upon receipt, the Administrator shall deposit all Dividends, optional cash
investments and initial cash investments in accounts controlled by the Administrator. The
Administrator shall maintain appropriate records of the Accounts of Participants.

     Section 10.4 Liability of the Company, the Administrator and Any Independent Agent.
The Company, the Administrator, and any Independent Agent shall not be liable for any act done in
good faith, or for the good faith omission to act in administering or performing their duties with
respect to the Plan, including, without limitation, any claim of liability arising out of failure
to terminate a Participant’s Account upon such Participant’s death prior to receipt of notice in
writing of such death, or with respect to the prices or times at which, or sources from which,
shares are purchased or sold for a Participant’s Account, or with respect to any loss or
fluctuation in the market value before or after the purchase or sale of such shares.

     Section 10.5 Records and Reports. The Administrator shall keep appropriate records
concerning the Plan, Accounts of Participants, purchases and sales of Common Stock made under the
Plan, and Participants’ addresses of record and shall send shareholder materials and statements to
each Participant in accordance with the provisions of Sections 7.4 and 7.5 hereof.

     Section 10.6 Selection of Independent Agent. Any Independent Agent serving in such
capacity pursuant to the Plan shall be selected by the Company, and the Administrator and the
Company, or either of them, shall, subject to the provisions hereof, make such arrangements and
enter into such agreements with the Independent Agent in connection with the activities
contemplated by the Plan as the Administrator and the Company, or either of them, deem reasonable
and appropriate.

     Section 10.7 Source of Shares of Common Stock. The Company shall not change the
source of shares of Common Stock purchased by Participants in the Plan (i.e., either (a) newly
issued shares of Common Stock or shares of Common Stock held in the Company’s treasury purchased
from the Company or (b) shares of Common Stock purchased in the open market) more than once in any
three month period. The Company may exercise its right to change the source of shares upon
approval by any one of the following:

     (i) the Company’s Board of Directors,

     (ii) the Finance Committee of the Company’s Board of Directors,

     (iii) the Company’s Chief Financial Officer, or

     (iv) the Company’s Treasurer

provided, however, that, if necessary and requested by the Independent Agent at any time, the
Company may settle fractional shares with treasury stock even if otherwise shares are being
purchased on the open market.

11

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

     Section 11.1 Controlling Law. This Plan shall be construed, regulated and
administered under the laws of the State of Arizona.

     Section 11.2 Acceptance of Terms and Conditions of Plan by Participants. Each
Participant, by completing an Enrollment Form and as a condition of participation herein, for the
Participant, the Participant’s heirs, executors, administrators, legal representatives and assigns,
approves and agrees to be bound by the provisions of this Plan and any subsequent amendments
hereto, and all actions of the Company and the Administrator hereunder.

     Section 11.3 Receipt by Administrator. Unless otherwise agreed by the Company and
the Administrator, monies, Enrollment Forms, and other forms and communications will be considered
to be received when delivered, either by postal service or electronic delivery, to the
Administrator before 12:00 p.m. Eastern Standard Time on any business day.

CERTIFICATE

   I, NANCY C. LOFTIN, Senior Vice President, General Counsel and Secretary of Pinnacle West Capital Corporation, an Arizona
corporation, do HEREBY CERTIFY that the foregoing is a true, correct and complete copy of the Third Amended and Restated Pinnacle
West Capital Corporation Investors Advantage Plan and that it is in full force and effect as of the date hereof.

   IN WITNESS WHEREOF, I have signed this Certificate as of the 25th day of November, 2008.

	 	 	 
	 

	 	/s/ Nancy C. Loftin
	 

	 	 
	 

	 	NANCY C. LOFTIN
	 

	 	Senior Vice President, General Counsel and Secretary

12exv10w1

Exhibit 10.1

AMENDMENT TO SERVICES AGREEMENT

     THIS
AMENDMENT TO SERVICES AGREEMENT (the “Amendment”) is made and entered into as of November
24, 2008, by and between Panda Energy Management, LP (“PEM”), a Delaware limited partnership, and
Panda Ethanol, Inc. (“PEI” or the
“Company”), a Nevada corporation. PEM and the Company are
hereinafter sometimes referred to individually as a “Party” and jointly as the “Parties.”

     WHEREAS, the Parties have previously entered into the Services Agreement, effective as of
September 1, 2007 (the “Services Agreement”), for the performance of certain administrative
services to PEI and its subsidiaries; and

     WHEREAS, the Parties desire to amend and modify the Services Agreement to provide, among other
things, for the payment of PEM Services (as defined in the Service Agreement) in the form of cash,
as described below;

     NOW, THEREFORE, in consideration of the mutual promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
hereto agree as follows:

1. Terms of Payment for PEM Services. Section 4 of the Services Agreement is hereby
amended and restated in its entirety as follows:

     (a) Within thirty days from the end of each calendar month, PEM will submit an invoice
to the Company for all expenses to be reimbursed to PEM in cash, as specified in Exhibit 1.
Such expenses shall be immediately due and payable and if not paid within thirty (30) days
shall bear interest at the rate of 12% per annum;

     (b) With respect to PEM Services performed under the Services Agreement during the
period of October 1, 2008 through October 15, 2008, upon receipt and verification of an
invoice for such PEM Services, the Company agrees promptly to instruct its stock transfer
agent to issue a certificate to PEM for the number of shares of the Company’s common stock
equal to the aggregate value of PEM Services provided divided by the volume weighted average
closing price for the last 10 trading days of October and to direct the certificate
therefore to be delivered to PEM as soon as reasonably practical.

     (c) Within thirty days from the end of each calendar month, PEM shall submit in
writing an invoice or invoices covering its charges to the Company for PEM Services provided
pursuant to this Agreement and rendered to the Company hereunder during such calendar month
(except with respect to the month ended October 31, 2008, such period will begin on October
16, 2008 and end on October 31, 2008) that are to be paid to PEM in cash as specified in
Exhibit 1. PEI shall deliver to PEM such payment within thirty days after its receipt of
PEM’s invoice.

 

2. Termination. The first sentence of Section 8 of the Services Agreement is hereby
amended and restated in its entirety as follows:

This Agreement and the provision, or coordination of provision, of PEM Services by PEM as
the case may be, may be terminated on 15 business days’ prior written notice by either
Party.

3. Exhibit 1. Exhibit 1 to the Services Agreement is hereby amended and restated in its
entirety as attached to this Amendment.

4. Binding Effect. The Parties confirm that, except to the extent specifically amended
hereby, the provisions of the Services Agreement shall remain unmodified, and the Services
Agreement as so amended is hereby confirmed as being in full force and effect and shall be binding
upon the Parties and their respective successors and assigns.

5. Governing Law. This Amendment shall be governed by the laws of the State of Texas.

6. Counterparts. This Amendment may be executed in multiple counterparts, each of which
shall constitute an original, and all of which together shall constitute one document.

[Remainder of Page Intentionally Left Blank.

Signature Page Follows]

-2-

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the date first above
written.

	 	 	 	 	 
	 	PANDA ENERGY MANAGEMENT, LP

By: PEMC, Inc., its General Partner

 	 
	 	By:  	/s/ Todd W. Carter	 
	 	 	Name:  	Todd W. Carter	 
	 	 	Title:  	President	 
	 

	 	 	 	 	 
	 	PANDA ETHANOL, INC.

 	 
	 	By:  	/s/ Natasha Ray	 
	 	 	Name:  	Natasha Ray 	 
	 	 	Title:  	Chief Financial Officer and Treasurer 	 

-3-

 

	 	 	 	 	 

Exhibit 1

Payment of Non-Labor related PEM Services by company

All amounts payable by the Company in cash for the non-labor related PEM Services provided pursuant
to this Agreement shall be remitted to PEM in United States dollars in the form of a check or wire
transfer to a bank designated in the invoice or otherwise in writing by PEM. As payment relates to
non-labor related PEM Services, PEM and Company will adhere to the payment terms shown in Section
4(a).

Payment of Labor Related PEM Services by Company

All labor related PEM Services rendered to the Company by PEM employees, excluding those PEM
employees that also hold a position with the Company’s board of directors, shall be payable by the
Company in United States dollars in the form of check or wire transfer to a bank designated in the
invoice or otherwise in writing by PEM. As payment relates to labor-related PEM Services, PEM and
Company will adhere to the payment terms shown in Section 4(b) or (c). Any other PEM Services or
expenses related thereto shall be payable in cash according to Section 4(a) of the Agreement.

Determination of Value of Services Provided:

Each month, PEM employee time sheets will be submitted which allocate work hours spent on various
activities.

Each PEM employee’s annual salary divided by 2,080 will determine that PEM employee’s hourly rate.
The hourly rate for each individual providing PEM Services, multiplied by 2.0 times, will be
applied to the aggregate monthly hours of services provided by that individual to the Company to
determine the value of the PEM Services rendered by PEM to Company. This calculation will be
performed for each PEM employee that provides services to Company.

Registration Rights:

Stock issued as payment for PEM Services provided prior to October 16, 2008 will have the
registration rights provided by that certain Registration Rights Agreement, dated as of November 9,
2007, by and among the Company, Panda Energy International, Inc., and the other holders party
thereto, as amended from time to time.

A-1

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