Document:

Avista Corporation 2006 NEO Base Compensation Table

 Exhibit 10.1 
  
 Avista Corporation 
 2006 NEO Base
Compensation Table 
  

							
	 Name and Principal Position

	  	Current Base
Compensation

	  	New Base
Compensation

	 Gary G. Ely
	  	$	687,500	  	$	715,000
	 Chairman of the Board, President and Chief Executive Officer
	  	 	 	  	 	 
	 Malyn K. Malquist
	  	$	314,010	  	$	325,000
	 Senior Vice President and Chief Financial Officer
	  	 	 	  	 	 
	 Scott L. Morris
	  	$	302,500	  	$	325,000
	 Senior Vice President
	  	 	 	  	 	 
	 David J. Meyer
	  	$	240,000	  	$	240,000
	 Vice President and Chief Counsel for Regulatory and Governmental Affairs
	  	 	 	  	 	 
	 Karen S. Feltes
	  	$	219,090	  	$	230,000
	 Senior Vice President of Human Resources and Corporate SecretaryAvista Corporation 2005 NEO Incentive Compensation Table

 Exhibit 10.2 
  
 Avista Corporation 
 2005 NEO
Incentive Compensation Table 
  

				
	 Name and Principal Position

	  	2005 Bonus

	 Gary G. Ely
	  	$	510,159
	 Chairman of the Board, President and Chief Executive Officer
	  	 	 
	 Malyn K. Malquist
	  	$	155,340
	 Senior Vice President and Chief Financial Officer
	  	 	 
	 Scott L. Morris
	  	$	149,646
	 Senior Vice President
	  	 	 
	 David J. Meyer
	  	$	98,940
	 Vice President and Chief Counsel for Regulatory and Governmental Affairs
	  	 	 
	 Karen S. Feltes
	  	$	108,384
	 Senior Vice President of Human Resources and Corporate SecretaryAvista Corporation 2006 Executive Incentive Plan

 Exhibit 10.3 
  
 AVISTA CORPORATION & AVISTA UTILITIES 
 EXECUTIVE OFFICER INCENTIVE PLAN 
 FOR 2006 
  
 PLAN PROVISIONS 
  
 Purpose: The 2006 Incentive Plan is designed to focus each executive on the
company’s strategic goals. Clearly, stabilizing the financial health of the company continues to be a key goal linked directly to maintaining reliable cost-effective service levels to run our business efficiently. 
  
 Plan Year: January 1, 2006 –
December 31, 2006 
  
 Eligibility: All executive officers of Avista
Corporation are eligible to participate in the Plan. The officer must be employed by the company as of December 31 to be eligible for payout. Avista has the right to prorate any incentive payout if the officer is hired during the plan year.
Subsidiary officers are not eligible for this plan. See special circumstances for details. 
  
 Incentive Award Target: Each officer will have an incentive award target expressed as a percentage of their 2006 base salary and will be notified of the actual incentive award target applicable to them for the
plan year, as approved by the Compensation and Organization Committee of the Board. 
  
 Measurements & Targets: The Executive Officer Incentive Plan focuses on the customer and the financial health of the company. 
  
 The plan starts out with four Standard Performance Triggers that must be achieved for the plan to pay out. These performance levels are critical to the success of the
business. Each measure triggers a portion of the incentive award pool and is weighted as shown in Exhibit A. 
  
 Once the Standard Performance Triggers are achieved, awards are earned based on Earnings Per Share and Utility O&M Cost Per Customer measures as provided for in Exhibit B. 
  
 Payment Opportunity: Each measure is independent of the other. Therefore, awards may
be paid for achieving only one target. Seventy percent (70%) of the target award is based on Corp. and Utility Basic Earnings per Share (EPS) targets. The other thirty percent (30%) is based on Utility O&M Cost Per Customer targets.

  
 For all measurements, the payout calculations between threshold, target and
exceeds levels are on a sliding scale. 
  

 1 

 Incentive amounts in excess of 100% (up to 150%) of an individual’s target may be paid in the form of non-cash
equivalents, at the discretion and approval of the CEO and the Board Compensation and Organization Committee. 
  
 Determining Targets: To determine the Corp and Utility EPS targets for the Plan, Avista considers and incorporates the EPS target spread communicated to the investment community and the budgeted EPS numbers.
The Utility O&M Cost per Customer target is based on the projected number of customers and O&M expense for the Plan year. These components are combined to create the O&M Cost Per Customer measure. To determine the target, O&M expense
(less estimated incentive payout) is divided by the projected customer count (customer growth increment based on 12 months of actual growth from the prior year added to the actual year-end December customer count). 
  
 Example Award Calculation: See Exhibit C 
  
 Payment of Awards: To receive an award, individuals must be employed by Avista Corp or
Avista Utilities on December 31. However, officers are eligible for a partial award if they have at least 6 months of service during the Plan year and their employment ends because of retirement, permanent disability or death. 
  
 Officers must “meet” or “exceed” performance expectations for the Plan
year to be eligible for payout. Partial performance ratings may reduce payout. 
  
 Award payments, if earned, will be paid after January of the next plan year. Award amounts, if paid, will be figured on a percentage of the participant’s December 31 base salary and employment status. 
  
 Administration of Plan: The plan is approved by the Board Compensation and
Organization Committee and administered by Avista. The committee will have sole discretion to make plan interpretations including but not limited to: 
  

	 	•	 	Discretion to add, modify or delete the plan at any time 

  

	 	•	 	Adjustments to corporate funding levels to reflect significant reorganization or transfers within the Company 

  

	 	•	 	Adjustments to Company financial results needed to better reflect the actual performance of the Company 

  

	 	•	 	Discretionary funding in the event threshold performance is not achieved 

  

	 	•	 	Normalizing financial results based upon extremely unusual events 

  
 Special Circumstances 
  
 Death: A pro-rated award, considering Company and individual performance, may be approved for payment within three months of payout after year-end to the estate of
any participant who dies after serving at least six months during the plan year. 
  
 Disability and Retirement: A pro-rated award, considering Company and individual performance, may be approved for payment at payout after year-end to any participant 

  

 2 

 
who becomes permanently disabled or retires after serving at least six months during the plan year. 
  
 Leave of Absence: Participants are not eligible for payment for periods while on an
approved leave of absence during the plan year. Payments are pro-rated. Short-term disability leave is not included. 
  
 Resignation/Termination: No award will be payable under this plan to any employee who resigns from or is terminated by Avista Corp or Avista Utilities before
receiving the award payment. 
  
 Discipline: No incentive will be payable
under this plan to any employee who is on a Written Reminder or Last Chance Agreement step of formal discipline as of December 31. 
  
 Transfers between Avista Corp and Avista Utilities: Both are under the same plan so no pro-rating is necessary. 
  
 Transfers between Corp/Utilities and Subsidiaries: To be paid a pro-rated award under
this Plan, an officer must have at least 6 months of service with Avista Corp or Avista Utilities. Award amounts will be figured on the December 31 base pay or the base pay before transfer to Subsidiary. Subsidiaries will determine their own
guidelines around payout. 
  

 3Avista Corporation 2006 NEO Performance Share Awards Table

 Exhibit 10.4 
  
 Avista Corporation 
 2006 NEO
Performance Share Awards Table 
  

									
	 Name and Principal Position

	  	 Total Number
 of Performance
 Shares Paid

	  	 Total Value
 of Performance
 Shares Paid

	  	 Cash Dividend
 Equivalent Rights

	 Gary G. Ely
	  	77,280	  	$	1,375,584	  	$	119,784
	 Chairman of the Board, President and Chief Executive Officer
	  	 	  	 	 	  	 	 
	 Malyn K. Malquist
	  	18,600	  	$	331,080	  	$	28,830
	 Senior Vice President and Chief Financial Officer
	  	 	  	 	 	  	 	 
	 Scott L. Morris
	  	18,600	  	$	331,080	  	$	28,830
	 Senior Vice President
	  	 	  	 	 	  	 	 
	 David J. Meyer
	  	18,600	  	$	331,080	  	$	28,830
	 Vice President and Chief Counsel for Regulatory and Governmental Affairs
	  	 	  	 	 	  	 	 
	 Karen S. Feltes
	  	6,360	  	$	113,208	  	$	9,858
	 Senior Vice President of Human Resources and Corporate Secretary
	  	 	  	 	 	  	 	 

  
 The table above shows information
regarding performance shares paid out under the Company’s Long-Term Incentive Compensation Plan as confirmed by the Compensation & Organization Committee of the Board of Directors on February 9, 2006 to each executive officer who
is expected to be a NEO in the 2006 Proxy Statement. The payout was based on the Company’s three-year total shareholder return compared to the returns reported in the S&P 400 MidCap Utilities Index. To receive 100 percent of the award, the
Company had to perform at the 55th percentile among the S&P 400 MidCap Utilities Index. To receive 150 percent
of the award, the Company had to perform at or above the 85th percentile ranking. Awards were pro-rated for
performance between the 55th and 85th percentile rankings. 
  
 The payout equaled 120 percent of the performance shares granted because the Company performed at the 67th percentile among the S&P 400 MidCap Utilities Index during the three-year period ended December 31, 2005. Dividend Equivalent Rights were calculated
and paid out in cash to the extent the performance shares were paid. 
  
 The total
value of performance shares paid is based on the average of the low and high price of the Company’s Common Stock on January 3, 2006 of $17.80 per share.Avista Corporation 2006 NEO Performance Share Grants Table

 Exhibit 10.5 
  
 Avista Corporation 
 2006 NEO
Performance Shares Grant Table 
  

					
	 Name and Principal Position

	  	 Performance
 Shares

	  	 Restricted
 Shares

	 Gary G. Ely
	  	47,600	  	12,600
	 Chairman of the Board, President and Chief Executive Officer
	  	 	  	 
	 Malyn K. Malquist
	  	11,500	  	3,000
	 Senior Vice President and Chief Financial Officer
	  	 	  	 
	 Scott L. Morris
	  	11,500	  	3,000
	 Senior Vice President
	  	 	  	 
	 David J. Meyer
	  	3,900	  	1,000
	 Vice President and Chief Counsel for Regulatory and Governmental Affairs
	  	 	  	 
	 Karen S. Feltes
	  	11,500	  	3,000
	 Senior Vice President of Human Resources and Corporate Secretary
	  	 	  	 

  
 The table above shows information
regarding performance shares and restricted shares granted under the Company’s Long-Term Incentive Compensation Plan as approved by the Compensation & Organization Committee of the Board of Directors on February 9, 2006 to each
executive officer who is expected to be a NEO in the 2006 Proxy Statement. 
  
 The
performance share awards will be issued only if the Company achieves certain relative shareholder return targets when measured against the S&P 400 MidCap Utilities Index over a three-year period ending December 31, 2008. The amount of the
payment with respect to any award is determined at the end of the three-year performance cycle based on the Company’s final average percentile ranking relative to the S&P 400 MidCap Utilities Index and is payable at the Company’s
option in either cash or Company Common Stock, or both. The number of performance shares paid to executive officers at the end of the three-year cycle will range from 0 to 150 percent of the grant. No performance shares will be paid unless the
Company achieves at least the 45th percentile ranking in relative shareholder return when measured against the S&P 400 MidCap Utilities Index over the performance period. To receive 100 percent of the award, the Company must rank at the 55th
percentile among the S&P 400 MidCap Utilities Index. To receive the maximum of 150 percent of the award, the Company must perform at or above the 85th percentile ranking. The Company uses a sliding-scale approach to indicate the percentage of
potential award for varying levels of performance above and below the targeted level. Individual awards are based on actual results using a sliding scale between threshold (45th percentile), target (55th percentile), and exceeds (85th percentile)
levels. Dividend Equivalent Rights are calculated and paid out in cash when and to the extent the performance shares are paid. 
  
 The Long-Term Incentive Plan for 2006 and beyond will have a combination of performance shares and restricted shares. Of the total award, 75 percent will be delivered
through performance shares and 25 percent through restricted shares. Restricted shares vest in equal thirds each year over a three-year period and are payable in Avista Corp. Common Stock at the end of each year in the three-year period if the
service condition is met with the exception of restricted shares for Gary G. Ely. In addition to the service condition, the Company must meet a return on equity target for Mr. Ely’s restricted shares to vest.

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