Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 18, 2007
 	 	 	 	 	
Commission File Number	 	Exact Name of Registrant as Specified in
Charter; State of Incorporation;
Address and Telephone Number	 	IRS Employer
Identification Number	

1-8962	 	Pinnacle West Capital Corporation
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000	 	86-0512431	
 	 	 	 	 	
1-4473	 	Arizona Public Service Company
(an Arizona corporation)
400 North Fifth Street, P.O. Box 53999
Phoenix, AZ 85072-3999
(602) 250-1000	 	86-0011170	
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 		
o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 		
o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
     This combined Form 8-K is separately filed by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

   

 

TABLE OF CONTENTS
 	 	 	 	 	
 	 	Page	 	
Item 8.01 Other Events	 	 	2	 	
Item 9.01 Financial Statements and Exhibits	 	 	2	 	
Signatures	 	 	3	 	
  EX-10.2	
  EX-99.1	

Table of Contents
 
Item 8.01. Other Events.
     On April 18, 2007, the Board of Directors of Pinnacle West Capital Corporation (the “Company”) adopted an amendment (the “Amendment”) to the Pinnacle West Capital Corporation 2007 Long-Term Incentive Plan (the “2007 Plan”). The Amendment provides that the term of any Stock Appreciation Rights (as defined in the 2007 Plan) granted under the 2007 Plan will not exceed ten years. The 2007 Plan is subject to the approval of the Company’s shareholders at the Company’s 2007 Annual Meeting of Shareholders to be held on May 23, 2007.
     If the shareholders approve the 2007 Plan, the Company will not issue any additional shares or awards under the Pinnacle West Capital Corporation 2002 Long-Term Incentive Plan (the “2002 Plan”) or under the Directors Equity Plan. At March 31, 2007, a total of 1,475,771 shares of Company common stock could potentially be issued pursuant to outstanding awards under the 2002 Plan, a substantial portion of which are subject to the achievement of three-year performance measures. No awards have been made under the 2002 Plan since March 31, 2007 and no awards will be made under the 2002 Plan before the 2007 Annual Meeting of Shareholders. Exhibit 99.1 provides information regarding outstanding stock awards at December 31, 2006 and March 31, 2007.
Item 9.01. Financial Statements and Exhibits.

10.1	 	Pinnacle West Capital Corporation 2007 Long-Term Incentive Plan (incorporated by reference to Appendix B to the Company’s definitive Proxy Statement filed with the Securities and Exchange Commission on April 20, 2007, File No. 1-8962)	

10.2	 	First Amendment of the Pinnacle West Capital Corporation 2007 Long-Term Incentive Plan, dated as of April 18, 2007	

99.1	 	Summaries of Outstanding Stock Awards at December 31, 2006 and March 31, 2007	
 2 

Table of Contents
SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
 	 	 	 	PINNACLE WEST CAPITAL CORPORATION	
 	 	 	 	(Registrant)	
 	 	 	 	 	
Dated: April 20, 2007	 	By:	 	          /s/ Donald E. Brandt	
 	 	 	 	 	
 	 	 	 	          Donald E. Brandt	
 	 	 	 	          Executive Vice President and	
 	 	 	 	          Chief Financial Officer	
 	 	 	 	 	
 	 	 	 	ARIZONA PUBLIC SERVICE COMPANY	
 	 	 	 	(Registrant)	
 	 	 	 	 	
Dated: April 20, 2007	 	By:	 	          /s/ Donald E. Brandt	
 	 	 	 	 	
 	 	 	 	          Donald E. Brandt	
 	 	 	 	          President and Chief Financial Officer	
 3 

Exhibit 10.2
FIRST AMENDMENT
TO THE
PINNACLE WEST CAPITAL CORPORATION
2007 LONG-TERM INCENTIVE PLAN
     Pinnacle West Capital Corporation (the “Company”) hereby amends the Pinnacle West Capital Corporation 2007 Long-Term Incentive Plan (the “Plan”), pursuant to Section 14.1 of the Plan, as follows:
     1. Section 8.1 (b) of the Plan is hereby amended in its entirety to read as set forth below:
     (b) Other Terms . All SAR grants will be evidenced by an Award Agreement. The terms, methods of exercise, methods of settlement, and any other terms and conditions of any SAR will be determined by the Committee at the time of the grant of the Award and as set forth in the Award Agreement; provided that the form of consideration payable in settlement of a SAR shall be Stock or cash as specified in the Award Agreement; and provided, further, that the term of any SAR granted under the Plan shall not exceed ten years.
     2. Section 12.2 of the Plan is hereby amended in its entirety to read as set forth below:
     12.2 TERM OF AWARD . The term of each Award shall be for the period determined by the Committee, provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of ten years from the date of its grant.
     3. This First Amendment shall be effective as of the Effective Date of the Plan, as determined in accordance with Section 2.1 of the Plan.
     4. This First Amendment amends only the provisions of the Plan noted above.
     IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative on this                      day of April, 2007.
 	 	 	 	 	 	 		
 	 	PINNACLE WEST CAPITAL CORPORATION		
 	 	 	 	 	 	 		
 	 	By:	 	 	 	 		
 	 	 	 	 	
 	 	 	 	Its:	 	 		

 

Exhibit 99.1
Reconciliation of Outstanding Options and Nonvested Awards (other than Options) from 2006 10K to 2007 Proxy Statement to outstanding as of 3/31/2007
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Number of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	All	 	 	 	 	 	 	All Outstanding	 	 	 	 	 	 	securities to be	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Number of	 	 	Outstanding	 	
 	 	All Outstanding	 	 	 	 	 	 	Nonvested	 	 	 	 	 	 	Options and	 	 	 	 	 	 	issued upon	 	 	 	 	 	 	 	 	 	 	 	 	 	 	securities to be	 	 	Options and	 	
 	 	Options and	 	 	 	 	 	 	Performance	 	 	 	 	 	 	Nonvested	 	 	 	 	 	 	exercise of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	issued upon	 	 	Nonvested	 	
 	 	Nonvested	 	 	 	 	 	 	Share and	 	 	 	 	 	 	Awards (other	 	 	Additional	 	 	outstanding	 	 	 	 	 	 	Performance	 	 	Outstanding	 	 	exercise of	 	 	Awards (other	 	
 	 	Performance	 	 	Canceled	 	 	Stock	 	 	 	 	 	 	than options) as	 	 	Shares if	 	 	options, warrants	 	 	 	 	 	 	Shares	 	 	Performance	 	 	outstanding	 	 	than options) as	 	
 	 	Share and Stock	 	 	Performance	 	 	Ownership	 	 	Estimated	 	 	reported in	 	 	Maximum	 	 	and rights per 2007	 	 	Options	 	 	Cancelled	 	 	Share Grants	 	 	options, warrants	 	 	of March 31,	 	
 	 	Ownership	 	 	Shares as of	 	 	Grants as of	 	 	Performance	 	 	2006	 	 	Potential	 	 	proxy statement	 	 	Exercised	 	 	1/1/2007-	 	 	(Target) as of	 	 	and rights as of	 	 	2007 for 2002	 	
 	 	Grants (1)	 	 	12/31/2006	 	 	12/31/2006	 	 	Share Payouts (2)	 	 	10K (3)	 	 	Payout (4)	 	 	(5)	 	 	1/1/2007-3/31/2007	 	 	3/31/2007	 	 	3/31/2007	 	 	3/31/2007 (7)	 	 	LTIP Only	 	
 	 	 	
1994 Plan Options	 	 	741,999	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	741,999	 	 	 	 	 	 	 	741,999	 	 	 	(59,766	)	 	 	 	 	 	 	 	 	 	 	682,233	 	 	 	—	 	
2002 Plan Options	 	 	345,639	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	345,639	 	 	 	 	 	 	 	345,639	 	 	 	(38,832	)	 	 	 	 	 	 	 	 	 	 	306,807	 	 	 	306,807	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Subtotal Outstanding Options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,087,638	 	 	 	 	 	 	 	1,087,638	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	989,040	 	 	 	306,807	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2005 Performance Share Grant	 	 	215,300	 	 	 	(17,910	)	 	 	197,390	 	 	 	75	%	 	 	148,042	 	 	 	246,738	 	 	 	394,780	 	 	 	 	 	 	 	(9,475	)	 	 	187,915	 	 	 	375,830	 	 	 	375,830	 	
2006 Performance Share Grant	 	 	274,070	 	 	 	(5,535	)	 	 	268,535	 	 	 	100	%	 	 	268,535	 	 	 	268,535	 	 	 	537,070	 	 	 	 	 	 	 	(6,885	)	 	 	261,650	 	 	 	523,300	 	 	 	523,300	 	
2006 Stock Ownership Grant (6)	 	 	12,526	 	 	 	 	 	 	 	12,526	 	 	 	 	 	 	 	12,526	 	 	 	 	 	 	 	—	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	 	 	—	 	
2007 Performance Share Grant	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	134,917	 	 	 	269,834	 	 	 	269,834	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Subtotal Performance and Stock Ownership Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	429,103	 	 	 	 	 	 	 	931,850	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,168,964	 	 	 	1,168,964	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,516,741	 	 	 	 	 	 	 	2,019,488	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,158,004	 	 	 	1,475,771	 	

			
(1)	 	Performance share amounts are original grant at Target (page 115 of 2006 10K)	
 		
(2)	 	Best estimates at year-end 2006 of potential payouts of performance share grants (% of Target)	
 		
(3)	 	Footnote 16, page 115 of 2006 10K	
 		
(4)	 	Proxy statement reflects maximum potential payout (200% of Target) of performance shares — see page 42 of 2007 proxy statement	
 		
(5)	 	From equity compensation plans approved by security holders — see page 42 of 2007 proxy statement	
 		
(6)	 	2006 Stock Ownership shares were paid out in February 2007 and therefore are not included in the proxy (actual payout was 12,898 shares)	
 		
(7)	 	Reflects maximum potential payout (200% of Target) of performance shares. The weighted average exercise price of the outstanding options is $40.70. The weighted average remaining contractual term of the outstanding options is 3.8 years.