Item 8.01. Other Events.
In connection with a review of its executive compensation practices, Pinnacle West Capital Corporation (the "Company") has determined that, on a going forward basis, it will no longer provide excise tax gross-up payments in new and materially amended agreements with its named executive officers. In unusual circumstances where the Company believes that accommodations have to be made to recruit a new executive to the Company, limited reimbursement for taxes payable may be included in executives' contracts; but even in those circumstances, the excise tax gross-ups will be limited to payments triggered by both a change in control and termination of employment and will be subject to a three-year sunset provision.

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