PORTLAND GENERAL CORPORATION
MANAGEMENT DEFERRED COMPENSATION PLAN
1996 RESTATEMENT
Effective January 1, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I - PURPOSE 1
1.1 Restatement 1
1.2 Purpose 1
1.3 Effective Date 1
1.4 Plan Sponsor 1
ARTICLE II - DEFINITIONS 1
2.1 Account 1
2.2 Base Salary 1
2.3 Beneficiary 2
2.4 Board 2
2.5 Bonuses 2
2.6 Change in Control 2
2.7 Committee 3
2.8 Company 3
2.9 Compensation 3
2.10 Deferral Election 3
2.11 Determination Date 3
2.12 Direct Subsidiary 4
2.13 Eligible Employee 4
2.14 Financial Emergency 4
2.15 Incentive Compensation 4
2.16 Indirect Subsidiary 4
2.17 Interest 5
2.18 Paid Time Off 5
2.19 Paid Time Off Cancellation 5
2.20 Participant 5
2.21 Participating Employer 5
2.22 Pension Plan 5
2.23 Plan 5
2.24 Policies 5
2.25 Senior Administrative Officer 6
ARTICLE III - ELIGIBILITY AND DEFERRALS 6
3.1 Eligibility 6
3.2 Deferral Elections 6
3.3 Limits on Elective Deferrals 7
3.4 Matching Contributions 7
3.5 Welfare Benefits 7
(i)
TABLE OF CONTENTS
PAGE
ARTICLE IV - DEFERRED COMPENSATION ACCOUNT 7
4.1 Crediting to Account 7
4.2 Determination of Accounts 7
4.3 Vesting of Accounts 7
4.4 Statement of Accounts 8
ARTICLE V - PLAN BENEFITS 8
5.1 Benefits 8
5.2 Withdrawals for Financial Emergency 8
5.3 Form of Benefit Payment 8
5.4 Accelerated Distribution 9
5.5 Withholding; Payroll Taxes 9
5.6 Commencement of Payments 10
5.7 Full Payment of Benefits 10
5.8 Payment to Guardian 10
ARTICLE VI - RESTORATION OF PENSION PLAN BENEFITS 10
6.1 Pension Plan 10
6.2 Restoration of Pension Plan Benefits 10
6.3 Restoration of Pension Plan Benefits in Event of Change in Control 11
ARTICLE VII - BENEFICIARY DESIGNATION 11
7.1 Beneficiary Designation 11
7.2 Amendments 11
7.3 No Beneficiary Designation 11
7.4 Effect of Payment 11
ARTICLE VIII - ADMINISTRATION 12
8.1 Senior Administrative Officer; Duties 12
8.2 Agents 12
8.3 Binding Effect of Decisions 12
8.4 Indemnity of Senior Administrative Officer; Committee 12
8.5 Availability of Plan Documents 12
8.6 Cost of Plan Administration 12
(ii)
TABLE OF CONTENTS
PAGE
ARTICLE IX - CLAIMS PROCEDURE 13
9.1 Claim 13
9.2 Denial of Claim 13
9.3 Review of Claim 13
9.4 Final Decision 13
ARTICLE X - AMENDMENT AND TERMINATION OF PLAN 13
10.1 Amendment 13
10.2 Termination 14
10.3 Payment at Termination 14
ARTICLE XI - MISCELLANEOUS 14
11.1 Unfunded Plan 14
11.2 Liability 15
11.3 Trust Fund 15
11.4 Nonassignability 15
11.5 Not a Contract of Employment 16
11.6 Protective Provisions 16
11.7 Governing Law 16
11.8 Terms 16
11.9 Validity 16
11.10 Notice 16
11.11 Successors 16
(iii)
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
A
Account: 2.1 1
B
Base Salary: 2.2 1
Beneficiary: 2.3 2
Board: 2.4 2
Bonuses: 2.5 2
C
Change in Control: 2.6 2
Committee: 2.7 3
Company: 2.8 3
Compensation: 2.9 3
D
Deferral Election: 2.10 3
Determination Date: 2.11 3
Direct Subsidiary: 2.12 4
E
Eligible Employee: 2.13 4
ERISA: 3.5 7
Exchange Act: 2.6(a) 2
F
Financial Emergency: 2.14 4
I
Incentive Compensation: 2.15 4
Indirect Subsidiary: 2.16 4
Interest: 2.17 5
(iv)
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
P
Paid Time Off: 2.18 5
Paid Time Off Cancellation: 2.19 5
Participant: 2.20 5
Participating Employer: 2.21 5
Pension Plan: 2.22 5
PGC: 2.6(a) 2
PGE: 2.6(a) 2
Plan: 2.23 5
Policies: 2.24 5
S
Senior Administrative Officer: 2.25 6
(v)
PORTLAND GENERAL CORPORATION
MANAGEMENT DEFERRED COMPENSATION PLAN
1996 RESTATEMENT
ARTICLE I - PURPOSE
1.1 Restatement
Portland General Corporation adopted a Management Deferred Compensation
Plan effective January 1, 1987 to cover qualified management employees.
Portland General Corporation also restated its Directors' and Senior Officers'
Deferred Compensation Plan on January 1, 1987. Pursuant to Article 8.1 of the
Management Deferred Compensation Plan and Article 9.1 of the Directors' and
Senior Officers' Deferred Compensation Plan, 1987 Restatement, the Company is
amending both plans in order to merge the plans for all employees of
Participating Employers. The existing plans were merged, renamed and amended
for all management employees of Participating Employers by the December 1,
1988 Restatement. The Plan was further amended by the 1990 and 1994
Restatements.
1.2 Purpose
The purpose of this Management Deferred Compensation Plan is to provide
elective deferred compensation in excess of the limits on elective deferrals
under qualified cash or deferred arrangements. It is intended that the Plan
will aid in attracting and retaining personnel of exceptional ability.
1.3 Effective Date
This 1996 Restatement shall be effective as of January 1, 1996.
1.4 Plan Sponsor
The Plan is adopted for the benefit of selected employees of Portland
General Corporation, an Oregon corporation, and selected employees of any
corporations or other entities affiliated with or subsidiary to it, if such
corporations or entities are selected by the Board.
ARTICLE II - DEFINITIONS
2.1 Account
"Account" means the account maintained by a Participating Employer in
accordance with Article IV with respect to any deferral of Compensation
pursuant to this Plan.
2.2 Base Salary
"Base Salary" means the Eligible Employee's actual base pay in the pay
period and, except as provided herein, excluding any bonuses and/or overtime
pay.
PAGE 1 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.3 Beneficiary
"Beneficiary" means the person, persons or entity entitled under Article
VII to receive any Plan benefits payable after a Participant's death.
2.4 Board
"Board" means the Board of Directors of Portland General Corporation.
2.5 Bonuses
"Bonuses" means Our Teamworks Awards, Notable Achievement Awards, and any
other form of cash Incentive Compensation explicitly designated as deferrable
pursuant to this Plan by the Deferral Election form approved by the Senior
Administrative Officer.
2.6 Change in Control
"Change in Control" means an occurrence in which:
(a) Any "person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Portland General Corporation ("PGC") or Portland General
Electric ("PGE"), any trustee or other fiduciary holding securities under
the employee benefit plan of PGC or PGE, or any Employer owned, directly
or indirectly, by the stockholders of PGC or PGE in substantially the same
proportions as their ownership of stock of PGC or PGE), is or becomes the
"beneficial owner" (as defined in Rule 13d-3) under the Exchange Act),
directly or indirectly, of securities representing thirty percent (30%) or
more of the combined voting power of PGC's or PGE's then outstanding
voting securities;
(b) During any period or two (2) consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with PGC to effect a transaction described in clause (a), (c) or (d) of
this Paragraph) whose election by the Board or nomination for election by
PGC's stockholders was approval by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors as of the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority thereof;
(c) The stockholders of PGC or PGE approve a merger or consolidation
of PGC or PGE with any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of PGC or PGE
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than eighty percent (80%) of the combined voting
power of the voting securities of PGC or PGE or such surviving entity
outstanding immediately after such merger or consolidation or (b) a merger
or consolidation effected to implement a recapitalization of PGC or PGE
(or similar transaction) in which no "person" (as hereinabove defined)
acquires more than thirty percent (30%) of the combined voting power of
PGC's or PGE's then outstanding securities; or
PAGE 2 - MANAGEMENT DEFERRED COMPENSATION PLAN
(d) The stockholders of PGC or PGE approve a plan of complete
liquidation of PGC or PGE or an agreement for the sale or disposition by
PGC or PGE of sixty percent (60%) or more of PGC's or PGE's assets
(including stock of subsidiaries) to a person or entity that is not a
subsidiary or parent corporation. For purposes of determining whether a
sale or other disposition of sixty percent (60%) of PGE's assets has
occurred, only long-term assets shall be considered. Assets shall not be
considered long-term assets if they constitute "regulatory assets,"
"stranded investments" or abandoned or non-operational projects. Projects
in economy shutdown shall be considered long-term assets.
2.7 Committee
"Committee" means the Human Resources Committee of the Board.
2.8 Company
"Company" means Portland General Corporation, an Oregon Corporation.
2.9 Compensation
"Compensation" means the total of the following, before reduction for
elective deferrals under this Plan or a Participating Employer's tax qualified
Retirement Savings Plan or any other flexible benefit plan:
(a) Base Salary;
(b) Bonuses;
(c) Any interest on the above payments credited by a Participating
Employer for the benefit of an Eligible Employee prior to the date of
payment, without respect to any deferral of Compensation made pursuant to
this Plan, by a Participating Employer.
Compensation, for purposes of this Plan, may include any new form of cash
remuneration paid by a Participating Employer to any Eligible Employee which
is explicitly designated as deferrable pursuant to this Plan by the Deferral
Election form approved by the Senior Administrative Officer. Compensation for
purposes of this Plan, does not include expense reimbursements, imputed
income, or any form of noncash compensation or benefits.
2.10 Deferral Election
"Deferral Election" means the election completed by Participant in a form
approved by the Senior Administrative Officer which indicates Participant's
irrevocable election to defer Compensation as designated in the Deferral
Election, pursuant to Article III.
2.11 Determination Date
"Determination Date" means the last day of each calendar month.
PAGE 3 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.12 Direct Subsidiary
"Direct Subsidiary" means any corporation of which a Participating
Employer owns at least eighty percent (80%) of the total combined voting power
of all classes of its stock entitled to vote.
2.13 Eligible Employee
"Eligible Employee" means an employee of a Participating Employer who:
(a) Is exempt;
(b) Is not covered by a collective bargaining agreement; and
(c) If employed for the entire calendar year, receives or, based on
current levels of base pay is expected to receive, Compensation from one
(1) or more Participating Employers in the calendar year, in an amount
equal to or in excess of the threshold amount described in 2.13(e) below,
or
(d) If employed for a part of the calendar year, receives or, based
on an annualized level of base pay would have received, Compensation from
one (1) or more Participating Employers in the calendar year, in an amount
equal to or in excess of the threshold amount described in 2.13(e) below.
Notwithstanding the above, eligibility is at the discretion of the Senior
Administrative Officer.
(e) The threshold amount in calendar year 1996 and any subsequent
year shall be eighty-five thousand dollars ($85,000). Such amount may be
adjusted by the Senior Administrative Office each subsequent calendar year
at the same time and in not less than the percentage ratio as the cost of
living adjustment in the dollar limit on defined benefits under Section
415(d) of the Internal Revenue Code.
2.14 Financial Emergency
"Financial Emergency" means a financial need resulting from a serious
unforeseen personal or family emergency, such as an act of God, an adverse
business or financial transaction, divorce, serious illness or accident, or
death in the family.
2.15 Incentive Compensation
"Incentive Compensation" means payments made to a Participant in
recognition of meritorious work performance but shall not include, without
limitation, any payment received as moving expense, mortgage expense or
mortgage interest reimbursement.
2.16 Indirect Subsidiary
"Indirect Subsidiary" means any corporation of which a Participating
Employer directly and constructively owns at least eighty percent (80%) of the
total combined voting power of all classes of its stock entitled to vote. In
determining the amount of stock of a corporation that is constructively owned
by a Participating Employer, stock owned, directly or constructively, by a
corporation shall be considered as being owned proportionately by its
shareholders according to such shareholders' share of voting power of all
classes of its stock entitled to vote.
PAGE 4 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.17 Interest
"Interest" means the interest yield computed at the monthly equivalent of
an annual yield that is three (3) percentage points higher than the annual
yield on Moody's Average Corporate Bond Yield Index for the three (3) calendar
months preceding the immediately prior month as published by Moody's Investors
Service, Inc. (or any successor thereto), or, if such index is no longer
published, a substantially similar index selected by the Board.
2.18 Paid Time Off
"Paid Time Off" means those vacation and holiday days for which the
Employer pays employees for time not worked.
2.19 Paid Time Off Cancellation
"Paid Time Off Cancellation" means cash payments made in lieu of Paid Time
Off earned by an Eligible Employee.
2.20 Participant
"Participant" means any Eligible Employee who has elected to make
deferrals under this Plan.
2.21 Participating Employer
"Participating Employer" means the Company or any affiliated or subsidiary
company designated by the Board as a Participating Employer under the Plan, as
long as such designation has become effective and continues to be in effect.
The designation as a Participating Employer shall become effective only upon
the acceptance of such designation and the formal adoption of the Plan by a
Participating Employer. A Participating Employer may revoke its acceptance of
designation as a Participating Employer at any time, but until it makes such
revocation, all of the provisions of this Plan and any amendments thereto
shall apply to the Eligible Employees of the Participating Employer and their
Beneficiaries.
2.22 Pension Plan
"Pension Plan" means the Participating Employer's Pension Plan, as may be
amended from time to time, and any successor defined benefit retirement income
plan or plans maintained by the Participating Employer which qualify under
Section 401(a) of the Internal Revenue Code.
2.23 Plan
"Plan" means the Portland General Corporation Management Deferred
Compensation Plan, as may be amended from time to time.
2.24 Policies
"Policies" means any life insurance policies, annuity contracts or the
proceeds therefrom owned or which may be acquired by Participating Employer.
PAGE 5 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.25 Senior Administrative Officer
"Senior Administrative Officer" means the employee in the management
position designated by the Committee to administer the Plan.
ARTICLE III - ELIGIBILITY AND DEFERRALS
3.1 Eligibility
(a) GENERAL. An Eligible Employee who has completed one (1) year of
continuous employment with one (1) or more Participating Employers shall
be eligible to participate by making a Deferral Election under Paragraph
3.2 below. The Senior Administrative Officer shall notify Eligible
Employees about the Plan and the benefits provided under it. The
requirement of one (1) year of continuous employment may be waived by the
Senior Administrative Officer.
(b) CESSATION OF ELIGIBILITY. An Eligible Employee who ceases to
satisfy condition 2.13(a) or 2.13(b) of the definition of Eligible
Employee shall cease participating as to new deferrals immediately. An
Eligible Employee who ceases to satisfy condition 2.13(c) of the
definition of Eligible Employee may continue to participate in the Plan if
such individual has a current election to defer under the Plan at the time
the Employee ceases to satisfy condition 2.13(c).
3.2 Deferral Elections
(a) TIME OF ELECTIONS. An Eligible Employee may elect to participate
in the Plan with respect to any Compensation and/or Paid Time Off
Cancellation designated in a Deferral Election in a form approved by the
Senior Administrative Officer. The Deferral Election must be filed with
the Senior Administrative Officer no later than December 15, or such
shorter period as is designated in the Deferral Election form.
(b) MID-YEAR ELIGIBILITY. If an individual first becomes eligible to
participate during a calendar year and wishes to defer Compensation and/or
Paid Time Off Cancellation during the remainder of the year, a Deferral
Election may be filed no later than thirty (30) days following
notification of eligibility to participate to the individual by the Senior
Administrative Officer. Such Deferral Election shall be effective only
with regard to Compensation and/or Paid Time Off Cancellation earned after
it is filed with the Senior Administrative Officer.
(c) IRREVOCABILITY. A Deferral Election for the following calendar
year shall become irrevocable on the December 15 by which it is due under
Paragraph 3.2(a) and a Deferral Election for the current calendar year
shall become irrevocable upon filing with the Senior Administrative
Officer under Paragraph 3.2(b).
(d) TRANSFER TO A PARTICIPATING EMPLOYER. If a Participant transfers
employment from one (1) Participating Employer to another Participating
Employer, the Participant's Deferral Election shall remain in effect for
the remainder of the calendar year with respect to Compensation earned by
the individual after the transfer to the new Participating Employer.
PAGE 6 - MANAGEMENT DEFERRED COMPENSATION PLAN
3.3 Limits on Elective Deferrals
A Participant may elect to defer up to eighty percent (80%) of Base Salary
and up to one hundred percent (100%) of Bonuses. The level of deferral elected
in either case must be in one percent (1%) increments. A Participant may elect
to defer up to one hundred twenty (120) hours per year of Paid Time Off in
one-tenth (1/10) hour increments, but may not defer any Paid Time Off earned
in prior calendar years, or the first two hundred (200) hours of Paid Time Off
earned in the calendar year to which the Deferral Election relates.
3.4 Matching Contributions
The Participating Employer shall provide a matching contribution for each
Participant who is making deferrals of Base Salary under this Plan. The
matching contribution shall be six percent (6%) of the Participant's annual
elective Base Salary deferral under this Plan. For purposes of this provision,
Base Salary shall not include amounts received as a Nuclear Regulatory
Commission licensing bonus.
3.5 Welfare Benefits
Compensation deferred under this Plan shall constitute compensation for
purposes of any welfare plans, (as defined by the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), sponsored by the Participating
Employer.
ARTICLE IV - DEFERRED COMPENSATION ACCOUNT
4.1 Crediting to Account
The amount of the elective deferrals and matching contributions for a
Participant under this Plan shall be credited to an Account for the
Participant on the books of the Participating Employer at the time the
Compensation would have been paid in cash. Any taxes or other amounts due from
the Participant with respect to the deferred Compensation under federal, state
or local law, such as a Participant's share of FICA, shall be withheld from
nondeferred Compensation payable to the Participant at the time the deferred
amounts are credited to the Account.
4.2 Determination of Accounts
The last day of each calendar month shall be a Determination Date. Each
Participant's Account as of each Determination Date shall consist of the
balance of the Account as of the immediately preceding Determination Date,
plus the Participant's elective deferrals, matching contributions, and
Interest credited under this Plan, minus the amount of any distributions made
from this Plan since the immediately preceding Determination Date. Interest
credited shall be calculated as of each Determination Date based upon the
average daily balance of the Account since the preceding Determination Date.
4.3 Vesting of Accounts
Account balances in this Plan shall be fully vested at all times.
PAGE 7 - MANAGEMENT DEFERRED COMPENSATION PLAN
4.4 Statement of Accounts
The Senior Administrative Officer shall submit to each Participant, after
the close of each calendar quarter and at such other times as determined by
the Senior Administrative Officer a statement setting forth the balance of the
Account maintained for the Participant.
ARTICLE V - PLAN BENEFITS
5.1 Benefits
(a) ENTITLEMENT TO BENEFITS AT TERMINATION. Benefits under this Plan
shall be payable to a Participant on termination of employment with the
Participating Employer, Portland General Corporation, and any and all
Direct or Indirect Subsidiaries of Portland General Corporation. The
amount of the benefit shall be the balance of the Participant's Account
including Interest to the date of payment, in the form elected under
Paragraph 5.3 below.
(b) ENTITLEMENT TO BENEFITS AT DEATH. Upon the death of a
Participant for whom an Account is held under this Plan, a death benefit
shall be payable to the Participant's Beneficiary in the same form as the
Participant elected for payments at termination of employment, under
Paragraph 5.3 below. The amount of the benefit shall be the balance of the
Participant's Account including Interest to the date of payment.
5.2 Withdrawals for Financial Emergency
A Participant may withdraw part or all of the Participant's Account for a
Financial Emergency as follows:
(a) DETERMINATION. The existence of a Financial Emergency and the
amount to be withdrawn shall be determined by the Senior Administrative
Officer.
(b) SUSPENSION. A Participant who makes a withdrawal for Financial
Emergency from any company-sponsored deferral plan, whether qualified or
nonqualified, shall be suspended from participation in this Plan for
twelve (12) months from the date of such withdrawal. Compensation and/or
Paid Time Off Cancellation payable during such suspension that would have
been deferred under this Plan shall instead be paid to the Participant. No
matching contribution shall be credited to a Participant's Account under
this Plan during any period of suspension.
5.3 Form of Benefit Payment
(a) The Plan benefits attributable to the elective deferrals for any
calendar year shall be paid in one (1) of the forms set out below, as
elected by the Participant in the form of payment designation filed with
the Deferral Election for that year. The forms of benefit payment are:
(i) A lump-sum payment;
(ii) Monthly installment payments in substantially equal payments
of principal and Interest over a period of up to one hundred eighty
(180) months. The amount of the
PAGE 8 - MANAGEMENT DEFERRED COMPENSATION PLAN
installment payment shall be
redetermined on the first day of the month coincidental with or next
following the anniversary of the date of termination each year, based
upon the then current rate of Interest, the remaining Account balance,
and the remaining number of payment periods; or
(iii) In the event the account balance is ten thousand dollars
($10,000) or less, that benefit will be paid out in a lump sum
notwithstanding the form of benefit payment elected by the
Participant.
(b) A Participant may elect to file a change of payment designation
which shall supersede all prior form of payment designations with respect
to the Participant's entire Account. The Participant may redesignate a
combination of lump sum and monthly installments if approved by the Senior
Administrative Officer. If, upon termination, the Participant's most
recent change of payment designation has not been in effect for twelve
(12) full months prior to such termination, then the prior election shall
be used to determine the form of payment. The Senior Administrative
Officer may, in his sole discretion, direct that plan benefits be paid
pursuant to the change of payment designation, notwithstanding the twelve
(12) month requirement.
5.4 Accelerated Distribution
Notwithstanding any other provision of the Plan, a Participant shall be
entitled to receive, upon written request to the Senior Administrative
Officer, a lump-sum distribution of all or a portion of the vested Account
balance, subject to the following:
(a) PENALTY.
(i) If the distribution is requested within thirty-six (36)
months following a Change in Control, six percent (6%) of the account
shall be forfeited and ninety-four percent (94%) of the account paid
to the Participant.
(ii) If the distribution is requested at any time other than that
in (i) above, ten percent (10%) of the account shall be forfeited and
ninety percent (90%) of the account paid to the Participant.
(b) SUSPENSION. A Participant who receives a distribution under this
section shall be suspended from participation in this Plan for twelve (12)
calendar months from the date of such distribution. All eligibility
requirements must be met to reenter the Plan. The account balance shall be
as of the Determination Date immediately preceding the date on which the
Senior Administrative Officer receives the written request. The amount
payable under this section shall be paid in a lump sum within sixty-five
(65) days following the receipt of the Participant's written request by
the Senior Administrative Officer.
5.5 Withholding; Payroll Taxes
Each Participating Employer shall withhold from payments made hereunder
any taxes required to be withheld from a Participant's wages for the federal
or any state or local government. Withholding shall also apply to payments to
a Beneficiary unless an election against withholding is made under Section
3405(a)(2) of the Internal Revenue Code.
PAGE 9 - MANAGEMENT DEFERRED COMPENSATION PLAN
5.6 Commencement of Payments
Payment shall commence at the discretion of the Senior Administrative
Officer, but not later than sixty-five (65) days after the end of the month in
which a Participant retires, dies or otherwise terminates employment. All
payments shall be made as of the first day of the month.
5.7 Full Payment of Benefits
Notwithstanding any other provision of this Plan, all benefits shall be
paid no later than one hundred eighty (180) months following the date payment
to a Participant commences.
5.8 Payment to Guardian
If a Plan benefit is payable to a minor or a person declared incompetent
or to a person incapable of handling the disposition of property, the Senior
Administrative Officer may direct payment of such Plan benefit to the
guardian, legal representative or person having the care and custody of such
minor or incompetent person. The Senior Administrative Officer may require
proof of incompetency, minority, incapacity or guardianship as he may deem
appropriate prior to distribution of the Plan benefit. Such distribution shall
completely discharge the Senior Administrative Officer, the Participating
Employer, and the Company from all liability with respect to such benefit.
ARTICLE VI - RESTORATION OF PENSION PLAN BENEFITS
6.1 Pension Plan
If a Participating Employer maintains a tax qualified Pension Plan for the
benefit of eligible employees, and the Pension Plan provides benefits
determined under a formula that is based in part on the employee's nondeferred
compensation, a Participant in this Plan may receive a smaller benefit under
the Pension Plan as a result of electing deferrals under this Plan.
6.2 Restoration of Pension Plan Benefits
In addition to the benefits payable under Paragraph 5.1 above,
Participating Employer shall pay to any Participant whose Pension Plan benefit
is not restored under any other employee or executive benefit plan maintained
by Participating Employer, a benefit payment equal to the excess of (b) over
(a) as follows:
(a) The actuarial equivalent lump sum present value of the retirement
income (or death benefit) payable (either immediately or deferred) under
the Pension Plan; and
(b) the actuarial equivalent lump sum present value of the retirement
income (or death benefit) that would have been payable under the Pension
Plan if Participant had made no Deferral Elections in any calendar year
under this Plan. The actuarial equivalent lump sum present values shall be
calculated in the same manner and using the same factors as are used to
calculate lump-sum distributions under the Pension Plan. If Participant
terminates employment prior to attaining the age of fifty-five (55),
payment of the restoration of Pension Plan benefits shall be made as if
Participant had made a lump-sum election pursuant to Paragraph 5.3(a)(i)
above with respect to the payment of the restoration of Pension Plan
benefits. If Participant terminates employment upon or after attaining the
age of fifty-five (55), pay-
PAGE 10 - MANAGEMENT DEFERRED COMPENSATION PLAN
ment of the restoration of Pension Plan
benefits shall be made as if Participant had made an election to receive
monthly installment payments in substantially equal payments of principal
and Interest over a period of one hundred twenty (120) months pursuant to
Paragraph 5.3(a)(ii) above with respect to the payment of the restoration
of Pension Plan benefits. In the event the actuarial equivalent lump sum
present value is ten thousand dollars ($10,000) or less, that benefit will
be paid out in a lump sum.
6.3 Restoration of Pension Plan Benefits in Event of Change in Control
In the event of a Change in Control, and a subsequent termination of the
Pension Plan within three (3) years following a Change in Control, all Plan
Participants shall receive a restoration of Pension Plan benefits under
Paragraph 6.2.
ARTICLE VII - BENEFICIARY DESIGNATION
7.1 Beneficiary Designation
Each Participant shall have the right, at any time, to designate one (1)
or more persons or entities as the Participant's Beneficiary, primary as well
as secondary, to whom benefits under this Plan shall be paid in the event of
the Participant's death prior to complete distribution to the Participant of
the benefits due under the Plan. Each Beneficiary designation shall be in a
written form prescribed by the Senior Administrative Officer and will be
effective only when filed with the Senior Administrative Officer during the
Participant's lifetime.
7.2 Amendments
Any Beneficiary designation may be changed by a Participant without the
consent of any Beneficiary by the filing of a new Beneficiary designation with
the Senior Administrative Officer. If a Participant's Compensation is
community property, any Beneficiary designation shall be valid or effective
only as permitted under applicable law.
7.3 No Beneficiary Designation
In the absence of an effective Beneficiary designation, or if all
Beneficiaries predecease a Participant, the Participant's estate shall be the
Beneficiary. If a Beneficiary dies after a Participant and before payment of
benefits under this Plan has been completed, the remaining benefits shall be
payable to the Beneficiary's estate.
7.4 Effect of Payment
Payment to the Beneficiary shall completely discharge the Participating
Employer's obligations under this Plan.
PAGE 11 - MANAGEMENT DEFERRED COMPENSATION PLAN
ARTICLE VIII - ADMINISTRATION
8.1 Senior Administrative Officer; Duties
This Plan shall be administered by a Senior Administrative Officer
appointed by the Committee. The Senior Administrative Officer may be a
Participant under this Plan. The Senior Administrative Officer shall have the
authority to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Plan and decide or resolve any and
all questions including interpretations of this Plan as may arise in
connection with the Plan. The Senior Administrative Officer shall report to
the Committee on an annual basis regarding Plan activity, and at such other
times as may be requested by the Committee.
8.2 Agents
In the administration of this Plan, the Senior Administrative Officer may,
from time to time, employ agents and delegate to such agents, including
employees of any Participating Employer, such administrative duties as he sees
fit, and may from time to time consult with counsel, who may be counsel to any
Participating Employer.
8.3 Binding Effect of Decisions
The decision or action of the Senior Administrative Officer in respect of
any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all
persons having any interest in the Plan.
8.4 Indemnity of Senior Administrative Officer; Committee
Each Participating Employer shall indemnify and hold harmless the Senior
Administrative Officer, the Committee, and its individual members against any
and all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to this Plan, except in the case of gross
negligence or willful misconduct.
8.5 Availability of Plan Documents
Each Participant shall receive a copy of this Plan, and the Senior
Administrative Officer shall make available for inspection by any Participant
a copy of the rules and regulations used in administering the Plan.
8.6 Cost of Plan Administration
The Company shall bear all expenses of administration of this Plan.
However, a ratable portion of the expense shall be charged back to each
Participating Employer.
PAGE 12 - MANAGEMENT DEFERRED COMPENSATION PLAN
ARTICLE IX - CLAIMS PROCEDURE
9.1 Claim
Any person claiming a benefit, requesting an interpretation or ruling
under the Plan or requesting information under the Plan shall present the
request in writing to the Senior Administrative Officer or his delegatee who
shall respond in writing as soon as practicable.
9.2 Denial of Claim
If the claim or request is denied, the written notice of denial shall
state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based.
(b) A description of any additional material or information required
and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
9.3 Review of Claim
Any person whose claim or request is denied or who has not received a
response within thirty (30) days may request review by notice given in writing
to the Senior Administrative Officer. The claim or request shall be reviewed
by the Senior Administrative Officer, who may, but shall not be required to,
grant the claimant a hearing. On review, the claimant may have representation,
examine pertinent documents and submit issues and comments in writing.
9.4 Final Decision
The decision by the Senior Administrative Officer on review shall normally
be made within sixty (60) days. If an extension of time is required for a
hearing or other special circumstances, the claimant shall be notified and the
time limit shall be one hundred twenty (120) days. The decision shall be in
writing and shall state the reasons and the relevant Plan provisions. All
decisions on review shall be final and bind all parties concerned.
ARTICLE X - AMENDMENT AND TERMINATION OF PLAN
10.1 Amendment
The Senior Administrative Officer may amend the Plan from time to time as
may be necessary for administrative purposes and legal compliance of the Plan,
provided, however, that no such amendment shall affect the benefit rights of
Participants or Beneficiaries in the Plan. The Committee may amend the Plan at
any time, provided, however, that no amendment shall be effective to decrease
or restrict the accrued rights of Participants and Beneficiaries to the
amounts in their Accounts at the time of the amendment.
PAGE 13 - MANAGEMENT DEFERRED COMPENSATION PLAN
10.2 Termination
The Board of each Participating Employer may at any time, in its sole
discretion, terminate or suspend the Plan in whole or in part for that
Participating Employer. However, no such termination or suspension shall
adversely affect the benefits of Participants which have accrued prior to such
action, the benefits of any Participant who has previously retired, the
benefits of any Beneficiary of a Participant who has previously died, or
already accrued Plan liabilities between Participating Employers.
10.3 Payment at Termination
Notwithstanding Paragraph 5.3 above, if the Plan is terminated, payment of
each Account to a Participant or a Beneficiary for whom it is held shall
commence within sixty (60) days of Plan termination in the earlier of one (1)
of the following forms:
(a) The form and time of payment designated by the Participant; or
(b) Paid in the following form:
Appropriate Account Balance PAYOUT PERIOD
Less than $25,000 Lump sum
$25,000 but less than $100,000 Monthly installments over 2 years
$100,000 but less than $500,000 Monthly installments over 3 years
$500,000 or more Monthly installments over 5 years
Interest earned on the unpaid balance in Participant's Account shall be
the applicable Interest rate on the Determination Date immediately
preceding the effective date of such termination of the Plan.
ARTICLE XI - MISCELLANEOUS
11.1 Unfunded Plan
This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly compensated employees" within the meaning of Sections 201, 301, and
401 of ERISA, and therefore to be exempt from the provisions of Parts 2, 3
and 4 of Title I of ERISA. Accordingly, the Board may terminate the Plan
and commence termination payout under 10.3 above for all or certain
Participants, or remove certain employees as Participants, if it is
determined by the United States Department of Labor or a court of competent
jurisdiction that the Plan constitutes an employee pension benefit plan
within the meaning of Section 3(2) of ERISA which is not so exempt. This
Plan is not intended to create an investment contract, but to provide
retirement benefits to eligible individuals who have elected to participate
in the Plan. Eligible individuals are select members of management who, by
virtue of their position with Participating Employer, are uniquely informed
as to Participating Employer's operations and have the ability to
materially affect Participating Employer's profitability and operations.
PAGE 14 - MANAGEMENT DEFERRED COMPENSATION PLAN
11.2 Liability
(a) LIABILITY FOR BENEFITS. Except as otherwise provided in this
paragraph, liability for the payment of a Participant's benefit
pursuant to this Plan shall be borne solely by the Participating
Employer that employs the Participant and reports the Participant as
being on its payroll during the accrual or increase of the Plan
benefit, and no liability for the payment of any Plan benefit shall be
incurred by reason of Plan sponsorship or participation except for the
Plan benefits of a Participating Employer's own employees. Provided,
however, that each Participating Employer, by accepting the Board's
designation as a Participating Employer under the Plan and formally
adopting the Plan, agrees to assume secondary liability for the payment
of any benefit accrued or increased while a Participant is employed and
on the payroll of a Participating Employer that is a Direct Subsidiary
or Indirect Subsidiary of the Participating Employer at the time such
benefit is accrued or increased. Such liability shall survive any
revocation of designation as a Participating Employer with respect to
any liabilities accrued at the time of such revocation. Nothing in this
paragraph shall be interpreted as prohibiting any Participating
Employer or any other person from expressly agreeing to the assumption
of liability for a Plan Participant's payment of any benefits under the
Plan.
(b) UNSECURED GENERAL CREDITOR. Participants and their
Beneficiaries, heirs, successors, and assigns shall have no secured
legal or equitable rights, interest or claims in any property or assets
of a Participating Employer, nor shall they be beneficiaries of, or
have any rights, claims or interests in any Policies or the proceeds
therefrom owned or which may be acquired by a Participating Employer.
Except as provided in Section 11.3, such Policies or other assets of a
Participating Employer shall not be held under any trust for the
benefit of Participants, their Beneficiaries, heirs, successors or
assigns, or held in any way as collateral security for the fulfilling
of the obligations of a Participating Employer under this Plan. Any and
all of a Participating Employer's assets and Policies shall be, and
remain, the general, unpledged, unrestricted assets of the
Participating Employer. A Participating Employer's obligation under the
Plan shall be that of an unfunded and unsecured promise to pay money in
the future.
11.3 Trust Fund
At its discretion, each Participating Employer, jointly or severally,
may establish one (1) or more trusts, with such trustee as the Board may
approve, for the purpose of providing for the payment of such benefits.
Such trust or trusts may be irrevocable, but the assets thereof shall be
subject to the claims of the Participating Employer's creditors. To the
extent any benefits provided under the Plan are actually paid from any such
trust, the Participating Employer shall have no further obligation with
respect thereto, but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by the Participating Employer.
11.4 Nonassignability
Neither a Participant nor any other person shall have any right to
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey in advance of actual receipt the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to which
are, expressly declared to be nonassignable and nontransferable. No part of
the amounts payable shall, prior to actual payment, be subject to seizure
or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any
other person's bankruptcy or insolvency.
PAGE 15 - MANAGEMENT DEFERRED COMPENSATION PLAN
11.5 Not a Contract of Employment
The terms and conditions of this Plan shall not be deemed to constitute
a contract of employment between a Participating Employer and a
Participant, and neither a Participant nor a Participant's Beneficiary
shall have any rights against a Participating Employer except as may
otherwise be specifically provided herein. Moreover, nothing in this Plan
shall be deemed to give a Participant the right to be retained in the
service of a Participating Employer or to interfere with the right of a
Participating Employer to discipline or discharge a Participant at any
time.
11.6 Protective Provisions
A Participant will cooperate with a Participating Employer by
furnishing any and all information requested by a Participating Employer,
in order to facilitate the payment of benefits hereunder, and by taking
such physical examination as a Participating Employer may deem necessary
and taking such other action as may be requested by a Participating
Employer.
11.7 Governing Law
The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Oregon, except as preempted by
federal law.
11.8 Terms
In this Plan document, unless the context clearly indicates the
contrary, the masculine gender will be deemed to include the female gender,
and the singular shall include the plural.
11.9 Validity
In case any provisions of this Plan shall be held illegal or invalid
for any reason, such illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.
11.10 Notice
Any notice or filing required or permitted to be given to the Senior
Administrative Officer under the Plan shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail to the Senior
Administrative Officer or to Secretary of Participating Employer. Notice to
the Senior Administrative Officer, if mailed, shall be addressed to the
principal executive offices of Participating Employer. Notice mailed to the
Participant shall be at such address as is given in the records of the
Participating Employer. Notices shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.
11.11 Successors
The provisions of this Plan shall bind and inure to the benefit of each
Participating Employer and its successors and assigns. The term successors
as used herein shall include any corporate or other business entity which
shall, whether by merger, consolidation, purchase or otherwise, acquire all
or substantially all of the business and assets of a Participating
Employer, and successors of any such corporation or other business entity.
PAGE 16 - MANAGEMENT DEFERRED COMPENSATION PLAN
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its officers thereunto duly authorized, as of the ____ day of
May, 1996.
PORTLAND GENERAL CORPORATION
By: /s/ Don F. Kielblock
Donald F. Kielblock
Senior Administrative Officer and
Vice President, Human Resources
PAGE 17 - MANAGEMENT DEFERRED COMPENSATION PLAN