PORTLAND GENERAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 RESTATEMENT
Effective January 1, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I - PURPOSE 1
1.1 Purpose 1
1.2 Effective Date 1
ARTICLE II - DEFINITIONS 1
2.1 Actuarially Equivalent 1
2.2 Basic Plan 1
2.3 Basic Plan Offset 1
2.4 Board 2
2.5 Cause 2
2.6 Change in Control 2
2.7 Committee 3
2.8 Company 3
2.9 Credited Service 3
2.10 Dependent 3
2.11 Direct Subsidiary 4
2.12 Disability 4
2.13 Earnings 4
2.14 Employment 4
2.15 Final Average Earnings 4
2.16 Indirect Subsidiary 4
2.17 Other Retirement Income 4
2.18 Participant 5
2.19 Participating Employer 5
2.20 Plan 5
2.21 Retirement 5
2.22 Senior Administrative Officer 5
2.23 Senior Officer 5
2.24 Spouse 5
ARTICLE III - ELIGIBILITY 6
3.1 Eligibility 6
3.2 Retirement 6
3.3 Forfeitures 6
3.4 Claims Procedure After Change in Control 7
(i)
TABLE OF CONTENTS
PAGE
ARTICLE IV - AMOUNT, FORM AND PAYMENT OF SUPPLEMENTAL BENEFIT 8
4.1 Normal Retirement Benefit 8
4.2 Early Retirement Benefit 8
4.3 Separation from Service Benefit 9
4.4 Postponed Retirement Benefit 9
4.5 Retention of Accrued Benefit 9
4.6 Reduction of Benefits 9
4.7 Unreduced Benefit Date 9
4.8 Commencement of Benefits 10
4.9 Form of Benefit 10
4.10 Benefit Increases for Retirees 10
4.11 Accelerated Distribution 10
ARTICLE V - PRERETIREMENT SURVIVOR BENEFITS 10
5.1 Survivor Benefit 10
5.2 Benefit Payment 11
5.3 Dependent Benefit 11
5.4 Cessation of Benefit Upon Remarriage 11
ARTICLE VI - DISABILITY BENEFITS 11
6.1 Disability Retirement 11
6.2 Disability Benefit 11
6.3 Form and Commencement of Benefits 11
6.4 Survivor and Dependent Benefits 12
6.5 Evidence of Continued Disability 12
ARTICLE VII - ADMINISTRATION 12
7.1 Senior Administrative Officer; Duties 12
7.2 Agents 12
7.3 Binding Effect of Decisions 12
7.4 Indemnity of Senior Administrative Officer; Committee 12
7.5 Availability of Plan Documents 13
7.6 Cost of Plan Administration 13
ARTICLE VIII - CLAIMS PROCEDURE 13
8.1 Claim 13
8.2 Denial of Claim 13
8.3 Review of Claim 13
8.4 Final Decision 13
(ii)
TABLE OF CONTENTS
PAGE
ARTICLE IX - TERMINATION OR AMENDMENT 14
9.1 Amendment 14
9.2 Termination 14
ARTICLE X - MISCELLANEOUS 14
10.1 Unfunded Plan 14
10.2 Liability 14
10.3 Trust Fund 15
10.4 Nonassignability 15
10.5 Payment to Guardian 15
10.6 Not a Contract of Employment 15
10.7 Protective Provisions 16
10.8 Terms 16
10.9 Governing Law 16
10.10 Validity 16
10.11 Notice 16
10.12 Successors 16
(iii)
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
A
Actuarially Equivalent: 2.1 1
Annual Supplemental Benefit: 4.1(a) 8
B
Basic Plan: 2.2 1
Basic Plan Offset: 2.3 1
Board: 2.4 2
C
Cause: 2.5 2
Change in Control: 2.6 2
Committee: 2.7 3
Company: 2.8 3
Credited Service: 2.9 3
D
Dependent: 2.10 3
Direct Subsidiary: 2.11 4
Disability: 2.12 4
E
Earnings: 2.13 4
Employment: 2.14 4
ERISA: 10.1 14
Exchange Act: 2.6(a) 2
F
Final Average Earnings: 2.15 4
I
Indirect Subsidiary: 2.16 4
O
Other Retirement Income: 2.17 4
P
Participant: 2.18 5
Participating Employer: 2.19 5
PGC: 2.6(a) 2
PGE: 2.6(a) 2
Plan: 2.20 5
(iv)
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
R
Retirement: 2.21 5
S
Senior Administrative Officer: 2.22 5
Senior Officer: 2.23 5
Spouse: 2.24 5
T
Temporary Social Security Supplement: 4.2(b) 8
U
Unreduced Benefit Date: 4.7 9
(v)
PORTLAND GENERAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 RESTATEMENT
ARTICLE I - PURPOSE
1.1 Purpose
The principal objectives of this Supplemental Executive Retirement Plan
are to provide key executives with competitive retirement benefits, protect
against reductions in retirement benefits due to tax law limitations on
qualified plans and to facilitate early retirement. The Plan is designed to
provide a benefit which, when added to other retirement income of the
executive, will meet this objective. This Plan was originally effective on
July 1, 1983.
1.2 Effective Date
This 1990 Restatement is adopted to make amendments to the Plan effective
January 1, 1996.
ARTICLE II - DEFINITIONS
2.1 Actuarially Equivalent
"Actuarially Equivalent" shall mean the equivalence in value between two
(2) or more forms and/or times of payment based upon a determination by an
actuary chosen by the Senior Administrative Officer using a discount rate
equal to the 30-Year Treasury Bill rate on the January 1st of the year in
which the determination occurs plus one percent (1%) and the unisex mortality
table chosen by the actuary, which choice shall be binding on all parties.
2.2 Basic Plan
"Basic Plan" shall mean the Participating Employers' Pension Plan or
Plans, as may be amended from time to time, and any successor defined benefit
retirement income plan or plans maintained by the Participating Employers
which qualify under Section 401(a) of the Internal Revenue Code.
2.3 Basic Plan Offset
"Basic Plan Offset" shall mean the amount of benefit that would be paid
from the Basic Plan to a Participant, assuming eligible compensation used to
calculate such benefit includes amounts deferred under any Participating
Employer sponsored nonqualified deferred compensation plan, in the form of a
straight life annuity from the Early, Normal, Disability or Postponed
Retirement Date, regardless of the amount actually paid or the actual method
of payment under the Basic Plan.
PAGE 1 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
2.4 Board
"Board" shall mean the Board of Directors of Portland General Corporation.
2.5 Cause
Prior to a Change in Control, "Cause" shall mean:
(a) Employee engages in an act of dishonesty or moral turpitude
(including but not limited to conviction of a felony) which materially
injures or damages Employer,
(b) Employee willfully fails to substantially perform his or her
duties hereunder and such willful failure results in demonstrable material
injury and damage to Employer,
(c) A determination that Employee has misrepresented or concealed a
material fact for the purpose of securing employment, or
(d) Employee's performance is substantially below the standard of
performance which can reasonably be expected from an individual occupying
Employee's position or Employee substantially fails to meet performance
objectives, including without limitation guiding behaviors, which have
been previously agreed to between Employee and Employer, such as
performance objectives relating to profit.
Following a Change in Control, Cause shall mean:
(a) Employee engages in an act of dishonesty or moral turpitude
(including but not limited to conviction of a felony) which materially
injures or damages Employer, or
(b) Employee willfully fails to substantially perform his or her
duties hereunder and such willful failure results in demonstrable material
injury and damage to Employer.
2.6 Change in Control
A "Change in Control" shall mean:
(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
an 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 of 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 stockhold-
PAGE 2 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ers was approved 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 of 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:
(i) 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
(ii) 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
(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 nonoperational projects. Projects
in economy shutdown shall be considered long-term assets.
2.7 Committee
"Committee" shall mean the Human Resources Committee of the Board.
2.8 Company
"Company" shall mean Portland General Corporation, an Oregon Corporation.
2.9 Credited Service
"Credited Service" shall mean a Participant's Years of Credited Service or
Benefit Service as defined in the Basic Plan. Credited Service shall continue
to accrue during a Participant's period of Disability.
2.10 Dependent
"Dependent" shall mean an unmarried child of the Participant until the age
of nineteen (19) (age twenty-six (26) if a full-time student). An unmarried
child may also qualify as a Dependent by reason of mental retardation or
physical handicap for as long as the condition exists, if such child qualifies
as a dependent under regulations set forth by the Internal Revenue Service by
reason of such mental retardation or physical handicap.
PAGE 3 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
2.11 Direct Subsidiary
"Direct Subsidiary" shall mean 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.
2.12 Disability
"Disability" shall mean the inability of a Participant to perform with
reasonable continuity the material duties of any gainful occupation for which
the Participant is reasonably fitted by education, training and experience.
2.13 Earnings
"Earnings" shall mean total annual base salary, before any reductions
pursuant to voluntary deferrals by the employee under Participating Employer-
sponsored plans; plus any cash annual incentive compensation awards; plus any
cash long-term incentive awards earned prior to January 1, 1987, but excluding
any other long-term incentive awards. For purposes of determining Earnings for
any particular year, Earnings for the year shall consist of base salary, cash
annual incentive compensation awards, and cash long-term incentive awards
earned prior to January 1, 1987, earned during that year.
2.14 Employment
"Employment" shall mean the period or periods during which an individual
is an employee of one or more Participating Employers.
2.15 Final Average Earnings
"Final Average Earnings" shall mean a Participant's highest average of any
three consecutive years' Earnings during the final ten (10) years of
Employment. If the Participant has fewer than three (3) years of Employment,
then his Final Average Earnings shall be determined based on the average of
the actual Employment period.
2.16 Indirect Subsidiary
"Indirect Subsidiary" shall mean 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.
2.17 Other Retirement Income
"Other Retirement Income" shall mean retirement income payable to a
Participant as set forth below:
(a) FOR OTHER THAN DISABILITY RETIREMENT. Any periodic income
continuance, severance payments or other defined benefit retirement
payments from a Participating Employer.
PAGE 4 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(b) FOR DISABILITY RETIREMENT. Income from the Portland General
Corporation Long-Term Disability Plan or any other long-term disability
plan sponsored by a Participating Employer.
2.18 Participant
"Participant" shall mean an employee of a Participating Employer, who is
also a Senior Officer as defined in Paragraph 2.23 and designated in writing
as a Participant by the Senior Administrative Officer.
2.19 Participating Employer
"Participating Employer" shall mean 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 Participants and their Beneficiaries of
the Participating Employer.
2.20 Plan
"Plan" shall mean the Portland General Corporation Supplemental Executive
Retirement Plan, as may be amended from time to time.
2.21 Retirement
"Retirement" and "Retire" shall mean the termination of a Participant's
Employment with Portland General Corporation and any and all Direct or
Indirect Subsidiaries of Portland General Corporation on one of the Retirement
dates specified in Paragraph 3.2.
2.22 Senior Administrative Officer
"Senior Administrative Officer" shall mean the employee in the management
position designated by the Committee to administer the Plan.
2.23 Senior Officer
"Senior Officer" shall mean the Chief Executive Officer, the President,
Division Presidents, all Senior Vice Presidents, all Vice Presidents, the
Treasurer and the Controller of the Participating Employer, all as elected or
appointed by the Board of Directors of the Participating Employer.
2.24 Spouse
"Spouse" shall mean an individual who is a spouse as defined under the
Basic Plan.
PAGE 5 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE III - ELIGIBILITY
3.1 Eligibility
Eligibility to participate shall be limited to those employees who have
attained the position of Senior Officer and are designated in writing as a
Participant by the Senior Administrative Officer, or those employees who have
previously been selected as Participants.
3.2 Retirement
Each Participant is eligible to Retire and receive a benefit under this
Plan beginning on one of the following dates:
(a) NORMAL RETIREMENT DATE, which is the first day of the month
following the month in which the Participant reaches age sixty-five (65);
(b) EARLY RETIREMENT DATE, which is the first day of any month
following the month in which the Participant reaches age fifty-five (55)
and has completed five (5) years of Employment with Portland General
Corporation and any Direct and Indirect Subsidiaries of Portland General
Corporation;
(c) POSTPONED RETIREMENT DATE, which is the first day of the month
following the Participant's Normal Retirement Date in which the
Participant terminates Employment with Portland General Corporation and
any and all Direct and Indirect Subsidiaries of Portland General
Corporation; or
(d) DISABILITY RETIREMENT DATE, which is the first day of the month
following six (6) months of Disability as certified by the Senior
Administrative Officer.
3.3 Forfeitures
A Participant who is receiving, or may be entitled to receive, a benefit
shall forfeit any right to receive benefits if one of the following occurs:
(a) The Participant is discharged for Cause prior to a Change in
Control, as determined by the Committee;
(b) The Participant is discharged for Cause following a Change in
Control, as determined by the Committee, provided, however, that in lieu
of the Claims Procedure provided in Article VIII, the Participant shall be
entitled to proceed pursuant to Section 3.4.
(c) The Participant performs services for an organization where there
is a conflict of interest which is adverse to the Company's interest, as
determined by the Committee; or
(d) The Participant voluntarily terminates employment without
providing for transition in disregard of the Company's best interests, as
determined by the Committee.
PAGE 6 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
3.4 Claims Procedure After Change in Control
(a) If the Participant is discharged for Cause following a Change in
Control, and the Participant, in good faith, believes this Plan has failed
to pay or provide payment of any amounts required to be paid or provided
for hereunder, the Participant shall be entitled to consult with
independent counsel, and the Plan agrees to pay the reasonable fees and
expenses of such counsel for the Participant, advising him or her in
connection therewith or in bringing any proceedings, or in defending any
proceedings, including any appeal arising from any proceeding, involving
the Participant's rights under this Plan, such right to reimbursement to
be immediate upon the presentment by the Participant of written billings
of such reasonable fees and expenses. The Participant shall be entitled to
the prime rate of interest established from time to time at United States
National Bank of Oregon or its successor for any payments of such
expenses, or any other payments under this Plan, that are overdue.
(b) Because it is agreed that time will be of the essence in
determining whether any payments are due to Participant under this Plan
following a Change in Control, Participant may, if he or she desires,
submit any claim for payment under this Plan or dispute regarding the
interpretation of this Plan to arbitration. This right to select
arbitration shall be solely that of Participant, and Participant may
decide whether or not to arbitrate in his or her discretion. The "right to
select arbitration" is not mandatory on Participant, and Participant may
choose in lieu thereof to bring an action in an appropriate civil court.
Once an arbitration is commenced, however, it may not be discontinued
without the mutual consent of both parties to the arbitration.
(c) Any claim for arbitration shall be filed in writing with an
arbitrator of Participant's choice who is selected by the method described
in the next four (4) sentences. The first step of the selection shall
consist of Participant submitting a list of five (5) potential arbitrators
to the Plan. Each of the five (5) arbitrators must be either 1) a member
of the National Academy of Arbitrators located in the State of Oregon, or
2) a retired Oregon Federal District Court, Oregon Supreme Court or Oregon
Court of Appeals judge. Within one (1) week after receipt of the list, the
Plan shall select one (1) of the five (5) arbitrators as the arbitrator
for the dispute in question. If the Plan fails to select an arbitrator in
a timely manner, Participant shall then designate one (1) of the five (5)
arbitrators as the arbitrator for the dispute in question.
(d) The arbitration hearing shall be held within seven (7) days (or
as soon thereafter as possible) after the picking of the arbitrator. No
continuance of said hearing shall be allowed without the mutual consent of
Participant and the Plan. Absence from or nonparticipation at the hearing
by either party shall not prevent the issuance of an award. Hearing
procedures which will expedite the hearing may be ordered at the
arbitrator's discretion, and the arbitrator may close the hearing in his
or her sole discretion when he or she decides he or she has heard
sufficient evidence to satisfy issuance of an award.
(e) The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than one (1) week after the close of the
hearing. In the event the arbitrator finds that Participant was not
terminated for Cause, he or she shall order the Plan to immediately take
the necessary steps to remedy the breach. The award of the arbitrator
shall be final and binding upon the parties. The award may be enforced in
any appropriate court as soon as possible after its rendition. If an
action is brought to confirm the award, both the Plan and Participant
agree that no appeal shall be taken by either party from any decision
rendered in such action.
PAGE 7 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(f) Solely for purposes of determining the allocation of the costs
described in this subsection, the Plan will be considered the prevailing
party in a dispute if the arbitrator determines 1) Participant was
terminated for Cause, and 2) the claim by Participant was not made in good
faith. Otherwise, Participant will be considered the prevailing party. In
the event that the Plan is the prevailing party, the fee of the arbitrator
and all necessary expenses of the hearing (excluding any attorneys' fees
incurred by the Plan) including stenographic reporter, if employed, shall
be paid by Participant. In the event that Participant is the prevailing
party, the fee of the arbitrator and all necessary expenses of the hearing
(INCLUDING all attorneys' fees incurred by Participant in pursuing his or
her claim), including the fees of a stenographic reporter if employed,
shall be paid by the Plan.
ARTICLE IV-AMOUNT, FORM AND PAYMENT OF
SUPPLEMENTAL BENEFIT
4.1 Normal Retirement Benefit
The annual benefit payable at a Normal Retirement Date under the Plan
shall equal:
(a) Three percent (3%) of Final Average Earnings for each of the
first fifteen (15) years of Credited Service, plus one and one half
percent (1-1/2%) of Final Average Earnings for each of the next ten (10)
years of Credited Service, plus, for service accrued prior to March 1,
1988, three-quarters of one percent (3/4%) for each year of Credited
Service in excess of twenty-five (25) ("Annual Supplemental Benefit");
(i) less any Basic Plan Offset;
(ii) less any Other Retirement Income.
4.2 Early Retirement Benefit
(a) The annual benefit payable at an Early Retirement Date shall
equal the Annual Supplemental Benefit based on Credited Service to the
Early Retirement Date, reduced in accordance with Paragraph 4.6 as
appropriate;
(i) less any Basic Plan Offset;
(ii) less any Other Retirement Income.
(b) An additional benefit ("Temporary Social Security Supplement")
shall be payable to a Participant who commences benefits on an Early
Retirement Date which is prior to the earliest date the Participant is
eligible for retirement benefits under the Social Security Act. Such
Temporary Social Security Supplement shall not be payable during any
period when the Participant is eligible to collect Social Security
disability benefits. Such Temporary Social Security Supplement shall equal
the Social Security benefit payable at such earliest date based on
calculation procedures in the Basic Plan. Such amount shall be payable
until the earlier of:
(i) the earliest date the Participant is eligible for Social
Security retirement benefits; or
PAGE 8 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(ii) the Participant's date of death.
4.3 Separation from Service Benefit
The annual benefit payable at a date of separation from service other than
as a result of Retirement, Disability, or Termination upon a Change in Control
shall equal:
(a) Annual Supplemental Benefit based on Credited Service and Final
Average Earnings as of the Participant's date of separation from service,
reduced in accordance with Paragraph 4.6 as appropriate;
(i) less any Basic Plan Offsets;
(ii) less any Other Retirement Income.
(b) The benefit shall commence on the first day of the month
following such date that would have constituted an Early Retirement Date
had the Participant remained employed.
4.4 Postponed Retirement Benefit
The annual benefit payable at a Postponed Retirement Date shall be equal
to the benefit determined in accordance with Paragraph 4.1 based on Credited
Service and Final Average Earnings as of the Participant's Postponed
Retirement Date.
4.5 Retention of Accrued Benefit
In the event a Participant is transferred to an employer who is not a
Participating Employer, the benefit payable at Retirement Date shall be
calculated based on Credited Service and Final Average Earnings with all
Participating Employers and as of the last date of Employment with a
Participating Employer. In the event a Participant is transferred to a
position other than that of Senior Officer, the benefit payable at Retirement
Date shall be calculated based on Credited Service and Final Average Earnings
as a Senior Officer as of the last day such Senior Officer status was held
with all Participating Employers.
4.6 Reduction of Benefits
In the event that a benefit calculated under Paragraphs 4.2 or 4.3 is to
commence prior to the Unreduced Benefit Date such benefit shall be reduced by
seven-twelfths of one percent (7/12%) for each month by which the date of
benefit commencement precedes the Unreduced Benefit Date.
4.7 Unreduced Benefit Date
"Unreduced Benefit Date" shall mean the earlier of:
(a) The first of the month following the date the Participant attains
age sixty-two (62), or
(b) The earliest date when the sum of the Participant's age and
Credited Service would total eighty-five (85) years.
PAGE 9 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
4.8 Commencement of Benefits
Benefits payable in accordance with Paragraph 4.1, 4.2 and 4.4 shall
commence on the first day of the month following the Participant's Retirement
and shall continue to be paid on the first day of each succeeding month until
the first day of the month following the later of the death of the Participant
or the death of the Participant's Spouse.
4.9 Form of Benefit
The benefits under this Plan shall be payable as follows:
(a) If the Participant is unmarried when benefits begin, a straight
life annuity; or
(b) If the Participant is married when benefits begin, an annuity in
the same amount as 4.9(a) for the life of the Participant and an annuity
of fifty percent (50%) of that amount continuing to the Participant's
Spouse for the life of Participant's Spouse, if the Participant
predeceases the Spouse.
4.10 Benefit Increases for Retirees
Benefits payable to retirees receiving benefits under this Plan shall be
increased in the same manner and at the same time as benefits are increased
for retirees under the Basic Plan.
4.11 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 equal to the Actuarially Equivalent of the
vested benefits under this Plan on the date the written request was received,
subject to the following:
(a) PENALTY. 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 and shall have
no future benefit accruals under this Plan.
(c) PAYMENT. 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.
ARTICLE V - PRERETIREMENT SURVIVOR BENEFITS
5.1 Survivor Benefit
If a Participant should die before actual Retirement, the Spouse will
receive a benefit equal to:
PAGE 10 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(a) Fifty percent (50%) of the amount of the Participant's Annual
Supplemental Benefit determined in accordance with Paragraph 4.1, based on
the Final Average Earnings at death but assuming Credited Service
continued to accrue until Normal Retirement Date;
(b) Less any benefits to such Spouse actually payable from the Basic
Plan.
5.2 Benefit Payment
Spouse benefits will be payable monthly, and will commence on the first
day of the month following the month in which the Participant dies. The last
payment will be on the first day of the month in which the Spouse dies, or
such other date pursuant to the provisions of Paragraph 5.4. Payments may
commence to eligible Dependents pursuant to Paragraph 5.3.
5.3 Dependent Benefit
If no eligible Spouse survives the Participant, or if the surviving Spouse
who was eligible for payment under this Section dies with eligible Dependents
remaining, the benefit determined in Paragraph 5.1 above shall be payable to
any eligible Dependents in equal shares. Such monthly benefit shall be paid
each Dependent until such person fails to qualify as a Dependent.
5.4 Cessation of Benefit Upon Remarriage
In the event a Spouse receiving benefits under this Plan remarries, such
Spouse will stop receiving, as of the date of remarriage, any further monthly
benefits from this Plan (including future benefits to any Dependents).
However, in lieu of any further monthly benefits from this Plan, a Spouse will
receive six (6) months of benefits in a lump sum within forty-five (45) days
after the Senior Administrative Officer is notified of such remarriage.
ARTICLE VI - DISABILITY BENEFITS
6.1 Disability Retirement
In the event a Participant suffers a Disability after completing two (2)
years of Employment, the Participant shall be entitled to Retire on a
Disability Retirement Date.
6.2 Disability Benefit
The annual Disability benefit shall be equal to the benefit determined in
accordance with Paragraph 4.1, based on projected years of Credited Service to
Normal Retirement and based on Final Average Earnings determined as of the
last day of Employment with Participating Employer before commencement of
Disability.
6.3 Form and Commencement of Benefits
Disability benefits will be payable monthly and will commence on the
Participant's Disability Retirement Date. The last Disability payment will be
as of the first day of the month during which a disabled Participant either
recovers, dies or retires under the Basic Plan. In the case of a disabled
Participant, recovery will be determined by the Senior Administrative Officer.
If the Participant retires under the Basic Plan, retirement benefits shall be
payable pursuant to Paragraph 4.1, 4.2 or 4.4 of this
PAGE 11 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Plan based on years of
Credited Service at Retirement date and Final Average Earnings assuming no
change in Earnings at his Disability Retirement Date.
6.4 Survivor and Dependent Benefits
In the event a disabled Participant dies, the Participant's Spouse and
Dependents shall be eligible for Preretirement Survivor Benefits as set out in
Article V.
6.5 Evidence of Continued Disability
The Senior Administrative Officer may require, no more frequently than
once per calendar year, that a disabled Participant submit medical evidence of
continued Disability satisfactory to the Senior Administrative Officer. The
Disability benefit may be discontinued based on a consideration of such
evidence or lack thereof.
ARTICLE VII - ADMINISTRATION
7.1 Senior Administrative Officer; Duties
This Plan shall be administered by the Senior Administrative Officer
appointed by the Committee. The Senior Administrative Officer may be a
Participant under the Plan. The Senior Administrative Officer shall have the
authority to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve any and
all questions, including interpretations of the 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.
7.2 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.
7.3 Binding Effect of Decisions
The decision or action of the Senior Administrative Officer with respect
to 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, conclusive and binding upon all persons
having any interest in the Plan.
7.4 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.
PAGE 12 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
7.5 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.
7.6 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.
ARTICLE VIII - CLAIMS PROCEDURE
8.1 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.
8.2 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.
8.3 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.
8.4 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 relevant plan provisions. All
decisions on review shall be final and bind all parties concerned.
PAGE 13 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE IX - TERMINATION OR AMENDMENT
9.1 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 rights of Participants and Beneficiaries to the benefit
accrued at the time of the amendment.
9.2 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.
ARTICLE X - MISCELLANEOUS
10.1 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 the Employee Retirement Income Security Act of 1974, as amended ("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, subject to Paragraph
9.2 of this Plan, 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 (as currently in effect or hereafter
amended) which is not so exempt.
10.2 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 as
accrued at the time of such revocation. Nothing in this paragraph shall be
interpreted as prohibiting
PAGE 14 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
any Participating Employer or any other person
from expressly agreeing to 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
Participating Employer, nor shall they be Beneficiaries of, or have any
rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by
Participating Employer. Except as provided in Section 10.3, such policies,
annuity contracts or other assets of 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 Participating Employer under this
Plan. Any and all of Participating Employer's assets and policies shall
be, and remain, the general, unpledged, unrestricted assets of
Participating Employer. Participating Employer's obligation under the Plan
shall be that of an unfunded and unsecured promise to pay money in the
future.
10.3 Trust Fund
At its discretion, each Participating Employer, jointly or severally, may
establish one or more trusts, with such trustees 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 Participating Employer's creditors. To the extent any benefits
provided under the Plan are actually paid from any such trust, 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 a Participating Employer.
10.4 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 amount 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.
10.5 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.
10.6 Not a Contract of Employment
The terms and conditions of this Plan shall not be deemed to constitute a
contract of employment between Participating Employer and the Participant, and
the Participant (or the Partici-
PAGE 15 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
pant's Beneficiary) shall have no rights
against 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 Participating Employer
or to interfere with the right of Participating Employer to discipline or
discharge a Participant at any time.
10.7 Protective Provisions
A Participant shall cooperate with Participating Employer by furnishing
any and all information requested by Participating Employer, in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as Participating Employer may deem necessary and taking such
other action as may be requested by Participating Employer.
10.8 Terms
In this Plan document, unless the context clearly indicates the contrary,
the masculine gender will be deemed to include the feminine gender, and the
singular shall include the plural.
10.9 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.
10.10 Validity
If any provision of this Plan shall be held illegal or invalid for any
reason, said 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.
10.11 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 the Secretary of the Participating Employer. Notice
mailed to the Participant shall be at such address as is given in the records
of the Participating Employer. Such notice 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.
10.12 Successors
The provisions of this Plan shall bind and inure to the benefit of
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 Participating Employer, and
successors of any such corporation or other business entity.
PAGE 16 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
IN WITNESS WHEREOF, and pursuant to resolution of the Board, the Company
has caused this instrument to be executed by its officers thereunto duly
authorized, as of the 1st day of April, 1996.
PORTLAND GENERAL CORPORATION
By: /s/ Don F. Kielblock
Its: Vice President
PAGE 17 - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN