THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AMENDED AND RESTATED
1990 LONG-TERM
INCENTIVE MASTER PLAN
Portland General Corporation
1996 Restatement
Portland General Corporation
AMENDED AND RESTATED
1990 Long-Term Incentive Master Plan
1996 Restatement
TABLE OF CONTENTS
ARTICLE SECTION PAGE
1. ESTABLISHMENT, PURPOSE, AND DURATION .............................. 1
1.1 ESTABLISHMENT OF THE PLAN ................................... 1
1.2 PURPOSE OF THE PLAN ......................................... 1
1.3 DURATION OF THE PLAN ........................................ 1
2. DEFINITIONS AND CONSTRUCTION ...................................... 2
2.1 DEFINITIONS ................................................. 2
2.2 GENDER AND NUMBER ........................................... 5
2.3 SEVERABILITY ................................................ 5
3. ADMINISTRATION .................................................... 5
3.1 THE COMMITTEE ............................................... 5
3.2 AUTHORITY OF THE COMMITTEE .................................. 5
3.3 DECISIONS BINDING ........................................... 6
3.4 GRANTS OF OPTIONS BY CHIEF EXECUTIVE OFFICER OR INSIDER
COMMITTEE ................................................... 6
4. SHARES SUBJECT TO THE PLAN ........................................ 7
4.1 NUMBER OF SHARES ............................................ 7
4.2 LAPSED AWARDS ............................................... 8
4.3 ADJUSTMENTS IN AUTHORIZED SHARES ............................ 8
5. ELIGIBILITY AND PARTICIPATION ..................................... 8
5.1 ELIGIBILITY ................................................. 8
5.2 ACTUAL PARTICIPATION ........................................ 9
6. STOCK OPTIONS ..................................................... 9
6.1 GRANT OF OPTIONS ............................................ 9
6.2 OPTION AGREEMENT ............................................ 9
6.3 OPTION PRICE ................................................ 9
6.4 DURATION OF OPTIONS ......................................... 9
6.5 EXERCISE OF OPTIONS ......................................... 9
6.6 PAYMENT ..................................................... 9
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ARTICLE SECTION PAGE
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY ....................... 10
6.8 DIVIDEND EQUIVALENTS ON STOCK OPTIONS ....................... 10
6.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT .................................................. 10
6.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 12
6.11 TRANSFERABILITY OF OPTIONS .................................. 12
7. STOCK APPRECIATION RIGHTS ......................................... 12
7.1 GRANT OF SARS ............................................... 12
7.2 EXERCISE OF SARS IN LIEU OF OPTIONS ......................... 13
7.3 EXERCISE OF SARS IN ADDITION TO OPTIONS ..................... 13
7.4 EXERCISE OF SARS INDEPENDENT OF OPTIONS ..................... 13
7.5 SAR AGREEMENT ............................................... 13
7.6 TERM OF SARS ................................................ 13
7.7 PAYMENT OF SAR AMOUNT ....................................... 13
7.8 SECTION 16 REQUIREMENTS ..................................... 14
7.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT .................................................. 14
7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 15
7.11 TRANSFERABILITY OF SARS ..................................... 15
8. RESTRICTED STOCK .................................................. 15
8.1 GRANT OF RESTRICTED STOCK ................................... 15
8.2 RESTRICTED STOCK AGREEMENT .................................. 16
8.3 TRANSFERABILITY ............................................. 16
8.4 OTHER RESTRICTIONS .......................................... 16
8.5 CERTIFICATE LEGEND .......................................... 16
8.6 REMOVAL OF RESTRICTIONS ..................................... 16
8.7 VOTING RIGHTS ............................................... 16
8.8 DIVIDENDS AND OTHER DISTRIBUTIONS ........................... 17
8.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT .................................................. 17
8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 17
9. PERFORMANCE UNITS AND PERFORMANCE SHARES .......................... 17
9.1 GRANT OF PERFORMANCE UNITS/SHARES ........................... 17
9.2 VALUE OF PERFORMANCE UNITS/SHARES ........................... 17
9.3 EARNING OF PERFORMANCE UNITS/SHARES ......................... 18
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES ...... 18
9.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
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ARTICLE SECTION PAGE
RETIREMENT .................................................. 18
9.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS ................. 18
9.7 TRANSFERABILITY ............................................. 19
10. OTHER STOCK-BASED AWARDS ......................................... 19
10.1 OTHER STOCK-BASED AWARDS .................................... 19
10.2 TRANSFERABILITY ............................................. 19
11. BENEFICIARY DESIGNATION .......................................... 19
12. RIGHTS OF EMPLOYEES .............................................. 19
12.1 EMPLOYMENT .................................................. 19
12.2 PARTICIPATION ............................................... 19
13. CHANGE IN CONTROL ................................................ 20
14. AMENDMENT, MODIFICATION, AND TERMINATION ......................... 20
14.1 AMENDMENT, MODIFICATION, AND TERMINATION .................... 20
14.2 AWARDS PREVIOUSLY GRANTED ................................... 21
15. WITHHOLDING ...................................................... 21
15.1 TAX WITHHOLDING ............................................. 21
15.2 SHARE WITHHOLDING ........................................... 21
16. INDEMNIFICATION .................................................. 21
17. SUCCESSORS ....................................................... 22
18. REQUIREMENTS OF LAW .............................................. 22
18.1 REQUIREMENTS OF LAW ......................................... 22
18.2 GOVERNING LAW ............................................... 22
iii
PORTLAND GENERAL CORPORATION
AMENDED AND RESTATED
1990 LONG-TERM INCENTIVE MASTER PLAN
1996 RESTATEMENT
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Portland General Corporation
("Portland General") established the Portland General Corporation 1990
Long-Term Incentive Master Plan (hereinafter referred to as the "Plan") to
be effective October 1, 1990, subject to the approval of the Board of
Directors and the shareholders of Portland General, which approval was
given by the Board of Directors on October 1, 1990 and by the Shareholders
at the Annual Meeting of Shareholders held April 30, 1991. The Plan shall
remain in effect as provided in Section 1.3 herein. The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares, Performance
Units, and other Stock-Based Awards.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success, and enhance the value of the Company by linking the personal
interests of Employees to those of Company shareholders, and by providing
Employees with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Employees upon
whose judgment, interest, and special effort the successful conduct of its
operation largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on October 1,
1990 (the "Effective Date") and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant
to Article 14 herein, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no
event may an Award be granted under the Plan on or after the tenth (10th)
anniversary of the Plan's Effective Date.
1
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. Whenever used in the Plan, the following terms
shall have the meanings set forth below and, when the meaning is intended,
the initial letter of the word is capitalized:
(a) "Award" means, individually or collectively, a grant under
this Plan of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units, or other Stock-Based
Awards.
(b) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
(c) "Board" or "Board of Directors" means the Board of Directors
of Portland General Corporation or any successor thereto as
provided in Article 17 herein.
(d) "Cause" means (i) willful and gross misconduct on the part
of a Participant that is materially and demonstrably
detrimental to the Company; (ii) the commission by a
Participant of one or more acts which constitute an
indictable crime under United States Federal, state, or
local law; or (iii) such other meaning as shall be specified
by the Committee. Unless otherwise provided by the
committee at the time of making an Award, "Cause" under
either (i), (ii) or (iii) shall be determined in good faith
by a written resolution duly adopted by the affirmative vote
of not less than two-thirds (2/3rds) of all the Directors
at a meeting duly called and held for that purpose after
reasonable notice to the Participant and opportunity for the
Participant and his or her legal counsel to be heard.
(e) "Change in Control" of the Company shall be defined by the
Committee at the time of making each and every Award
hereunder.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Committee" means the committee, as specified in Article 3,
appointed by the Board to administer the Plan with respect
to grants of Awards.
(h) "Company" means Portland General Corporation, an Oregon
corporation (including any and all Subsidiaries), or any
successor
2
thereto as provided in Article 17 herein.
(i) "Demotion" shall mean the reduction of a Participant's
salary grade, job classification, or title (the
Participant's job classification or title shall govern in
all cases where said job classification or title are not
defined by means of a salary grade) with the Company to a
level at which Awards under this Plan or any other plan
providing long-term incentives to Employees have NOT been
granted within the three (3) years preceding such demotion.
(j) "Director" means any individual who is a member of the Board
of Directors.
(k) "Disability" means a permanent and total disability, within
the meaning of Code Section 22(e)(3), as determined by the
Committee in good faith, upon receipt of sufficient
competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give
professional medical advice.
(l) "Dividend Equivalent" means an accrual for payment of cash
or Shares equal in value to dividends paid on Shares subject
to Options.
(m) "Employee" means any employee of the Company. Directors who
are also employed by the Company shall be considered
Employees under this Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor Act thereto.
(o) "Fair Market Value" means the closing price of Shares on the
relevant date, as reported in the WALL STREET JOURNAL or a
similar publication selected by the Committee.
(p) "Grant Price" means the value of a SAR on the date of grant,
as determined by the Committee.
(q) "Incentive Stock Option" or "ISO" means an option to
purchase Shares, granted under Article 6 herein, which is
designated as an Incentive Stock Option and is intended to
meet the requirements of Section 422 of the Code, or any
successor Section thereto.
3
(r) "Insider" shall mean an Employee of the Company who is, at
the time an Award is made under this Plan, designated as
subject to Section 16 of the Exchange Act and the Rules
promulgated thereunder or a Director.
(s) "Noninsider" shall mean an individual who is not an Insider.
(t) "Noninsider Committee" means the committee, as specified in
Section 3.4, that may be appointed by the Board to grant
Options to Noninsiders.
(u) "Nonqualified Stock Option" or "NQSO" means an option to
purchase Shares, granted under Article 6 herein, which is
not intended to be an Incentive Stock Option.
(v) "Option" means an Incentive Stock Option or a Nonqualified
Stock Option.
(w) "Option Price" means the price at which a Share may be
purchased by a Participant pursuant to an Option, as
determined by the Committee.
(x) "Outside Director" means a Director who meets the definition
of "nonemployee director" under the Rules promulgated under
Section 16 of the Exchange Act, as such definition may be
amended from time to time.
(y) "Participant" means an Employee of the Company who has
outstanding an Award granted under the Plan.
(z) "Performance Unit" or "Performance Share" means an Award
granted to an Employee pursuant to Article 9 herein.
(aa) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock is limited in some
way (based on the passage of time, the achievement of
performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and the
Shares are subject to a substantial risk of forfeiture, as
provided in Article 8 herein.
(ab) "Restricted Stock" means an Award granted to an Employee
pursuant to Article 8 herein.
4
(ac) "Stock Appreciation Right" or "SAR" means an Award, granted
alone or in tandem with an Option, designated as a SAR,
granted to an Employee pursuant to Article 7 herein.
(ad) "Stock-Based Award" means an Award granted to an Employee
pursuant to Article 10 herein.
(ae) "Shares" means the $3.75 par value Common Stock of Portland
General Corporation.
(af) "Subsidiary" means any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least 50%
of the total combined voting power of all classes of stock,
or any other entity (including, but not limited to,
partnerships and joint ventures) in which the Company owns
at least 50% of the combined equity thereof. In the event
that applicable law permits the ownership of less than 50%
of the total combined voting power of all classes of stock
of a corporation to cause such corporation to constitute a
"Subsidiary," then the requirement of 50% ownership in this
definition shall be lowered to the lowest level permitted
under applicable law.
2.2 GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the
plural.
2.3 SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by a committee
consisting solely of two or more Outside Directors, who shall be appointed
from time to time by, and shall serve at the discretion of, the Board of
Directors. Provided, however, that if for any reason the Committee does
not qualify to administer the Plan, as contemplated by the Article 16 of
the Exchange Act and the Rules promulgated thereunder, the Board of
Directors may appoint a new Committee so as to comply therewith.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full power
except as limited by law or by the Articles of Incorporation or Bylaws of
Portland General or any
5
successor thereto as provided in Article 17 herein, subject to the
provisions herein, to determine the size and types of Awards; to determine
the terms and conditions of such Awards in a manner consistent with the
Plan; to construe and interpret the Plan and any agreement or instrument
entered into under the Plan; to establish, amend, or waive rules and
regulations for the Plan's administration; and (subject to the provisions
of Article 14 herein) to amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the discretion of
the Committee as provided in the Plan. Further, the Committee shall make
all other determinations which may be necessary or advisable for the
administration of the Plan. As permitted by law, the Committee may
delegate its authorities as identified hereunder.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive, and
binding on all persons, including the Company, its stockholders, Employees,
Participants, and their estates and beneficiaries.
3.4 GRANTS OF OPTIONS BY CHIEF EXECUTIVE OFFICER OR INSIDER
COMMITTEE. The Board of Directors may grant to the Chief Executive Officer
(the "CEO") of Portland General or any successor thereto as provided in
Article 17 herein, or a Committee appointed by it consisting of at least
two Directors one of whom shall be the CEO if the CEO is a Director
("Noninsider Committee") the authority to grant Options to Noninsiders.
Options granted pursuant to this Section 3.4 shall be subject to the
provisions of this Section 3.4, the limits specifically prescribed by the
Board of Directors and the requirements of Oregon law. Prior to the grant
of such Options, the CEO or the Noninsider Committee, as the case may be,
shall obtain the opinion of legal counsel for the Company that each person
chosen to receive an Option under this Section is properly classified as a
Noninsider.
The Options granted by the CEO to Noninsiders pursuant to this Section
between October 1, 1990 and October 2, 1991 may be granted upon such terms
and provisions as deemed appropriate by the CEO; provided, however, that
the aggregate number of Shares available for grant is one hundred thousand
(100,000), that any such Option granted not exceed 5,000 shares per
employee per year, that the exercise price for any such Options granted
shall equal the fair market value of Shares on the date of grant, and that
all Options granted must be exercised within ten (10) years after the date
of the grant.
At any time after October 2, 1991, the Board of Directors may
authorize the CEO or the Noninsider Committee to grant Options for an
additional number of Shares and upon such terms and provisions as the Board
shall determine subject to the terms of this Section 3.4. The initial one
hundred thousand (100,000) Shares authorized pursuant to the immediately
preceding paragraph and any such additional Shares granted under Options
pursuant to this Section shall be counted toward the maximum number of
Shares subject to this Plan, as set forth in Section 4.1.
6
In addition to the authority granted to the CEO or the Noninsider
Committee to grant Options to Noninsiders pursuant to this Section 3.4, the
CEO may, at any time, recommend to the Committee Insiders to receive grants
of Options, and may recommend the number of Shares and the terms and
provisions applicable to such Options; provided, however, that
notwithstanding such recommendation, the grant of any Option to Insiders
and the terms and conditions applicable thereto shall be at the sole
discretion of the Committee. In the event that the Committee shall choose
to grant an Option to an Insider upon the recommendation of the CEO, the
Committee may choose to apply the number of Shares subject to such Option
against the number of Shares available for grant by the CEO or the
Noninsider Committee pursuant to this Section 3.4, such that the number of
Shares available to the CEO or the Noninsider Committee is reduced by the
number of Shares covered by such Option.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as
provided in Section 4.3 herein, the total number of Shares available for
grant under the Plan may not exceed 2,300,000; of which no more than
1,150,000 may be issued as Restricted Stock. These 2,300,000 Shares may be
either authorized but unissued or reacquired Shares.
The following rules will apply for purposes of the determination of
the number of Shares available for grant under the Plan:
(a) The grant of an Option or Restricted Stock Award shall
reduce the Shares available for grant under the Plan by the
number of Shares subject to such Award.
(b) The grant of a Stock Appreciation Right related to an Option
("Tandem SAR") shall reduce the number of Shares available
for grant by the number of Shares subject to the related
Option if the Tandem SAR is granted "in lieu of" the Option.
If the number of "in lieu of" SARs granted in Tandem with
Options exceeds the number of Shares subject to the related
Option, then the number of Shares available for grant shall
additionally be reduced by the amount of such excess;
provided, however, that to the extent such grants are paid
in cash, such Shares shall again be available for the grant
of Awards under the Plan in accordance with Section 16 of
the Exchange Act and the Rules promulgated thereunder.
(c) The grant of a Tandem SAR "in addition to" the related
Option shall reduce the number of Shares available for grant
by the number of Shares subject to the SAR, in addition to
the number of Shares subject
7
to the related Option.
(d) The grant of Stock Appreciation Rights not related to an
Option ("Freestanding SAR") shall reduce the number of
Shares available for grant by the number of Freestanding
SARs granted.
(e) The grant of Performance Units and/or Performance Shares
shall reduce the number of Shares available for grant while
outstanding; provided, however, that to the extent such
grants are paid in cash, such Shares shall again be
available for the grant of Awards under the Plan in
accordance with Section 16 of the Exchange Act and the Rules
promulgated thereunder.
(f) The grant of other Stock-Based Awards shall reduce the
number of Shares available for grant hereunder to the extent
Shares are utilized, as determined by the Committee in
accordance with the provisions of Section 16 of the Exchange
Act and the Rules promulgated thereunder.
4.2 LAPSED AWARDS. If any Award granted under this Plan terminates,
expires, or lapses for any reason (with the exception of the termination of
a Tandem SAR granted "in lieu of" the related Option or a related Option
upon exercise of the corresponding "in lieu of" SAR), any Shares subject to
such Award again shall be available for the grant of an Award under the
Plan to the extent allowed pursuant to Section 16 of the Exchange Act and
the Rules promulgated thereunder.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation,
stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, such adjustment
shall be made in the number and class of Shares which may be delivered
under the Plan, and in the number and class of and/or price of Awards
granted under the Plan, as may be determined to be appropriate and
equitable by the Committee, in its sole discretion, to prevent dilution or
enlargement of rights; and provided that the number of Shares subject to
any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan
include all Employees of the Company, including Employees who are members
of the Board, but excluding Directors who are not Employees.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Employees,
those to whom Awards shall be
8
granted and shall determine the nature and amount of each Award. No
Employee shall have any right to be granted an Award under this Plan.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Employees at any time and from time to time
as shall be determined by the Committee. The Committee shall have
discretion in determining the number of Shares subject to Options granted
to each Employee. The Committee may grant ISOs, NQSOs, or a combination
thereof. Nothing in this Article 6 shall be deemed to prevent the grant of
NQSOs in excess of the maximum established by Section 422 of the Code, or
any successor Section thereto.
6.2 OPTION AGREEMENT. Each Option grant shall be evidenced by an
Option Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Option Agreement also
shall specify whether the Option is intended to be an ISO within the
meaning of Section 422 of the Code, or any successor Section thereto, or a
NQSO whose grant is intended not to fall under the Code provisions of
Section 422, or any successor Section thereto.
6.3 OPTION PRICE. The Option Price for each grant of an Option to
an Employee shall be determined by the Committee; provided that, in the
case of an ISO, the Option Price shall not be less than 100% of the Fair
Market Value of such Share on the date the Option is granted; and, provided
further, that in the case of a NQSO, the Option Price shall not be less
than the minimum price permissible under Oregon law.
6.4 DURATION OF OPTIONS. Each Option granted to an Employee shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no ISO shall be exercisable later than the tenth
(10th) anniversary date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted to Employees under the
Plan shall be exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve, which need
not be the same for each grant or for each Employee. However, in no event
may any Option granted under this Plan to an Insider become exercisable
prior to six (6) months following the date of its grant.
6.6 PAYMENT. Options shall be exercised in accordance with
established procedures.
The Option Price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having a
9
Fair Market Value at the time of exercise equal to the total Option Price;
provided that any such Shares tendered by an Insider shall have been held
by such Insider for at least six months prior to such tender, or (c) by a
combination of (a) and (b). The Committee also allows cashless exercise as
permitted under Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law.
The proceeds from such a payment shall be added to the general funds of the
Company and shall be used for general corporate purposes.
The Committee also shall have the authority to extend loans to
Participants in order to aid Participants in the exercise of their Options,
upon such terms and requiring such security as the Committee, in its sole
discretion, shall deem appropriate.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in
the Participant's name, Share certificates in an appropriate amount based
upon the number of Shares purchased under the Option(s).
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee shall
impose such restrictions, including restrictions on transferability, on
Options granted, and on any Shares acquired pursuant to the exercise of an
Option, under the Plan, as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are
then listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.
6.8 DIVIDEND EQUIVALENTS ON STOCK OPTIONS. Employees owning Options
may be granted, at no additional cost, Dividend Equivalents based on the
dividends declared on Shares on record dates during the period between the
grant date of an Option and the date the Option is exercised, or an
equivalent period, as determined by the Committee. Such Dividend
Equivalents may be converted to additional Shares subject to the Option
("Dividend Equivalent Shares"), or cash, or both, by such formula as may be
determined by the Committee, provided, however, that such formula shall
conform to any holding period, notice provision or other requirement under
Section 16 of the Exchange Act and the Rules promulgated thereunder.
Dividend equivalents shall be computed as of each record date, with
respect to: (i) the number of Shares subject to the Option; and (ii) the
number of Dividend Equivalent Shares previously earned by the Employee
which were not issued during the period immediately prior to the dividend
record date.
6.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT.
10
(a) TERMINATION BY DEATH. In the event the employment of an
Employee is terminated by reason of death, any outstanding
Options granted to that Employee shall immediately vest 100%
and shall remain exercisable at any time prior to their
expiration date, or for one (1) year after the date that
employment was terminated, whichever period is shorter, by
such person or persons as shall have been named as the
Employee's beneficiary, or by such persons that have
acquired the Employee's rights under the Option by will or
by the laws of descent and distribution. However, the
Committee, in its sole discretion, may, at any time prior,
including at the time an Award is made or after such
termination, provide for the vesting and exercise of all or
a portion of such Options.
(b) TERMINATION BY DISABILITY. In the event the employment of
an Employee is terminated by reason of Disability, any
outstanding Options granted to that Employee shall
immediately vest 100%, and shall remain exercisable at any
time prior to their expiration date, or for one (1) year
after the date that the Employee's Disability is determined
by the Committee to be total and permanent, whichever period
is shorter. However, the Committee, in its sole discretion,
may, at any time prior, including at the time an Award is
made or after such termination, provide for the vesting and
exercise of all or a portion of such Options.
(c) TERMINATION BY RETIREMENT. In the event the employment of
an Employee is terminated by reason of "normal retirement"
(as defined under the then established rules of the
Company's tax-qualified pension retirement plan), any
outstanding Options granted to that Employee shall
immediately vest 100%, and shall remain exercisable at any
time prior to their expiration date, or for three (3) years
after the date that employment was terminated, whichever
period is shorter. However, the Committee, in its sole
discretion, may, at any time prior, including at the time an
Award is made or after such termination, provide for the
vesting and exercise of all or a portion of such Options.
In the event the employment of an Employee is terminated by
reason of Company's tax-qualified pension retirement plan),
any outstanding Options granted to that Employee that are
not then vested shall be forfeited. However, the Committee,
in its sole discretion, may, at any time prior, including at
the time an Award is made or after such termination, provide
for the vesting and exercise of all or a portion of
11
such Options.
(d) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax
treatment prescribed under Section 422 of the Internal
Revenue Code of 1986, as amended, or any successor Section
thereto, may not be available if the Options are not
exercised within the time periods after each of the various
types of employment termination prescribed by said Section.
6.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment
of an Employee shall terminate for any reason (other than the reasons set
forth in Section 6.9 or for Cause), all nonvested Options held by the
Employee immediately shall be forfeited to the Company. However, the
Committee, in its sole discretion, may at any time prior, including at the
time an Award is made or after such termination, provide for the vesting
and exercise of all or any portion of such Options, upon such terms and
conditions as its deems proper.
If the employment of the Employee shall terminate for Cause, all
outstanding Options immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the vested
status of the Options.
Any Options forfeited under this Section shall again be available for
grant under the Plan in accordance with Section 16 of the Exchange Act and
the Rules promulgated thereunder.
6.11 TRANSFERABILITY OF OPTIONS. The Committee may establish the
terms by which any Option granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan,
an SAR may be granted to an Employee at any time and from time to time as
shall be determined by the Committee. An SAR may be granted in any of the
following forms:
(a) "In lieu of" Options (as described in Section 4.1(b)
herein);
(b) "In addition to" Options (as described in Section 4.1(c)
herein);
(c) Independent of Options (a "Freestanding SAR"); or
(d) In any combination of (a), (b), or (c) above.
The Committee shall have complete discretion in determining the number
of SARs
12
granted to each Participant (subject to Section 4.1 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs. However, the Grant Price of a Freestanding SAR
shall be at least equal to the Fair Market Value of Shares on the date of
grant of the SAR. The Grant Price of "in lieu of" or "in addition to" SARs
(as described in Section 4.1 herein) shall equal the Option Price of the
related Option. Further, in no event shall any SAR granted hereunder
become exercisable within the first six (6) months of its grant.
7.2 EXERCISE OF SARS IN LIEU OF OPTIONS. SARs granted "in lieu of"
Options (as described in Section 4.1 herein) may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the
right to exercise an equivalent number of Options. The SAR may be
exercised only with respect to the Shares for which its related Option is
then exercisable. Option Stock with respect to which the SAR shall have
been exercised may not be subject again to an Award under this Plan.
Notwithstanding any other provision of this Plan to the contrary, with
respect to an SAR granted "in lieu of" an "Incentive Stock Option" within
the meaning of Section 422 of the Code, or any successor Section thereto:
(i) the SAR will expire no later than the expiration of the underlying
Incentive Stock Option; (ii) the SAR amount may be for no more than one
hundred percent (100%) of the difference between the Option Price of the
underlying Incentive Stock Option and the market price of the Shares
subject to the underlying Incentive Stock Option at the time the SAR is
exercised; and (iii) the SAR may be exercised only when the market price of
the Shares subject to the Incentive Stock Option exceeds the Option Price
of the Incentive Stock Option.
7.3 EXERCISE OF SARS IN ADDITION TO OPTIONS. SARs granted "in
addition to" Options (as described in Section 4.1 herein) shall be deemed
to be exercised upon the exercise of the related Options. The deemed
exercise of SARs granted "in addition to" Options shall not necessitate a
reduction in the number of related Options.
7.4 EXERCISE OF SARS INDEPENDENT OF OPTIONS. SARs granted
independently of Options may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes upon the SARs.
7.5 SAR AGREEMENT. Each SAR grant shall be evidenced by an SAR
Agreement that shall specify the Grant Price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.6 TERM OF SARS. The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion, however, such term
shall not exceed ten (10) years.
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7.7 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount
determined by multiplying:
(a) The difference between the Fair Market Value of a Share on
the date of exercise over the Grant Price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the sole discretion of the Committee, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination
thereof.
7.8 SECTION 16 REQUIREMENTS. Notwithstanding any other provision
of the Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the
time of exercise to specified periods or the ability to exercise in cash or
Shares ) as may be required to satisfy the requirements of Section 16 of
the Exchange Act and the Rules promulgated thereunder.
7.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT.
(a) TERMINATION BY DEATH. In the event the employment of a
Participant is terminated by reason of death, any
outstanding SARs granted to that Participant shall
immediately vest 100%, and shall remain exercisable at any
time prior to their expiration date, or for one (1) year
after the date that employment is terminated, whichever
period is shorter, by such person or persons as shall have
been named as the Participant's beneficiary, or by such
persons that have acquired the Participant's rights under
the SARs by will or by the laws of descent and distribution.
However, the Committee, in its sole discretion, may, at any
time prior, including at the time an Award is made or after
such termination, provide for the vesting and exercise of
all or a portion of such Options.
(b) TERMINATION BY DISABILITY. In the event the employment of a
Participant is terminated by reason of Disability, any
outstanding SARs granted to that Participant shall
immediately vest 100%, and shall remain exercisable at any
time prior to their expiration date, or for one (1) year
after the date the Participant's Disability is determined by
the Committee to be total and permanent, whichever period is
shorter. However, the Committee, in its sole discretion,
may, at any time prior
14
including at the time an Award is made or after such
termination, provide for the vesting and exercise of all or
a portion of such Options.
(c) TERMINATION BY RETIREMENT. In the event the employment of a
Participant is terminated by reason of "normal retirement"
(as defined under the then established rules of the
Company's tax qualified pension retirement plan), all
outstanding SARs granted to that Participant shall
immediately vest 100%, and shall remain exercisable at any
time prior to their expiration date, or for one (1) year
after the date that employment was terminated, whichever
period is shorter. However, the Committee, in its sole
discretion, may, at any time prior,
including at the time an Award is made or after such
termination, provide for the vesting and exercise of all or
a portion of such Options.
In the event the employment of a Participant is terminated
by reason of "early retirement" (as defined under the then
established rules of the Company's tax qualified pension
retirement plan), any outstanding SARs granted to that
Participant that are not then vested shall be forfeited.
However, the Committee, in its sole discretion, may, at any
time prior, including at the time an Award is made or after
such termination, provide for the vesting and exercise of
all or a portion of such Options.
7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment
of a Participant shall terminate for any reason other than the reasons
described in Section 7.9, or for Cause, all nonvested SARs held by the
Participant at that time immediately shall be forfeited to the Company.
However, the Committee, in its sole discretion, may at any time prior,
including at the time an Award is made or after such termination, provide
for the vesting and exercise of all or any portion of such SARs, upon such
terms and conditions as it deems proper.
If the employment of the Participant shall terminate for Cause, all
outstanding SARs immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the vested
status of the SARs.
Any SAR forfeited to the Company shall again be available for grant
under the Plan pursuant to Section 16 of the Exchange Act and the Rules
promulgated thereunder.
7.11 TRANSFERABILITY OF SARS. The Committee may establish the terms
by which an SAR granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise
15
alienated or hypothecated.
ARTICLE 8. RESTRICTED STOCK
8.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Employees in such amounts as the Committee
shall determine.
8.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by a Restricted Stock Agreement that shall specify the Period
of Restriction, or Periods, the number of Restricted Stock Shares granted,
and such other provisions as the Committee shall determine.
8.3 TRANSFERABILITY. Except as provided in this
Section 8.3, the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated
until the end of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Committee in its
sole discretion and set forth in the Restricted Stock Agreement. However,
in no event may any Restricted Stock granted under the Plan become vested
in a Participant prior to six (6) months following the date of its grant.
Prior to vesting, all rights with respect to the Restricted Stock granted
to a Participant under the Plan shall be available during his or her
lifetime only by such Participant.
8.4 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan
as it may deem advisable including, without limitation, restrictions based
upon the achievement of specific performance goals (Company-wide,
divisional, and/or individual), and/or restrictions under applicable
Federal or state securities laws; and may legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
8.5 CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 8.4 herein, each certificate representing
Shares of Restricted Stock granted pursuant to the Plan shall bear the
following legend:
"The sale or other transfer of the Shares of Stock represented
by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer
as set forth in the Portland General Corporation 1990 Long-Term
Incentive Master Plan, and in a Restricted Stock Agreement dated
__________. A copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of Portland General
Corporation."
16
8.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction. Once the Shares are
released from the restrictions, the Participant shall be entitled to have
the legend required by Section 8.5 removed from his or her Share
certificate.
8.7 VOTING RIGHTS. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares.
8.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted
hereunder shall be entitled to receive all dividends and other
distributions paid with respect to those Shares while they are so held. If
any such dividends or distributions are paid in Shares, the Shares shall be
subject to the same restrictions on transferability and forfeitability as
the Shares of Restricted Stock with respect to which they were paid, and
shall reduce the number of Shares available for grant under the Plan.
8.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR
RETIREMENT.
(a) TERMINATION BY DEATH. Upon the death of a Participant, all
restrictions on the Participant's Restricted Stock shall lapse,
provided, however, such restrictions shall not lapse until the
expiration of the six (6) month vesting period provided in
Section 8.3.
(b) TERMINATION BY DISABILITY. In the event that a
Participant's employment with the Company is terminated by
reason of Disability, the restrictions on the Participant's
Restricted Stock shall lapse on the date the Participant's
disability is determined by the Committee to be total and
permanent, provided, however, such restrictions shall not lapse
until the expiration of the six (6) month vesting period in
Section 8.3.
(c) TERMINATION BY RETIREMENT. In the event that a
Participant's employment with the Company is terminated by
reasons of "normal retirement" (as defined under the then
established rules of the Company's tax qualified pension
retirement plan), the restrictions shall lapse on the number of
shares of Restricted Stock in each restricted stock grant which
bears the same ratio to the total number of shares of Restricted
Stock in such grant still subject to restrictions, as the period
of employment during the Period of Restriction for such grant
bears to the full Period of Restriction for such grant, rounded
up to a full share, unless otherwise determined by the Committee
to vest the previously granted Restricted Stock in some greater
17
amount, provided, however, such restrictions shall not lapse
until the expiration of the six (6) month vesting period
provided in Section 8.3.
8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment
of the Participant shall terminate for any reason other than those reasons
described in Section 8.9, including a termination for Cause, all nonvested
Shares of Restricted Stock held by the Participant at that time immediately
shall be forfeited and returned to the Company. However, with the
exception of a termination of employment for Cause, the Committee, in its
sole discretion, may, at any time prior, including at the time an Award is
made or after such termination, provide for lapsing of the restrictions on
Restricted Stock following employment termination upon such terms and
provisions as it deems proper; provided that, no such lapsing of
restrictions shall occur after the expiration date of the Restricted Stock.
Shares of Restricted Stock forfeited and returned to the Company may
again be available for grant under the Plan, consistent with Section 16 of
the Exchange Act and the Rules promulgated thereunder.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the
Plan, Performance Units or Performance Shares may be granted to Employees
at any time and from time to time, as shall be determined by the Committee.
The Committee shall have complete discretion in determining the number of
Performance Units or Performance Shares granted to each Employee.
9.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value that is in
direct relation to the Fair Market Value of a Share at the time of grant.
The Committee shall set performance goals in its discretion which,
depending on the extent to which they are met, will determine the number
and/or value of Performance Units or Performance Shares that will be paid
out to the Participants. The time period during which the performance
goals must be met shall be called a "Performance Period." The Performance
Period pertaining to each Performance Unit or Performance Share Award shall
be between two (2) and six (6) years in length, and shall be established by
the Committee at the time of grant.
9.3 EARNING OF PERFORMANCE UNITS/SHARES. After the applicable
Performance Period has ended, the holder of Performance Units or
Performance Shares shall be entitled to receive payout on the number of
Performance Units or Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.
18
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment
of earned Performance Units/Performance Shares shall be made in a single
lump sum, within forty-five (45) calendar days, or such longer period as
may be required under Section 16 of the Exchange Act and the Rules
promulgated thereunder, following the close of the applicable Performance
Period. The Committee, in its sole discretion, may pay earned Performance
Units or Performance Shares in the form of cash or in Shares (or in a
combination thereof) which have an aggregate Fair Market Value equal to the
value of the earned Performance Units or Performance Shares at the close of
the applicable Performance Period; provided, however, that the Committee
may place transfer restrictions on such Shares to meet the requirements of
Section 16 of the Exchange Act and the Rules promulgated thereunder.
9.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR
RETIREMENT. In the event the employment of a Participant is terminated by
reason of death, Disability, or "normal retirement" (as defined under the
then established rules of the Company's tax qualified pension retirement
plan) during the applicable Performance Period, the Participant shall
receive a prorated payout on the Performance Units or Performance Shares
based on the Participant's full number of months of service during the
Performance Period as compared to the entire length of the Performance
Period, further adjusted based on the achievement of the preestablished
performance goals. Payment of earned Performance Units or Performance
Shares shall be made at the same time payments are made to Participants who
did not terminate service during the applicable Performance Period, or such
other time as is required to comply with Section 16 of the Exchange Act and
the Rules promulgated thereunder.
9.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that
a Participant terminates employment with the Company for any reason other
than those reasons set forth in Section 9.5, all Performance Units or
Performance Shares shall be forfeited by the Participant to the Company;
provided, however, that in the event of early retirement or an involuntary
termination of the employment of the Participant by the Company other than
for Cause, the Committee, in its sole discretion, may waive the automatic
forfeiture provisions and pay out on a pro rata basis, as provided in
Section 9.5.
9.7 TRANSFERABILITY. The Committee may establish the terms by which
any Performance Units may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated.
ARTICLE 10. OTHER STOCK-BASED AWARDS
10.1 OTHER STOCK-BASED AWARDS. The Committee shall have the right to
grant other Stock-Based Awards which may include, without limitation, the
grant of Shares based on certain conditions, the payment of cash based on
the performance of the Common Stock, and the payment of Shares in lieu of
cash under other Company incentive bonus programs.
19
Payment under or settlement of any such Awards shall be made in such manner
and at such times as the Committee may determine.
10.2 TRANSFERABILITY. The Committee may establish the terms by which
any Stock-Based Awards granted under this Section of the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated.
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Human
Resource Department of the Company, or such other department as the Company
may specify in writing to the Participant, during the Participant's
lifetime. In the absence of any such designation, benefits remaining
unpaid at the Participant's death shall be paid to the Participant's
estate.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to
continue in the employ of the Company.
For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.
12.2 PARTICIPATION. No Employee shall have the right to be selected
to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
ARTICLE 13. CHANGE IN CONTROL
In order to maintain all of the Employees' rights in the event of a
Change in Control of the Company, the Committee, as constituted prior to
such Change in Control, in its sole discretion, may, as to any outstanding
Award to an Employee, either at the time the Award to the Employee is made
or at any time thereafter, take any one or more of the following actions:
(i) Provide for the acceleration of any time periods relating to the
exercise or realization of any such Award so that such Award may
be exercised or
20
realized in full on or before a date fixed by the Committee;
(ii) Provide for the purchase of any such Award by the Company for an
amount of cash equal to the amount which could have been
attained upon the exercise of such Award or in realization of
such Employee's rights had such Award been currently exercisable
or payable;
(iii) Make such adjustment to any such Award then outstanding as the
Committee deems appropriate to reflect such Change in Control
providing, however, that such change does not detriment the
value of any Award to the Employee;
(iv) Cause any such Award then outstanding to be assumed, or new
rights substituted therefore, by the acquiring or surviving
corporation in such Change in Control.
The Committee may, at its discretion, include such further provisions
and limitations in any Employee's Award Agreement, documenting such Awards,
as the Committee may deem equitable and in the best interests of the
Company.
21
ARTICLE 14. AMENDMENT, MODIFICATION, AND TERMINATION
14.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of
the Board, at any time and from time to time, the Committee may terminate,
amend, or modify the Plan. However, without the approval of the
stockholders of the Company (as may be required by the Code, by Section 16
of the Exchange Act and the Rules promulgated thereunder, by any national
securities exchange or system on which the Shares are then listed or
reported, or by a regulatory body having jurisdiction with respect hereto)
no such termination, amendment, or modification may:
(a) Increase the total amount of Shares which may be issued
under this Plan, except as provided in Section 4.3 herein;
or
(b) Change the class of Employees eligible to participate in the
Plan; or
(c) Materially increase the cost of the Plan or materially
increase the benefits to Participants; or
(d) Extend the maximum period after the date of grant during
which Options or SARs may be exercised; or
(e) Change the provisions of the Plan regarding Option Price.
14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall in any manner adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.
ARTICLE 15. WITHHOLDING
15.1 TAX WITHHOLDING. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect
to any grant, exercise, or payment made under or as a result of this Plan.
15.2 SHARE WITHHOLDING. With respect to withholding required upon
the exercise of NQSOs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event hereunder, Participants may elect, subject
to the approval of the Committee, to satisfy the withholding requirement,
in whole or in part, by having the Company withhold Shares having a Fair
Market Value, on the date the tax is to be determined, equal to the amount
required to be withheld. All elections shall be irrevocable, and be made
in writing, signed by
22
the Participant in advance of the day that the transaction becomes taxable.
Share withholding elections made by Insiders must comply with any
additional restrictions required by Section 16 of the Exchange Act and the
Rules promulgated thereunder.
ARTICLE 16. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against
and from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him or
her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or
she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such Persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
ARTICLE 17. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
ARTICLE 18. REQUIREMENTS OF LAW
18.1 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
18.2 GOVERNING LAW. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of Oregon.
23