PORTLAND GENERAL HOLDINGS, INC.
MANAGEMENT DEFERRED COMPENSATION PLAN
1997 RESTATEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I-PURPOSE ......................................... 1
1.1 Restatement ......................................... 1
1.2 Purpose ............................................. 1
1.3 Effective Date ...................................... 1
1.4 Plan Sponsor ........................................ 1
ARTICLE II-DEFINITIONS .................................... 1
2.1 Account ............................................. 1
2.2 Base Salary ......................................... 2
2.3 Beneficiary ......................................... 2
2.4 Board ............................................... 2
2.5 Bonuses ............................................. 2
2.6 Change in Control ................................... 2
2.7 Committee ........................................... 3
2.8 Company ............................................. 3
2.9 Compensation ........................................ 3
2.10 Deferral Election .................................. 3
2.11 Determination Date ................................. 3
2.12 Direct Subsidiary .................................. 3
2.13 Eligible Employee .................................. 4
2.14 Financial Emergency ................................ 4
2.15 Incentive Compensation ............................. 4
2.16 Indirect Subsidiary ................................ 4
2.17 Interest ........................................... 5
2.18 Paid Time Off ...................................... 5
2.19 Paid Time Off Cancellation ......................... 5
2.20 Participant ........................................ 5
2.21 Participating Employer ............................. 5
2.22 Pension Plan ....................................... 5
2.23 Plan ............................................... 5
2.24 Policies ........................................... 6
2.25 President .......................................... 6
2.26 Senior Administrative Officer ...................... 6
ARTICLE III-ELIGIBILITY AND DEFERRALS ..................... 6
3.1 Eligibility ......................................... 6
3.2 Deferral Elections .................................. 6
3.3 Limits on Elective Deferrals ........................ 7
3.4 Matching Contributions .............................. 7
3.5 Welfare Benefits .................................... 7
i
TABLE OF CONTENTS
PAGE
ARTICLE IV-DEFERRED COMPENSATION ACCOUNT .................. 7
4.1 Crediting to Account ................................ 7
4.2 Determination of Accounts ........................... 8
4.3 Vesting of Accounts ................................. 8
4.4 Statement of Accounts ............................... 8
ARTICLE V-PLAN BENEFITS ................................... 8
5.1 Benefits ............................................ 8
5.2 Withdrawals for Financial Emergency ................. 9
5.3 Form of Benefit Payment ............................. 9
5.4 Accelerated Distribution ............................ 10
5.5 Withholding; Payroll Taxes .......................... 11
5.6 Commencement of Payments ............................ 11
5.7 Full Payment of Benefits ............................ 11
5.8 Payment to Guardian ................................. 11
ARTICLE VI-RESTORATION OF PENSION PLAN BENEFITS ........... 11
6.1 Pension Plan ........................................ 11
6.2 Restoration of Pension Plan Benefits ................ 11
6.3 Restoration of Pension Plan Benefits in Event of
Change in Control ................................... 12
ARTICLE VII-BENEFICIARY DESIGNATION ....................... 12
7.1 Beneficiary Designation ............................. 12
7.2 Amendments .......................................... 12
7.3 No Beneficiary Designation .......................... 13
7.4 Effect of Payment ................................... 13
ARTICLE VIII-ADMINISTRATION ............................... 13
8.1 Senior Administrative Officer; Duties ............... 13
8.2 Agents .............................................. 13
8.3 Binding Effect of Decisions ......................... 13
8.4 Indemnity of Senior Administrative Officer;
Committee ........................................... 13
8.5 Availability of Plan Documents ...................... 14
8.6 Cost of Plan Administration ......................... 14
ii
TABLE OF CONTENTS
PAGE
ARTICLE IX-CLAIMS PROCEDURE ............................... 14
9.1 Claim ............................................... 14
9.2 Denial of Claim ..................................... 14
9.3 Review of Claim ..................................... 14
9.4 Final Decision ...................................... 14
ARTICLE X-AMENDMENT AND TERMINATION OF PLAN ............... 15
10.1 Amendment .......................................... 15
10.2 Termination ........................................ 15
10.3 Payment at Termination ............................. 15
ARTICLE XI-MISCELLANEOUS .................................. 15
11.1 Unfunded Plan ...................................... 15
11.2 Liability .......................................... 16
11.3 Trust Fund ......................................... 16
11.4 Nonassignability ................................... 17
11.5 Not a Contract of Employment ....................... 17
11.6 Protective Provisions .............................. 17
11.7 Governing Law ...................................... 17
11.8 Terms .............................................. 17
11.9 Validity ........................................... 17
11.10 Notice ............................................ 18
11.11 Successors ........................................ 18
iii
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
A
Account: 2.1 ............................................. 1
B
Base Salary: 2.2 ......................................... 2
Beneficiary: 2.3 ......................................... 2
Board: 2.4 ............................................... 2
Bonuses: 2.5 ............................................. 2
C
Change in Control: 2.6 ................................... 2
Committee: 2.7 ........................................... 3
Company: 2.8 ............................................. 3
Compensation: 2.9 ........................................ 3
D
Deferral Election: 2.10 .................................. 3
Determination Date: 2.11 ................................. 3
Direct Subsidiary: 2.12 .................................. 3
E
Eligible Employee: 2.13 .................................. 4
ERISA: 3.5 ............................................... 7
Exchange Act: 2.6(a) ..................................... 2
F
Financial Emergency: 2.14 ................................ 4
I
Incentive Compensation: 2.15 ............................. 4
Indirect Subsidiary: 2.16 ................................ 4
Interest: 2.17 ........................................... 5
iv
INDEX OF TERMS
TERM AND PROVISION NUMBER PAGE
P
Paid Time Off: 2.18 ....................................... 5
Paid Time Off Cancellation: 2.19 .......................... 5
Participant: 2.20 ......................................... 5
Participating Employer: 2.21 .............................. 5
Pension Plan: 2.22 ........................................ 5
PGC: 2.6(a) ............................................... 2
Plan: 2.23 ................................................ 5
President: 2.25 ........................................... 6
Policies: 2.24 ............................................ 6
S
Senior Administrative Officer: 2.26 ....................... 6
v
PORTLAND GENERAL HOLDINGS, INC.
MANAGEMENT DEFERRED COMPENSATION PLAN
1997 RESTATEMENT
ARTICLE I-PURPOSE
1.1 Restatement
Portland General Corporation adopted a Management Deferred
Compensation Plan effective January 1, 1987 to cover qualified
management employees. Portland General Corporation also restated its
Directors' and Senior Officers' Deferred Compensation Plan on January
1, 1987. Pursuant to Article 8.1 of the Management Deferred
Compensation Plan and Article 9.1 of the Directors' and Senior
Officers' Deferred Compensation Plan, 1987 Restatement, the Company has
amended both plans in order to merge the plans for all employees of
Participating Employers. The existing plans were merged, renamed and
amended for all management employees of Participating Employers by the
December 1, 1988 Restatement. The Plan was further amended by the 1990,
1994 and 1996 Restatements.
1.2 Purpose
The purpose of this Management Deferred Compensation Plan is to
provide elective deferred compensation in excess of the limits on
elective deferrals under qualified cash or deferred arrangements. It is
intended that the Plan will aid in attracting and retaining personnel
of exceptional ability.
1.3 Effective Date
This 1997 Restatement shall be effective as of June 25, 1997.
1.4 Plan Sponsor
The Plan is adopted for the benefit of selected employees of
Portland General Holdings, Inc., an Oregon corporation, and selected
employees of any corporations or other entities affiliated with or
subsidiary to it, if such corporations or entities are selected by the
Board.
ARTICLE II-DEFINITIONS
2.1 Account
"Account" means the account maintained by a Participating Employer
in accordance with Article IV with respect to any deferral of
Compensation pursuant to this Plan.
PAGE 1 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.2 Base Salary
"Base Salary" means the Eligible Employee's actual base pay in the
pay period and, except as provided herein, excluding any bonuses and/or
overtime pay.
2.3 Beneficiary
"Beneficiary" means the person, persons or entity entitled under
Article VII to receive any Plan benefits payable after a Participant's
death.
2.4 Board
"Board" means the Board of Directors of Portland General Holdings,
Inc..
2.5 Bonuses
"Bonuses" means Our Teamworks Awards, Notable Achievement Awards,
and any other form of cash Incentive Compensation explicitly designated
as deferrable pursuant to this Plan by the Deferral Election form
approved by the Senior Administrative Officer.
2.6 Change in Control
"Change in Control" means an occurrence in which:
(a) Any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than Portland General Holdings, Inc. ("PGH"),
any trustee or other fiduciary holding securities under the employee
benefit plan of PGH, or any Employer owned, directly or indirectly,
by the stockholders of PGH in substantially the same proportions as
their ownership of stock of PGH), 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 PGH's then outstanding voting
securities; or
(b) During any period or two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board, and any
new director whose election by the Board or nomination for election
by PGC's stockholders was approval by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors as of the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof.
(c) Notwithstanding anything to the contrary in the foregoing, no
"Change in Control" shall be deemed to have occurred upon the
consummation of the Amended and Restated Agreement and Plan of
Merger by and among Enron Corp., Portland General Corporation and
Enron Oregon Corp., dated as of July 20, 1996, or amended and
restated from time to time.
PAGE 2 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.7 Committee
"Committee" means the Non-Qualified Benefits Committee of the Board.
2.8 Company
"Company" means Portland General Holdings, Inc., an Oregon
Corporation.
2.9 Compensation
"Compensation" means the total of the following, before reduction
for elective deferrals under this Plan or a Participating Employer's
tax qualified Retirement Savings Plan or any other flexible benefit
plan:
(a) Base Salary;
(b) Bonuses;
(c) Any interest on the above payments credited by a
Participating Employer for the benefit of an Eligible Employee prior
to the date of payment, without respect to any deferral of
Compensation made pursuant to this Plan, by a Participating
Employer.
Compensation, for purposes of this Plan, may include any new form of
cash remuneration paid by a Participating Employer to any Eligible
Employee which is explicitly designated as deferrable pursuant to this
Plan by the Deferral Election form approved by the Senior
Administrative Officer. Compensation for purposes of this Plan, does
not include expense reimbursements, imputed income, or any form of
noncash compensation or benefits.
2.10 Deferral Election
"Deferral Election" means the election completed by Participant in a
form approved by the Senior Administrative Officer which indicates
Participant's irrevocable election to defer Compensation as designated
in the Deferral Election, pursuant to Article III.
2.11 Determination Date
"Determination Date" means the last day of each calendar month.
2.12 Direct Subsidiary
"Direct Subsidiary" means any corporation of which a Participating
Employer owns at least eighty percent (80%) of the total combined
voting power of all classes of its stock entitled to vote.
PAGE 3 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.13 Eligible Employee
"Eligible Employee" means an employee of a Participating Employer who:
(a) Is exempt;
(b) Is not covered by a collective bargaining agreement; and
(c) If employed for the entire calendar year, receives or, based on
current levels of base pay is expected to receive, Compensation from one
(1) or more Participating Employers in the calendar year, in an amount
equal to or in excess of the threshold amount described in 2.13(e) below,
or
(d) If employed for a part of the calendar year, receives or, based on
an annualized level of base pay would have received, Compensation from one
(1) or more Participating Employers in the calendar year, in an amount
equal to or in excess of the threshold amount described in 2.13(e) below.
Notwithstanding the above, eligibility is at the discretion of the Senior
Administrative Officer.
(e) The threshold amount in calendar year 1996 and any subsequent year
shall be eighty-five thousand dollars ($85,000). Such amount may be
adjusted by the Senior Administrative Officer each subsequent calendar
year at the same time and in not less than the percentage ratio as the
cost of living adjustment in the dollar limit on defined benefits under
Section 415(d) of the Internal Revenue Code.
2.14 Financial Emergency
"Financial Emergency" means a financial need resulting from a
serious unforeseen personal or family emergency, such as an act of God,
an adverse business or financial transaction, divorce, serious illness
or accident, or death in the family.
2.15 Incentive Compensation
"Incentive Compensation" means payments made to a Participant in
recognition of meritorious work performance but shall not include,
without limitation, any payment received as moving expense, mortgage
expense or mortgage interest reimbursement.
2.16 Indirect Subsidiary
"Indirect Subsidiary" means any corporation of which a Participating
Employer directly and constructively owns at least eighty percent (80%)
of the total combined voting power of all classes of its stock entitled
to vote. In determining the amount of stock of a corporation that is
constructively owned by a Participating Employer, stock owned, directly
or constructively, by a corporation shall be considered as being owned
proportionately by its shareholders according to such shareholders'
share of voting power of all classes of its stock entitled to vote.
PAGE 4 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.17 Interest
"Interest" means the interest yield computed at the monthly
equivalent of an annual yield that is three (3) percentage points
higher than the annual yield on Moody's Average Corporate Bond Yield
Index for the three (3) calendar months preceding the immediately
prior month as published by Moody's Investors Service, Inc. (or any
successor thereto), or, if such index is no longer published, a
substantially similar index selected by the Board.
2.18 Paid Time Off
"Paid Time Off" means those vacation and holiday days for which the
Employer pays employees for time not worked.
2.19 Paid Time Off Cancellation
"Paid Time Off Cancellation" means cash payments made in lieu of
Paid Time Off earned by an Eligible Employee.
2.20 Participant
"Participant" means any Eligible Employee who has elected to make
deferrals under this Plan.
2.21 Participating Employer
"Participating Employer" means the Company or any affiliated or
subsidiary company designated by the Board as a Participating Employer
under the Plan, as long as such designation has become effective and
continues to be in effect. The designation as a Participating Employer
shall become effective only upon the acceptance of such designation and
the formal adoption of the Plan by a Participating Employer. A
Participating Employer may revoke its acceptance of designation as a
Participating Employer at any time, but until it makes such revocation,
all of the provisions of this Plan and any amendments thereto shall
apply to the Eligible Employees of the Participating Employer and their
Beneficiaries.
2.22 Pension Plan
"Pension Plan" means the Participating Employer's Pension Plan, as
may be amended from time to time, and any successor defined benefit
retirement income plan or plans maintained by the Participating
Employer which qualify under Section 401(a) of the Internal Revenue
Code.
2.23 Plan
"Plan" means the Portland General Holdings, Inc. Management Deferred
Compensation Plan, as may be amended from time to time.
PAGE 5 - MANAGEMENT DEFERRED COMPENSATION PLAN
2.24 Policies
"Policies" means any life insurance policies, annuity contracts or
the proceeds therefrom owned or which may be acquired by Participating
Employer.
2.25 President
"President" means the President of the Company.
2.26 Senior Administrative Officer
"Senior Administrative Officer" means the employee in the management
position designated by the Committee to administer the Plan.
ARTICLE III-ELIGIBILITY AND DEFERRALS
3.1 Eligibility
(a) General. An Eligible Employee who has completed one (1) year
of continuous employment with one (1) or more Participating
Employers shall be eligible to participate by making a Deferral
Election under Paragraph 3.2 below. The Senior Administrative
Officer shall notify Eligible Employees about the Plan and the
benefits provided under it. The requirement of one (1) year of
continuous employment may be waived by the Senior Administrative
Officer.
(b) Cessation of Eligibility. An Eligible Employee who ceases to
be an employee of a Participating Employer or to satisfy condition
2.13(a) or 2.13(b) of the definition of Eligible Employee shall
cease participating as to new deferrals immediately. An Eligible
Employee who ceases to satisfy condition 2.13(c) of the definition
of Eligible Employee may continue to participate in the Plan if such
individual has a current election to defer under the Plan at the
time the Employee ceases to satisfy condition 2.13(c).
3.2 Deferral Elections
(a) Time of Elections. An Eligible Employee may elect to
participate in the Plan with respect to any Compensation and/or Paid
Time Off Cancellation designated in a Deferral Election in a form
approved by the Senior Administrative Officer. The Deferral Election
must be filed with the Senior Administrative Officer no later than
December 15, or such shorter period as is designated in the Deferral
Election form.
(b) Mid-Year Eligibility. If an individual first becomes
eligible to participate during a calendar year and wishes to defer
Compensation and/or Paid Time Off Cancellation during the remainder
of the year, a Deferral Election may be filed no later than thirty
(30) days following notification of eligibility to participate to
the individual by the Senior Administrative Officer. Such Deferral
Election shall
PAGE 6 - MANAGEMENT DEFERRED COMPENSATION PLAN
be effective only with regard to Compensation and/or
Paid Time Off Cancellation earned after it is filed with the Senior
Administrative Officer.
(c) Irrevocability. A Deferral Election for the following
calendar year shall become irrevocable on the December 15 by which
it is due under Paragraph 3.2(a) and a Deferral Election for the
current calendar year shall become irrevocable upon filing with the
Senior Administrative Officer under Paragraph 3.2(b).
(d) Transfer to a Participating Employer. If a Participant
transfers employment from one (1) Participating Employer to another
Participating Employer, the Participant's Deferral Election shall
remain in effect for the remainder of the calendar year with respect
to Compensation earned by the individual after the transfer to the
new Participating Employer.
3.3 Limits on Elective Deferrals
A Participant may elect to defer up to eighty percent (80%) of Base
Salary and up to one hundred percent (100%) of Bonuses. The level of
deferral elected in either case must be in one percent (1%) increments.
A Participant may elect to defer up to one hundred twenty (120) hours
per year of Paid Time Off in one-tenth (1/10) hour increments, but may
not defer any Paid Time Off earned in prior calendar years, or the
first two hundred (200) hours of Paid Time Off earned in the calendar
year to which the Deferral Election relates.
3.4 Matching Contributions
The Participating Employer shall provide a matching contribution for
each Participant who is making deferrals of Base Salary under this
Plan. The matching contribution shall be six percent (6%) of the
Participant's annual elective Base Salary deferral under this Plan. For
purposes of this provision, Base Salary shall not include amounts
received as a Nuclear Regulatory Commission licensing bonus.
3.5 Welfare Benefits
Compensation deferred under this Plan shall constitute compensation
for purposes of any welfare plans, (as defined by the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")),
sponsored by the Participating Employer.
ARTICLE IV-DEFERRED COMPENSATION ACCOUNT
4.1 Crediting to Account
The amount of the elective deferrals and matching contributions for
a Participant under this Plan shall be credited to an Account for the
Participant on the books of the Participating Employer at the time the
Compensation would have been paid in cash. Any taxes or other amounts
due from the Participant with respect to the deferred Compensation
under federal, state or local law, such as a Participant's share of
FICA, shall be withheld from nondeferred Compensation payable to the
Participant at the time the deferred amounts are credited to the
Account.
PAGE 7 - MANAGEMENT DEFERRED COMPENSATION PLAN
4.2 Determination of Accounts
The last day of each calendar month shall be a Determination Date.
Each Participant's Account as of each Determination Date shall consist
of the balance of the Account as of the immediately preceding
Determination Date, plus the Participant's elective deferrals, matching
contributions, and Interest credited under this Plan, minus the amount
of any distributions made from this Plan since the immediately
preceding Determination Date. Interest credited shall be calculated as
of each Determination Date based upon the average daily balance of the
Account since the preceding Determination Date.
4.3 Vesting of Accounts
Account balances in this Plan shall be fully vested at all times.
4.4 Statement of Accounts
The Senior Administrative Officer shall submit to each Participant,
after the close of each calendar quarter and at such other times as
determined by the Senior Administrative Officer a statement setting
forth the balance of the Account maintained for the Participant.
ARTICLE V-PLAN BENEFITS
5.1 Benefits
(a) Entitlement to Benefits at Termination. Benefits under this
Plan shall be payable to a Participant on termination of employment
with all Participating Employers. The amount of the benefit shall be
the balance of the Participant's Account including Interest to the
date of payment, in the form elected under Paragraph 5.3 below.
Notwithstanding the above, if a Participant transfers employment
from a Participating Employer to an affiliate of the Company or
Portland General Electric Company, including subsidiaries and joint
venture partners, the status of which shall be determined at the
discretion of the Senior Administrative Officer, the Participating
Employer shall continue to maintain the Participant's Account
pursuant to Section IV. Benefits shall be payable to such
Participant under this paragraph or Paragraph 5.1(b) below when the
Participant is no longer employed by any affiliated company, as
determined at the discretion of the Senior Administrative Officer.
(b) Entitlement to Benefits at Death. Upon the death of a
Participant for whom an Account is held under this Plan, a death
benefit shall be payable to the Participant's Beneficiary in the
same form as the Participant elected for payments at termination of
employment, under Paragraph 5.3 below. The amount of the benefit
shall be the balance of the Participant's Account including Interest
to the date of payment.
PAGE 8 - MANAGEMENT DEFERRED COMPENSATION PLAN
5.2 Withdrawals for Financial Emergency
A Participant may withdraw part or all of the Participant's Account
for a Financial Emergency as follows:
(a) Determination. The existence of a Financial Emergency and
the amount to be withdrawn shall be determined by the Senior
Administrative Officer.
(b) Suspension. A Participant who makes a withdrawal for
Financial Emergency from any company-sponsored deferral plan,
whether qualified or nonqualified, shall be suspended from
participation in this Plan for twelve (12) months from the date of
such withdrawal. Compensation and/or Paid Time Off Cancellation
payable during such suspension that would have been deferred under
this Plan shall instead be paid to the Participant. No matching
contribution shall be credited to a Participant's Account under this
Plan during any period of suspension.
5.3 Form of Benefit Payment
(a) The Plan benefits attributable to the elective deferrals for
any calendar year shall be paid in one (1) of the forms set out
below, as elected by the Participant in the form of payment
designation filed with the Deferral Election for that year. The
forms of benefit payment are:
(i) A lump-sum payment;
(ii) Monthly installment payments in substantially equal
payments of principal and Interest over a period of up to one
hundred eighty (180) months. The amount of the installment
payment shall be redetermined on the first day of the month
coincidental with or next following the anniversary of the date
of termination each year, based upon the then current rate of
Interest, the remaining Account balance, and the remaining number
of payment periods; or
(iii) For Participants designated by the President to the
Senior Administrative Officer, monthly installment payments over
a period of up to one hundred eighty (180) months, consisting of
interest only payments for up to one hundred twenty (120) months
and principal and interest payments of the remaining Account
balance over the remaining period. The amount of the installment
payment shall be redetermined on the first day of the month
coincidental with or next following the anniversary of the date
of termination each year, based upon the then current rate of
Interest, the remaining Account balance, and the remaining number
of payment periods.
(iv) In the event the account balance is ten thousand dollars
($10,000) or less, that benefit will be paid out in a lump sum
notwithstanding the form of benefit payment elected by the
Participant.
(b) A Participant may elect to file a change of payment
designation which shall supersede all prior form of payment
designations with respect to the Participant's entire Account. The
Participant may redesignate a combination of
PAGE 9 - MANAGEMENT DEFERRED COMPENSATION PLAN
lump sum and monthly
installments if approved by the Senior Administrative Officer. If,
upon termination, the Participant's most recent change of payment
designation has not been in effect for twelve (12) full months prior
to such termination, then the prior election shall be used to
determine the form of payment. The Senior Administrative Officer
may, in his sole discretion, direct that plan benefits be paid
pursuant to the change of payment designation, notwithstanding the
twelve (12) month requirement.
(c) Participants designated by the President to the Senior
Administrative Officer may elect to file a change of payment
designation which shall supersede all prior form of payment
designations with respect to the Participant's entire Account. The
Participant may redesignate monthly installment payments over a
period of up to one hundred eighty (180) months, consisting of
interest only payments for up to one hundred twenty (120) months and
principal and interest payments of the remaining Account balance
over the remaining period. To be effective, such designation must be
approved by the President and the Senior Administrative Officer. If,
upon termination, the Participant's most recent change of payment
designation has not been in effect for twelve (12) full months prior
to such termination, then the prior election shall be used to
determine the form of payment. The Senior Administrative Officer
may, in his sole discretion, direct that Plan benefits be paid
pursuant to the change of payment designation, notwithstanding the
twelve (12) month requirement.
5.4 Accelerated Distribution
Notwithstanding any other provision of the Plan, a Participant shall
be entitled to receive, upon written request to the Senior
Administrative Officer, a lump-sum distribution of all or a portion of
the vested Account balance, subject to the following:
(a) Penalty.
(i) If the distribution is requested within thirty-six (36)
months following a Change in Control, six percent (6%) of the
account shall be forfeited and ninety-four percent (94%) of the
account paid to the Participant.
(ii) If the distribution is requested at any time other than
that in (i) above, ten percent (10%) of the account shall be
forfeited and ninety percent (90%) of the account paid to the
Participant.
(b) Suspension. A Participant who receives a distribution under
this section shall be suspended from participation in this Plan for
twelve (12) calendar months from the date of such distribution. All
eligibility requirements must be met to reenter the Plan. The
account balance shall be as of the Determination Date immediately
preceding the date on which the Senior Administrative Officer
receives the written request. The amount payable under this section
shall be paid in a lump sum within sixty-five (65) days following
the receipt of the Participant's written request by the Senior
Administrative Officer.
PAGE 10 - MANAGEMENT DEFERRED COMPENSATION PLAN
5.5 Withholding; Payroll Taxes
Each Participating Employer shall withhold from payments made
hereunder any taxes required to be withheld from a Participant's wages
for the federal or any state or local government. Withholding shall
also apply to payments to a Beneficiary unless an election against
withholding is made under Section 3405(a)(2) of the Internal Revenue
Code.
5.6 Commencement of Payments
Payment shall commence at the discretion of the Senior
Administrative Officer, but not later than sixty-five (65) days after
the end of the month in which a Participant retires, dies or otherwise
terminates employment. All payments shall be made as of the first day
of the month.
5.7 Full Payment of Benefits
Notwithstanding any other provision of this Plan, all benefits shall
be paid no later than one hundred eighty (180) months following the
date payment to a Participant commences.
5.8 Payment to Guardian
If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of
property, the Senior Administrative Officer may direct payment of such
Plan benefit to the guardian, legal representative or person having the
care and custody of such minor or incompetent person. The Senior
Administrative Officer may require proof of incompetency, minority,
incapacity or guardianship as he may deem appropriate prior to
distribution of the Plan benefit. Such distribution shall completely
discharge the Senior Administrative Officer, the Participating
Employer, and the Company from all liability with respect to such
benefit.
ARTICLE VI-RESTORATION OF PENSION PLAN BENEFITS
6.1 Pension Plan
If a Participating Employer maintains a tax qualified Pension Plan
for the benefit of eligible employees, and the Pension Plan provides
benefits determined under a formula that is based in part on the
employee's nondeferred compensation, a Participant in this Plan may
receive a smaller benefit under the Pension Plan as a result of
electing deferrals under this Plan.
6.2 Restoration of Pension Plan Benefits
In addition to the benefits payable under Paragraph 5.1 above,
Participating Employer shall pay to any Participant whose Pension Plan
benefit is not restored under any other employee or executive benefit
plan maintained by Participating Employer, a benefit payment equal to
the excess of (b) over (a) as follows:
PAGE 11 - MANAGEMENT DEFERRED COMPENSATION PLAN
(a) The actuarial equivalent lump sum present value of the
retirement income (or death benefit) payable (either immediately or
deferred) under the Pension Plan; and
(b) the actuarial equivalent lump sum present value of the
retirement income (or death benefit) that would have been payable
under the Pension Plan if Participant had made no Deferral Elections
in any calendar year under this Plan. The actuarial equivalent lump
sum present values shall be calculated in the same manner and using
the same factors as are used to calculate lump-sum distributions
under the Pension Plan. If Participant terminates employment prior
to attaining the age of fifty-five (55), payment of the restoration
of Pension Plan benefits shall be made as if Participant had made a
lump-sum election pursuant to Paragraph 5.3(a)(i) above with respect
to the payment of the restoration of Pension Plan benefits. If
Participant terminates employment upon or after attaining the age of
fifty-five (55), payment of the restoration of Pension Plan benefits
shall be made as if Participant had made an election to receive
monthly installment payments in substantially equal payments of
principal and Interest over a period of one hundred twenty (120)
months pursuant to Paragraph 5.3(a)(ii) above with respect to the
payment of the restoration of Pension Plan benefits. In the event
the actuarial equivalent lump sum present value is ten thousand
dollars ($10,000) or less, that benefit will be paid out in a lump
sum.
6.3 Restoration of Pension Plan Benefits in Event of Change in Control
In the event of a Change in Control, and a subsequent termination of
the Pension Plan within three (3) years following a Change in Control,
all Plan Participants shall receive a restoration of Pension Plan
benefits under Paragraph 6.2.
ARTICLE VII-BENEFICIARY DESIGNATION
7.1 Beneficiary Designation
Each Participant shall have the right, at any time, to designate one
(1) or more persons or entities as the Participant's Beneficiary,
primary as well as secondary, to whom benefits under this Plan shall be
paid in the event of the Participant's death prior to complete
distribution to the Participant of the benefits due under the Plan.
Each Beneficiary designation shall be in a written form prescribed by
the Senior Administrative Officer and will be effective only when filed
with the Senior Administrative Officer during the Participant's
lifetime.
7.2 Amendments
Any Beneficiary designation may be changed by a Participant without
the consent of any Beneficiary by the filing of a new Beneficiary
designation with the Senior Administrative Officer. If a Participant's
Compensation is community property, any Beneficiary designation shall
be valid or effective only as permitted under applicable law.
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7.3 No Beneficiary Designation
In the absence of an effective Beneficiary designation, or if all
Beneficiaries predecease a Participant, the Participant's estate shall
be the Beneficiary. If a Beneficiary dies after a Participant and
before payment of benefits under this Plan has been completed, the
remaining benefits shall be payable to the Beneficiary's estate.
7.4 Effect of Payment
Payment to the Beneficiary shall completely discharge the
Participating Employer's obligations under this Plan.
ARTICLE VIII-ADMINISTRATION
8.1 Senior Administrative Officer; Duties
This Plan shall be administered by a Senior Administrative Officer
appointed by the Committee. The Senior Administrative Officer may be a
Participant under this Plan. The Senior Administrative Officer shall
have the authority to make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Plan
and decide or resolve any and all questions including interpretations
of this Plan as may arise in connection with the Plan. The Senior
Administrative Officer shall report to the Committee on an annual basis
regarding Plan activity, and at such other times as may be requested by
the Committee.
8.2 Agents
In the administration of this Plan, the Senior Administrative
Officer may, from time to time, employ agents and delegate to such
agents, including employees of any Participating Employer, such
administrative duties as he sees fit, and may from time to time consult
with counsel, who may be counsel to any Participating Employer.
8.3 Binding Effect of Decisions
The decision or action of the Senior Administrative Officer in
respect of any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
8.4 Indemnity of Senior Administrative Officer; Committee
Each Participating Employer shall indemnify and hold harmless the
Senior Administrative Officer, the Committee, and its individual
members against any and all claims, loss, damage, expense or liability
arising from any action or failure to act with respect to this Plan,
except in the case of gross negligence or willful misconduct.
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8.5 Availability of Plan Documents
Each Participant shall receive a copy of this Plan, and the Senior
Administrative Officer shall make available for inspection by any
Participant a copy of the rules and regulations used in administering
the Plan.
8.6 Cost of Plan Administration
The Company shall bear all expenses of administration of this Plan.
However, a ratable portion of the expense shall be charged back to each
Participating Employer.
ARTICLE IX-CLAIMS PROCEDURE
9.1 Claim
Any person claiming a benefit, requesting an interpretation or
ruling under the Plan or requesting information under the Plan shall
present the request in writing to the Senior Administrative Officer or
his delegatee who shall respond in writing as soon as practicable.
9.2 Denial of Claim
If the claim or request is denied, the written notice of denial
shall state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claim review procedure.
9.3 Review of Claim
Any person whose claim or request is denied or who has not received
a response within thirty (30) days may request review by notice given
in writing to the Senior Administrative Officer. The claim or request
shall be reviewed by the Senior Administrative Officer, who may, but
shall not be required to, grant the claimant a hearing. On review, the
claimant may have representation, examine pertinent documents and
submit issues and comments in writing.
9.4 Final Decision
The decision by the Senior Administrative Officer on review shall
normally be made within sixty (60) days. If an extension of time is
required for a hearing or other special circumstances, the claimant
shall be notified and the time limit shall be one hundred twenty (120)
days. The decision shall be in writing and shall state the reasons and
the relevant Plan provisions. All decisions on review shall be final
and bind all parties concerned.
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ARTICLE X-AMENDMENT AND TERMINATION OF PLAN
10.1 Amendment
The Senior Administrative Officer may amend the Plan from time to
time as may be necessary for administrative purposes and legal
compliance of the Plan, provided, however, that no such amendment shall
affect the benefit rights of Participants or Beneficiaries in the Plan.
The Committee may amend the Plan at any time, provided, however, that
no amendment shall be effective to decrease or restrict the accrued
rights of Participants and Beneficiaries to the amounts in their
Accounts at the time of the amendment. Such amendments shall be subject
to the following:
(a) Preservation of Account Balance. No amendment shall reduce
the amount accrued in any Account to the date such notice of the
amendment is given.
(b) Changes in Interest Rate. No amendment shall reduce the
rate of Interest to be credited, after the date of the amendment,
on the amount already accrued in any Account or on the deferred
Compensation credited to any Account under Deferral Elections
already in effect on the date of the amendment.
10.2 Termination
The board of directors of each Participating Employer may at any
time, in its sole discretion, terminate or suspend the Plan in whole or
in part for that Participating Employer. However, no such termination
or suspension shall adversely affect the benefits of Participants which
have accrued prior to such action, the benefits of any Participant who
has previously retired, the benefits of any Beneficiary of a
Participant who has previously died, or already accrued Plan
liabilities between Participating Employers.
10.3 Payment at Termination
If the Plan is terminated, payment of each Account to a
Participant or a Beneficiary for whom it is held shall commence
pursuant to Paragraph 5.6, and shall be paid in the form designated by
the Participant.
ARTICLE XI-MISCELLANEOUS
11.1 Unfunded Plan
This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of
Sections 201, 301, and 401 of ERISA, and therefore to be exempt from
the provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly,
the Board may terminate the Plan and commence termination payout under
10.3 above for all or certain Participants, or remove certain employees
as Participants, if it is determined by the United States Department of
Labor or a court of competent jurisdiction that the Plan constitutes an
employee pension benefit plan within the meaning of Section 3(2) of
ERISA
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which is not so exempt. This Plan is not intended to create an
investment contract, but to provide retirement benefits to eligible
individuals who have elected to participate in the Plan. Eligible
individuals are select members of management who, by virtue of their
position with Participating Employer, are uniquely informed as to
Participating Employer's operations and have the ability to materially
affect Participating Employer's profitability and operations.
11.2 Liability
(a) Liability for Benefits. Except as otherwise provided in this
paragraph, liability for the payment of a Participant's benefit
pursuant to this Plan shall be borne solely by the Participating
Employer that employs the Participant and reports the Participant as
being on its payroll during the accrual or increase of the Plan
benefit, and no liability for the payment of any Plan benefit shall
be incurred by reason of Plan sponsorship or participation except
for the Plan benefits of a Participating Employer's own employees.
Provided, however, that each Participating Employer, by accepting
the Board's designation as a Participating Employer under the Plan
and formally adopting the Plan, agrees to assume secondary liability
for the payment of any benefit accrued or increased while a
Participant is employed and on the payroll of a Participating
Employer that is a Direct Subsidiary or Indirect Subsidiary of the
Participating Employer at the time such benefit is accrued or
increased. Such liability shall survive any revocation of
designation as a Participating Employer with respect to any
liabilities accrued at the time of such revocation. Nothing in this
paragraph shall be interpreted as prohibiting any Participating
Employer or any other person from expressly agreeing to the
assumption of liability for a Plan Participant's payment of any
benefits under the Plan.
(b) Unsecured General Creditor. Participants and their
Beneficiaries, heirs, successors, and assigns shall have no secured
legal or equitable rights, interest or claims in any property or
assets of a Participating Employer, nor shall they be beneficiaries
of, or have any rights, claims or interests in any Policies or the
proceeds therefrom owned or which may be acquired by a Participating
Employer. Except as provided in Section 11.3, such Policies or other
assets of a Participating Employer shall not be held under any trust
for the benefit of Participants, their Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for
the fulfilling of the obligations of a Participating Employer under
this Plan. Any and all of a Participating Employer's assets and
Policies shall be, and remain, the general, unpledged, unrestricted
assets of the Participating Employer. A Participating Employer's
obligation under the Plan shall be that of an unfunded and unsecured
promise to pay money in the future.
11.3 Trust Fund
At its discretion, each Participating Employer, jointly or
severally, may establish one (1) or more trusts, with such trustee as
the Board may approve, for the purpose of providing for the payment of
such benefits. Such trust or trusts may be irrevocable, but the assets
thereof shall be subject to the claims of the Participating Employer's
creditors. To the extent any benefits provided under the Plan are
actually paid from any such trust, the
PAGE 16 - MANAGEMENT DEFERRED COMPENSATION PLAN
Participating Employer shall
have no further obligation with respect thereto, but to the extent not
so paid, such benefits shall remain the obligation of, and shall be
paid by the Participating Employer.
11.4 Nonassignability
Neither a Participant nor any other person shall have any right to
sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and
all rights to which are, expressly declared to be nonassignable and
nontransferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant
or any other person, nor be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy or
insolvency.
11.5 Not a Contract of Employment
The terms and conditions of this Plan shall not be deemed to
constitute a contract of employment between a Participating Employer
and a Participant, and neither a Participant nor a Participant's
Beneficiary shall have any rights against a Participating Employer
except as may otherwise be specifically provided herein. Moreover,
nothing in this Plan shall be deemed to give a Participant the right to
be retained in the service of a Participating Employer or to interfere
with the right of a Participating Employer to discipline or discharge a
Participant at any time.
11.6 Protective Provisions
A Participant will cooperate with a Participating Employer by
furnishing any and all information requested by a Participating
Employer, in order to facilitate the payment of benefits hereunder, and
by taking such physical examination as a Participating Employer may
deem necessary and taking such other action as may be requested by a
Participating Employer.
11.7 Governing Law
The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Oregon, except as preempted by
federal law.
11.8 Terms
In this Plan document, unless the context clearly indicates the
contrary, the masculine gender will be deemed to include the female
gender, and the singular shall include the plural.
11.9 Validity
In case any provisions of this Plan shall be held illegal or invalid
for any reason, such illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be
PAGE 17 - MANAGEMENT DEFERRED COMPENSATION PLAN
construed and enforced
as if such illegal and invalid provision had never been inserted
herein.
11.10 Notice
Any notice or filing required or permitted to be given to the Senior
Administrative Officer under the Plan shall be sufficient if in writing
and hand delivered, or sent by registered or certified mail to the
Senior Administrative Officer or to Secretary of Participating
Employer. Notice to the Senior Administrative Officer, if mailed, shall
be addressed to the principal executive offices of Participating
Employer. Notice mailed to the Participant shall be at such address as
is given in the records of the Participating Employer. Notices shall be
deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for
registration or certification.
11.11 Successors
The provisions of this Plan shall bind and inure to the benefit of
each Participating Employer and its successors and assigns. The term
successors as used herein shall include any corporate or other business
entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets
of a Participating Employer, and successors of any such corporation or
other business entity.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its officers thereunto duly authorized this 5th day of
September, 1997.
PORTLAND GENERAL HOLDINGS, INC.
By: /s/ Don F. Kielblock
Its: Vice President
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