EXHIBIT (10)m
COMPENSATION AGREEMENT
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This Compensation Agreement ("Agreement") is made effective as of
February 9, 1994 between PacifiCorp, an Oregon corporation (the "Company") and
Keith R. McKennon (the "Director").
The Director has been elected Chairman of the Board of Directors of
the Company. The Company wishes to provide compensation to the Director that
will induce him to perform in such a way as to enhance the investment return to
the Company's shareholders. Part of the inducement will be achieved by causing
the Director to hold a substantial investment in the Company's common stock (the
"Common Stock"). Therefore, the Company and the Director agree as follows:
1. ANNUAL COMPENSATION OF DIRECTOR. The Director's total annual
compensation for service on the Company's Board of Directors for the 12 months
beginning February 9, 1994 shall be $150,000. The total annual compensation for
subsequent years shall be as determined by the Board of Directors. Of the total
annual compensation, $10,000 shall be provided through the Director's
participation in the PacifiCorp Non-Employee Directors' Stock Compensation Plan.
The balance of the total annual compensation shall be provided through a grant
of restricted stock under Section 2.
2. GRANT OF COMMON STOCK.
2.1 The Company hereby grants to the Director $140,000 in Common
Stock (the "First Year Grant") as of February 9, 1994, subject to the following
vesting restriction. One-twelfth of the First Year Grant shall become vested on
the 9th day of each calendar month starting with March 9, 1994 if the Director
continues in service as Chairman of the Company's Board of Directors until such
day. If the Director's service as Chairman of the Company's Board of Directors
terminates for any reason before February 9, 1995, the Director shall forfeit
any unvested portion of the granted Common Stock.
2.2 If the Director continues as Chairman of the Company's Board of
Directors on February 9 of any year after 1994 (the "Grant Date"), the Company
shall grant to the Director Common Stock equal in value on the Grant Date to the
Director's total annual compensation for the 12 months beginning on the Grant
Date, minus $10,000, subject to the following vesting restriction. One-twelfth
of the Common Stock granted on the Grant Date shall become vested on the 9th day
of
each calendar month starting with the March 9 following the Grant Date if the
Director continues in service as Chairman of the Company's Board of Directors
until such day. If the Director's service as Chairman of the Company's Board of
Directors terminates for any reason before the first anniversary of the Grant
Date, the Director shall forfeit any unvested portion of the granted Common
Stock.
3. PURCHASE OF COMMON STOCK AND PLACEMENT IN ESCROW.
3.1 When the Director is entitled to a grant of Common Stock under
Section 2, the Company shall pay to a securities broker or other third party
cash in the amount provided in 2.1 or 2.2 with instructions to purchase shares
of Common Stock on the market at the current market price in the Director's name
and deliver them to the escrow holder under 3.2. Payment for the First Year
Grant shall be made upon execution of this Agreement by the Company and the
Director.
3.2 For purposes of facilitating the enforcement of the provisions of
Section 2 of this Agreement, the granted shares shall be issued in the
Director's name and the certificate or certificate(s) representing such shares
shall be delivered, together with a stock power or stock powers executed by the
Director, in blank, to the Secretary of the Company, to hold said certificate(s)
and stock power(s) in escrow and to take all such actions as are in accordance
with the terms of this Agreement. The Director hereby acknowledges that the
Secretary of the Company is so appointed as the escrow holder with the foregoing
authorities as a material inducement to make this Agreement and that said
appointment is coupled with an interest and is irrevocable.
3.3 The Director agrees that the escrow holder under 3.2 shall not be
liable to any party to this Agreement (or to any other party) for any actions or
omissions unless the escrow holder is grossly negligent with respect thereto.
Upon release of granted shares from the restrictions provided by Section 2, the
escrow holder shall deliver to the Director or, in the event of the Director's
death, to the Director's successor a certificate or certificates representing
the granted shares.
4. RIGHTS AS SHAREHOLDER. Subject to the provisions of this Agreement,
the Director shall be entitled to all of the rights of a shareholder with
respect to the granted shares, including the right to vote such shares and to
receive ordinary dividends payable with respect to such shares from the date of
the grant.
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5. TRANSFER RESTRICTIONS. None of the granted shares may be sold,
assigned, pledged or otherwise transferred, voluntarily or involuntarily, by the
Director prior to the date such shares become vested under the provisions of
Section 2.
6. MERGERS, CONSOLIDATIONS OR CHANGES IN CAPITAL STRUCTURE. If, after
the date of this Agreement, the outstanding Common Stock of the Company is
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of shares or
dividend payable in shares, or in the event of any consolidation, merger or plan
of exchange involving the Company pursuant to which Common Stock is converted
into cash, any Common Stock, other securities or other consideration issued or
distributed with respect to the granted shares in any such transaction shall be
subject to the restrictions and conditions set forth herein.
7. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed under the laws
of the state of Oregon, exclusive of choice of law rules. If any provision or
provisions of this Agreement are found to be unenforceable, the remaining
provisions shall nevertheless be enforceable and shall be construed as if the
unenforceable provisions were deleted.
(b) This is the entire agreement between the parties with respect to
the subject matter hereof and this Agreement supersedes all prior oral or
written agreements between the Company and the Director relating to the subject
matter hereof.
(c) This Agreement may be amended or modified only by written consent
of the Company and the Director.
Company: PACIFICORP, an Oregon corporation
By: JOHN C. HAMPTON
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Its: Chairman of the Personnel
Committee
Director: KEITH R. MCKENNON
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Keith R. McKennon
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