EXHIBIT (10)d
PACIFICORP
1995 PERFORMANCESHARE
INCENTIVE PLAN
FEBRUARY 1995
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PACIFICORP
1995 PERFORMANCESHARE
INCENTIVE PLAN
PURPOSE
The purpose of the PerformanceShare Incentive Plan is to provide a means for
sharing company financial success and rewarding employees for their
contributions to the operational effectiveness of their business units and the
company overall.
INCENTIVE OPPORTUNITY
The maximum award opportunity for participating employees is 4% of their
eligible earnings as defined below:
Bargaining Unit: Eligible Earnings (includes Overtime)
Salaried: Greater of Eligible Earnings or
Annualized Year-end Salary
This maximum award is the result of multiplying a guideline award of 2.67% of
eligible earnings by company and organization unit factors which indicate
exceptional achievement.
ELIGIBILITY
Eligible employees are all regular employees, full- and part-time, who have
been continuously employed for at least six months prior to December 31, 1995.
A participant must be actively employed at payout to receive an award.
Participants who have at least six months of service, but less than twelve,
will be eligible for pro rata awards. An employee who retires during the year
will be eligible for a pro rata payout based on eligible earnings at the time
of retirement.
TERM
The plan year is defined as January 1 through December 31, 1995.
PERFORMANCE TARGETS
Two primary performance targets influence incentive opportunity. These are
company performance and organizational unit performance, as follows:
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COMPANY PERFORMANCE FACTOR (CPF)
The Company Performance Factor is determined considering several
components including Earnings Available for Common (EAC), Safety, Company
Renewal, Total Shareholder Return, and Prices. A financial threshold of
$330M in earnings has been established as well as a maximum EAC of $365M.
Performance between the threshold and maximum will be calculated
utilizing the formula displayed in Exhibit 1. No awards will be paid if
the EAC threshold is not achieved. This EAC performance factor is
subject to being modified by the following:
SAFETY -
PacifiCorp's commitment to a safe work place for our employees and
the people in the communities in which we serve must be absolute.
Therefore, the Company's demonstration of this commitment to safety
will be assessed by the CEO and Personnel Committee at year-end.
Based upon this assessment the Committee will assign a factor in the
range of minus twenty percentage points to zero percentage points.
COMPANY RENEWAL -
PacifiCorp is committed to continuous renewal of the business
through reaching new customers and markets beyond our current
geographic constraints, developing new competencies, and introducing
new products and services. PacifiCorp's ability to demonstrate to
the Personnel Committee our success in these areas of Company
renewal will determine this factor. At year-end the Personnel
Committee will receive a report on the Company's renewal
accomplishments. The Personnel Committee will be asked to
subjectively determine PacifiCorp's success and assign a renewal
factor in the range of minus ten to plus ten percentage points.
TOTAL SHAREHOLDER RETURN -
PacifiCorp's Total Shareholder Return (TSR) (stock price movement
plus dividends) is compared with the performance of a peer group
(top 50 electric utilities as listed by Salomon Brothers.) If
PacifiCorp's total shareholder return for the year equals the
average performance of the peer group, then the factor will be zero
percentage points. The relative percentage of performance above or
below the peer group will be added to or subtracted from zero; not
to be greater than plus ten points or less than minus ten points.
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PRICES -
The Company's residential, commercial, and industrial tariff prices
will be compared with competing investor-owned and publicly-owned
utilities' tariff prices in the seven states in which PacifiCorp
serves. As of the fourth quarter of 1994 our prices were 94% of the
weighted average price in our seven state service territory. If our
prices continue to equal 94% of the average price in our service
territory then this factor will be five percentage points. If our
prices exceed 94% of the average price in our service territory,
then for each full percentage point by which we exceed that level,
one point will be reduced from five to no less than a factor of
minus ten points. If our prices are less than 94% of the average
price in our service territory, then each full percentage point by
which we are lower is added to five for a maximum price factor of
plus ten percentage points.
The modifier is calculated as follows:
Safety Factor + Company Renewal Factor +
Total Shareholder Return Factor + Prices Factor
This final modifier is added to or subtracted from the EAC performance factor
to produce the Company Performance Factor (CPF). Maximum CPF is 180%.
OPERATIONS PERFORMANCE FACTOR (OPF)
The Operations Performance Factor (OPF) is determined based upon performance
against pre-established goals set by each organizational unit and approved by
the CEO.
Individuals responsible for overseeing multiple organizations will have their
OPF calculated based upon the weighted average of subordinate OPFs. Maximum
OPF is 120%.
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AWARD FORMULA
The formula for all employees is the same:
Guideline Award x [(.50 x CPF) + (.50 x OPF)] = Individual Award
AWARD EXAMPLE:
Assumptions:
Employee eligible earnings = $40,000
Employee incentive guideline = 2.67%
Company Performance Factor (CPF)
EAC Performance = 1.00
+ Modifier (Safety, Renewal, TSR, Prices) = .20
______
Final CPF = 1.20
Organization Performance Factor (OPF) = 1.10
Award Calculation:
$40,000 x .0267 x [(.50 x 1.20) + (.50 x 1.10)] = Award
Guideline Award
$1,068 x 1.15 = $1,228
PAYOUT
Awards will be paid in cash. Awards will be paid as soon as is practicable
after 1995 financial statements close. Payout will be based on the
organizational unit to which an employee is assigned at year-end.
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AUDIT AND APPROVAL OF AWARD RECOMMENDATIONS
The financial calculations necessary to determine the company earnings and
corresponding EAC Performance Factor, as well as other steps in determining
the award for each individual, will be reviewed by the corporate auditing
staff before incentive payments are made. The Personnel Committee of the
Board of Directors will approve awards prior to payout.
If minor errors are identified after audit or approval have occurred which
result in nonmaterial adjustments to individual awards, the Vice President of
Human Resources will have the authority to approve adjusted awards according
to the procedures defined in the administrative guidelines.
ADMINISTRATIVE GUIDELINES
Administrative issues not specifically included in the plan document will be
included in the administrative guidelines to the plan. The CEO will approve
these guidelines and has authority to amend them.