PACIFICORP STOCK INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
-----------------------------------
(Grant by Personnel Committee)
GRANT DATE: February 10, 1998
BETWEEN: PACIFICORP,
an Oregon corporation the "Company"
AND: _______________________ the "Optionee"
To attract and retain the services of and to provide performance
incentives to selected employees, officers and directors and selected
nonemployee agents, consultants, advisors and independent contractors of the
Company and its subsidiaries, the Board of Directors of the Company (the
"Board") adopted and the shareholders of the Company approved the Company's
Stock Incentive Plan (the "Plan"). Pursuant to the Plan, the Board has
granted to the Optionee an option to purchase the number of shares of the
Company's Common Stock (the "Stock") indicated below.
1. GRANT. The Company grants to the Optionee upon the terms and
conditions set forth below the right and option (the "Option"), subject to
the vesting schedule set forth in paragraph 3, to purchase any part of an
aggregate of ________ shares of the Company's authorized but unissued Common
Stock at a purchase price of $24.00 per share, this price being the closing
price of the Company's Common Stock on the New York Stock Exchange on
February 9, 1998, and the fair market value of the Shares on February 10,
1998 (the "Grant Date"). It is the intent of the Board that this Option be a
nonstatutory Stock Option and that it not qualify as an Incentive Stock
Option pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. OPTION TERM. Subject to reduction in the Option term as provided
in subparagraphs 4, 6 and 7 below, the Option shall continue in effect until
ten years from the date hereof (the "Expiration Date").
3. RIGHT TO EXERCISE. The Option may be exercised from time to time in
the following amounts: (a) none before the first anniversary of the Grant Date;
(b) one-third of the total number of shares covered by the Option shall become
exercisable after the first anniversary of the Grant Date; (c) an additional
one-third of the total number of shares covered by the Option shall become
exercisable after the second anniversary of the Grant Date; and (d) the
remaining one-third of the total number of shares covered by the Option shall
become exercisable after the third anniversary of the Grant Date. The Option
shall not be exercised for any fractional shares. If the Optionee does not
exercise the Option in any one year with respect to the full number of shares to
which
the Optionee is entitled in that year, the Optionee's rights shall be
cumulative and the Optionee may purchase those shares in any subsequent year
during the term of the Option.
4. LIMITATIONS ON RIGHT TO EXERCISE. Except as provided in
subparagraphs 6 and 7 hereof, the Option shall not be exercised unless at the
time of such exercise the Optionee is in the employ of the Company or a
subsidiary of the Company and shall have been so employed continuously since
the date the Option was granted, and then only to the extent specified in
Section 9. Absence on leave or on account of illness under rules established
by the Board or by the Personnel Committee of the Board (the "Committee")
shall not be deemed an interruption of employment for purposes of the Option.
5. NONTRANSFERABILITY. The Option shall not be assignable or
transferable by the Optionee, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the Optionee's domicile at the time of death. The Option shall be
exercisable during the Optionee's lifetime only by the Optionee.
6. TERMINATION OF EMPLOYMENT. In the event the employment of the
Optionee by the Company or a parent or subsidiary of the Company shall terminate
for any reason other than because of death, disability within the meaning of
Section 22(e)(3) of the Code, or Retirement (as defined below), the Option may
be exercised by the Optionee at any time prior to the Expiration Date or the
expiration of 30 days after the date of such termination of employment,
whichever is the shorter period, but only to the extent that the Optionee was
entitled to exercise the Option on the date of termination; provided, however,
that if (i) the employment of the Optionee is terminated by the Company within
two years following a Change in Control (as defined below) or (ii) an Employer
Disposition (as defined below) occurs and either (a) the Optionee is not
employed by the Company or a parent or subsidiary of the Company within 120 days
after such Employer Disposition or (b) the Optionee is employed by the Company
or a parent or subsidiary of the Company within 120 days after such Employer
Disposition but leaves such employment on or before the 120th day, the vesting
of the Option shall be accelerated so that the Option is fully exercisable. If
the Optionee's employment is terminated because of physical disability within
the meaning of Section 22(e)(3) of the Code, the vesting of the Option shall be
accelerated so that the Option is fully exercisable and the Option may be
exercised by the Optionee at any time prior to the Expiration Date or the
expiration of 12 months after the date of such termination, whichever is the
shorter period. If the Optionee dies while in the employ of the Company or a
subsidiary of the Company, the vesting of the Option shall be accelerated so
that the Option is fully exercisable and the option may be exercised at any time
prior to the Expiration Date or the expiration of 12 months after the date of
the Optionee's death, whichever is the shorter period, but only by the persons
to whom such Optionee's rights under the Option pass by the Optionee's will or
by the laws of descent and distribution of the state or country of the
Optionee's domicile at the time of death. If the Optionee's employment is
terminated because of Retirement, the vesting of the Option shall be accelerated
so that the Option is fully exercisable and the Option may be exercised at any
time prior to the Expiration Date or the expiration of 36 months after the date
of such Retirement, whichever is the shorter period. For
purposes of this Agreement, "Retirement" shall mean voluntary retirement
after age 55 and completion of at least five "years of service" within the
meaning of the tax qualified defined benefit plan maintained by the Company;
provided, however, that "Retirement" shall not include any retirement or
termination of employment under the terms of the Company's 1998 Enhanced
Early Retirement and Workforce Reduction Programs. For purposes of this
Agreement "Employer Disposition" shall mean a disposition of all the equity
ownership of the subsidiary employing the Optionee that results in no part of
such equity ownership being held by the Company or any of its subsidiaries.
For purposes of this Agreement, "Change in Control" shall mean the occurrence
of any one of the following events:
(a) A tender or exchange offer, other than one made by the
Company, is made for Common Stock (or securities convertible into Common
Stock) and such offer results in a portion of those securities being
purchased and the offeror after the consummation of the offer is the
beneficial owner (as determined pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), directly or
indirectly, of at least 20 percent of the outstanding Common Stock of the
Company; or
(b) The Company receives a report on Schedule 13D under the
Exchange Act reporting the beneficial ownership by any person of 20 percent
or more of the Company's outstanding Common Stock; or
(c) During any period of 12 months or less, individuals who at the
beginning of such period constituted a majority of the Board of Directors
cease for any reason to constitute a majority thereof unless the nomination
or election of such new directors was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.
7. PURCHASE OF SHARES. Shares may be purchased pursuant to the Option
only upon receipt by the Company of written notice from the Optionee of the
Optionee's desire to purchase, specifying the number of shares the Optionee
desires to purchase and the date on which the Optionee desires to complete
the purchase, which shall not be more than 30 days after receipt of the
notice. On or before the date specified for completion of the purchase of
the shares, the Optionee shall pay the Company the full purchase price of the
shares in cash or, with the consent of the Committee, in whole or in part in
Common Stock of the Company valued at fair market value, restricted stock,
performance units or other contingent awards denominated in either stock or
cash, promissory notes or other consideration. No shares shall be issued
until full payment has been made, and the Optionee shall have none of the
rights of a shareholder until shares are issued. Upon notification of the
amount due and prior to or concurrently with delivery of the certificate
representing the shares, the Optionee shall pay to the Company any amounts
necessary to satisfy applicable federal, state, and local withholding tax
requirements. If the Optionee fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
Optionee, including salary, subject to applicable law.
8. STOCK SPLITS; COMBINATIONS; MERGERS, REORGANIZATIONS, ETC. Except
as provided in the final sentence of this Section 8, if the outstanding
shares of Stock are
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, reclassification,
stock split-up, combination of shares, or dividend payable in shares, the
Board or the Committee shall make appropriate adjustment in the number and
kind of shares as to which the Option, or portion thereof then unexercised,
shall be exercisable, in order that the Optionee's proportionate interest
shall be maintained as before the occurrence of such event. Such adjustment
in the Option shall be made without change in the total price applicable to
the unexercised portion of the Option and with a corresponding adjustment in
the option price per share. The Company shall have no obligation to effect
any adjustment that would or might result in the issuance of fractional
shares, and any fractional shares resulting from any adjustment may be
disregarded or provided for in any manner determined by the Board or the
Committee. Any such adjustment made by the Board or the Committee shall be
conclusive. In the event of the dissolution or liquidation of the Company or
a merger or other reorganization in which the Company is not the surviving
corporation (each a "Transaction"), in lieu of adjusting the Option as
described above, the Board or the Committee may, in its sole discretion,
provide a 30-day period immediately prior to consummation of the Transaction
during which the Optionee shall have the right to exercise the Option to the
extent shares subject to the Option are or would be vested as of the date of
consummation of the Transaction. Upon the expiration of such 30-day period
all further rights to purchase shares pursuant to the Option shall
immediately terminate.
9. CONDITIONS. The obligations of the Company under this Agreement
shall be subject to the approval of such state or federal authorities or
agencies as may have jurisdiction in the matter, including without limitation
the public utility regulatory authorities having jurisdiction over issuances
of securities by the Company. The Company will use its best efforts to take
such steps as may be required by state or federal law or applicable
regulations, including rules and regulations of the public utility regulatory
authorities, the Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with the
issuance or sale of any shares acquired pursuant to this Agreement or the
listing of such shares on any such exchange. Notwithstanding the foregoing,
the Company shall not be obligated to issue or deliver shares under this
Agreement if, upon advice of its legal counsel, such issuance or delivery
would violate state or federal securities laws or state or federal laws
governing the issuance of securities by a public utility.
10. LEGENDS. Certificates representing the shares subject to this
Agreement shall bear such legends as the Company shall deem appropriate to
reflect any restrictions on transfer imposed by federal or applicable state
securities laws.
11. EMPLOYMENT. Nothing in the Plan or in this Agreement shall confer
upon the Optionee any right to be continued in the employment of the Company
or any subsidiary or interfere in any way with the right of the Company or
any subsidiary to terminate the Optionee's employment at any time for any
reason, with or without cause, or to decrease such employee's compensation or
benefits.
12. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of any successor of the Company, but except as provided
above, the Option granted shall not be assigned or otherwise disposed of by
the Optionee.
13. THE PLAN. In addition to the provisions hereof, this Agreement and
the option granted hereby are governed by, and subject to the terms and
conditions of the Plan. The Optionee acknowledges receipt of a copy of the
Plan. The Optionee represents that the Optionee is familiar with the terms
and conditions of the Plan, and hereby accepts the Option subject to all of
the terms and conditions thereof, which terms and conditions shall control to
the extent inconsistent in any respect with the provisions of this Agreement.
14. BOARD DETERMINATIONS. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Board,
the Committee, or other administrator of the Plan, as to any questions
arising under the Plan or this Agreement. This Agreement, as supplemented by
the Plan, shall bind and inure to the benefit of the Company and its
successors and assigns, and the Optionee and the Optionee's estate in the
event of death.
15. INDEPENDENT TAX ADVICE. The Optionee agrees that the Optionee has
or will obtain the advice of independent tax counsel regarding the federal
and state income tax consequences of the receipt and exercise of the Option
granted hereby and of the disposition of the Stock acquired upon exercise
hereof. The Optionee acknowledges that the Optionee has not relied and will
not rely upon any advice or representations by the Company or by its
employees or representatives with respect to the tax treatment of the Option
granted hereunder.
16. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Oregon.
PACIFICORP
By_____________________________________
Its_____________________________________
________________________________________
[signature]
Address:
SSN: