1998 RESTATEMENT
PACIFICORP
EXECUTIVE SEVERANCE PLAN
DECEMBER 1, 1996
(AS AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 1998)
PACIFICORP
AN OREGON CORPORATION
700 NE MULTNOMAH
PORTLAND, OR 97232 COMPANY
PACIFICORP
EXECUTIVE SEVERANCE PLAN
DECEMBER 1, 1996
(AS AMENDED AND RESTATED DECEMBER 1, 1998)
PACIFICORP
AN OREGON CORPORATION
700 NE MULTNOMAH
PORTLAND, OR 97232 COMPANY
Effective December 1, 1996, the Company adopted the PacifiCorp
Executive Severance Plan (the Plan) as an executive severance program to
supersede and replace the prior PacifiCorp Executive Severance Plan that
terminated by its terms December 31, 1995. The Plan, as amended and restated
December 1, 1998, also supersedes and replaces any prior executive severance pay
policy or other policy, plan or practice under which severance benefits have
been provided to executives of the Company and adopting affiliates except
benefits provided pursuant to any individual separation agreement entered into
in writing prior to December 1, 1998 between any executive and the Company.
ARTICLE I
EFFECTIVE DATE; PLAN YEAR; ERISA
1.01 EFFECTIVE DATE
The effective date of the Plan is December 1, 1996. The 1998
Restatement is effective December 1, 1998.
1.02 PLAN YEAR
The plan year shall be a calendar year.
1.03 ERISA
The Plan is intended to be and shall be administered and maintained
primarily for the purpose of providing benefits for a select group of management
or highly compensated employees. Severance pay and benefits under the Plan
shall be paid as needed solely from the general assets of Employer, in
accordance with Department of Labor regulation Section 2520.104-24.
The Plan is intended to qualify for the alternative method of compliance in
Department of Labor Regulation Section 2520.104-23.
ARTICLE II
APPLICATION TO COMPANY AND AFFILIATES
2.01 EMPLOYERS
2.01-1 The Company maintains the Plan, and any affiliate approved
by the Company may adopt and maintain the Plan for its employees.
"Affiliate" means a corporation, person or other entity that is designated as
an affiliate by the Company.
2.01-2 "Employer" means the Company, with respect to its employees,
and any adopting affiliate, with respect to its employees. The Plan is a
single plan maintained by the Company and any adopting affiliate.
2.02 ADOPTION PROCEDURE
An affiliate may adopt the Plan by a written statement signed by the
affiliate, subject to approval and revocation by the Company. The statement
shall include the effective date of adoption and any special provisions that are
to be applicable only to employees of the affiliate.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 ELIGIBLE EMPLOYEES
Eligible employees are key employees of any Employer selected by the
Personnel Committee of the Company's Board of Directors (Committee) and
designated as Level 1 eligible employees or Level 2 eligible employees.
3.02 PARTICIPANT
An eligible employee must satisfy the requirements of 3.03 and 3.04 to
be entitled to severance benefits under the Plan and upon satisfying those
requirements shall be a participant in the Plan.
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3.03 REQUIREMENTS OF PARTICIPATION AND BENEFITS
3.03-1 Subject to meeting the additional conditions set forth in
3.04, an eligible employee will participate and be entitled to severance
benefits upon satisfaction of the following conditions:
(a) The eligible employee's employment terminates under
any of the following circumstances:
(i) When there is no Change in Control, the
eligible employee has resigned within 30 days after
a material alteration in the eligible employee's
position (as determined according to 3.03-2) that
has a detrimental impact on the eligible employee
(as determined according to 3.03-4).
(ii) Following a Change in Control, the eligible
employee has tendered resignation within two months
after a material alteration of position (as determined
according to 3.03-3).
(iii) There has been an Employer-initiated termination.
An Employer-initiated termination is any termination of
the eligible employee's employment by Employer (including
a request for resignation that is agreed to by the eligible
employee) for any reason other than cause under 3.04.
3.03-2 Where there is no Change in Control, a material alteration
in position occurs when there is either a material alteration in assignment
or compensation, as defined in this Section.
(a) A material alteration in assignment occurs when:
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(i) There is material reduction in the scope of
the eligible employee's duties and responsibilities; and
(ii) There is a material reduction in the eligible
employee's authority; and
(iii) The new assignment has not been designated by
the Chief Executive Officer of the Company as a position
with unique strategic importance for the Company; and
(iv) The assignment is not reasonably expected to
provide the eligible employee with a meaningful training
opportunity to enhance the eligible employee's opportunities
for future advancement.
(b) A material alteration in compensation occurs when:
(i) An eligible employee's annualized base salary
is reduced by any amount or the annualized base salary
and target bonus opportunity combined is reduced by at
least 15 percent of the employee's base salary and target
bonus opportunity before the change in compensation; and
(ii) the change in compensation is not the result of a
general reduction in executive compensation for reasons
unrelated to the particular employee's assignment.
3.03-3 During the 24-month period following a Change in Control of
the Company (as determined according to 3.03-6), a material alteration in
position occurs in any of the following events:
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(a) The eligible employee's reporting level in the
Company has been changed and is lower after the change than
it was before.
(b) There is a material reduction in the scope of the
eligible employee's duties and responsibilities.
(c) There is a material reduction in the eligible
employee's authority.
(d) There is a material alteration in compensation
(as defined in 3.03-2(b)).
(e) The eligible employee is relocated (or informed
of a relocation) within 24 months following a Change in
Control. (For purposes of this provision, relocation shall
mean reassignment to a position in an office located more
than 100 miles from the eligible employee's then-current
office or 60 miles from the eligible employee's residence).
3.03-4 Where there is no Change in Control, a material alteration
in position shall be deemed to have a detrimental impact on the eligible
employee:
(a) When the alteration is a material alteration in
compensation (as defined in 3.03-2); or
(b) An eligible employee is required to relocate by
the Company to a new geographic area and that employee has
been relocated by the Company within the past year. For
purposes of this provision, relocation shall mean reassignment
to a position in an office located more than 100 miles from
the eligible employee's then-current office or 60 miles from
the eligible employee's residence; however, this provision
shall not apply to any eligible employee in the first year of
employment with the Company.
3.03-5 Determinations concerning whether a material alteration in
position and a detrimental impact has occurred shall be subject to the
following:
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(a) Where there is no Change in Control, all questions
concerning whether a material alteration in position that has
a detrimental impact on the eligible employee has occurred shall
be determined by the Company exercising full discretion when
acting under 5.04-1 through 5.04-3 and, in the case of the review
of a denied claim, by the Committee exercising full discretion
when acting under 5.04-4 and 5.04-5.
(b) During the 24 months following a Change in Control, the
eligible employee exercising full discretion shall determine
whether a material alteration in position has occurred, subject
to 3.03-7.
3.03-6 A "Change in Control" shall mean the occurrence of any of
the following events:
(a) The consummation of:
(i) any consolidation, merger or plan of share
exchange involving the Company (a "Merger") as a result
of which the holders of outstanding securities of the
Company ordinarily having the right to vote for the election
of directors ("Voting Securities") immediately prior to the
Merger do not continue to hold at least 50 percent of the
combined voting power of the outstanding Voting Securities
of the surviving or continuing corporation immediately after
the Merger, disregarding any Voting Securities issued or
retained by such holders in respect of securities of any other
party to the Merger; or
(ii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all,
or substantially all, the assets of the Company.
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(b) At any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the
Board ("Incumbent Directors") shall cease for any reason to
constitute at least a majority thereof; provided, however, that
the term "Incumbent Director" shall also include each new director
elected during such two-year period whose nomination or election
was approved by two-thirds of the Incumbent Directors then in office.
(c) Any "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Act")) shall, as a result of a tender or exchange offer, open market
purchases or privately negotiated purchases from anyone other than
the Company, have become the beneficial owner (within the meaning
of Rule 13d-3 under the Act), directly or indirectly, of Voting
Securities representing 20 percent or more of the combined voting
power of the then outstanding Voting Securities.
3.03-7 If there is an alteration to the eligible employee's
position during the 24 months following a Change in Control, the employee may
tender resignation from employment if in the employee's judgment a material
alteration in position has occurred. The resignation shall be contingent
upon the Company's acknowledgment that it will not challenge the employee's
determination and the employee will participate and be entitled to severance
benefits upon resignation. The Company will have five business days to
inform the employee whether it intends to challenge the employee's
determination that a material alteration of position has occurred. If the
Company notifies the employee that it will challenge the employee's
determination that a material alteration of position has occurred, the
employee may treat that notice as denial of the employee's claim for benefits
and seek review of that decision under 5.04-4. Alternately, the employee may
refer the claim for benefits to arbitration. Both the employee and the
Company will be expected to reasonably cooperate in good faith in the
arbitration process to ensure timely resolution. The employee will continue
to be paid until the issue is resolved in arbitration.
3.03-8 An eligible employee who holds the office of Chief Executive
Officer, President, Chief Operating Officer or Chief Financial Officer
immediately before Change in Control shall have a "walk-away right". If such
eligible employee resigns effective on a date no less than 12 months and no
more than 14 months after a Change in Control, the employee
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shall be entitled to severance benefits provided in 4.01 whether or not the
eligible employee experiences a material alteration in position.
3.04 ADDITIONAL CONDITIONS FOR RECEIPT OF BENEFITS AND DISQUALIFICATION
FROM PARTICIPATION
3.04-1 An eligible employee must execute the following within the
time period specified by Employer in order to be entitled to severance
benefits:
(a) A waiver and release of claims against the Company
and affiliates in the form provided by Employer.
(b) Any agreement to repay severance benefits under
circumstances required by 4.06.
(c) An agreement to forego any severance rights or benefits
under any other severance plan maintained by or agreement with
Employer or any affiliate.
(d) Any other agreement required by Employer, including but
not limited to, confidentiality, noncompetition, nonsolicitation,
nondisparagement, assistance to Employer and assistance in defense
of litigation agreements. Except as provided in Exhibit A or B,
the Employer shall determine the terms of any agreement on a
discretionary basis with respect to each individual participant.
3.04-2 A disqualified participant shall not receive benefits under
the Plan. If the disqualification occurs after receipt of some or all
benefits, the participant shall repay such benefit(s) as set forth in 4.06-1.
The eligible employee or participant will be disqualified from participation
and ineligible for any severance benefits in the event of any of the
circumstances specified below.
(a) The eligible employee is terminated "for cause,"
as defined below:
(i) Where there is no Change in Control, a
termination for cause is any termination of employment
determined
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according to 3.04-3 to have been for cause.
(ii) During the 24-month period following a
Change in Control, a termination for cause is a
termination of employment for either of the following
reasons determined according to 3.04-3:
a. The eligible employee's gross
misconduct; or
b. The eligible employee's gross
negligence or conduct which indicates a
reckless disregard for the consequences and
has a material adverse effect on the Company
or its affiliates.
(b) The eligible employee fails to execute and deliver
to Employer within the Designated Acceptance Period any of
the agreements required under 3.04-1.
(c) The eligible employee revokes or breaches any of
the required agreements under 3.04-1.
3.04-3 All questions concerning whether a termination was for cause
under 3.04-2(a)(1) or for a reason stated in 3.04-2(b) or (c) shall be
determined by the Company exercising full discretion when acting under 5.04-1
through 5.04-3 and, in the case of the review of a denied claim, by the
Committee exercising full discretion when acting under 5.04-4 and 5.04-5. All
questions concerning whether a termination was for gross misconduct or gross
negligence shall be determined by the Company based upon the preponderance of
the evidence when acting under 5.04-1 through 5.04-2 and, in the case of the
review of a denied claim, by the Committee exercising full discretion when
acting under 5.04-4 and 5.04-5.
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ARTICLE IV
SEVERANCE BENEFITS
4.01 SEVERANCE BENEFITS
4.01-1 A participant entitled to severance benefits shall receive
severance pay and other benefits as provided in Exhibit A, provided however,
that if the participant's termination of employment is within 24 months
following a Change in Control (as defined in Section 3.03-6), the participant
entitled to severance benefits shall receive severance pay and other benefits
as provided in Exhibit B.
4.01-2 Group health continuation benefits and outplacement provided
under 4.01-1 shall be subject to 4.02 and 4.03.
4.02 GROUP HEALTH CONTINUATION BENEFITS
4.02-1 Participants who are awarded severance benefits under 4.01,
and their covered dependents, shall receive continued Employer-subsidized
coverage under one of the following group health plans:
(a) The group health plans in which they were enrolled
at the time of termination.
(b) If the plans in (a) are not available to active
employees, the similar group health plans provided to active
employees, as determined by Employer.
4.02-2 The coverage provided under 4.02-1 shall continue until the
earlier of (a), (b) or (c) below:
(a) Three months after coverage would otherwise end due
to the participant's termination of employment; provided,
however, if the termination of employment is within 24 months
following a Change in Control the duration of coverage shall
be the period of time set forth in Exhibit B.
(b) The date of eligibility for comparable group health
coverage obtained through other employment of the participant
after the participant's termination date with Employer.
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(c) The last day of the month for which the participant
fails to make any contribution toward the cost of such coverage
that is required by Employer of similarly situated active employees.
4.02-3 Employer shall continue its contributions for the
continuation coverage provided under 4.02-1. The amount of such contribution
with respect to each participant shall be Employer's cost to provide such
coverage to similarly situated active employees.
4.02-4 After termination of coverage under 4.02-1, participants and
covered dependents may elect to continue their group health coverage on a
self-pay basis as allowed by law. The group health plan continuation
benefits provided under 4.03-1 shall reduce a participant's, and any other
affected person's, maximum continuation period for any continuation coverage
required by law. For the purposes of 4.03, "group health plans" include the
Employer-sponsored medical, dental and vision plans but exclude any health
care spending account under any cafeteria plan maintained by Employer
pursuant to Section 125 of the Internal Revenue Code of 1986 and related
regulations.
4.03 OUTPLACEMENT BENEFITS
Employer shall provide a minimum of 12 months of executive level
outplacement benefits to participants entitled to severance benefits following
termination of employment in accordance with Employer's policy on outplacement
benefits as in effect from time to time.
4.04 TIME AND MANNER OF PAYMENT
4.04-1 Employer shall determine, in its sole discretion, the time
and manner of payment of any severance pay. The Employer may, in its sole
discretion, deliver the approximate value of severance benefits provided by
Exhibit A or B, as applicable, in a form acceptable to the participant other
than the form prescribed in the applicable schedule. Subject to the
exercise of such discretion to pay in installments (and assuming the
participant has not been disqualified), severance pay shall be paid in a lump
sum cash payment within a reasonable time after the date the participant may
no longer revoke a waiver and release of claims required under 3.04-3.
4.04-2 Employer shall withhold from any amounts paid under this
Plan any income tax or other amounts as allowed or required by law, including
any Excise Tax determined under 4.07.
4.04-3 Severance pay shall not be included as eligible compensation
under any retirement plan maintained by Employer or any affiliate.
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4.05 NOTICE OF ACCEPTANCE PERIOD
4.05-1 Employer shall give eligible employees written notice of the
time period within which they must meet any conditions required in order to
receive the benefits offered under this Plan (the Designated Acceptance
Period). If an eligible employee fails to meet the conditions within the
Designated Acceptance Period, the eligible employee shall not be entitled to
participation and severance benefits under this Plan.
4.05-2 All eligible employees over the age of 40 shall be notified
of the right to consult with an attorney before accepting benefits under this
Plan and before executing any required waiver and release of claims forms.
4.06 REPAYMENT OF SEVERANCE
4.06-1 Employer shall require a participant to repay severance
benefits if the participant is rehired by Employer or an affiliate or in the
event of a disqualification under 3.04.
4.06-2 If repayment is required under 4.06-1, the Company shall
determine the amount, timing and manner of repayment on a discretionary basis
with respect to each individual participant, subject to the following:
(a) If repayment is made in a lump sum, the lump sum
shall be repaid before the participant begins work with Employer
or an affiliate.
(b) If repayment is made in periodic installments, the
repayment shall be made in accordance with both of the following
requirements:
(i) The participant shall sign and execute a promissory
note furnished by Employer before the participant begins work with
Employer or an affiliate.
(ii) The terms of the promissory note shall be
commercially reasonable as determined by Employer.
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4.07 EXCISE TAX PAYMENT
4.07-1 If any of the payments provided for in 4.01, 4.02 or any
other payment or benefit received or to be received by a participant in
connection with a Change in Control of the Company or a termination of
employment (collectively, the "Severance Payments") will be subject to the
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any similar tax that may hereafter be imposed (the "Excise
Tax"), the Company shall pay to the participant an additional amount (the
"Gross-Up Payment"). The Gross-Up Payment shall compensate the participant
any Excise Tax related to Section 4999 and any federal, state and local taxes
paid by the participant due to the Gross-Up Payment. The amount of the
Gross-Up Payment shall be calculated by the Company such that the net amount
retained by the participant shall be the Severance Payments less any
applicable federal, state and local income taxes on the Severance Payments.
4.07-2 For purposes of determining the amount of the Gross-Up
Payment, the participant shall be deemed to pay federal income taxes at the
highest stated marginal rate of federal income taxation in the calendar year
in which the Gross-Up Payment is to be made and state and local income taxes
at the highest marginal rate of taxation in the state and locality of
residence on the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of termination
of employment, the participant shall repay to the Company at the time that
the amount of such reduction in Excise Tax is finally determined the portion
of the Gross-Up Payment directly and indirectly attributable to such
reduction plus interest on the amount of such repayment at the rate provided
for in Section 1274(d) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of
the termination of employment (including by reason of any Severance Payment
the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest payable to the taxing authorities
with respect to such excess) at the time that the amount of such excess is
finally determined.
ARTICLE V
ADMINISTRATION
5.01 ADMINISTRATOR
The Plan shall be administered by the Committee.
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5.02 COMMITTEE'S POWERS AND DUTIES
5.02-1 Except as expressly provided herein, the Committee shall
interpret the Plan, decide any questions about the rights of participants and
in general administer the Plan. Unless timely submitted to arbitration, any
decision by the Committee shall be final and bind all parties. The Committee
shall have discretion to carry out its responsibilities, except as provided
in 3.03-5(b), 3.03-7 and 3.04-3.
5.02-2 The Committee may delegate all or part of the administrative
duties except in connection with review under 5.04-4 and 5.04-5 to one or
more agents and may retain advisors for assistance. The Committee may
consult with and rely upon the advice of counsel who may be counsel for the
Company or any affiliate.
5.02-3 The Committee shall be the plan administrator under federal
laws and regulations applicable to plan administration and shall comply with
such laws and regulations. The Committee shall be the agent for service of
process on the Plan at the Company's address.
5.03 COMPANY AND EMPLOYER FUNCTIONS
5.03-1 All authority of the Company or an Employer shall be
exercised by the chief executive officer of the Company or the Employer, who
may delegate some or all of the authority to any officer or manager of the
Company or the Employer.
5.03-2 The power to amend or terminate this Plan may be exercised
only by the Company's chief executive officer, who may delegate some or all
of the authority to any officer of the Company.
5.03-3 The Board of Directors of the Company or any Employer shall
have no administrative authority or function with respect to the Plan. Being
a member of the Board shall not, in and of itself, make a person a plan
fiduciary.
5.04 CLAIMS AND REVIEW PROCEDURES
5.04-1 Any person claiming a benefit or requesting information, an
interpretation or a ruling under the Plan shall present the request in
writing to the person designated by the Company; provided, however, that
during the 24 months following a Change in Control an eligible employee may
initiate arbitration and seek a declaratory order as to whether a material
alteration in the employee's position has occurred. The employee is not
required to complete the claims and review procedure set forth in Section
5.04 prior to requesting such declaratory order.
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5.04-2 The decision on a claim shall be made by the Company and
shall normally be made within 90 days. If special circumstances require an
extension of time for processing the claim, the claimant shall be so notified
and the time limit shall be 180 days. If the claimant has not been notified
of a decision on a claim within the time limit, the claim shall be deemed
denied.
5.04-3 If the claim or request is denied, the written notice of
denial shall state:
(a) The reasons for denial, with specific reference to
the terms of the Plan on which denial is based.
(b) A description of any additional material or information
required for review of the claim and an explanation of why it is
necessary.
(c) An explanation of the Plan's claims review procedure.
5.04-4 Any person whose claim or request is denied, or who has not
received a response within 90 days, or within 180 days if special
circumstances require an extension of time, may request review by notice in
writing to the Committee. The original decision will be reviewed by the
Committee or the Committee's delegate, who may, but shall not be required to,
grant the claimant a hearing. On review, whether or not there is a hearing,
the claimant may have representation, examine pertinent documents and submit
issues and comments in writing.
5.04-5 The decision on review shall normally be made within 60
days. If an extension of time is required for a hearing or other special
circumstances, the claimant shall be so notified and the time limit shall be
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
binding on all parties concerned. If the participant does not receive a
decision within the time limit, the claim shall be considered wholly denied
on review.
5.04-6 Interpretations of the plan shall be determined based on the
following:
(a) Where there is no Change in Control, the Company, when
acting on a claim under 5.04-2 and 5.04-3, and the Committee,
when acting on a review of a
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claim under 5.04-4 and 5.04-5, shall have full and absolute
discretion to determine all questions concerning eligibility
and participation and whether or not the conditions for payment
of severance benefits have been made, including questions of
interpretation of the Plan.
(b) During the 24 months following a Change in Control,
(i) the Company and Committee shall apply the standard
of review set forth in 3.04-3 to all questions concerning
whether a termination was for gross misconduct or gross
negligence; and
(ii) the Company shall give deference to the eligible
employee's determination as to whether the employee has
experienced an alteration under 3.03-3.
5.04-7 Decisions by the Company on claims shall have no binding
effect on the Committee and no precedential value when the Committee is
acting on a review of a claim within 24 months of a Change in Control.
5.05 INDEMNITY AND BONDING
5.05-1 Subject to the indemnification provisions in the Articles
and Bylaws of the Company and any provisions and procedures in the corporate
resolutions of the Company, the Company shall indemnify and defend any Plan
fiduciary who is an officer, director or employee of the Company against any
claim or liability that arises from any action or inaction in connection with
the Plan, subject to the following rules:
(a) Coverage shall be limited to actions taken in good
faith that the fiduciary reasonably believed were not opposed
to the best interest of the Plan.
(b) Negligence by the fiduciary shall be covered to the
fullest extent permitted by law.
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(c) Coverage shall be reduced to the extent of any insurance
coverage.
5.05-2 Plan fiduciaries shall be bonded to the extent required by
applicable law.
5.06 EXPENSES
5.06-1 A Committee member who is employed full-time by an Employer
shall not be separately compensated for services as Administrator. The
Committee shall be reimbursed by the Company for all expenses incurred while
acting as Committee.
5.06-2 The Company may elect to pay any administrative fees or
expenses and may allocate the cost among the Employers. Otherwise, the
expenses and fees shall be paid from Company assets.
ARTICLE VI
GENERAL PROVISIONS
6.01 ENFORCEABILITY AND EXCLUSIVE BENEFIT
The Company and Employers intend the terms of this Plan, including
those relating to the coverage and benefits, to be legally enforceable. The
Company and Employers further intend that the Plan be maintained for the
exclusive benefit of eligible employees of Employers.
6.02 AMENDMENT
The Company may amend this Plan at any time only by written
instrument. No purported oral amendment shall have any effect.
6.03 TERMINATION
The Company may terminate this Plan at any time; provided, however,
that the Plan may not be altered, amended or terminated within the 24 months
following a Change in Control.
6.04 GOVERNING LAW
This Plan shall be construed according to the laws of Oregon, except
as preempted by federal law.
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6.05 NOT CONTRACT OF EMPLOYMENT
Nothing in this Plan shall give any employee the right to continue
employment. The Plan shall not prevent discharge of any employee at any time
for any reason.
6.06 ATTORNEYS' FEES
In any suit or action arising out of or in any way pertaining to this
Plan, the prevailing party may recover from the other party reasonable
attorneys' fees at trial and on any appeal.
6.07 UNFUNDED
All benefits payable under this Plan shall be unfunded and shall be
payable only from the general assets of Employer. The participants shall have
no interest in any assets of Employer and shall have no rights greater than the
rights of any unsecured general creditor of Employer.
6.08 NONASSIGNMENT
6.08-1 The rights of a participant under this Plan are personal;
provided however, following a Change in Control, an eligible employee
participant's spouse or estate (as determined by the Company) will receive
any unpaid severance pay to the extent that the circumstances set forth in
6.08-2 are met.
6.08-2 If an eligible employee or participant dies prior to
receiving payment of severance pay, the Company shall pay the employee's
spouse or estate any unpaid severance pay if (1) the employee or participant
had been notified of a Company-initiated termination or material alteration
in position that would have made the employee eligible for severance pay but
for the employee's death; and (2) such termination, notice of termination,
material alteration in position or notice of material alteration occurred
following a Change in Control and within 24 months of such Change in Control.
6.08-3 No interest of a participant under this Plan may be
assigned, transferred, seized by legal process or subjected to the claims of
creditors in any way. A participant's rights under this Plan are not subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge
or encumbrance.
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6.09 CONDITIONS
The waiver of a condition of benefits on any occasion shall not
constitute a waiver of any other condition on the same occasion or a waiver of
the same or any other condition on any other occasion.
6.10 OBLIGATIONS OF EMPLOYERS
The obligations of the Employers under this Plan are obligations to
their own employees alone and the Company assumes no obligations to employees of
any other Employer.
6.11 ARBITRATION
6.11-1 Any dispute arising out of or in any way pertaining to the
interpretation or administration of this Plan shall be submitted to binding
arbitration. Except as provided in 5.04-1, no claim may be submitted to
arbitration until exhaustion of the claims and review procedure under 5.04.
Claims must be submitted to arbitration within six months of the date the
claim accrues. Except as specifically provided herein, the arbitration shall
be governed under Federal Arbitration Act. The parties shall select a
mutually agreeable arbitrator. If the parties are unable to agree on the
selection of an arbitrator within thirty days, each party shall designate one
arbitrator from the list of Oregon and Washington arbitrators maintained by
the Judicial Arbitration and Mediation Services (J.A.M.S) office in Portland,
Oregon. The arbitrators so selected shall select a third arbitrator. The
arbitration shall be conducted in Portland, Oregon with no attorneys' fees or
costs to be awarded to either side; provided however, that in the event of a
dispute concerning whether an employee has experienced a material alteration
in position following a Change in Control, a prevailing employee shall be
entitled to an award of reasonable attorneys fees and costs (including
without limitation interest on any overdue payment).
6.11-2 Any claim involving a challenge to the exercise of
discretion shall be determined by the arbitrator based upon substantial
evidence on the record. Any claim involving
19
a decision by the Company or Committee that is to be based upon the
preponderance of the evidence (see 3.04-3) shall be determined by the
arbitrator based upon the preponderance of the evidence.
Effective Date: December 1, 1998
Adopted: December 1, 1998
COMPANY PACIFICORP
By /s/ Michael J. Pittman
------------------------------
Michael J. Pittman
Date: December 1, 1998
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EXHIBIT A
SEVERANCE PAY
1. Participants entitled to severance benefits shall receive
severance pay as follows:
Level 1: Two times annual cash compensation
Level 2: One times annual cash compensation
2. "Annual cash compensation" shall mean the sum of the following:
(a) The eligible employee's annualized base salary rate in
effect at the time of material alteration in the position or
termination, whichever is greater.
(b) The eligible employee's guideline incentive award in effect
at the time of material alteration in the position or termination,
whichever is greater, as determined by Employer in accordance with the
applicable incentive program.
(c) The eligible employee's annualized vehicle allowance in
effect at the time of material alteration in the position or
termination, whichever is greater.
3. A noncompetition agreement required by Employer as a condition
for severance benefits shall be for a period of two years for
participants entitled to Level 1 severance benefits and for a period
of one year for participants entitled to Level 2 severance benefits.
EXHIBIT B
CHANGE IN CONTROL SEVERANCE BENEFITS
1. Participants entitled to severance benefits in the 24 months
following a Change in Control as defined in 3.03-6 will be designated
by the Personnel Committee Board into one of the following three
categories for severance benefits.
- 3 times annual cash compensation
- 2.5 times annual cash compensation
- 2 times annual cash compensation
2. During the 24 months following the Change in Control, the Company
shall not change the designation of employees in effect at the time of
the Change in Control. The Personnel Committee may change the
designation of employees from 2 times annual cash compensation to 2.5
times annual cash compensation at any time in the 24 months following
a Change in Control (as defined in Section 3.03-6) but cannot reduce
the benefit during this 24 month period.
3. "Annual cash compensation" shall mean the sum of the following:
(a) The eligible employee's annualized base salary rate in
effect immediately prior to the material alteration in the position or
at the time of termination, whichever is greater.
(b) The eligible employee's guideline incentive award in effect
immediately prior to the material alteration in the position or at the
time of termination, whichever is greater.
(c) The eligible employee's annualized vehicle allowance in
effect immediately prior to the material alteration in the position or
at the time of termination, whichever is greater.
4. Subject to 4.02 of the Plan, participants entitled to severance
benefits in the 24 months following a Change in Control (as defined in
Section 3.03-6) shall receive Group Health Continuation Benefits as
follows:
YEARS OF SERVICE MONTHS OF CONTINUED BENEFITS
---------------- ----------------------------
0-5 6
6-10 12
11-15 18
16 or more 24
5. A noncompetition agreement required by Employer as a condition
for severance benefits following a Change in Control shall be for a
period of one year for all participants.
2