CONFORMED COPY
PACIFICORP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 RESTATEMENT
January 1, 1996
(As Amended through Amendment No. 6)
PacifiCorp
an Oregon corporation
700 NE Multnomah
Portland, Oregon 97232 Company
[LETTERHEAD]
TABLE OF CONTENTS
PAGE
INDEX OF TERMS iii
1. PURPOSE; EMPLOYERS; ADMINISTRATION 1
1.1 Purpose 1
1.2 Affiliates; Employers 1
1.3 Administration 2
2. PARTICIPATION; SERVICE; FORFEITURE 2
2.1 Eligibility; Participants 2
2.2 Service 3
2.3 Vesting 3
2.4 Misconduct Forfeiture 3
2.5 Change in Control; Employer Disposition 3
2.6 Removal from Active Participation 4
3. PARTICIPANTS' RETIREMENT BENEFITS 5
3.1 Entitlement; Retirement Dates 5
3.2 Normal Retirement Benefit 5
3.3 Actuarial Equivalents 8
3.4 Early Retirement Benefit 8
3.5 Termination Benefit 10
3.6 Time and Manner of Payment 10
3.7 Time of Payment After Employer Disposition 11
3.8 Basic Plan Make-Up 11
3.9 Benefits After Change in Control 11
4. PRERETIREMENT DEATH BENEFITS 13
4.1 Spouse's Benefit 13
4.2 Dependent Child's Benefit 13
5. DISABILITY 14
5.1 Service Continuation 14
5.2 Benefits 14
i
6. CLAIMS PROCEDURE 14
6.1 Original Claim 14
6.2 Denial 14
6.3 Request for Review 15
6.4 Final Decision 15
6.5 Arbitration 15
7. AMENDMENT; TERMINATION 15
7.1 Amendment 15
7.2 Termination 16
8. GENERAL PROVISIONS 16
8.1 Nonassignability 16
8.2 Funding 17
8.3 Trust 17
8.4 Notices 17
8.5 Attorneys' Fees 17
8.6 Indemnity 17
8.7 Applicable Law 18
8.8 Company Obligation 18
8.9 Payment for Individual's Benefit 18
8.10 Not Contract of Employment 18
9. EFFECTIVE DATE 18
ii
INDEX OF TERMS
SECTION PAGE
Accrued Benefit 3.6 10
Actuarial Equivalent 3.3 8
Basic Plan Preamble 1
Benefit Starting Date 3.7 11
Benefit Year 2.2 3
Board 1.3 2
Career Ratio 3.4(b) 9
Change in Control 2.5 3
Chief Executive Officer 2.1 2
Committee 1.3 2
Earliest Normal Retirement Date 3.5 10
Early Retirement Date 3.1(b) 5
Early Retirement Factor 3.4(c) 9
Final Average Pay 3.2(a) 5
Normal Retirement Benefit 3.2 5
Normal Retirement Date 3.1(a) 5
Other Plan Offset 3.2(d) 7
PacifiCorp Primary Insurance Amount 3.2(c) 7
Participant 2.1 2
Performance Benefit 3.2(b) 6
Projected Short Service Factor 3.4(a) 9
Short Service Factor 3.2(b) 6
Year of Participation 2.2 3
Years of Service 2.2 3
iii
PACIFICORP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 RESTATEMENT
JANUARY 1, 1996
(AS AMENDED THROUGH AMENDMENT NO. 6)
PACIFICORP
AN OREGON CORPORATION
700 NE MULTNOMAH
PORTLAND, OREGON 97232 COMPANY
The Company adopted this plan effective January 1, 1988 to providing
retirement benefits for its executive employees and those of Company Affiliates
that adopt the plan with the approval of the Company. The plan is the successor
to several nonqualified supplemental retirement plans maintained by the Company
and its Affiliates. The benefits provided by the plan are in addition to those
provided by the tax qualified defined benefit plans maintained by the Company
and its Affiliates (the Basic Plans).
In order to base eligibility for participation on annual salary rate,
replace a portion of the benefit formula with a Performance Benefit, provide for
earlier vesting and an earlier Early Retirement Date, and eliminate the increase
in benefits commencing after earliest normal retirement date, the Company adopts
this 1996 Restatement.
1. PURPOSE; EMPLOYERS; ADMINISTRATION
1.1 PURPOSE
The purpose of this plan is to provide eligible executive officers of
the Company and its Affiliates with additional retirement benefits that will
help to attract and retain individuals of very high quality.
1.2 AFFILIATES; EMPLOYERS
The plan shall apply to the Company and to Affiliates that adopt the
plan for their employees with the approval of the Company. Affiliate means a
member, with the Company, of a controlled group or group of trades or businesses
under common control under sections
414(b) or (c) of the Internal Revenue Code. The term "Employer" refers to the
Company and such an adopting Affiliate. Adoption of the plan by an Affiliate
shall be by a statement in writing that is signed by the Affiliate and by the
Company. The statement shall include the effective date of adoption and any
special provisions that are to be applicable to employees of the adopting
Affiliate.
1.3 ADMINISTRATION
This plan shall be administered by the Personnel Committee (the
Committee) of the Company's Board of Directors (the Board). The Committee shall
interpret the plan and make determinations about benefits. Any decision by the
Committee within its authority shall be final and binding on all parties. The
Committee shall consider recommendations from the President of the Company where
provided for in this plan and otherwise in its discretion. The Committee may
delegate any part of its powers and responsibilities to others.
2. PARTICIPATION; SERVICE; FORFEITURE
2.1 ELIGIBILITY; PARTICIPANTS
An individual described in any of the categories in (a) through (f)
shall be eligible to accrue benefits under the plan commencing with the first
of any month as of which the officer's annual base salary rate exceeds
$125,000. If an executive officer receives a lump sum payment in lieu of an
increase in annual base salary rate, the executive officer shall be treated
as having received such increase during the 12-month period to which the lump
sum payment applies for purposes of determining eligibility for the plan. As
of July 1 of each year, commencing with July 1, 1996, the $125,000 shall be
increased by the percentage increase in salary provided by the Company's
nonunion employee merit pool applicable to salary adjustments taking effect
in such year. An individual who has benefits accrued under this plan prior to
the 1996 Restatement and does not satisfy the eligibility requirement of this
2.1 shall participate in the plan for the limited purpose of receiving prior
accrued benefits. An executive officer or other individual who has an
accrued benefit under the plan shall be referred to as a participant.
(a) An executive officer of PacifiCorp.
(b) An officer of Pacific Telecom, Inc.
(c) An officer of PacifiCorp Financial Services, Inc.
(d) The President of Pacific Generation Company.
2
(e) The President and the Chief Operating Officer of
PacifiCorp Power Marketing, Inc.
(f) Any other executive employee of an Employer who is
recommended for participation by the President of the Company and
approved by the Board of the Company.
2.2 SERVICE
A participant's Years of Service and Benefit Years for purposes of
this plan shall be determined under the rules for such service under the Basic
Plan(s) covering the participant, except as follows. Any limitation of the
Basic Plan(s) on the length of service counted for periods in which no services
are performed shall be disregarded. A participant shall be credited with a Year
of Participation under this plan for each calendar year during which the
participant satisfied the eligibility requirement of 2.1 and was not removed
from active participation under 2.6. A partial Year of Participation shall be
credited based on the number of completed calendar months.
2.3 VESTING
A participant's right to receive benefits under this plan shall be
vested at all times.
2.4 MISCONDUCT FORFEITURE
Unless a Change in Control has occurred, the Committee may forfeit the
benefit for any participant, or the participant's spouse, beneficiary or
contingent annuitant, if:
(a) The participant is discharged for any act that is
materially inimical to the best interests of the Company and that
constitutes, on the part of the participant, common law fraud,
felony, or other gross malfeasance of duty; or
(b) After retirement, the participant performs services for
an organization where there is a major conflict of interest that
is materially adverse to the Company as a whole or any of its
principal subsidiaries.
2.5 CHANGE IN CONTROL
"Change in Control" shall mean the occurrence of any of the following
events:
(a) The consummation of:
3
(1) 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
(2) 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.
(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.
2.6 REMOVAL FROM ACTIVE PARTICIPATION
An individual who previously has qualified for participation under 2.1
shall be removed from active participation as of the first day of any month at
which the individual ceases to so qualify. Upon removal the participant shall
have an Accrued Benefit determined under 3.5 on the basis of the participant's
Final Average Pay, Projected Short Service Factor, Performance Benefit, and
Career Ratio, calculated as of the effective date of removal, and on the
participant's PacifiCorp Primary Insurance Amount and Other Plan Offset
calculated as of the date of benefit commencement. If the participant qualifies
for a retirement benefit under 3.1, the Accrued Benefit shall be paid as either
a normal retirement benefit or an early retirement
4
benefit depending on whether the participant terminates employment before
normal retirement date. If an early retirement benefit is paid, the Early
Retirement Factor shall be based on the months by which commencement of the
benefit precedes age 60.
3. PARTICIPANTS' RETIREMENT BENEFITS
3.1 ENTITLEMENT; RETIREMENT DATES
A participant shall be entitled to retirement benefits under this plan
on becoming eligible for benefits under a Basic Plan because of termination of
employment after vesting under 2.3 or one of the following retirement dates:
(a) Normal retirement - age 65.
(b) Early retirement - 5 Years of Participation plus
either of the following:
(1) Age 55; or
(2) Age 50 and 15 Years of Service.
3.2 NORMAL RETIREMENT BENEFIT
A participant's normal retirement benefit under this plan shall be a
single life annuity for the life of the participant equal to 50 percent of Final
Average Pay (FAP) plus the Performance Benefit (PB) times the Short Service
Factor (SSF) minus the PacifiCorp Primary Insurance Amount (PPIA) and the Other
Plan Offset (OPO) as follows:
Benefit = [([50% x FAP] + PB) x SSF] - PPIA - OPO
The terms used in this formula are defined as follows:
(a) Final Average Pay (FAP) means the amount
determined for the participant under the Basic Plan, with
the following adjustments:
(1) The limit on annual compensation counted
for any participant to $200,000 per year through
1993 and to $150,000 per year thereafter (both
subject to cost of living adjustments) shall not
apply.
5
(2) No reduction shall be made for deferrals
elected by the participant under a nonqualified
deferred compensation plan maintained by the
Company or an Affiliate.
(3) No benefit payments under a nonqualified
deferred compensation plan shall be counted.
(4) No part of long-term incentive, stock
bonus or stock option compensation shall be
counted.
(5) All cash bonuses that are not part of a
long-term incentive plan or arrangement shall be
counted, without the 10 percent limit of the Basic
Plan, except as follows. Cash bonuses paid as an
incentive in connection with an acquisition,
disposition, or merger of an entity, business, or
piece of property shall not be counted, except to
the extent designated in writing by the Company.
(6) A bonus earned in one calendar year and
paid in the following calendar year, including any
bonus paid in the year following employment
termination, shall be divided evenly among the
participant's completed calendar months of
employment with Employer during the year the bonus
was earned and counted as compensation in those
months.
(b) Performance Benefit (PB) means an additional 1
percent of Final Average Pay (FAP) for each calendar year of
participation, commencing with 1996, for which the Company
meets a performance goal set by the Committee for that year
and announced to participants. If the participant is
employed by Employer for less than a full year, including a
partial initial or final year of employment, the 1 percent
amount shall be prorated based on the portion of the year
worked. The total amount of Performance Benefit payable to
a participant shall not exceed 15 percent of the
participant's Final Average Pay, minus the number of
percentage points, if any, provided to the participant by
9.2(c).
6
(c) Short Service Factor (SSF) means a percentage, not
to exceed 100 percent, determined by dividing the
participant's Benefit Years by 15.
(d) PacifiCorp Primary Insurance Amount (PPIA) means
the portion earned while working at PacifiCorp of the
participant's primary insurance amount on retirement at or
after age 65 under the federal Social Security Act
determined as follows:
(1) The amount shall be estimated from the
regular pay rate under rules established by the
Committee assuming a standard pay progression over
a full working career.
(2) The amount shall not be changed by
amendments to the Act or cost of living index
adjustments after the participant's actual
termination date or attainment of Social Security
retirement age, whichever is first.
(3) If a participant retires early, the
Primary Social Security Benefit shall be the
amount that would be received at age 65 assuming
no further earnings and no change in the Act.
(4) The portion earned at PacifiCorp shall
be determined by multiplying the participant's
full primary insurance amount by a ratio of the
participant's Years of Service divided by 35.
(e) Other Plan Offset (OPO) means the sum of the
straight life actuarial equivalents of (1) through (4)
below, as interpreted under (5) below:
(1) Retirement benefits payable under the
Basic Plan, including any benefits assumed from
the Utah Power & Light Company Deferred
Compensation Plan and excess benefits provided by
the Utah Power & Light Company Retirement and
Death Benefit Plan.
7
(2) Retirement benefits payable under a
defined benefit plan or individual retirement
benefit agreement, whether or not tax-qualified,
on account of service before employment with
Employer.
(3) Benefits paid or payable under a defined
contribution plan on account of service before
employment with Employer if the earlier employer
maintained no defined benefit plan covering the
participant during the period of such service and
the aggregate employer contributions to the
defined contribution plan were 3 percent or more
of the participant's compensation, as defined for
determining Final Average Pay under this plan,
with the earlier employer.
(4) Any amount added to an account of the
participant under a nonqualified deferred
compensation plan maintained by Employer to
compensate for reduction in the Basic Plan benefit
on account of compensation deferrals.
(5) For purposes of determining whether
employer contributions to a defined contribution
plan are 3 percent or more of compensation, and
for measuring the amount of offset, elective
contributions under a 401(k) plan and
contributions individually elected by a
self-employed person shall be disregarded.
3.3 ACTUARIAL EQUIVALENTS
Actuarial equivalents shall be determined on the basis of the
actuarial equivalency factors used by the Basic Plan.
3.4 EARLY RETIREMENT BENEFIT
A participant's early retirement benefit shall be a single life
annuity for the life of the participant equal to 50 percent of Final Average Pay
(FAP) plus the Performance Benefit (PB) times the Projected Short Service Factor
(PSSF) times the Career Ratio (CR) minus the PacifiCorp Primary Insurance Amount
(PPIA) times the Early Retirement Factor (ERF) minus the Other Plan Offset (OPO)
as follows:
8
Benefit = ([([(50% x FAP) + PB] x PSSF x CR) - PPIA] x ERF) - OPO
The terms Final Average Pay (FAP), Performance Benefit (PB), and PacifiCorp
Primary Insurance Amount (PPIA) are defined in 3.2. The term Other Plan Offset
(OPO) shall be as defined in 3.2, except the offset for a participant whose
Benefit Starting Date is earlier than age 55 shall not apply until the first of
the month after age 55. As a result, such a participant shall receive a larger
monthly benefit until attainment of age 55 and then a monthly benefit reduced by
the amount of the Other Plan Offset. At age 55 the participant's benefit under
this plan in the form of a single life annuity shall be offset by the amount of
the participant's Other Plan Offset stated in single life annuity form. The
remaining benefit shall be adjusted to the same form of benefit the participant
had commenced receiving on the previous early retirement based on the factors
for actuarial equivalency in effect at the time the adjustment is made and the
ages of the participant and any contingent annuitant at such time. The
participant shall not be permitted to change to a different form of benefit. If
a contingent annuitant dies after the early retirement and before the
participant attains age 55, the adjustment shall be based on the age the
contingent annuitant would have attained but for such death. If a participant
starting benefits before age 55 elects a contingent annuity and dies before age
55, the benefit of the contingent annuitant shall be reduced by the Other Plan
Offset when the participant would have attained age 55. The definitions of the
remaining terms are as follows:
(a) Projected Short Service Factor (PSSF) means the
Short Service Factor the participant would have had at age
60 if Benefit Years had continued to that date. If the
participant is over age 60 at the time the early retirement
benefit is determined, the Projected Short Service Factor
shall be the same as the Short Service Factor. As a result,
it shall be based on actual Benefit Years as of the date the
determination is made.
(b) Career Ratio (CR) means the participant's actual
Benefit Years, up to a maximum of 30, divided by the
participant's projected Benefit Years at age 60, up to a
maximum of 30, assuming continuous full-time service to that
date. If the participant is earning Benefit Years at or
after age 60, the Career Ratio shall be 1.0.
(c) Early Retirement Factor (ERF) means a percentage
equal to 100 percent minus .25 percent for each month by
which the commencement of benefits precedes the end of the
month in which the participant will attain age 60.
9
3.5 TERMINATION BENEFIT
A participant who terminates employment before early or normal
retirement date and after becoming vested shall receive the participant's
Accrued Benefit as provided below. The Accrued Benefit is a single life annuity
for the life of the participant equal to 50 percent of Final Average Pay (FAP)
plus the Performance Benefit (PB) times the Projected Short Service Factor
(PSSF) times the Career Ratio (CR) minus the PacifiCorp Primary Insurance Amount
(PPIA) times the Early Retirement Factor (ERF) minus the Other Plan Offset (OPO)
as follows:
Benefit = [([(50% x FAP) + PB] x PSSF x CR) - PPIA) x ERF] - OPO
The terms used in this formula are defined in 3.2 and 3.4.
3.6 TIME AND MANNER OF PAYMENT
Retirement benefits under 3.2 or 3.4 shall commence as of the first
day of the month beginning after a termination of employment that constitutes a
retirement under 3.1. Termination benefits under 3.5 shall commence as of the
first day of the month after the participant's early retirement date. A
participant who does not have 5 Years of Participation shall commence receiving
benefits on the first of the month after the later of the participant's
termination of employment or the participant's attainment of age 55. The date
of commencement shall be the participant's Benefit Starting Date. Payment shall
be made monthly in one of the forms listed below on the payment schedule
maintained for that form by the Basic Plan covering the participant. If the
participant is covered by more than one Basic Plan, the payment schedule for the
plan with the largest benefit shall apply. The amount paid in the forms
provided in (b), (c) or (d) shall be the actuarial equivalent, as determined
under 3.3, of the amount paid in the form provided in (a). The form shall be
irrevocably elected by the participant on a form provided by the Committee prior
to receipt of the first payment, subject to the following. An election by a
married participant of a form provided in (a) or (d) shall not be effective
unless the spouse consents in the manner provided under the Basic Plan for
elections not to receive a joint and survivor annuity.
(a) A single life annuity for the life of the
participant.
(b) A life annuity with payments continuing after the
participant's death at 50 percent to a contingent annuitant
for life.
(c) A life annuity with payments continuing after the
participant's death at 100 percent to a contingent annuitant
for life.
(d) A life annuity with payments continuing to a
designated beneficiary for the remainder of the first 120
months if the participant dies before then.
10
3.7 TIME OF PAYMENT AFTER EMPLOYER DISPOSITION
A participant who becomes vested upon an Employer Disposition shall
receive payment of the benefit under this plan upon becoming eligible for a
benefit at early or normal retirement date under the Basic Plan covering the
participant at the time of the Employer Disposition. The amount payable shall
be based on the participant's Final Average Pay, Performance Benefit, Short
Service Factor or Projected Short Service Factor, Career Ratio, PacifiCorp
Primary Insurance Amount, and Other Plan Offset determined at the time of the
Employer Disposition. The Early Retirement Factor shall be determined at the
time benefits commence.
3.8 BASIC PLAN MAKE-UP
If a participant in this plan has a reduced benefit under the Basic
Plan as a result of any of the causes described in (a), (b), or (c) below, and
such reduction is not otherwise made up by this plan, the amount of such
reduction shall be paid as an additional benefit under this plan. The
additional benefit provided by this 3.7 shall be paid at the same time and in
the same form as it would have been under the Basic Plan if there had been no
reduction. The causes for which a benefit reduction will be made up are as
follows:
(a) The participant's election to defer pay under a
nonqualified deferred compensation plan of Employer for a
year in which the participant is removed from participation
under 2.5.
(b) The limits on benefits imposed by Internal Revenue
Code Section 415.
(c) The limit on compensation imposed by Internal
Revenue Code Section 401(a)(17).
3.9 BENEFITS AFTER CHANGE IN CONTROL
(a) A participant whose employment with the Company
and its Affiliates is involuntarily terminated no more than
24 months after a Change in Control or who voluntarily
terminates such employment at least 12 months, and no more
than 14 months, after a Change in Control shall be provided
with benefit enhancements as follows:
(1) The participant shall be credited with three
Benefit Years, in addition to the participant's actual
Benefit Years, in calculating the participant's Short
Service Factor and the participant's Career Ratio. The
participant shall be credited with
11
three additional increments of 1 percent of Final Average
Pay in calculating the participant's Performance Benefit.
(2) The participant's Final Average Pay shall be the
amount determined under 3.2(a) or the amount determined
under the alternative definition in the following sentence,
whichever is greater. The alternative definition is the sum
of the participant's base salary received in the last 12
completed calendar months of employment with the Company and
its Affiliates, plus the greater of (i) the participant's
target annual bonus for the calendar year in which such
employment terminates or (ii) the average of the highest
three consecutive annual bonuses from the Company and its
Affiliates received in the last ten years of such
employment.
(b) A termination of employment shall be treated as
involuntary under (a) if the participant is discharged or if the
participant resigns after any of the following occurs following
the Change in Control:
(1) The participant's annualized base salary or target
bonus opportunity is decreased.
(2) The participant is reassigned to a position in an
office located more than 100 miles from the participant's
then-current office or 60 miles from the participant's
residence, whichever is greater.
(3) The participant's reporting level in the Company
is changed and is lower after the change than it was before;
there is a material reduction in the scope of the
participant/s duties or responsibilities; or there is a
material reduction in the participant's authority.
(c) If there is an alteration to the participant's position
during the 24 months following a Change in Control, the participant
may tender resignation from employment if in the participant's
judgment an event described in (b) above has occurred. The
resignation shall be contingent upon the Company's acknowledgment that
it will not challenge the participant's determination and the
participant will be entitled to the benefit enhancements described in
(a) upon resignation. The Company will have five business days to
give notice to the participant that it intends to challenge the
participant's determination that a material alteration of position has
occurred. If the Company gives the participant such notice, the
participant may treat that notice as denial of the participant's claim
for
12
benefits and seek review of such decision under 6.3. Alternatively,
the participant may refer the claim for benefits to arbitration
under 6.5. Both the participant and the Company will be expected
to reasonably cooperate in good faith in the arbitration process to
ensure timely resolution. The participant will continue to receive
salary and benefits from the Company at the rate in effect at the
time the resignation is tendered until the issue is resolved in
arbitration.
4. PRERETIREMENT DEATH BENEFITS
If a participant with a spouse or dependent children dies before the
Benefit Starting Date while employed with the Company or an Affiliate, whether
or not an adopting Employer, a death benefit shall be paid as provided below.
The death benefit shall be a percentage of the participant's Accrued Benefit as
of the date of death, based on an Early Retirement Factor of 100 percent.
4.1 SPOUSE'S BENEFIT
A surviving spouse shall be paid a benefit as follows:
(a) The amount shall be 50 percent of the
participant's Accrued Benefit.
(b) The form shall be a single life annuity for the
life of the spouse starting with the month following the
date of death.
4.2 DEPENDENT CHILD'S BENEFIT
If the participant is unmarried with one or more dependent children,
the benefit shall be paid to such children. A dependent child is one who is age
19 to 22 and enrolled in a full-time program of education at a secondary school
or at a college, university or other post-secondary school or who is age 18 or
younger. The dependent child's benefit shall be paid as follows:
(a) The amount payable to a sole dependent child shall
be 25 percent of the participant's Accrued Benefit.
(b) The amount payable to two or more dependent
children shall be 40 percent of the participant's Accrued
Benefit, divided equally among such children.
(c) The dependent child's benefit shall be paid
monthly starting with the month following the date of death
and ending with
13
the month the individual ceases to be a dependent child.
If one of two dependent children receiving a share of the
amount under (b) ceases to be a dependent child, the
remaining dependent child then shall receive the amount
under (a).
5. DISABILITY
5.1 SERVICE CONTINUATION
A disabled participant shall continue to accrue benefit service under
this plan so long as Benefit Hours are accrued for the participant under the
Basic Plan.
5.2 BENEFITS
A disabled participant continuing to accrue service shall be treated
like any other employee until disability ends or retirement or death occurs. In
the event of death or retirement after disability, retirement or spouse's death
benefits under this plan shall be determined in the same manner as for any
participant.
6. CLAIMS PROCEDURE
6.1 ORIGINAL CLAIM
Any person whose benefit under this plan is not promptly paid may
present a written claim for the benefit to the Committee. The Committee shall
respond to the claim in writing as soon as practicable. However, during the 24
months following a Change in Control a participant may initiate arbitration
under 6.5 and seek a declaratory order as to whether an event described in
3.9(b) has occurred. The participant is not required to complete the claims and
review procedure described in 6.1 through 6.4 prior to requesting such
declaratory order.
6.2 DENIAL
If the claim 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.
14
6.3 REQUEST FOR REVIEW
Any person whose claim is denied or who has not received a response
within 30 days may request review of the claim by the trustee for the plan
appointed under 8.3 by notice given in writing to the trustee. The claim or
request shall be reviewed by the trustee which may, but shall not be required
to, have the claimant and a representative of the Committee appear before it.
On review, the claimant may have representation, examine pertinent documents,
and submit issues and comments in writing.
6.4 FINAL DECISION
The trustee's decision on review shall normally be made within 60
days. If an extension is required for a hearing or other special circumstances
the claimant shall be so notified and the time limit shall be 120 days. The
trustee's 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.
6.5 ARBITRATION
A dispute between the Company and a participant as to whether an event
described in 3.9(b) has occurred may be submitted by the participant to binding
arbitration. 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 arbitrator shall
rule in favor of the participant if there is substantial evidence on the record
supporting the participant's position. The arbitration shall be conducted in
Portland, Oregon with no attorneys' fees or costs to be awarded to either side,
except as follows. A prevailing participant shall be entitled to an award of
reasonable attorneys fees and costs (including without limitation interest on
any overdue payment).
7. AMENDMENT; TERMINATION
7.1 AMENDMENT
The Company may amend this plan at any time so long as the rights
preserved on termination under 7.2 are not reduced. No amendment may accelerate
the time of payment of benefits to persons participating in the plan at the time
of the amendment.
15
7.2 TERMINATION
The Board of Directors of the Company may terminate the plan at any
time as follows:
(a) Termination shall be by notice to the Committee,
which shall notify participants of the termination. The
termination date shall not be earlier than the first day of
the month in which notice is given.
(b) After the effective date of termination no further
executive officers shall become participants and no further
benefits shall accrue for existing participants.
(c) The Accrued Benefit of each existing participant
shall be paid under the terms of the plan as in effect
before termination. The Accrued Benefit shall be calculated
as follows:
(1) Final Average Pay, Years of Service, and
Years of Participation shall be determined as
though the effective date of plan termination were
a termination of employment.
(2) The PacifiCorp Primary Insurance Amount
shall be estimated on the basis of the pay level
and the Social Security Act as in existence at the
time of plan termination.
(3) The Other Plan Offset shall be based on
the benefits accrued under the Basic Plan and
other qualified plans at the time of plan
termination.
8. GENERAL PROVISIONS
8.1 NONASSIGNABILITY
The rights of a participant under this plan are personal. No interest
of a participant or any beneficiary or representative of a participant may be
directly or indirectly transferred, encumbered, seized by legal process or in
any other way subjected to the claims of any creditor.
16
8.2 FUNDING
The rights of the participants and beneficiaries under this plan shall
be an unfunded, unsecured promise of the Company to make future payments.
8.3 TRUST
The Company shall establish a trust with a financial institution for
payment of benefits under the plan, which shall be a grantor trust for tax
purposes. The trust shall provide that any assets contributed to the Trustee
shall be used exclusively for payment of benefits under this plan except in the
event the Company becomes insolvent, in which case the trust fund shall be held
for payment of the Company's obligations to its general creditors.
8.4 NOTICES
A notice under this plan shall be in writing and shall be effective
when actually delivered or, if mailed, when deposited postpaid as first class
mail. Mail shall be directed to the Company at the address stated in this plan,
to the participant at the address shown on the Company's employment records, or
to such other address as a party shall specify by notice to the other parties or
as the Committee may determine to be appropriate. Notices to the Committee
shall be sent to the Company's address.
8.5 ATTORNEYS' FEES
If suit or action is instituted to enforce any rights under this plan,
the prevailing party may recover from the other party reasonable attorneys' fees
at trial and on any appeal.
8.6 INDEMNITY
The Company shall indemnify and defend any member of the Committee or
any officer, director or employee of an Employer from 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 interests of the plan;
(b) Negligence by the fiduciary shall be covered to
the fullest extent permitted by law; and
(c) Coverage shall be reduced to the extent of any
insurance coverage.
17
8.7 APPLICABLE LAW
This plan shall be construed according to the laws of Oregon except as
preempted by federal law.
8.8 COMPANY OBLIGATION
Benefits payable under this plan shall be an obligation of the
Company, which may charge the cost back to the Employer of the participant. If
an Employer merges, consolidates, or otherwise reorganizes or if its business or
assets are acquired by another entity and it remains an Affiliate of the
Company, this plan shall continue with respect to those eligible individuals who
continue as employees of the successor company. The transition of Employers
shall not be considered a termination of employment for purposes of this plan.
If an Employer ceases to be an Affiliate of the Company, a participant employed
by that Employer shall cease accruing Years of Service and changes in Final
Average Pay. The participant shall receive benefits under this plan on a later
termination of employment with Employer if the participant had reached a
retirement date or become vested before the affiliation ceased.
8.9 PAYMENT FOR INDIVIDUAL'S BENEFIT
Payment for a person entitled to benefits shall be made to one of the
following if the recipient is court-appointed or the payment is ordered by a
court:
(a) To a parent or spouse or a child of legal age;
(b) To a legal guardian; or
(c) To one furnishing maintenance, support, or
hospitalization.
8.10 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.
9. EFFECTIVE DATE
9.1 This Restatement shall be effective January 1, 1996.
9.2 The following transition rules shall apply at the effective date
provided in 9.1:
18
(a) The benefit payable to a participant who was
covered by the plan before January 1, 1996, or to the
surviving spouse or dependent children of such a
participant, shall be no less than the participant's Accrued
Benefit determined under 3.6 of the plan, as in effect on
December 31, 1995, on the basis of the participant's Final
Average Pay, Projected Short Service Factor, and Career
Ratio calculated as of December 31, 1995 and on a Primary
Social Security Benefit and Qualified Plan Offset equal to
the participant's PacifiCorp Primary Insurance Amount and
Other Plan Offset, respectively, calculated as of the date
of benefit commencement. If the participant had attained
age 55 on or before December 31, 1995, the participant shall
have an Earliest Retirement Date upon attaining age 62 and
completing 30 Years of Service. The portion of the normal
retirement benefit of such a participant equal to the
Accrued Benefit described above shall be increased by
one-third of one percent for each month by which the
participant's Earliest Retirement Date precedes the
participant's actual benefit commencement date. No increase
shall be made for a month beginning after the participant's
65th birthday.
(b) An individual becoming a participant in the plan
as a result of the new eligibility standards in 2.1 of this
Restatement shall be credited with Years of Participation
for years before 1996 during which the individual was an
executive officer of an Employer and had an annual base
salary rate of over $125,000.
(c) For an individual who was a participant over age
50 on January 1, 1996 the 50 percent amount in the benefit
formulas in 3.2, 3.4 and 3.6 shall be increased by one
percent for each year of age at nearest birthday above age
50 at January 1, 1996.
Adopted: November 8, 1995.
1996 RESTATEMENT EXECUTED AS FOLLOWS EFFECTIVE AS PROVIDED IN ARTICLE 9:
- ------------------------------------------------------------------------
PACIFICORP
By FREDERICK W. BUCKMAN
-------------------------------
President
Executed: February 23, 1996
19
AMENDMENT NO. 1 EXECUTED AS FOLLOWS EFFECTIVE AS IF INCLUDED IN THE 1996
RESTATEMENT:
- ------------------------------------------------------------------------
Company PACIFICORP
By FREDERICK W. BUCKMAN
----------------------------
President
Executed: July 9, 1996
AMENDMENT NO. 2 EXECUTED AS FOLLOWS EFFECTIVE MAY 21, 1997:
- ------------------------------------------------------------
Adopted: May 21, 1997
Company PACIFICORP
By FREDERICK W. BUCKMAN
-----------------------------
President
Executed: August 20, 1997
AMENDMENT NO. 3 EXECUTED AS FOLLOWS EFFECTIVE SEPTEMBER 1, 1997:
- ----------------------------------------------------------------
Adopted: August 13, 1997
Company PACIFICORP
By FREDERICK W. BUCKMAN
-------------------------
President
Executed: October 1, 1997
20
AMENDMENT NO. 4 EXECUTED AS FOLLOWS EFFECTIVE JANUARY 1, 1997 AS IF INCLUDED IN
THE 1996 RESTATEMENT:
- -------------------------------------------------------------------------------
Company PACIFICORP
By FREDERICK W. BUCKMAN
------------------------------
Executed: November 19, 1997
AMENDMENT NO. 5 EXECUTED AS FOLLOWS EFFECTIVE MAY 21, 1997 AND SEPTEMBER 1,
1997:
- ---------------------------------------------------------------------------
Adopted: February 11, 1998
Company PACIFICORP
By MICHAEL J. PITTMAN
------------------------
Executed: September 13, 1998
AMENDMENT NO. 6 EXECUTED AS FOLLOWS EFFECTIVE JANUARY 1, 1999:
- --------------------------------------------------------------
Adopted: November 18, 1998
Company PACIFICORP
By KEITH McKENNON
--------------------
Executed: November 20, 1998
21