PACIFICORP STOCK INCENTIVE PLAN
PacifiCorp, an Oregon corporation (the "Company"), amends and restates
its 1996 Stock Retention Plan, as adopted effective August 14, 1996, to
provide in its entirety as set forth herein. The 1996 Stock Retention Plan,
as amended and restated (the "Plan"), shall be renamed the PacifiCorp Stock
Incentive Plan and shall govern awards made on or after the date the Plan is
approved by the Company's board of directors (the "Board of Directors"). The
amendment and restatement of the Plan will not affect the terms of any
outstanding awards.
1. PURPOSE. The purpose of this Plan is to enable the Company to
attract and retain the services of and provide performance incentives to (1)
selected employees, officers and directors of the Company or of any
subsidiary of the Company ("Employees") and (2) selected nonemployee agents,
consultants, advisors and independent contractors of the Company or any
subsidiary.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in paragraph 14, the shares to be offered under the Plan shall
consist of Common Stock of the Company, and the total number of shares of
Common Stock that may be issued under the Plan shall not exceed 14,500,000
shares, all of which may be issued pursuant to the exercise of options
granted pursuant to the Plan. The shares issued under the Plan may be
authorized and unissued shares or reacquired shares or shares acquired in the
market; provided, however, that the Company will not directly issue any
shares pursuant to the Plan or take any action pursuant to the Plan that
would require approval of the public utility regulatory authorities having
jurisdiction over issuances of securities by the Company until it has
received all such required approvals. Prior to receipt of such approvals,
any shares of Common Stock to be issued pursuant to the Plan will be acquired
in the market. Subject to the foregoing limitations, (a) if any award
granted under the Plan expires, terminates or is cancelled, the unissued
shares subject to such award shall again be available under the Plan and (b)
if shares sold or awarded under the Plan are forfeited to the Company or
repurchased by the Company, that number of shares shall again be available
under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
(a) EFFECTIVE DATE. The Plan (as amended and restated) shall
become effective on the date adopted by the Board of Directors. Awards may
be granted and shares may be awarded or sold under the Plan at any time after
the effective date and before termination of the Plan.
(b) DURATION. The Plan shall continue in effect for a period of ten
years from the date adopted by the Board of Directors, subject to earlier
termination by the Board of Directors. The Board of Directors may suspend or
terminate the Plan at any
time, except with respect to awards then outstanding under the Plan.
Termination shall not affect the terms of any outstanding awards.
4. ADMINISTRATION.
(a) BOARD OF DIRECTORS. The Plan shall be administered by the
Board of Directors of the Company, which shall determine and designate from
time to time the individuals to whom awards shall be made, the amount of the
awards and the other terms and conditions of the awards. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt
and amend rules and regulations relating to administration of the Plan,
advance the lapse of any waiting period, accelerate any exercise date, waive
or modify any restriction applicable to shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the
Board of Directors necessary or desirable for the administration of the Plan.
The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive.
The Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any related agreement in the
manner and to the extent it shall deem expedient to carry the Plan into
effect, and it shall be the sole and final judge of such expediency.
(b) COMMITTEE. The Board of Directors may delegate to a committee
of the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to a Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee except (i) as otherwise provided by the Board of Directors and (ii)
that only the Board of Directors may amend or terminate the Plan as provided
in paragraphs 3 and 15.
(c) OFFICER. The Board of Directors or the Committee, as
applicable, may delegate to an executive officer of the Company authority to
administer those aspects of the Plan that do not involve the designation of
individuals to receive awards or decisions concerning the timing, amounts or
other terms of awards. No officer to whom administrative authority has been
delegated pursuant to this provision may waive or modify any restriction
applicable to an award to such officer under the Plan.
5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from
time to time, take the following actions, separately or in combination, under
the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), as provided in
paragraph 6; (ii) grant options other than Incentive Stock Options
("Non-Statutory Stock Options") as provided in paragraph 6; (iii) award stock
as provided in paragraph 7; (iv) sell shares subject to restrictions as
provided in paragraph 8; (v) grant stock appreciation rights as provided in
paragraph 9; (vi) grant cash bonus rights as provided in paragraph 10; (vii)
grant dividend equivalent rights as provided in paragraph 11; (viii) grant
Performance-based Rights as provided in paragraph 12 and (ix) grant foreign
qualified awards as provided in paragraph 13. Any such awards may be made to
Employees, including Employees who are officers or
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directors, and to other individuals described in paragraph 1 whom the Board
of Directors believes have made or will make an important contribution to the
Company or any subsidiary of the Company; provided, however, that only
Employees shall be eligible to receive Incentive Stock Options under the
Plan. The Board of Directors shall select the individuals to whom awards
shall be made and shall specify the action taken with respect to each
individual to whom an award is made. Unless otherwise determined by the
Board of Directors with respect to an award, each option, stock appreciation
right, cash bonus right, dividend equivalent right or performance-based right
granted pursuant to the Plan by its terms shall be nonassignable and
nontransferable by the recipient, 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 recipient's domicile at the time of death. No fractional
shares shall be issued in connection with any award. In lieu of any
fractional shares, cash may be paid in an amount equal to the value of the
fraction or, if the Board of Directors shall determine, the number of shares
may be rounded downward to the next whole share. No Employee may be granted
options or stock appreciation rights under the Plan for more than an
aggregate of 3,000,000 shares of Common Stock in any consecutive three-year
period.
6. OPTION GRANTS. With respect to each option grant, the Board of
Directors shall determine the number of shares subject to the option, the
option price, the period of the option, the time or times at which the option
may be exercised and whether the option is an Incentive Stock Option or a
Non-Statutory Stock Option and any other terms of the grant, all of which
shall be set forth in an option agreement between the Company and the
optionee. In the case of Incentive Stock Options, all terms shall be
consistent with the requirements of the Code and applicable regulations.
Upon the exercise of an option, the number of shares reserved for issuance
under the Plan shall be reduced by the number of shares issued upon exercise
of the option less the number of shares surrendered or withheld in connection
with the exercise of the option and the number of shares surrendered or
withheld to satisfy withholding obligations in accordance with paragraph 18.
7. STOCK AWARDS. The Board of Directors may award shares under the
Plan as stock bonuses or otherwise. The aggregate number of shares that may
be awarded pursuant to this provision shall not exceed 1,500,000 shares.
Shares awarded pursuant to this paragraph shall be subject to the terms,
conditions, and restrictions determined by the Board of Directors. The Board
of Directors may require the recipient to sign an agreement as a condition of
the award, but may not require the recipient to pay any monetary
consideration other than amounts necessary to satisfy tax withholding
requirements. The agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares awarded shall bear any legends required
by the Board of Directors. Upon the issuance of a stock award, the number of
shares available for issuance under the Plan shall be reduced by the number
of shares issued less the number of any shares surrendered to satisfy
withholding obligations in accordance with paragraph 18.
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8. PURCHASED STOCK. The Board of Directors may issue shares under the
Plan for such consideration (including promissory notes and services) as
determined by the Board of Directors. Shares issued under the Plan shall be
subject to the terms, conditions and restrictions determined by the Board of
Directors. All Common Stock issued pursuant to this paragraph 8 shall be
subject to a purchase agreement, which shall be executed by the Company and
the prospective recipient of the shares prior to the delivery of certificates
representing such shares to the recipient. The purchase agreement may
contain any terms, conditions, restrictions, representations and warranties
required by the Board of Directors. The certificates representing the shares
shall bear any legends required by the Board of Directors. Upon the issuance
of purchased stock, the number of shares available for issuance under the
Plan shall be reduced by the number of shares issued less the number of any
shares surrendered to satisfy withholding obligations in accordance with
paragraph 18.
9. STOCK APPRECIATION RIGHTS.
(a) GRANT. Stock appreciation rights may be granted under the
Plan by the Board of Directors, subject to such rules, terms, and conditions
as the Board of Directors prescribes.
(b) EXERCISE. Each stock appreciation right shall entitle the
holder, upon exercise, to receive from the Company in exchange therefor an
amount equal in value to the excess of the fair market value on the date of
exercise of one share of Common Stock of the Company over its fair market
value on the date of grant (or, in the case of a stock appreciation right
granted in connection with an option, the excess of the fair market value of
one share of Common Stock of the Company over the option price per share
under the option to which the stock appreciation right relates), multiplied
by the number of shares covered by the stock appreciation right or the
option, or portion thereof, that is surrendered. Payment by the Company upon
exercise of a stock appreciation right may be made in Common Stock valued at
fair market value, in cash, or partly in Common Stock and partly in cash, all
as determined by the Board of Directors. The Board of Directors may withdraw
any stock appreciation right granted under the Plan at any time and may
impose any conditions upon the exercise of a stock appreciation right or
adopt rules and regulations from time to time affecting the rights of holders
of stock appreciation rights. Such rules and regulations may govern the
right to exercise stock appreciation rights granted prior to adoption or
amendment of such rules and regulations as well as stock appreciation rights
granted thereafter. Upon the exercise of a stock appreciation right for
shares, the number of shares available for issuance under the Plan shall be
reduced by the number of shares issued less the number of any shares
surrendered or withheld to satisfy withholding obligations in accordance with
paragraph 18. Cash payments of stock appreciation rights shall not reduce
the number of shares of Common Stock available for issuance under the Plan.
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10. CASH BONUS RIGHTS. The Board of Directors may grant cash bonus
rights under the Plan in connection with (i) options granted or previously
granted, (ii) stock appreciation rights granted or previously granted, (iii)
stock awarded or previously awarded and (iv) shares sold or previously sold
under the Plan. Cash bonus rights will be subject to rules, terms and
conditions as the Board of Directors may prescribe. The payment of a cash
bonus shall not reduce the number of shares of Common Stock available for
issuance under the Plan. A cash bonus right granted in connection with an
option will entitle an optionee to a cash bonus when the related option is
exercised (or terminates in connection with the exercise of a stock
appreciation right related to the option) in whole or in part if, in the sole
discretion of the Board of Directors, the bonus right will result in a tax
deduction that the Company has sufficient taxable income to use. A cash
bonus right granted in connection with a stock award pursuant to paragraph 7
or purchase of stock pursuant to paragraph 8 will entitle the recipient to a
cash bonus payable when the stock award is awarded or the shares are
purchased or restrictions, if any, to which the stock is subject lapse. If
the stock awarded or the shares purchased are subject to restrictions and are
repurchased by the Company or forfeited by the holder, the cash bonus right
granted in connection with the stock awarded or shares purchased shall
terminate and may not be exercised.
11. DIVIDEND EQUIVALENT RIGHTS. The Board of Directors may grant
dividend equivalent rights under the Plan in connection with (i) options
granted or previously granted, (ii) stock appreciation rights granted or
previously granted, (iii) stock awarded or previously awarded, (iv) shares
sold or previously sold under the Plan or (v) as a freestanding award. The
terms and conditions of a dividend equivalent right shall be specified by the
Board of Directors at the time of grant. Each dividend equivalent right
shall entitle the recipient to receive an amount based on cash dividends that
would be payable with respect to the number of shares specified in connection
with the grant of the dividend equivalent right (or other award to which it
relates) if such shares had been held by the recipient during the period
specified in connection with such grant. Payment with respect to a dividend
equivalent right shall be made, subject to the limitations set forth in
paragraph 2, at the discretion of the Board of Directors, in cash or in
shares or in any combination thereof. Upon the exercise of a dividend
equivalent right for shares, the number of shares available for issuance
under the Plan shall be reduced by the number of shares issued less the
number of any shares surrendered to satisfy withholding obligations in
accordance with paragraph 18. Cash payments of dividend equivalent rights
shall not reduce the number of shares of Common Stock available for issuance
under the Plan.
12. PERFORMANCE-BASED AWARDS. The Board of Directors may grant awards
intended to qualify as performance-based compensation under Section 162(m) of
the Code and the regulations thereunder ("Performance-based Awards").
Performance-based Awards shall be denominated at the time of grant either in
shares of Common Stock ("Stock Performance Awards") or in dollar amounts
("Dollar Performance Awards"). Payment under a Stock Performance Award or a
Dollar Performance Award shall be made, at the discretion of the Board of
Directors, subject to the limitations set forth in paragraph 2, in shares of
Common Stock ("Performance Shares"), or in cash or in any
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combination thereof. Performance-based Awards shall be subject to the
following terms and conditions:
(a) AWARD PERIOD. The Board of Directors shall determine the
period of time for which a Performance-based Award is made (the "Award
Period").
(b) PERFORMANCE GOALS AND PAYMENT. The Board of Directors shall
establish in writing objectives ("Performance Goals") that must be met by the
Company or any subsidiary, division or other unit of the Company ("Business
Unit") during the Award Period as a condition to payment being made under the
Performance-based Award. The Performance Goals for each award shall be one
or more targeted levels of performance with respect to one or more of the
following objective measures with respect to the Company or any Business
Unit: earnings, earnings per share, stock price increase, total shareholder
return (stock price increase plus dividends), return on equity, return on
assets, return on capital, economic value added, revenues, operating income,
cash flows or any of the foregoing (determined according to criteria
established by the Board of Directors). The Board of Directors shall also
establish the number of Performance Shares or the amount of cash payment to
be made under a Performance-based Award if the Performance Goals are met or
exceeded, including the fixing of a maximum payment (subject to paragraph
12(d)). The Board of Directors may establish other restrictions to payment
under a Performance-based Award, such as a continued employment requirement,
in addition to satisfaction of the Performance Goals. Some or all of the
Performance Shares may be issued at the time of the award as restricted
shares subject to forfeiture in whole or in part if Performance Goals or, if
applicable, other restrictions are not satisfied.
(c) COMPUTATION OF PAYMENT. During or after an Award Period, the
performance of the Company or Business Unit, as applicable, during the period
shall be measured against the Performance Goals. If the Performance Goals
are not met, no payment shall be made under a Performance-based Award. If
the Performance Goals are met or exceeded, the Board of Directors shall
certify that fact in writing and certify the number of Performance Shares
earned or the amount of cash payment to be made under the terms of the
Performance-based Award.
(d) MAXIMUM AWARDS. No participant may receive Stock Performance
Awards in any fiscal year under which the maximum number of shares issuable
under the award, when aggregated with the shares issuable under any awards
made in the immediately preceding two fiscal years, exceeds 500,000 shares or
Dollar Performance Awards in any fiscal year under which the maximum amount
of cash payable under the award, when aggregated with the amount of cash
payable under awards made in the immediately preceding two fiscal years,
exceeds an aggregate of $3,000,000.
(e) EFFECT ON SHARES AVAILABLE. The payment of a
Performance-based Award in cash shall not reduce the number of shares of
Common Stock available for issuance under the Plan. The number of shares of
Common Stock available for issuance under the Plan shall be reduced by the
number of shares issued upon payment of an
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award, less the number of shares surrendered or withheld to satisfy
withholding obligations.
13. FOREIGN QUALIFIED GRANTS. Awards under the Plan may be granted to
such Employees and such other persons described in paragraph 1 residing in
foreign jurisdictions as the Board of Directors may determine from time to
time. The Board of Directors may adopt such supplements to the Plan as may be
necessary to comply with the applicable laws of such foreign jurisdictions
and to afford participants favorable treatment under such laws; provided,
however, that no award shall be granted under any such supplement with terms
that are more beneficial to the participants than the terms permitted by the
Plan.
14. CHANGES IN CAPITAL STRUCTURE.
(a) STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common
Stock of the Company is hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of any stock split, combination of shares or dividend
payable in shares, recapitalization or reclassification, appropriate
adjustment shall be made by the Board of Directors in the number and kind of
shares available for grants under the Plan. In addition, the Board of
Directors shall make appropriate adjustment in the number and kind of shares
as to which outstanding options, or portions thereof then unexercised, shall
be exercisable, so that the optionee's proportionate interest before and
after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors 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 of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.
(b) MERGERS, REORGANIZATIONS, ETC. The Board of Directors may
include such terms and conditions, including without limitation, provisions
relating to acceleration in the event of a change in control, as it deems
appropriate in connection with any award under the Plan with respect to a
merger, consolidation, plan of exchange, acquisition of property or stock,
separation, reorganization or liquidation to which the Company or a
subsidiary is a party or a sale of all or substantially all of the Company's
assets (each, a "Transaction"). Notwithstanding the foregoing, in the event
of a Transaction, the Board of Directors shall, in its sole discretion and to
the extent possible under the structure of the Transaction, select one of the
following alternatives for treating outstanding Incentive Stock Options or
Non-Statutory Stock Options under the Plan:
(i) Outstanding options shall remain in effect in accordance
with their terms.
(ii) Outstanding options shall be converted into options to
purchase stock in the corporation that is the surviving or acquiring
corporation in the
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Transaction. The amount, type of securities subject thereto and exercise
price of the converted options shall be determined by the Board of
Directors of the Company, taking into account the relative values of the
companies involved in the Transaction and the exchange rate, if any, used
in determining shares of the surviving corporation to be issued to holders
of shares of the Company. Unless otherwise determined by the Board of
Directors, the converted options shall be vested only to the extent that
the vesting requirements relating to options granted hereunder have been
satisfied.
(iii) The Board of Directors shall provide a 30-day period prior
to the consummation of the Transaction during which outstanding options may
be exercised to the extent then exercisable, and upon the expiration of
such 30-day period, all unexercised options shall immediately terminate.
The Board of Directors may, in its sole discretion, accelerate the
exercisability of options so that they are exercisable in full during such
30-day period.
(c) DISSOLUTION OF THE COMPANY. In the event of the dissolution
of the Company, options shall be treated in accordance with paragraph
14(b)(iii).
(d) RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of Directors
may also grant options, stock appreciation rights, performance units, stock
bonuses and cash bonuses and issue restricted stock under the Plan having
terms, conditions and provisions that vary from those specified in this Plan
provided that any such awards are granted in substitution for, or in
connection with the assumption of, existing options, stock appreciation
rights, stock bonuses, cash bonuses, restricted stock and performance units
granted, awarded or issued by another corporation and assumed or otherwise
agreed to be provided for by the Company pursuant to or by reason of a
Transaction.
15. AMENDMENT OF PLAN. The Board of Directors may at any time, and
from time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for
any other reason. Except as provided in paragraphs 9, 10 and 14, however, no
change in an award already granted shall be made without the written consent
of the holder of such award.
16. APPROVALS. The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter, including without limitation, public utility
regulatory authorities. The Company will use its best efforts to take steps
required by state or federal law or applicable regulations, including rules
and regulations of the Securities and Exchange Commission and any stock
exchange on which the Company's shares may then be listed, in connection with
the grants under the Plan. The foregoing notwithstanding, the Company shall
not be obligated to issue or deliver Common Stock under the Plan if such
issuance or delivery would violate applicable state or federal securities
laws or any applicable law relating to the issuance of securities by a public
utility.
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17. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee 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 by whom such employee
is employed to terminate such employee's employment at any time, for any
reason, with or without cause, or to decrease such employee's compensation or
benefits, or (ii) confer upon any person engaged by the Company any right to
be retained or employed by the Company or to the continuation, extension,
renewal, or modification of any compensation, contract, or arrangement with
or by the Company.
18. TAXES. Each participant who has received an award under the Plan
shall, upon notification of the amount due, pay to the Company in cash
amounts necessary to satisfy any applicable federal, state and local
withholding requirements. If the participant fails to pay the amount
demanded, the Company may withhold that amount from other amounts payable by
the Company to the participant including salary, subject to applicable law.
With the consent of the Board of Directors, a participant may satisfy this
withholding obligation, in whole or in part, by having the Company withhold
from any shares to be issued that number of shares that would satisfy the
amount due or by delivering Common Stock to the Company to satisfy the
withholding amount.
19. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Common Stock until
the date of issue to the recipient of a stock certificate for such shares.
Except as otherwise expressly provided in the Plan, no adjustment shall be
made for dividends or other rights for which the record date occurs prior to
the date such stock certificate is issued.
Approved by the Board of Directors: February 12, 1997
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