PACIFICORP STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
(PERFORMANCE BASED)
This Restricted Stock Agreement ("Agreement") is made effective as
of February 10, 1998, between PacifiCorp, an Oregon corporation (the
"Company") and _______________________ (the "Employee").
In consideration of the agreements set forth below, the Company and
the Employee agree as follows:
1. STOCK AWARD. Pursuant to the Company's Stock Incentive Plan (the
"Plan"), which was approved by the Company's shareholders on May 14, 1997, the
Company hereby awards to the Employee ______ shares (the "Grant Shares") of the
Company's Common Stock for calendar year _____ (the "Grant Year"). The Grant
Shares shall be owned by the Employee subject to the terms and conditions of
this Agreement and the Plan, a copy of which has been provided to the Employee.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Plan.
2. SHARES PURCHASED ON OPEN MARKET; ESCROW.
2.1 MARKET PURCHASE. As soon as practicable after execution of this
Agreement by the Company and the Employee, the Company shall pay to a
securities broker or other third party an amount equal to the market price
of the Grant Shares, with instructions to purchase the Grant Shares on the
open market in the Employee's name and to deliver the certificates
representing the Grant Shares into escrow pursuant to Section 2.2 of this
Agreement. For purposes of administrative convenience, the Company shall
have the authority to determine the number of certificates to be issued in
the Employee's name and the denomination of each certificate.
2.2 ESCROW. For purposes of facilitating the enforcement of Sections
3 and 5 of this Agreement, the Grant Shares purchased pursuant to Section
2.1 shall be delivered to a person or persons designated by the Company to
serve as escrow holder (individually or jointly, as applicable, the "Escrow
Holder"). The Escrow Holder may be an employee of the Company. Upon
delivery into escrow of the certificates representing the Grant Shares, the
Employee shall deliver to the Escrow Holder duly executed stock powers with
respect to each certificate. The Escrow Holder shall hold the certificates
and associated stock powers in escrow and shall release the Grant Shares to
the Company or the Employee, as applicable, only in accordance with Section
7 of this Agreement. The Employee hereby acknowledges that the Company's
designee is appointed as the Escrow Holder with the foregoing authorities
as a material inducement to make this Agreement and that said appointment
is coupled with an interest and is irrevocable. The Employee agrees that
said Escrow Holder shall not be liable to any party to this Agreement (or
to any other party) for any actions or omissions unless the Escrow Holder
is grossly negligent with respect thereto.
3. VESTING OF THE GRANT SHARES; FORFEITURE.
3.1 DEFINITION OF "TERMINATION OF EMPLOYMENT". A "Termination of
Employment" shall be deemed to occur on the date on which the Employee
ceases to be employed on a continuous full time basis by the Company or a
subsidiary of the Company for any reason or no reason, with or without
cause. The Employee shall not be treated as having a Termination of
Employment during the time the Employee is receiving long term disability
benefits provided by the Company or a subsidiary of the Company, unless the
Employee has received formal written notice of termination.
3.2 VESTING.
(a) REGULAR VESTING SCHEDULE. 25 percent of the Grant
Shares shall become non-forfeitable ("Vested") on each succeeding
February 15, starting with the February 15 following the end of the
Grant Year, if the following two conditions are satisfied:
(i) The Employee does not have a Termination of Employment
prior to such February 15; and
(ii) The Employee satisfies the Annual Purchase Requirement
described in Section 4 with respect to the calendar year that
ended on the December 31 immediately preceding such February 15.
(b) ACCELERATED VESTING. Any unvested Grant Shares shall
become fully Vested upon the occurrence of any of the following:
(i) Termination of Employment within two years after the
date on which any one of the events described in subparagraphs
(A), (B) or (C) below occur, or upon an "Employer Disposition"
described in subparagraph (D) below, unless the Employee becomes
employed by the Company or a subsidiary of the Company within 120
days after such Employer Disposition occurs:
(A) TENDER OR EXCHANGE OFFER. A tender or exchange
offer, other than one made by the Company, is made for
Common Stock (or securities convertible into Common Stock)
and such offer results in a portion of those securities
being purchased and the offeror after the consummation of
the offer is the beneficial owner (as determined pursuant to
Section 13 (d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, of at
least 20 percent of the outstanding Common Stock; or
(B) 20 PERCENT OWNER. The Company receives a report
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on Schedule 13D under the Exchange Act reporting the
beneficial ownership by any person of 20 percent or more of
the Company's outstanding Common Stock; or
(C) BOARD OF DIRECTORS. During any period of 12
months or less, individuals who at the beginning of such
period constituted a majority of the Company's Board of
Directors cease for any reason to constitute a majority
thereof unless the nomination or election of such new
directors was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of such period; or
(D) EMPLOYER DISPOSITION. All the equity ownership of
the subsidiary of the Company employing the Employee is
disposed of and as a result, no part of such equity
ownership is held by the Company or one of its subsidiaries.
(ii) January 1 following the death of the Employee;
(iii) January 1 following the Retirement of the Employee
after age 55 and completion of at least 5 "years of service"
within the meaning of the tax qualified defined benefit plan
maintained by the Employee's employer or, if no such defined
benefit plan exists, the Company's defined benefit plan; or
(iv) Receipt by the Employee of formal written notice of
termination following the permanent and total disability of the
Employee, which shall mean any medically determinable physical or
mental impairment that renders the Employee unable to engage in
any substantial gainful activity and can be expected to result in
death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
3.3 FORFEITURE. An Employee shall forfeit to the Company all or a
portion of the Grant Shares upon any of the following:
(a) TERMINATION OF EMPLOYMENT. If the Employee has a
Termination of Employment that is not described in 3.2(b), the
Employee shall forfeit any portion of the Grant Shares that is not
Vested under 3.2(a).
(b) FAILURE TO MEET ANNUAL PURCHASE REQUIREMENT. If the
Employee fails to meet the Annual Purchase Requirement described in
Section 4 for a calendar year, the Employee shall forfeit the Grant
Shares that would have become Vested on the February 15 following the
end of that year under 3.2(a). In the calendar year in which the
Employee has a Retirement as described in 3.2(b) (iii), the Employee
shall forfeit the Grant Shares that would have become vested
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on the February 15 following the end of that year unless the Employee
meets a prorated Annual Purchase Requirement based on the number of
days in the calendar year elapsed on the Retirement date.
(c) ATTEMPTED TRANSFER OF SHARES NOT VESTED. If an attempt is
made to assign, encumber, pledge or otherwise transfer any Grant
Shares before they are Vested, in violation of Section 5, the Employee
shall forfeit all of the Grant Shares with respect to which the
attempt was made.
4. ANNUAL PURCHASE REQUIREMENT.
4.1 DEFINITIONS.
(a) TARGET SHARES. The term "Target Shares" shall mean shares
of PacifiCorp Common Stock "beneficially owned" by the Employee within
the meaning of Rule 16a-1 (a) (2) promulgated under the Securities
Exchange Act of 1934. All shares granted under the Plan shall
constitute Target Shares, whether or not Vested.
(b) BASE SALARY. The term "Base Salary" shall mean, with
respect to each calendar year commencing with the Grant Year, the
Employee's annual regular salary as in effect on January 1 of such
calendar year.
(c) STOCK OWNERSHIP TARGET. The term "Stock Ownership Target"
shall mean, with respect to each calendar year commencing with the
Grant Year, a dollar amount equal to _______ times the Employee's Base
Salary for such calendar year.
(d) ANNUAL PURCHASE PERCENTAGE. The term "Annual Purchase
Percentage" shall mean, with respect to each calendar year commencing
with the Grant Year, the number equal to the total value of all of the
Target Shares purchased by or at the direction of the Employee on the
open market or under the Company's K Plus Employee Savings and Stock
Ownership Plan (the "K Plus Plan") or under the Company's Compensation
Reduction Plan during the calendar year, less the total value of all
of the Target Shares with respect to which the Employee disposed of
beneficial ownership during the calendar year, divided by the
Employee's Base Salary for the calendar year:
Annual Value of Target Value of Target
Purchase = Shares Purchased - Shares Disposed
Percentage -------------------------------------
Base Salary
; PROVIDED that for purposes of this calculation each Target Share
purchased or disposed of during the calendar year shall be valued at
the purchase or disposition price thereof.
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(e) MINIMUM OWNERSHIP TARGET. The term "Minimum Ownership
Target" shall mean, with respect to each calendar year commencing with
the Grant Year, a dollar amount equal to ______ times the Employee's
Base Salary for such calendar year.
4.2 ANNUAL PURCHASE REQUIREMENT.
(a) VALUATION. As soon as practicable following January 1 of
each of the four calendar years commencing with the year following the
Grant Year, the Company shall conduct a valuation of all the Target
Shares held by the Employee on such January 1. For purposes of this
valuation, each share of PacifiCorp Common Stock shall be deemed to
have a value equal to the average closing price of such stock on the
New York Stock Exchange over the 20 trading days immediately preceding
the January 1 of the year in which the valuation is being conducted.
(b) STOCK OWNERSHIP TARGET NOT MET. If the Target Shares held
by the Employee as of January 1 of a calendar year, when valued in
accordance with Section 4.2 (a), have a value less than the employee's
Stock Ownership Target for that year, the Employee shall purchase on
the open market or acquire under the K Plus Plan or under the
Company's Compensation Reduction Plan (such obligation being referred
to in this Agreement as the "Annual Purchase Requirement") such number
of Target Shares as may be necessary to cause the Employee's Annual
Purchase Percentage (calculated pursuant to paragraph 4.1 (d) above),
to equal or exceed ______ percent; PROVIDED, HOWEVER, that the value
of Target Shares to be purchased under the Annual Purchase
Requirement, when reduced by the value of Target Shares disposed of
during the year, shall not exceed the difference between the value of
the Employee's holdings of Target Shares as of January 1 of the
calendar year and the Stock Ownership Target.
(c) STOCK OWNERSHIP TARGET MET. If the Target Shares held by
the Employee as of January 1 of a calendar year, when valued in
accordance with Section 4.2 (a), have a value that equals or exceeds
the Employee's Stock Ownership Target for that year, the Annual
Purchase Requirement for such year shall be deemed to be satisfied and
the Employee shall have no obligation to purchase additional Target
Shares during the year.
(d) INFORMATION REQUESTED FROM EMPLOYEE. The Employee shall
provide the Company with such information, including evidence of
beneficial ownership of Target Shares and of purchases and
dispositions of Target Shares, as the Company may reasonably request
to administer the Annual Purchase Requirement.
4.3 WAIVER OF ANNUAL PURCHASE REQUIREMENT BY BOARD OF DIRECTORS. The
Board of Directors of the Company, or a committee thereof to which the
Board of Directors has delegated authority to administer the Plan (the
"Plan Administrator"), may
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waive the Annual Purchase Requirement for a given calendar year if the
Plan Administrator finds, in its absolute discretion, that compliance with
the Annual Purchase Requirement would result in extraordinary hardship for
the Employee.
4.4 WAIVER OF ANNUAL PURCHASE REQUIREMENT BY EXECUTIVE OFFICER. Any
executive officer to whom appropriate authority has been delegated pursuant
to Section 4 (c) of the Plan may waive the Annual Purchase Requirement for
a given calendar year if (i) such officer finds, in his or her absolute
discretion, that compliance with the Annual Purchase Requirement would
result in extraordinary hardship for the Employee AND (ii) the value of the
Target Shares held by the Employee on January 1 of the year exceeded the
Minimum Ownership Target.
5. RESTRICTION ON TRANSFER. The Employee shall not assign, encumber,
pledge or otherwise transfer, voluntarily or involuntarily, any Grant Shares
that are not Vested.
6. MERGERS, CONSOLIDATIONS OR CHANGES IN CAPITAL STRUCTURE. If, after
the date of this Agreement, the outstanding Common Stock of the Company is
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation by
reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of shares or
dividend payable in shares, or in the event of any consolidation, merger or plan
of exchange involving the Company pursuant to which the Company's Common Stock
is converted into cash, any Common Stock, other securities or other
consideration issued or distributed with respect to the Grant Shares in any such
transaction shall be subject to the restrictions and conditions set forth
herein, including the escrow requirements of Sections 2 and 7.
7. ESCROW. The certificates and associated stock powers delivered to the
Escrow Holder pursuant to Section 2.2 of this Agreement shall be held in escrow
until (i) receipt by the Escrow Holder of a certificate of the Company
certifying that some or all of the Grant Shares have Vested, or (ii) receipt by
the Escrow Holder of a certificate of the Company certifying that some or all of
the Grant Shares have been forfeited to the company pursuant to Section 3.3.
Upon receipt by the Escrow Holder of one of the foregoing certificates, the
Escrow Holder shall deliver to the Employee or the Company, as appropriate,
certificates representing all of the Grant Shares to which the Employee or the
Company, as applicable, is entitled.
8. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement or the Plan shall
(i) confer upon the Employee any right to be continued in the employment of the
Employee's employer or interfere in any way with the right of such employer to
terminate the Employee's employment at any time, for any reason or no reason,
with or without cause, or to decrease the Employee's compensation or benefits,
or (ii) confer upon the Employee any right to the continuation, extension,
renewal, or modification of any compensation, contract or arrangement with or by
the Company.
9. RIGHTS AS SHAREHOLDER. Subject to Section 2.2 and the other
provisions of this Agreement, the Employee shall be entitled to all of the
rights of a shareholder with respect to the Grant Shares, including the right to
vote such shares and to receive ordinary dividends payable
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with respect to such shares from the date of grant. Until the Grant Shares
become Vested, they will be treated for federal income tax purposes as owned
by the Company and dividends paid to the Employee with respect to the Grant
Shares will be treated for federal income tax purposes as additional
compensation. The Employee acknowledges that the certificates representing
the Grant Shares may bear such legends as may be required by law with respect
to the rights and restrictions applicable to the shares.
10. WITHHOLDING TAXES. The Company shall have the right to require the
Employee to remit to the Company, or to withhold from other amounts payable to
the Employee, as compensation or otherwise, an amount sufficient to satisfy all
federal, state and local withholding tax requirements.
11. APPROVALS. The obligations of the Company under this Agreement and
the Plan are subject to the approval of state and federal authorities or
agencies with jurisdiction in the matter. 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 grant evidenced by this Agreement. The foregoing
notwithstanding, the Company shall not be obligated to issue or deliver the
Grant Shares if such issuance or delivery would violate or result in a violation
of applicable state or federal securities laws.
12. MISCELLANEOUS.
12.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Oregon, without regard to the choice of law
principles applied in the courts of such state.
12.2 SEVERABILITY. If any provision or provisions of this Agreement
are found to be unenforceable, the remaining provisions shall nevertheless
be enforceable and shall be construed as if the unenforceable provisions
were deleted.
12.3 ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter
hereof and supersede all prior and contemporaneous oral or written
agreements between the Company and the Employee relating to the subject
matter hereof.
12.4 AMENDMENT. This Agreement may be amended or modified only
pursuant to the Plan or by written consent of the Company and the Employee.
12.5 SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
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COMPANY: PACIFICORP, an Oregon corporation
By:
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Title: Senior Vice President
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EMPLOYEE:
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[signature]
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[type or print name]
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