<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
NOT APPLICABLE
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
NOT APPLICABLE
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
NOT APPLICABLE
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
NOT APPLICABLE
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
NOT APPLICABLE
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
NOT APPLICABLE
------------------------------------------------------------------------
3) Filing Party:
NOT APPLICABLE
------------------------------------------------------------------------
4) Date Filed:
NOT APPLICABLE
------------------------------------------------------------------------
<PAGE>
[LETTERHEAD]
March 31, 1994
To Our Shareholders:
Our annual meeting of shareholders will be held this year in Portland,
Oregon, and you are cordially invited to attend.
<TABLE>
<C> <S>
Date: Wednesday, May 11, 1994
Time: 1:30 p.m.
Place: Red Lion Hotel/Lloyd Center
1000 NE Multnomah
Portland, Oregon
</TABLE>
The official business portion of the meeting will cover the items described
in the notice of the annual meeting and the proxy statement which are attached.
Management will also report on operations and other matters affecting the
Company, followed by a question and answer session. After the meeting, officers
and directors will be available to visit with shareholders.
Should you have any questions about any of the matters to be considered at
the meeting, we would be happy to hear from you.
Sincerely,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CHAIRMAN
P.S. A significant number of our shareholders own less than 100 shares each.
Regardless of the number of shares you own, your vote is important. The
prompt return of your proxy will save follow-up expenses and assure
proper representation at the meeting.
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of PACIFICORP:
The 1994 Annual Meeting of Shareholders of PacifiCorp will be held at the
Red Lion Hotel/Lloyd Center, 1000 NE Multnomah, Portland, Oregon on Wednesday,
May 11, 1994, at 1:30 p.m. Pacific Daylight Time, for the following purposes:
1. to elect four Class I directors, each to serve for a term of three
years, and one Class III director, to serve for a term of two years, and
until their successors are duly elected and qualified;
2. to approve the 1993 Restatement of the PacifiCorp Long-Term Incentive
Plan;
3. to act on the proposed ratification of the appointment of Deloitte &
Touche to serve as independent auditor of the Company for the year 1994;
and
4. to transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on March 18, 1994 will
be entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. The meeting is subject to adjournment from time to time as the
shareholders present in person or by proxy may determine.
All shareholders who find it convenient to do so are cordially invited to
attend the meeting in person.
Whether or not you plan to attend, please sign, date and return the
accompanying form of proxy in the enclosed postage paid return envelope. We
shall appreciate your giving this matter your prompt attention.
By Order of the Board of Directors
Sally A. Nofziger
VICE PRESIDENT AND CORPORATE SECRETARY
Portland, Oregon
March 31, 1994
<PAGE>
[LOGO]
[PACIFICORP LOGO]
700 N.E. MULTNOMAH
PORTLAND, OREGON 97232
PROXY STATEMENT
A proxy in the accompanying form is solicited by the Board of Directors of
PacifiCorp, an Oregon corporation (Company), for use at the meeting of
shareholders to be held at the Red Lion Hotel/Lloyd Center, 1000 NE Multnomah,
Portland, Oregon, on Wednesday, May 11, 1994, at 1:30 p.m. Pacific Daylight
Time, and at any adjournment or adjournments thereof. The approximate date this
proxy statement and accompanying proxy card are first being sent to shareholders
is March 31, 1994.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Corporate Secretary of the Company an instrument of
revocation or a duly executed proxy bearing a later date. The proxy may also be
revoked by electing to vote in person while in attendance at the meeting in
Portland. However, a shareholder who attends the meeting need not revoke the
proxy and vote in person, unless so desired.
The shares represented by each proxy will be voted in accordance with the
instructions specified in the proxy, if given. If a signed proxy is returned
without instructions, it will be voted for the directors, for approval of the
1993 Restatement of the PacifiCorp Long-Term Incentive Plan, for approval of
Deloitte & Touche as auditor and in accordance with this proxy statement on any
other business that may properly come before the meeting. Directors are elected
by a plurality of the votes cast by holders of the shares entitled to vote at
the Annual Meeting if a quorum is present. Except as disclosed with respect to
Proposal II, abstentions and broker non-votes are counted for purposes of
determining whether a quorum exists at the Annual Meeting, but are not counted
for any purpose in determining whether a proposal is approved and have no effect
on the determination of whether a plurality exists with respect to a given
nominee.
The Company's outstanding voting securities at March 18, 1994 consisted of
281,876,969 shares of Common Stock, 126,533 shares of 5% Preferred Stock,
657,943 shares of Serial Preferred Stock, 440,000 shares of $7.12 No Par Serial
Preferred Stock, 1,000,000 shares of $7.70 No Par Serial Preferred Stock and
750,000 shares of $7.48 No Par Serial Preferred Stock, each of which is entitled
to one vote on all matters to be presented at the meeting, and 5,000,000 shares
of the $1.98, Series 1992, and 666,210 shares of the $2.13 Series of No Par
Serial Preferred Stock, each of which is entitled to one-quarter of one vote on
all matters to be presented at the meeting. Only shareholders of record at the
close of business on March 18, 1994 will be entitled to notice of and to vote at
the meeting and any adjournment thereof. See "Security Ownership of Certain
Beneficial Owners and Management" for information concerning beneficial
ownership of the Company's stock.
1. ELECTION OF DIRECTORS
The persons named in the proxy will vote your stock for the election of four
directors to serve in Class I of the Company's Board of Directors for terms
expiring at the 1997 Annual Meeting and one director to serve in Class III for a
term expiring at the 1996 Annual Meeting, and until their successors shall be
duly elected and qualified. If any of the nominees becomes unavailable for
election for any reason (none currently being known), the proxy holders will
have discretionary authority to vote pursuant to the proxy for a suitable
substitute or substitutes. Each nominee for director is now serving on the
Board. There are no family relationships among the directors and executive
officers of the Company.
1
<PAGE>
The Board of Directors is divided into three classes: Class I, Class II and
Class III, each class as nearly equal in number as possible. The directors in
each class hold office for three-year terms. The four current Class I directors,
whose present terms expire in 1994, are being proposed for election for new
three-year terms (expiring in 1997) at this Annual Meeting. As a result of an
Oregon law requirement with respect to directors not previously elected by the
shareholders, the Class III director, a class whose term expires in 1996, is
being proposed for election for a two-year term. The bylaws of the Company
provide that the term of any director shall not extend beyond the regular
quarterly meeting of the Board of Directors following the date the director
reaches age 70, regardless of the normal expiration of the director's term.
Pursuant to this requirement, Mr. Hampton will retire prior to serving the full
term for which he is nominated. When Mr. Hampton reaches retirement age, either
the size of the Board will be reduced or a new director will be elected by the
Board to fill the vacancy until the next annual meeting of shareholders. The
tables that follow include information with respect to each director's business
experience for the past five years. See "Security Ownership of Certain
Beneficial Owners and Management" for information concerning share ownership of
nominees and directors.
The Board of Directors recommends a vote FOR the election of these nominees.
NOMINEES FOR ELECTION AT THE 1994 ANNUAL MEETING
<TABLE>
<CAPTION>
NAME, AGE, CLASS, PRINCIPAL
OCCUPATION AND OTHER DIRECTORSHIPS DIRECTOR SINCE
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
Frederick W. Buckman, 48 (Class III, 1996)..................................................... February 1994
President and Chief Executive Officer of the Company since February 1, 1994; formerly
President and Chief Executive Officer of Consumers Power Company, Jackson, Michigan,
1992-1994; President and Chief Operating Officer of Consumers Power Company, 1988-1991;
Director of PacifiCorp Holdings, Inc.
C. Todd Conover, 54 (Class I, 1997)............................................................ 1991
General Manager, Finance Industry Group, Tandem Computers Incorporated, a computer
manufacturing company, Cupertino, California, since January 1994; President and Chief
Executive Officer, The Vantage Company, a business consulting firm, Denver, Colorado;
formerly President and Chief Executive Officer, Central Banks of Colorado, 1991-1992; partner
and National Director-Bank Consulting, KPMG Peat Marwick 1988-1990; Director of Blount, Inc.
and PacifiCorp Holdings, Inc.
John C. Hampton, 68 (Class I, 1997)............................................................ 1983
Chairman and Chief Executive Officer of Hampton Resources, Inc., Portland, Oregon, and
affiliated companies, forest products industries.
Nolan E. Karras, 49 (Class I, 1997)............................................................ 1993
Investment Adviser, Karras & Associates, Inc., Roy, Utah, 1983 to date; former Member of Utah
House of Representatives (1981-1990); Speaker of the House (1989-1990); Chairman of Utah
State Building Board; Director of PacifiCorp Holdings, Inc.
Keith R. McKennon, 60 (Class I, 1997).......................................................... 1990
Chairman of the Board since February 9, 1994; Chairman and formerly Chief Executive Officer,
Dow Corning Corporation, Midland, Michigan, 1992-1993; Executive Vice President and Director,
The Dow Chemical Company, 1990-1992; President, Dow Chemical USA, 1987-1990; Director of
Tektronix, Inc. and Dow Corning Corporation.
</TABLE>
2
<PAGE>
DIRECTORS WHOSE TERMS CONTINUE
<TABLE>
<CAPTION>
NAME, AGE, CLASS, PRINCIPAL
OCCUPATION AND OTHER DIRECTORSHIPS DIRECTOR SINCE
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
C. M. Bishop, Jr., 69 (Class III, 1996)........................................................ 1970
Vice Chairman of the Board, formerly President, Pendleton Woolen Mills, a manufacturer of
woolen articles, Portland, Oregon; Director of First Interstate Bank of Oregon, N.A.,
Standard Insurance Company and Willamette Industries, Inc.
Richard C. Edgley, 58 (Class II, 1995)......................................................... 1987
Member of the Presiding Bishopric, formerly Managing Director, Finance and Records Department
of The Church of Jesus Christ of Latter-day Saints; previously Vice President of
Administration and Control for consumer non-food operations, General Mills, 1977-1981.
A. M. Gleason, 64 (Class II, 1995)............................................................. 1988
Vice Chairman of the Board, formerly President and Chief Executive Officer of the Company;
former Chairman and Chief Executive Officer of Pacific Telecom, Inc.; Director of Tektronix,
Inc., Blount, Inc., Comdial Corporation, Fred Meyer, Inc. and PacifiCorp Holdings, Inc.
Stanley K. Hathaway, 69 (Class II, 1995)....................................................... 1975
Partner, Hathaway, Speight, Kunz & Trautwein, Attorneys at Law, Cheyenne, Wyoming, 1975 to
date; Secretary, U.S. Department of Interior, 1975; Governor of Wyoming, 1967-1975; Director
of Apache Corporation.
Don M. Wheeler, 65 (Class III, 1996)........................................................... 1989
President and General Manager, Wheeler Machinery Company, equipment and machinery sales,
repairs, parts and service, Salt Lake City, Utah.
Nancy Wilgenbusch, 46 (Class III, 1996)........................................................ 1986
President, Marylhurst College, Portland, Oregon; previously Vice President of Marketing and
Public Affairs, College of Saint Mary, Omaha, Nebraska, 1981-1984; Director of Pacific
Telecom, Inc.
</TABLE>
DIRECTOR COMPENSATION AND CERTAIN TRANSACTIONS
The Company's directors other than officers are compensated for their board
service by a combination of cash and Company Common Stock under a Non-Employee
Directors' Stock Compensation Plan which seeks to increase the community of
interest between the Company's shareholders and its directors. Under this plan,
non-employee directors of the Company are granted approximately $50,000 worth of
the Company's Common Stock every five years. Non-employee directors having fewer
than five years of service remaining before reaching retirement age receive
stock equivalent to approximately $10,000 for each remaining year. Stock granted
under this plan vests over the five-year period following the grant or shorter
period to retirement, and unvested shares are forfeited if the recipient ceases
to be a director. The shares are purchased in the market with funds supplied by
the Company, and the certificates are then held by the Company until the shares
vest. During 1993, an aggregate of 4,657 shares previously granted under the
plan became vested.
The Company's directors other than officers receive the balance of their
compensation in the form of cash. They are paid $16,000 per year plus $750 for
each Board or committee meeting attended. Mr. McKennon is paid $150,000 per year
in Company Common Stock for his service as Chairman of the Board, including his
$10,000 per year participation in the Non-Employee Directors' Stock Compensation
Plan. Members of the Executive Committee and chairmen of the other committees of
the Board are paid an additional $2,500 per year. Non-employee members of the
Pacific Power Board and the Utah Power Board are paid $9,000 per year. Chairmen
of the subcommittees of those boards receive $750 for each subcommittee meeting
attended; members receive $600. In addition, members of
3
<PAGE>
the Utah Power Board who are former directors of Utah Power & Light Company,
including Messrs. Peterson and Wheeler, participate in a retirement plan under
which they are eligible to receive benefits of $560 per month upon retirement at
age 65 or older and certain death benefits.
During 1993, Messrs. Conover and Karras each received $3,000 in directors'
fees from PacifiCorp Holdings, Inc., Dr. Wilgenbusch received $21,000 in
directors' fees from Pacific Telecom, Inc. (Pacific Telecom), and Mr. Hathaway
received $7,250 in directors' fees from NERCO, Inc. (NERCO), formerly a
subsidiary of the Company. Dr. Wilgenbusch received 2,711 shares of Common Stock
of Pacific Telecom in 1993 under Pacific Telecom's non-employee director stock
compensation plan. A director's right to receive stock awarded under this plan
accrues over the five-year period following the grant or shorter period to
retirement, and unaccrued shares are forfeited if the recipient ceases to be a
director prior to the end of such period. Accrued shares vest upon retirement
and are subject to forfeiture prior to retirement under certain circumstances.
The shares are purchased in the market with funds supplied by Pacific Telecom,
and the certificates are held by Pacific Telecom until the director retires from
board service. Dividends on shares accumulate and are paid to the director at
the time the shares vest.
In 1993, the Company and its subsidiaries paid $130,463 in legal fees to
Hathaway, Speight, Kunz & Trautwein, in which firm Mr. Hathaway is a partner.
Mr. Wheeler is President of Wheeler Machinery Company, a company engaged in
sales and service of large earth-moving and grading equipment, engines and
related machinery. During 1993, the Company and its subsidiaries purchased
equipment and services from this company in the ordinary course of business for
a total of approximately $903,676. Richard E. Wheeler, Mr. Wheeler's brother, is
the owner of Wyoming Machinery Company, a business located in Casper, Wyoming,
similar to, but separate from, Wheeler Machinery Co. During 1993, the Company
and its subsidiaries purchased equipment and services from this company in the
ordinary course of business for a total of approximately $9,467,325. The Company
believes that the terms of these transactions were no less favorable to the
Company than those available from other parties. Similar purchases have been
made by the Company or its predecessors from these two companies since 1951.
BOARD COMMITTEES
The Board of Directors is responsible for the overall affairs of the
Company. To assist in carrying out its responsibilities, the Board has delegated
certain authority to several standing committees. The Board generally appoints
members of committees at its Annual Meeting in May of each year. The membership
of these committees as of March 31, 1994 is as follows:
<TABLE>
<CAPTION>
EXECUTIVE COMMITTEE COMMITTEE ON DIRECTORS AUDIT COMMITTEE
- ----------------------------------------- ----------------------------------------- ---------------------------
<S> <C> <C>
Keith R. McKennon* C. Todd Conover* C. M. Bishop, Jr.*
C. M. Bishop, Jr. C. M. Bishop, Jr. Richard C. Edgley
Frederick W. Buckman Keith R. McKennon Stanley K. Hathaway
Richard C. Edgley Nolan E. Karras
John C. Hampton Don M. Wheeler
Nancy Wilgenbusch
<CAPTION>
PERSONNEL COMMITTEE FINANCE COMMITTEE PRICING COMMITTEE
- ----------------------------------------- ----------------------------------------- ---------------------------
<S> <C> <C>
John C. Hampton* Richard C. Edgley* Frederick W. Buckman
C. Todd Conover Frederick W. Buckman A. M. Gleason
Nolan E. Karras C. Todd Conover
Nancy Wilgenbusch A. M. Gleason
<FN>
- ------------------------
*Chairman
</TABLE>
The Executive Committee held one meeting in 1993. The committee has and may
exercise all of the powers of the Board during the intervals between its
meetings that may be lawfully delegated, subject to such limitations as may be
provided by resolution of the Board.
4
<PAGE>
The Committee on Directors seeks and recommends specific candidates for
directors. In addition, the Committee on Directors reviews and recommends to the
Board policies on the qualifications, tenure, compensation and retirement of
directors and monitors compliance by individual directors with the policies
adopted by the Board. Shareholders who wish to submit names to the Committee on
Directors for consideration should do so in writing addressed to the Committee
on Directors,
c/o Corporate Secretary, PacifiCorp, 700 N.E. Multnomah, Portland, Oregon 97232.
The Committee on Directors held four meetings in 1993.
The Audit Committee held four meetings in 1993. It nominates the independent
auditor of the Company for approval by the Board of Directors and the
shareholders, reviews the planned scope and results of the annual audit, confers
with the independent auditor and reviews its recommendations with respect to
accounting, internal control and other matters, and confers periodically with
accounting officers of the Company. The Audit Committee also reviews important
regulatory and accounting pronouncements, meets with management and the internal
auditors to review the scope and results of internal audit activity, as
appropriate, and periodically reviews the adequacy of the Company's accounting
and financial personnel resources. The chairmen of audit committees of
subsidiaries and divisions of the Company report their deliberations and
activities to the Audit Committee. The Audit Committee reports the results of
its reviews and meetings to the Board.
The Personnel Committee makes recommendations to the Board on executive
compensation plans, approves salaries for officers of the Company and
administers the Long-Term Incentive Plan, the Supplemental Executive Retirement
Plan and the Executive Severance Plan. The Committee consists of four directors
who are not current or former officers or employees of the Company or any of its
subsidiaries. The chairman of the personnel committee of Pacific Telecom attends
meetings of the Personnel Committee in order to coordinate compensation
decisions between the business units, although the board of that subsidiary has
responsibility for setting the compensation of its officers, including the
annual cash compensation and subsidiary long-term incentive plan compensation of
its member on the Company's Corporate Policy Group. See "Severance Arrangements"
below for a listing of the current members of the Corporate Policy Group, all of
whom are considered to be executive officers of the Company. The Personnel
Committee held nine meetings in 1993. See "Personnel Committee Report on
Executive Compensation" below.
The Finance Committee, to the extent authority is delegated to it by the
Board with respect to each issuance of securities, approves the final terms of
issuance. The committee also consults with appropriate officers of the Company
concerning requirements for capital, the condition of the capital markets and
the most appropriate means of obtaining capital as needed from time to time. The
committee also reviews the general terms of proposed financings when requested
by the Chairman of the Board, the President or any Vice President, and reports
thereon to the Board. It held five meetings in 1993.
The Pricing Committee, to the extent authority is delegated to it by the
Board of Directors with respect to each issuance of securities, approves the
final terms of issuance within parameters set by the Board. The Pricing
Committee also authorizes redemptions of the Company's debt and equity
securities in accordance with their terms. The Pricing Committee held one
meeting and priced three issuances of securities during 1993.
In May 1993, the Board of Directors appointed a Succession Committee for the
purpose of identifying a successor to Mr. Gleason, whose normal retirement date
is April 1995. The Committee was composed of the chairmen of each of the
standing committees and the Chairman of the Board. The Committee, with the
assistance of a professional search firm, identified and evaluated potential
candidates and made a recommendation to the Board of Directors. Frederick W.
Buckman was elected President and Chief Executive Officer effective February 1,
1994. At that time, Mr. Gleason was named Vice Chairman of the Board. The
Succession Committee held six meetings during 1993 and one meeting in 1994,
after which it was disbanded.
5
<PAGE>
The Board of Directors held six meetings in 1993. All Board members attended
at least 75% of the aggregate of the meetings of the Board and the committees of
which they were members.
DIVISION BOARDS
The Company conducts its retail electric utility business through two
divisions, Pacific Power and Utah Power. The Board of Directors has appointed a
board to provide oversight for each of these divisions. These boards have been
delegated certain responsibilities relating to the business and operations of
Pacific Power and Utah Power, including review and recommendation of annual
construction and operating budgets, certain generating and transmission
projects, certain other capital expenditures, disposition of division property,
and Company policies and practices concerning customers of Pacific Power and
Utah Power. Membership of these boards includes persons who are not directors of
the Company. The Pacific Power Board and the Utah Power Board each held four
meetings in 1993.
<TABLE>
<CAPTION>
Pacific Power Board UTAH POWER BOARD
- ------------------------------ ------------------------------
<S> <C>
C. M. Bishop, Jr. Richard C. Edgley
William B. Douglas* Nolan E. Karras
M. K. Felt* Paul G. Lorenzini*
John C. Hampton Robert A. Peck*
Paul G. Lorenzini* Chase N. Peterson*
Michael D. Naumes* Verl R. Topham*
Linda Shelk* Don M. Wheeler
Ethel Simon-McWilliams*
Verl R. Topham*
<FN>
- ------------------------
* Not a director of the Company
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 18, 1994
regarding the beneficial ownership of the Company's Common Stock and Common
Stock of Pacific Telecom by (i) each director or nominee for director of the
Company; (ii) each of the executive officers named in the Summary Compensation
Table below; and (iii) all executive officers and directors of the Company as a
group. As of March 18, 1994, each of the directors and executive officers
identified below and all executive officers and directors of the Company as a
group owned less than 0.1% of the Company's Common Stock and less than 1% of the
Common Stock of Pacific Telecom. No person is known by the Company to be the
beneficial owner of more than five percent of any class of the Company's stock,
except that as of December 31, 1993, American Express Company and its
subsidiary, IDS Financial Corporation, World Financial Tower, New York, NY
10285, were the beneficial owners of an aggregate of 246,500 shares of the
Company's $7.70 No Par Serial Preferred Stock, which represents 6.8% of the
votes entitled to be cast by the holders of the No Par Serial Preferred Stock as
a class at the Annual Meeting.
6
<PAGE>
<TABLE>
<CAPTION>
Number of Shares (1)
---------------------------
Pacific
Beneficial Owner PacifiCorp Telecom
- ------------------------------------------------------------------------------------- ----------- --------------
<S> <C> <C>
Directors
Frederick W. Buckman............................................................... 40,091 --
C. Todd Conover.................................................................... 4,493 --
John C. Hampton.................................................................... 7,815 --
Nolan E. Karras.................................................................... 2,848 --
Keith R. McKennon.................................................................. 11,089 --
C.M. Bishop, Jr.................................................................... 16,108 --
Richard C. Edgley.................................................................. 4,580 --
A.M. Gleason....................................................................... 115,744 31,820
Stanley K. Hathaway................................................................ 16,553 --
Don M. Wheeler..................................................................... 12,532 --
Nancy Wilgenbusch.................................................................. 5,076 2,711
Nondirector Executive Officers
William J. Glasgow................................................................. 8,865 1,000
Paul G. Lorenzini.................................................................. 9,932 --
Charles E. Robinson................................................................ 42,396 63,772
Verl R. Topham..................................................................... 18,377 --
All executive officers and directors as a group (27 persons)......................... 408,602 101,685
<FN>
- ------------------------
(1) Includes ownership of (a) shares held by family members even though
beneficial ownership of such shares may be disclaimed and (b) shares
granted and subject to vesting as to which the individual has voting but
not investment power under individual compensation arrangements or one or
more of the stock based compensation plans of the Company or Pacific
Telecom.
</TABLE>
2. RESTATEMENT OF THE LONG-TERM INCENTIVE PLAN
INTRODUCTION
On November 17, 1993, upon the recommendation of the Personnel Committee,
the Board of Directors of the Company adopted the 1993 Restatement of the
Company's Long-Term Incentive Plan (Restated Plan), subject to the approval of
the Restated Plan by the shareholders at the Annual Meeting. The purpose of the
Restated Plan is to promote the long-term success of the Company and its
subsidiaries by aligning the interests of executive employees more closely with
those of the shareholders through a combination of performance-based incentives
in the form of annual grants of restricted PacifiCorp Common Stock and a
requirement for ownership by participants of the Common Stock of the Company or
Pacific Telecom.
The Restated Plan amends and restates the Company's Long-Term Incentive Plan
initially approved by the shareholders in 1985 and amended at the 1989 Annual
Meeting to increase the available awards under the plan from 600,000 to
1,600,000 shares of PacifiCorp Common Stock (as adjusted for the two-for-one
stock split in 1990). Under the current plan, the Personnel Committee
established corporate performance objectives for overlapping four-year
performance cycles every two years and set a target amount of shares of
PacifiCorp Common Stock for each participant. No cycle could begin later than
January 1, 1994 under the current plan, and 1,306,437 shares of PacifiCorp
Common Stock were available for awards under the plan as of January 1, 1994. The
Restated Plan calls for grants of restricted stock based on past performance
rather than target awards for future performance cycles.
7
<PAGE>
DESCRIPTION OF RESTATED PLAN
ADMINISTRATION
The Restated Plan will be administered by the Board of Directors of the
Company or a committee of the Board of Directors to whom authority for
administration has been delegated. Administrative functions that do not involve
selection of participants or decisions concerning the timing, pricing or amounts
of awards may be delegated to an executive officer of the Company. On November
17, 1993, the Board of Directors delegated authority for administration of the
Restated Plan to the Personnel Committee and delegated those limited
administrative functions to the Chief Executive Officer of the Company, subject
to change by the Board or Personnel Committee (Committee).
AWARDS
Subject to adjustment due to changes in capital structure, the total number
of shares of PacifiCorp Common Stock that may be awarded under the Restated Plan
may not exceed 900,000 shares. The Committee will select as participants those
executive employees of the Company and its subsidiaries who the Committee
believes have made or will make important contributions to the long-term
performance of the Company and its subsidiaries. Currently, 29 executive
employees of the Company and its subsidiaries are eligible for selection as
participants. The costs of awards under the Restated Plan will be borne by the
participant's employer.
The Restated Plan provides that the Committee may vary the grants each year
based on a subjective assessment of the Company's overall performance in
relation to long-term goals and plans. In determining the individuals to whom
awards will be made and the amounts of the grants, the Committee will consider
criteria such as the following:
(a) Total shareholder return relative to peer companies;
(b) Earnings per share growth over time relative to peer companies; and
(c) Achievement of long-term goals, strategies and plans.
Shares awarded under the Restated Plan will be subject to such terms,
conditions and restrictions as may be determined by the Committee to be
consistent with the purpose of the Restated Plan and the best interests of the
shareholders. The restrictions may include stock transfer restrictions and
forfeiture provisions designed to facilitate the achievement by participants of
specified stock ownership goals.
Upon the award of shares under the Restated Plan, the Company will pay to a
securities broker or other third party an amount equal to the purchase price of
the shares. Such securities broker or other third party will acquire the granted
shares in the market for the account of the participants. The certificates and
associated stock powers will be delivered to an escrow holder appointed by the
Company and will be held in escrow until the Company certifies that the shares
have vested or have been forfeited to the Company. The participant will be
entitled to all the rights of a shareholder with respect to granted shares,
including the right to vote such shares and to receive ordinary dividends
payable with respect to such shares from the date of the grant.
Awards under the Restated Plan are subject to accelerated vesting upon
termination of employment within two years after a change in control of the
Company. In general, under the Restated Plan such a change in control would
occur if any person acquires beneficial ownership of 20 percent or more of the
Company's Common Stock by tender offer or otherwise or if, during any period of
12 months, individuals who at the beginning of such period (and any new
directors whose election or nomination was approved by two-thirds of such
individuals) cease to constitute a majority of the Board of Directors.
8
<PAGE>
TERMS OF NOVEMBER 1993 GRANTS
Grants totaling 71,800 shares were made in November 1993 to 26 employees,
subject to approval of the Restated Plan by shareholders. As a result of these
grants, target awards for 142,900 shares were cancelled. These awards had been
made in 1992 under the current plan for the four-year performance cycle
beginning January 1, 1992 and ending December 31, 1995, for which decisions
concerning performance objectives were deferred pending review of the Company's
long-term incentive compensation program.
The following table sets forth the number of shares granted under the
Restated Plan and the approximate market value of those shares on November 17,
1993, the date of grant, to (i) each of the executive officers named in the
Summary Compensation Table below, (ii) all current executive officers as a group
and (iii) all employees, including all current officers who are not executive
officers, as a group. Directors who are not executive officers are not eligible
to participate in the Restated Plan.
1993 RESTATEMENT OF THE
PACIFICORP LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
DOLLAR VALUE NUMBER OF
NAME AND POSITION OF GRANT SHARES
- --------------------------------------------------------------------------------------- ------------- -----------
<S> <C> <C>
A. M. Gleason, Vice Chairman of the Board of Directors................................. $ 323,000 17,000
Charles E. Robinson, Chairman, President and Chief Executive Officer of Pacific
Telecom............................................................................... 85,500 4,500
William J. Glasgow, Senior Vice President and Chief Financial Officer of the Company... 52,250 2,750
Verl R. Topham, President of Utah Power................................................ 104,500 5,500
Paul G. Lorenzini, President of Pacific Power.......................................... 104,500 5,500
All current executive officers (17 persons)............................................ 1,124,800 59,200
All employees other than current executive officers (9 persons)........................ 239,400 12,600
</TABLE>
In order to align the interests of the executive employees more closely to
those of the shareholders, the individual restricted stock agreements for each
of the above participants contain vesting, forfeiture and stock ownership
requirements designed to encourage the participants to remain employed with the
Company and requiring them to have invested their own resources in the Common
Stock of the Company or Pacific Telecom. In general, the restricted stock
agreements provide that 25 percent of the shares granted in November 1993 become
nonforfeitable on February 15 of each of the four calendar years ending after
December 31, 1994, provided the recipients remain continuously employed by the
Company or a subsidiary of the Company and meet certain requirements for annual
investments in Common Stock of the Company or Pacific Telecom. The agreements
provide for accelerated vesting upon death, termination of employment after
permanent and total disability, retirement after age 55 with five years of
service, or termination of employment within two years after a change in control
of the Company as described above. Messrs. Gleason, Robinson and Topham are each
over 55 years of age with at least five years of service.
Failure to remain continuously employed by the Company or a subsidiary
results in forfeiture of all unvested shares unless accelerated vesting occurs
as described above. Failure to meet the annual investment requirement results in
forfeiture of any shares that would have vested on February 15 following the
calendar year for which the requirement was not met. Unvested shares may not be
transferred.
The annual investment requirement for each of the November 1993 grant
recipients consists of an overall stock ownership target and a specific annual
purchase requirement. In order to ensure full vesting of his or her restricted
stock, each recipient must satisfy the annual purchase requirement during each
of the four calendar years beginning with 1994 or until the recipient's stock
ownership target is exceeded. The stock ownership target is a number of shares
of Common Stock of the Company or Pacific Telecom, with an aggregate value equal
to a specified multiple of the recipient's
9
<PAGE>
annual base salary, between 1.5 and 4 times base salary, depending on the
recipient's position level. Similarly, the annual purchase requirement is a
number of shares with an aggregate value equal to a specific percentage of base
salary, which is either 10 or 15 percent of base salary depending on position
level.
The annual purchase requirement for a recipient may be waived for a given
year by the Board of Directors or the Committee upon a showing of extraordinary
hardship. The annual purchase requirement may also be waived by the Chief
Executive Officer of the Company, to whom this authority has been delegated, if
such officer finds that compliance would result in extraordinary hardship and
that the recipient's stock ownership exceeds a specified multiple of base
salary, from .75 to 2 times base salary depending on compensation level. The
Chief Executive Officer may not waive such requirement as it applies to himself.
TAX EFFECT
The recently enacted Federal Omnibus Budget Reconciliation Act of 1993
includes as Section 162(m) of the Internal Revenue Code (IRC Section 162(m)) a
provision limiting to $1 million the annual deduction by a publicly held
corporation of compensation paid to any executive, with some forms of incentive
compensation excluded from the limitation. Under the proposed regulations
relating to IRC Section 162(m), the Restated Plan will not meet the technical
requirements of the exclusion. Accordingly, grants causing the annual limitation
to be exceeded, if any, will not be fully deductible by the Company. However,
grants under the Restated Plan are not expected to cause the limitation to be
exceeded by a material amount for all executives as a group. The Restated Plan
was designed to align the interests of executives with those of shareholders, to
encourage retention of employment and to reward performance. The achievement of
those objectives was considered to be of more importance than meeting the
technical requirements of IRC Section 162(m).
AMENDMENT, DURATION AND TERMINATION OF THE RESTATED PLAN
The Board of Directors may modify or amend the Restated Plan in such
respects as it may deem advisable because of changes in the law while the plan
is in effect or for any other reason. Under the current plan, no amendment may
be made without the approval of shareholders if it would materially increase the
maximum aggregate performance share awards or materially modify the eligibility
requirements for participation in the plan.
The Restated Plan will be effective November 17, 1993, subject to approval
by the Company's shareholders. Unless earlier terminated, the Restated Plan
shall continue in effect until all shares available for awards are granted and
all restrictions on such shares, if any, have lapsed.
The Board of Directors may suspend or terminate the Restated Plan at any
time except with respect to granted shares then subject to restrictions.
Termination will not affect the forfeitability of shares awarded under the
Restated Plan.
VOTE REQUIRED
The affirmative vote of shares of the Company's capital stock representing a
majority of the votes present and entitled to be cast at the meeting will be
required for approval of the proposed Restated Plan. In order to take advantage
of the exemption contained in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, for purposes of this vote abstentions will be counted as
shares present and entitled to vote and will have the same effect as negative
votes, while broker non-votes will not be counted for any purpose in determining
whether this proposal has been approved.
The Board of Directors recommends a vote FOR approval of this proposal.
10
<PAGE>
3. APPOINTMENT OF INDEPENDENT AUDITOR
The Board of Directors, on recommendation of the Audit Committee and subject
to ratification by shareholders, has appointed Deloitte & Touche to perform an
examination of the consolidated financial statements of the Company and its
subsidiaries for the year 1994 and to render its opinion thereon.
Deloitte & Touche is an international accounting firm with substantial
experience in public utility accounting matters, an accounting area subject to
detailed regulation at both the national and state levels. The firm has acted as
independent auditor for PacifiCorp since 1933 and, as a consequence, has
competent, professionally qualified personnel who are familiar with the history
and operations of the Company. The Board of Directors believes that the firm is
well qualified to serve as the Company's independent auditor for 1994.
Representatives of the firm are expected to be present at the Annual Meeting
with an opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
The Board of Directors recommends a vote FOR this proposal.
PERSONNEL COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
The Personnel Committee of the Board of Directors is responsible for
approving compensation levels for officers of the Company, administering
executive compensation plans as authorized by the Board and recommending
executive compensation plans and compensation of the Chief Executive Officer to
the Board for approval. The Committee is also responsible for approving
incentive plans for all employees, salary structure and merit programs for
senior management and changes in policy relating to employee benefits. Following
is the report of the Personnel Committee describing the components of the
Company's executive compensation program and the basis upon which 1993
compensation determinations were made.
COMPENSATION PHILOSOPHY
It is the philosophy of the Company that executive compensation be linked
closely to corporate performance and increases in shareholder value. The
Company's compensation program has the following objectives:
- Provide competitive total compensation that enables the Company
to attract and retain key executives.
- Provide variable compensation opportunities that are linked to
performance.
- Establish an appropriate balance between incentives focused on
short-term objectives and those encouraging sustained superior
earnings performance and increases in shareholder value.
Qualifying compensation for deductibility under IRC Section 162(m), which
limits to $1 million the annual deduction by a publicly held corporation of
compensation paid to any executive except with respect to certain forms of
incentive compensation that qualify for exclusion, is one of many factors that
the Company considers in designing its incentive compensation arrangements. The
Company views the objectives outlined above as more important than compliance
with the technical requirements necessary to exclude compensation from the
deductibility limit of IRC Section 162(m). Nevertheless, the Company anticipates
that the amount of compensation in excess of the deductibility limit of IRC
Section 162(m) for all executive officers as a group will not be material. See
"Description of Restated Plan -- Tax Effect" for certain information concerning
the tax effect of the Restated Plan.
COMPENSATION PROGRAM COMPONENTS
The Personnel Committee, assisted by its outside consultant, evaluates the
total compensation package of executives annually in relation to competitive pay
levels. For positions with corporate-wide responsibility, the Committee uses a
blend of competitive data from comparably sized companies in the electric
utility industry and general industry, reflecting the diversification of the
Company's business operations. The companies used for the competitive
compensation analysis are not exactly
11
<PAGE>
the same as those electric utility companies included in the preparation of the
performance graph set forth below because the Committee believes that all of
those companies are not necessarily the Company's most direct competitors for
executive talent. The weighting of the data for each officer depends upon the
responsibilities of the officer. For officers whose exclusive focus is electric
operations, the weighting is 100% electric utility industry data; for officers
who have corporate-wide focus, the weighting depends upon the relative size of
the electric operations at the time the analysis is made. For 1993, the
weighting ranged from 75% to 80% electric utility industry and 20% to 25%
general industry data. The Committee seeks to maintain compensation
opportunities for the Company's senior executives such that they have a higher
percentage of compensation at risk than is typical for similar positions in the
utility industry. For Mr. Robinson, the Committee establishes awards under the
Company's Long-Term Incentive Plan, but the board of directors of Pacific
Telecom has responsibility for fixing his annual cash compensation and his
awards under Pacific Telecom's Long-Term Incentive Plan.
The Company's executive compensation program consists of two principal
elements: (a) annual cash compensation; and (b) long-term incentive pay. Actual
compensation depends upon performance as described below.
Annual cash compensation is comprised of base salary and annual incentive
compensation. Base salaries and target incentive amounts are considered for
adjustment annually based upon competitive pay levels, individual performance
and potential, and changes in duties and responsibilities. Base salary and the
incentive target are set at a level such that total annual cash compensation for
satisfactory performance would approximate the midpoint of pay levels in the
comparison group used to develop competitive data. Actual incentive amounts may
be less or more than target depending upon Company and business unit performance
in relation to established performance objectives, which include achievement of
targeted earnings available for Common Stock and the success of the
participant's organizational unit in achieving specific operational, financial
and management goals such as employee safety, system availability and
reliability, cost containment, customer service, and environmental stewardship.
The relative weights of the performance criteria vary among organizational units
in accordance with the nature of their operations. Earnings to a specified limit
above the threshold target fund the incentive pool. For 1993, the Company
achieved earnings available for Common Stock that resulted in a fully funded
incentive pool. The incentive pool is limited to 150% of the officers' aggregate
target awards. The amount of annual incentive compensation payable to a
participant from the pool is a function of actual operating unit performance
relative to goals. In aggregate, the operating units achieved 93% of the
objectives established for 1993. For selected PacifiCorp officers with overall
corporate responsibility, the Company's performance measurement is based on a
weighted average of the performance factors of the Company's businesses. For
1993, actual awards ranged between 110% and 158% of target awards. The plan
contains a formula under which the maximum amount that any participant can
receive is 200% of the participant's target award. Payments for 1993 are shown
in the Summary Compensation Table below.
The long-term incentive compensation program is intended to encourage
executives to strive to achieve sustained superior earnings performance and
increased shareholder value. During 1993, the Committee reviewed the Company's
long-term incentive plan, which had been adopted in 1985, to determine if it
continued to be consistent with the Company's objectives. Following that
evaluation and after consideration of various alternative methods of providing
incentives for achievement of the Company's objectives, the Committee, with the
assistance of its consultant, developed the 1993 Restatement of the Long-Term
Incentive Plan to replace the existing plan. This Restated Plan is designed to
provide stock-based incentives in the form of annual grants of restricted stock
coupled with a requirement that participants invest their own personal resources
in the stock of the Company or Pacific Telecom. The Restated Plan is more fully
described elsewhere in this proxy statement. See "Restatement of the Long-Term
Incentive Plan."
The Committee believes the Restated Plan will align the interests of
executive employees more closely with those of shareholders, will provide an
opportunity to link grant size to achievement of performance, and will provide a
stronger compensation element for retention of key employees. The principal
factors considered by the Committee in selecting participants and determining
the level of grants made in November 1993 were the Committee's subjective
assessment of the success of the restructuring of the Company in 1993 and the
improvement in the Company's financial performance
12
<PAGE>
following that restructuring. The Committee assessed the improvement in the
Company's financial performance by comparing the Company's projected 1993
financial results to the 1992 results and budgeted 1993 results, which
reflected, among other things, significant improvements in the Company's total
shareholder return and earnings per share growth. The Committee also considered
the success of the restructuring efforts to be consistent with its long-term
strategy to refocus the Company on its core utility business and the resulting
more favorable competitive position of the Company. The Committee did not
specifically consider the Company's 1993 performance in relation to peer
companies because the Company's unique circumstances, given the extent and
nature of its restructuring, made internal comparisons more relevant. The
Committee also was aware that targeted awards of 102,318 shares for the
four-year cycle which began January 1, 1990 and ended December 31, 1993 were not
paid under the current plan because the established performance objectives were
not met.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
No adjustment was made to Mr. Gleason's base salary or target incentive
amount during 1993 or 1992. The Committee decided to freeze his base salary at
1991 levels until his normal retirement date in April 1995. In lieu of any
salary increases during this period, Mr. Gleason was granted 16,300 shares of
restricted Company Common Stock in December 1992 as a long-term retention device
that links his compensation more directly to returns received by shareholders.
The amount of the stock grant was calculated based upon an estimate of the
increases in salary and related bonus that Mr. Gleason might have reasonably
expected to receive during the remainder of his service based on data available
to the Committee with respect to compensation increases anticipated for chief
executive officers of comparable companies. This stock will be forfeited if Mr.
Gleason voluntarily terminates his employment, or if his employment is
terminated for cause prior to his normal retirement date.
Mr. Gleason received a restricted stock grant in 1993 of 17,000 shares under
the Restated Plan. In fixing Mr. Gleason's award, the Committee considered the
significant improvement in the performance of the Company and Pacific Telecom
during the year, as well as the progress made with respect to the disposition of
noncore operations. The Committee also approved an annual incentive payment to
Mr. Gleason for 1993 performance. His incentive award, as shown in the Summary
Compensation Table, reflects 147% of his target award for the year. In
establishing Mr. Gleason's incentive award, 80% was based on the performance of
the Company's electric operations, as described above, and 20% was based on the
performance of Pacific Telecom and PacifiCorp Financial Services. The
performance of Pacific Telecom was measured on the basis of the return on
shareholders' equity for the year and the compound annual growth in net income
for the five-year period then ended. The performance of PacifiCorp Financial
Services was based on the subjective assessment of its achievement of objectives
relating to return on assets, reduction of debt and realization of asset values
consistent with established reserves. Effective February 1, 1994, Mr. Gleason
was elected Vice Chairman of the Board. Until his retirement, Mr. Gleason will
be compensated at an annual rate equal to his compensation for 1993.
Frederick W. Buckman was elected President and Chief Executive Officer of
the Company to succeed Mr. Gleason effective February 1, 1994. The Committee,
assisted by its outside consultant, developed a total compensation package
within the Company's compensation philosophy to attract him to accept the
leadership role as President and Chief Executive Officer, and to compensate him
for the loss of certain long-term compensation he would sacrifice by accepting
the Company's offer. That package includes a base salary of $504,116 for 1994
and a fixed bonus of $252,083; a grant of 25,000 shares of restricted stock that
will vest over a four-year period; and a grant of up to an additional 25,000
shares of restricted stock to be awarded contingent upon share-for-share
purchases by Mr. Buckman.
PERSONNEL COMMITTEE
C. Todd Conover
John C. Hampton
Nolan E. Karras
Nancy Wilgenbusch
13
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, S&P 500 INDEX AND TOP 50 UTILITIES*
The following graph provides a comparison of the annual percentage change in
the cumulative total shareholder return on the Company's Common Stock, with the
cumulative total return of the S&P 500 Index and the top 50 electric utilities,
ranked by 1992 revenues, as listed by Salomon Brothers. The comparison assumes
$100 was invested on December 31, 1988 in the Company's Common Stock and in each
of the foregoing indices and assumes the reinvestment of dividends. The only
change in the companies included in the list of the top 50 electric utilities
between 1992 and 1993 was the replacement of Hawaiian Electric Industries by
DPL, Inc. Hawaiian Electric Industries' revenues fell below the top 50
threshold.
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 FEB. 1993 1993
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
PacifiCorp $ 100.00 $ 137.47 $ 143.64 $ 172.37 $ 144.94 $ 135.64 $ 150.34
S&P 500 100.00 131.59 127.49 166.17 178.81 181.96 196.75
Top 50 Utilities 100.00 132.96 135.62 175.60 189.58 206.17 211.73
<FN>
- ------------------------
In February 1993 the Company agreed to dispose of its 82% interest in NERCO, its
mining and resource development subsidiary.
</TABLE>
*Allegheny Power System
American Electric Power
Baltimore Gas & Electric
Boston Edison Co
Carolina Power & Light
Centerior Energy Corp
Central & South West Corp
Cincinnati Gas & Electric
CMS Energy Corp
Commonwealth Edison
Consolidated Edison of NY
Detroit Edison Co
Dominion Resources Inc
DPL Inc
DQE Inc
Duke Power Co
Entergy Corp
Florida Progress Corp
FPL Group Inc
General Public Utilities
Gulf States Utilities Co
Houston Industries Inc
Illinois Power Co
Long Island Lighting
New England Electric System
New York State Elec & Gas
Niagara Mohawk Power
NIPSCO Industries Inc
Northeast Utilities
Northern States Power-MN
Ohio Edison Co
Oklahoma Gas & Electric
Pacific Gas and Electric Co
Pennsylvania Power & Light
Philadelphia Electric Co
Pinnacle West Capital
Potomac Electric Power
PSI Resources Inc
Public Service Co of Colo
Public Service Entrp
San Diego Gas & Electric
SCANA Corp
SCEcorp
Southern Co
TECO Energy Inc
Texas Utilities Co
Union Electric Co
UtiliCorp United Inc
Western Resources Inc
Wisconsin Energy Corp
14
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
services in all capacities to the Company and its subsidiaries for fiscal years
ended December 31, 1993, 1992 and 1991 of those persons who were, at December
31, 1993, the Chief Executive Officer of the Company and the other four most
highly compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION --------------------------
------------------------------------ LONG-TERM ALL OTHER
NAME AND ANNUAL OTHER ANNUAL RESTRICTED INCENTIVE COMPEN-
PRINCIPAL POSITION SALARY BONUS (1) COMPENSATION STOCK AWARD PAYOUTS SATION (2)
- --------------------------------------- --------- ---------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
A.M. Gleason........................... 1993 $ 600,000 $ 439,991 $ -- $ 323,000(3) $ -- $ 14,314
President and Chief 1992 600,000 -- 10,750 317,850(4) -- 16,141
Executive Officer of 1991 605,308 450,000 10,562 -- 1,217,945(5) 16,251
the Company
Charles E. Robinson.................... 1993 387,500 232,500 -- 85,500(3) 185,865(6) 12,611
Chairman, President 1992 375,000 -- -- -- 380,419(6) 12,006
and Chief Executive 1991 373,462 226,000 -- -- 289,512(5) 11,856
Officer of
Pacific Telecom
William J. Glasgow..................... 1993 286,068 156,710 -- 52,250(3) 70,000(7) 289,826(8)
Senior Vice President and 1992 280,000 -- 3,626 -- 198,000(7) 9,445
Chief Financial Officer of 1991 248,750 168,100 2,529 -- -- 9,185
the Company, and President
and Chief Executive Officer of
PacifiCorp Holdings, Inc.
Verl R. Topham......................... 1993 275,000 130,074 -- 104,500(3) -- 9,564
President of Utah Power 1992 251,002 -- -- -- -- 10,277
1991 231,006 99,400 -- -- -- 10,024
Paul G. Lorenzini...................... 1993 230,000 113,861 -- 104,500(3) -- 9,401
President of Pacific Power 1992 210,367 -- 1,110 -- -- 9,219
1991 165,210 59,200 805 -- 96,016(5) 8,494
<FN>
- ------------------------
(1) Please refer to the Personnel Committee Report for a description of the
Company's annual executive incentive plans. Incentive amounts are reported
for the year in which the related services were performed.
(2) Amounts shown for 1993 include (a) contributions of $9,214 to the
PacifiCorp K Plus Employee Savings and Stock Ownership Plan for Messrs.
Gleason, Robinson, Glasgow and Topham, and $9,097 for Mr. Lorenzini and (b)
$5,100, $3,397, $612, $350 and $304 for the portion of premiums on term
life insurance policies for Messrs. Gleason, Robinson, Glasgow, Topham and
Lorenzini, respectively, paid by the Company. These benefits are available
to all employees.
(3) Restricted stock grants made in November 1993 pursuant to the proposed 1993
Restatement of the Company's Long-Term Incentive Plan. (See "Restatement of
the Long-Term Incentive Plan" for a description of the Restated Plan and
the terms of the restricted stock grants.) Except for the restricted stock
grant to Mr. Gleason in 1992, as described in note 4 below, no other
restricted stock grants were made by the Company through 1993. At December
31, 1993, the aggregate value of all restricted stock holdings, based on
the market value of the shares at December 31, 1993, without giving effect
to the diminution of value attributed to the restrictions on such stock, of
Messrs. Gleason, Robinson, Glasgow, Topham and Lorenzini, respectively,
were $641,025, $86,625, $52,938, $105,875 and $105,875, respectively.
(4) Restricted stock grant on December 4, 1992 of 16,300 shares to Mr. Gleason
in connection with freezing his base salary at 1991 levels through his
normal retirement date in April 1995.
</TABLE>
(FOOTNOTES CONTINUED ON FOLLOWING PAGE.)
15
<PAGE>
<TABLE>
<S> <C>
Mr. Gleason will forfeit his entire stock grant if he voluntarily
terminates his employment or his employment is terminated for cause prior
to that date. Regular quarterly dividends are paid on the restricted stock.
See "Personnel Committee Report on Executive Compensation."
(5) Please refer to the "Restatement of the Long-Term Incentive Plan" for a
description of the Company's current Long-Term Incentive Plan. The costs of
this plan are borne by the participant's employer. For the four-year cycle
which ended December 31, 1991, and for which the payouts are listed in the
Summary Compensation Table, the performance criteria were relative return
on equity compared to an industry composite, earnings-per-share growth,
cash flow per share growth, and return on equity in excess of the risk-free
interest rate.
(6) Mr. Robinson is a participant in the Pacific Telecom Long-Term Incentive
Plan, under which participants received from zero to 260% of the targeted
shares of Pacific Telecom common stock, plus dividend equivalents in cash,
upon completion of a performance cycle based on their degree of success in
meeting the established long-term objectives. The plan had a four-year
performance cycle that ended December 31, 1992. In connection with the
proposed 1994 restatement of that plan and 1994 restricted stock grants
made thereunder, which are subject to shareholder approval at the 1994
annual meeting of shareholders of Pacific Telecom, the four-year
performance cycle scheduled to end December 31, 1994 was terminated and
prorated awards for that performance cycle were made to participants in
December 1993. The four-year performance cycle beginning January 1, 1993
and ending December 31, 1996 was terminated without any awards having been
made thereunder. For the performance cycle ended December 31, 1992, the
performance criteria were relative return on equity compared to an industry
composite and earnings per share growth. For the performance cycle ended
December 31, 1994, the performance criteria were earnings per share growth
and return on equity compared to a five-year Treasury Bond rate.
(7) Mr. Glasgow was a participant in the PacifiCorp Financial Services
Executive Long-Term Incentive Plan, which had a three-year performance
cycle ended December 31, 1992. Participants received from zero to 250% of a
target amount, which was determined as a percentage of the participant's
base salary, in cash based on their degree of success in meeting
established performance objectives. For the performance cycle ended
December 31, 1992, the performance criteria were based on continuing
efforts to downsize PacifiCorp Financial Services. Effective December 31,
1993, the plan was cancelled with two four-year cycles in progress. The
payment shown for 1993 reflects a proration of awards for those cycles in
recognition of the achievement of the Company's goals as a result of the
decision to accelerate disposition of financial services assets.
(8) Mr. Glasgow, as an employee of NERCO, was a participant in a sale incentive
program under which participants received a lump sum cash payment equal to
their base annual salary upon the closing of the disposition of NERCO in
1993.
</TABLE>
SEVERANCE ARRANGEMENTS
Under an Executive Severance Plan adopted by the Company in 1988, each
member of the Company's Corporate Policy Group will receive a severance payment
equal to twice the executive's total cash compensation during the last full
calendar year upon the termination of his employment with the Company. The
severance payment will be made to the executive in 24 equal monthly payments
following the date of the termination of his employment, and the payments will
be terminated by the Company if the executive accepts employment with a
competitor of the Company or its affiliates. The Executive Severance Plan does
not apply to the termination of an executive for reasons of normal retirement,
death or total disability, or to a termination for cause or a voluntary
termination. "Voluntary termination" does not include termination following the
failure to redesignate an executive to or the removal of an executive from the
Corporate Policy Group, or following a material change ordered in an executive's
authority, unless such redesignation, removal or change is agreed to by the
executive. Under the plan, "cause" for termination includes any act by an
executive that is materially contrary to the interests of the Company or its
affiliates and the willful and continued failure by an executive to devote his
full business time and efforts to the business affairs of the
16
<PAGE>
Company. The Personnel Committee of the Board, which has responsibility for
administering the plan and interpreting its provisions, has also interpreted the
term "cause" to include (but not be limited to) both gross negligence and
conduct which indicates a reckless disregard for the consequences thereof, where
such negligence or conduct has a material adverse effect on the Company or its
affiliated companies. The costs of this plan are borne by the participant's
employer. The Executive Severance Plan will terminate on December 31, 1995,
unless extended by the Personnel Committee. The current members of the Corporate
Policy Group are Messrs. Buckman, Glasgow, Lorenzini, Robinson and Topham.
Pacific Telecom has adopted an executive severance plan for certain of its
executive officers, including Mr. Robinson, which has terms comparable to the
Company's plan. Pacific Telecom's plan is intended to replace the Company's plan
as it relates to severance benefits payable to Mr. Robinson.
RETIREMENT PLANS
The Company and most of its subsidiaries have adopted noncontributory
defined benefit retirement plans (Retirement Plans) for their employees (other
than employees subject to collective bargaining agreements that do not provide
for coverage). Certain executive officers, including the executive officers
named in the Summary Compensation Table, are also eligible to participate in the
Company's non-qualified Supplemental Executive Retirement Plan ("SERP"). The
following description assumes participation in both the Retirement Plans and the
SERP. Participants receive benefits at retirement payable for life based on
length of service with the Company or its subsidiaries and average pay in the 60
consecutive months of highest pay out of the last 120 months, and pay for this
purpose would include salary and bonuses as reflected in the Summary
Compensation Table above. Actuarially equivalent alternative forms of benefits
are also available at the participant's election. Retirement benefits are
reduced to reflect Social Security benefits. Participants are entitled to
receive full benefits upon normal retirement (after age 65 with at least 15
years of service or after age 62 with at least 30 years of service).
Participants are also entitled to receive reduced benefits upon early retirement
after age 55 and at least five years of service.
The following table shows the estimated annual retirement benefit payable
upon normal retirement age at age 65 as of January 1, 1994. Amounts in the table
reflect payments from the Retirement Plans and the SERP combined.
ESTIMATED ANNUAL PENSION AT NORMAL RETIREMENT
<TABLE>
<CAPTION>
FINAL AVERAGE YEARS OF CREDITED SERVICE
ANNUAL PAY AT --------------------------------------------------
RETIREMENT DATE 5 15 25 30
- -------------------------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
$ 200,000..................................................... $ 43,333 $ 130,000 $ 130,000 $ 130,000
400,000..................................................... 86,667 260,000 260,000 260,000
600,000..................................................... 130,000 390,000 390,000 390,000
800,000..................................................... 173,333 520,000 520,000 520,000
1,000,000.................................................... 216,667 650,000 650,000 650,000
<FN>
- ------------------------
(1) The benefits shown in the table above assume that the individual will
remain in the employ of the Company until normal retirement at age 65 and
that the plans will continue in their present form. Amounts shown above do
not reflect the Social Security offset.
(2) The number of credited years of service used to compute benefits under the
plans for Messrs. Gleason, Robinson, Glasgow, Topham and Lorenzini are 30,
30, 6, 22 and 7, respectively.
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the Company's Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Based solely on reports and other information submitted by executive
17
<PAGE>
officers and directors, the Company believes that during the year ended December
31, 1993, and prior fiscal years, each of its executive officers, directors and
persons who own more than ten percent of the Company's Common Stock filed all
reports required by Section 16(a), except for the late filing by Mr. Lorenzini
of a report concerning a transfer of shares for no consideration.
ANNUAL REPORT
The Company's Annual Report for the year 1993 is being mailed to
shareholders with this proxy statement.
METHOD AND COST OF SOLICITING PROXIES
The cost of the solicitation of proxies will be paid by the Company. In
addition to solicitation by mail, employees of the Company may request the
return of proxies personally, by telephone or telegraph. The Company will, on
request, reimburse brokers and other persons holding shares for the benefit of
others for their expenses in forwarding proxies and accompanying material and in
obtaining authorization from beneficial owners of the Company's stock to execute
proxies. In addition, the Company has retained Georgeson & Company, Inc. to aid
in the solicitation at a fee not to exceed $18,000 plus expenses.
OTHER MATTERS
SHAREHOLDER PROPOSALS TO BE INCLUDED IN THE COMPANY'S PROXY STATEMENT.
A shareholder proposal to be considered for inclusion in proxy material for
the Company's 1995 Annual Meeting must be received by the Company not later than
November 30, 1994.
SHAREHOLDER PROPOSALS NOT IN THE COMPANY'S PROXY STATEMENT.
Shareholders wishing to present proposals for action at this annual meeting
or at another shareholders' meeting must do so in accordance with the Company's
Bylaws. A shareholder must give timely notice of the proposed business to the
Secretary. To be timely, a shareholder's notice must be in writing, delivered to
or mailed and received at the principal executive offices of the Company not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that if less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made, notice by the shareholder, to be timely, must be
received no later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. For each matter the shareholder proposes to
bring before the meeting, the notice to the Secretary must include (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting, (b) the name and address of
the shareholder proposing such business, (c) the class and number of shares of
the Company which are beneficially owned by the shareholder and (d) any material
interest of the shareholder in such business. The officer presiding at the
meeting may, if in the officer's opinion the facts warrant, determine that
business was not properly brought before the meeting in accordance with the
Company's Bylaws. If such officer does so, such officer shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.
SHAREHOLDER NOMINATIONS FOR DIRECTORS.
Shareholders wishing to directly nominate candidates for election to the
Board of Directors must do so in accordance with the Company's Bylaws by giving
timely notice in writing to the Secretary as defined above. The notice shall set
forth (a) as to each person whom the shareholder proposes to nominate (i) all
information relating to such person that is required to be disclosed in proxy
solicitations pursuant to Regulation 14A under the Securities Exchange Act of
1934, and (ii) the written consent of such person to be named in the proxy
statement as a nominee and to serve as a director if elected; and (b) as to the
shareholder giving the notice (i) the name and address of such shareholder and
(ii) the class and number of shares of the Company which are beneficially owned
by such shareholder. If the shareholder is not a shareholder of record at the
time of giving the notice, the notice
18
<PAGE>
must be accompanied by appropriate documentation of the shareholder's claim of
beneficial ownership. No person shall be eligible to serve as a director of the
Company unless nominated in accordance with the procedures set forth in the
Bylaws. The officer presiding at the meeting may, if in the officer's opinion
the facts warrant, determine that a nomination was not made in accordance with
the procedures prescribed by the Bylaws. If such officer does so, such officer
shall so declare to the meeting and the defective nomination shall be
disregarded.
OTHER BUSINESS.
The Board of Directors does not intend to present any business for action of
the shareholders at the meeting except the matters referred to in this proxy
statement. If any other matters should properly come before the meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
thereon in accordance with their judgment on such matters.
Whether or not you expect to be present at the meeting, please sign the
accompanying form of proxy and return it promptly in the enclosed stamped return
envelope.
By Order of the Board of Directors
Sally A. Nofziger
VICE PRESIDENT AND CORPORATE SECRETARY
19
<PAGE>
The following copy of the PacifiCorp Long-Term Incentive Plan,
1993 Restatement, is being sent to the Commission pursuant to the
requirements of Instruction 3 to Item 10 of Regulation 14A. A copy of
the plan is not being sent to shareholders with the definitive proxy
statement.
<PAGE>
PACIFICORP LONG TERM INCENTIVE PLAN
1993 RESTATEMENT
<PAGE>
PACIFICORP LONG TERM INCENTIVE PLAN
1993 RESTATEMENT
PacifiCorp, an Oregon corporation (the "Company"), amends and
restates its Long Term Incentive Plan, as adopted effective January 1, 1985
and amended by Amendment No. 1 effective October 25, 1985, to provide in its
entirety as set forth herein. This Long Term Incentive Plan, as amended and
restated (the "Plan"), shall govern incentive awards made on or after the date
the Plan is approved by the Company's board of directors (the "Board of
Directors"). Approval of the Plan by the Board of Directors shall not affect
incentive awards to be made with respect to performance cycles that began
under the Company's existing Long Term Incentive Plan prior to such approval,
unless the Company and the recipients of such awards agree otherwise.
1. PURPOSE AND ADOPTION BY SUBSIDIARIES.
1.1 PURPOSE. The purpose of the Plan, as restated herein, is
to promote the long-term success of the Company and its Subsidiaries by
providing stock-based incentives for selected executive employees of the
Company and its Subsidiaries to exert their best efforts on behalf of
the Company and its shareholders. Awards under the Plan shall take the
form of grants of shares of the Company's Common Stock ("Common Stock").
Such shares shall be held by Plan participants ("Participants") subject
to satisfaction of such vesting and stock ownership restrictions as may
be specified at the time of grant.
1.2 SUBSIDIARIES. For purposes of this Plan, the term
"Subsidiary" shall mean any corporation that is a member, together with
the Company, of a controlled group of corporations within the meaning of
Internal Revenue Code Section 1563 and that adopts this Plan with the
Company's approval. Awards under the Plan for any Participant employed
by a Subsidiary shall be the financial responsibility of such
Subsidiary. The Subsidiary's agreement to be bound by this obligation
and other terms of the Plan shall be evidenced by a statement of
adoption of the Plan executed by the Subsidiary and by the Company.
All grants under the Plan to a participant employed by a Subsidiary
shall be treated for tax purposes as if made by the Subsidiary and shall
be reported accordingly.
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
in Section 7, the total number of shares of Common Stock that may be awarded
under the Plan shall not exceed 900,000 shares. Shares awarded under the Plan
shall be purchased on the open market for delivery to Participants.
<PAGE>
3. EFFECTIVE DATE AND DURATION OF PLAN.
3.1 EFFECTIVE DATE. The Plan shall become effective on the
date adopted by the Board of Directors; provided, however, that no award
under the Plan shall be deemed effective until the Plan is approved by
the affirmative vote of the holders of a majority of the securities of
the Company represented and entitled to vote at a duly held meeting of
the Company's shareholders at which a quorum is present. Any award made
prior to shareholder approval of the Plan shall be conditioned on and
made subject to such approval. Subject to this limitation, shares may
be awarded under the Plan at any time after the effective date and
before termination of the Plan.
3.2 DURATION AND EARLY TERMINATION. Unless earlier
terminated, the Plan shall continue in effect until all shares available
for awards under the Plan have been awarded and all restrictions on such
shares, if any, have lapsed. The Board of Directors may suspend or
terminate the Plan at any time except with respect to outstanding shares
held subject to restrictions. Termination shall not affect the
forfeitability of shares awarded under the Plan.
4. ADMINISTRATION.
4.1 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, waive or modify any restriction applicable
to shares (except those restrictions imposed by law) and make all other
determinations that are, 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.
4.2 COMMITTEE. The Board of Directors may delegate to a
committee 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,
2
<PAGE>
and (ii) that only the Board of Directors may terminate or amend the
Plan as provided in Sections 3.2 and 11.
4.3 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
selection of Participants or decisions concerning the timing, pricing,
or amounts of awards. No officer to whom administrative authority has
been granted under this Section 4.3 may waive or modify any restriction
applicable to shares granted to such officer under the Plan.
5. ELIGIBILITY. All executive employees of the Company and its
Subsidiaries are eligible for selection as Participants. The Board of
Directors may, from time to time, select as Participants those executive
employees who the Board of Directors believes have made or will make important
contributions to the long-term performance of the Company and its
Subsidiaries.
6. AWARDS.
6.1 GRANT CRITERIA. In determining the individuals to whom
awards under the Plan shall be made and the amounts of the awards, the
Board of Directors shall consider criteria such as the following:
(a) Total shareholder return relative to peer companies;
(b) Earnings per share growth over time relative to peer
companies;
(c) Achievement of long term goals, strategies and plans;
and
(d) Maintenance of competitive position.
6.2 RESTRICTIONS. Shares awarded shall be subject to such
terms, conditions, and restrictions as may be determined by the Board of
Directors to be consistent with the purpose of the Plan and the best
interests of the Company. The restrictions may include, without
limitation, stock transfer restrictions and forfeiture provisions
designed to facilitate the achievement by Participants of specified
stock ownership goals.
6.3 AGREEMENTS. The Board of Directors may require the
recipient to sign an agreement as a condition of the award.
7. CHANGES IN CAPITAL STRUCTURE. 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 or of another
3
<PAGE>
corporation by reason of any reorganization, merger, consolidation, plan of
exchange, recapitalization, reclassification, stock split-up, combination of
shares or dividend payable in shares, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for awards
under the Plan. 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.
8. ACCELERATION UPON TERMINATION AFTER CHANGE IN CONTROL.
Notwithstanding any other provisions of the Plan or related agreements, all
restrictions affecting shares of Common Stock awarded to a Participant under
the Plan shall immediately lapse upon termination of the Participant's
employment within two years after the date on which any one of the following
events has taken place:
8.1 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
8.2 20 PERCENT OWNER. The Company receives a report on
Schedule 13D under the Exchange Act reporting the beneficial ownership
by any person of 20 percent or more of the Company's outstanding Common
Stock; or
8.3 BOARD OF DIRECTORS. During any period of 12 months or
less, individuals who at the beginning of such period constituted a
majority of the Board of Directors cease for any reason to constitute a
majority thereof unless the nomination or election of such new directors
was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period.
9. STOCK CERTIFICATE LEGENDS. The certificates representing shares
of Common Stock awarded under the Plan shall bear any legends required by the
Board of Directors.
10. WITHHOLDING TAX. The Company may require any recipient of an
award under the Plan to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements. If the recipient fails to pay the amount demanded, the Company
may withhold that amount
4
<PAGE>
from other amounts payable by the Company to the recipient, including salary
or fees for services, subject to applicable law.
11. 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 Sections 4.1 and 8, however, no change in
an award already granted shall be made without the written consent of the
recipient of such award.
12. 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. 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.
13. 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 or any
Subsidiary any right to be retained or employed by the Company or any
Subsidiary or to the continuation, extension, renewal, or modification of any
compensation, contract, or arrangement with or by the Company or any
Subsidiary.
14. RIGHTS AS A SHAREHOLDER. The recipient of an award under the
Plan shall have the right to vote all shares of Common Stock awarded to such
recipient and shall have the right to all ordinary dividends payable in
respect of such shares, regardless of whether such shares have vested or are
subject to restrictions.
Adopted by Board of Directors: November 17, 1993
Approved by Shareholders: , 199__
5
<PAGE>
PACIFICORP LONG TERM INCENTIVE PLAN
1993 RESTATEMENT
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement ("Agreement") is made effective as
of __________________, 19_____, 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 Long Term Incentive
Plan, 1993 Restatement (the "Plan") and subject to approval of such Plan by
the Company's shareholders at the Company's 1994 annual meeting of
shareholders, the Company hereby awards to the Employee _____________ shares
(the "Grant Shares") of the Company's Common Stock for calendar year 1994 (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. The Company and the
Employee agree that this award shall terminate and supersede any rights to
performance shares associated with the 1992-1995 performance cycle that began
under the Company's Long Term Incentive Plan prior to adoption of 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
<PAGE>
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, 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, as defined in Section
3.1, within two years after one of the events described in
Sections 8.1, 8.2 or 8.3 of the Plan;
2
<PAGE>
(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).
(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 and Pacific Telecom, Inc. Common
Stock "beneficially owned" by the Employee within the meaning of
3
<PAGE>
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")
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:
Value of Target Value of Target
Annual Shares Purchased - Shares Disposed
Purchase = of
---------------------------------------------
Percent-
age 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.
(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 Grant
Year, the Company shall conduct a valuation of all the Target
Shares held by the Employee on such January 1. For purposes
4
<PAGE>
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. Each share of Pacific Telecom, Inc.
Common Stock shall be deemed to have a value equal to the average
closing price of such stock as quoted on the NASDAQ National
Market over the 20 trading days immediately preceding such January
1.
(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 (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
(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 (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
5
<PAGE>
Administrator"), may 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 4.3 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
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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 STOCKHOLDER. 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 with respect to
such shares from the date of grant. 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. The Employee agrees that any dividends declared or paid in respect of
the Grant Shares prior to the Company's 1994 annual meeting of shareholders
shall be subject to forfeiture in the event shareholder approval of the Plan
is not obtained at the annual meeting. If forfeiture occurs, the Employee
shall promptly pay to the Company the full amount of dividends received. If
the Employee fails to repay such forfeited dividends, the Company shall have
the right to withhold the amount of such dividends from the Employee's salary
or other amounts payable to the Employee.
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.
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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.
COMPANY: PACIFICORP, an Oregon corporation
By:_____________________________
Title:__________________________
EMPLOYEE: ________________________________
[signature]
________________________________
[type or print name]
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PROXY PACIFICORP PROXY
The undersigned hereby appoints Frederick W. Buckman, C. Todd Conover and
Keith R. McKennon and each of them, proxies with power of substitution, to vote
in behalf of the undersigned at the Annual Meeting of Shareholders of PacifiCorp
on May 11, 1994, and at any adjournment thereof, all shares of the undersigned
in PacifiCorp. The proxies are instructed to vote as follows:*
Item 1. Election of Directors.
Nominees: Class I C. Todd Conover, John C. Hampton,
Nolan E. Karras, Keith R. McKennon
Class III Frederick W. Buckman
___ FOR all nominees listed (except as marked to the contrary above)
(TO WITHHOLD YOUR VOTE FOR ANY NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE)
___ WITHHOLD AUTHORITY to vote for all nominees listed.
Item 2. Approval of the 1993 Restatement of the PacifiCorp Long-Term
Incentive Plan FOR ___ AGAINST ___ ABSTAIN ___
Item 3. Approval of Deloitte & Touche as FOR ___ AGAINST ___ ABSTAIN ___
auditor
(The Board of Directors recommends a vote FOR Items 1, 2 and 3.)
*PACORP, as custodian under the Company's Dividend Reinvestment and Stock
Purchase Plan, Harris Trust and Savings Bank, as trustee under the Company's
K Plus Employee Savings and Stock Ownership Plan and Trust, and First Interstate
Bank of Utah as trustee for the Utah Power & Light Employee Savings and Stock
Purchase Plan of PacifiCorp, are instructed to execute a proxy, with identical
instructions, for any shares held for my benefit.
PLEASE SIGN ON OTHER SIDE AND RETURN PROMPTLY
<PAGE>
(Continued from other side)
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
INSTRUCTIONS, IF GIVEN. IF NO INSTRUCTIONS ARE GIVEN, THEY WILL BE VOTED FOR
THE DIRECTORS, FOR THE 1993 RESTATEMENT OF THE PACIFICORP LONG-TERM INCENTIVE
PLAN AND FOR THE AUDITOR. THE PROXIES MAY VOTE IN THEIR DISCRETION AS TO OTHER
MATTERS THAT MAY COME BEFORE THE MEETING.
Receipt is acknowledged of the notice and proxy statement relating to this
meeting.
______________________________________________________________________________
Signature Date Signature if held jointly Date
______________________________________________________________________________
IMPORTANT: Please sign exactly as name(s) To facilitate meeting
appear above. arrangements, please
check here if you plan ___
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS to attend the meeting
in person.
Please mark, date, sign and
return proxy card promptly.
