<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to
sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
PORTLAND GENERAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[PORTLAND GENERAL LOGO]
ONE WORLD TRADE CENTER
121 SW SALMON STREET
PORTLAND, OREGON 97204
Dear Common Shareholder:
You are cordially invited to attend Portland General Corporation's Annual
Meeting of Shareholders. The meeting will be held:
Tuesday, May 2, 1995 - 1:30 p.m.
Portland General Electric Company
Western Region Center
14655 SW Old Scholls Ferry Road
Beaverton, Oregon 97007
Please refer to page 19 for a map and directions to the meeting.
The Notice of Annual Meeting of Shareholders and Proxy Statement for
Portland General Corporation follow. Even if you plan to attend the Annual
Meeting in person, it is extremely important that you return the enclosed Proxy
Card to ensure that your shares are voted at the meeting. Please MARK, DATE,
SIGN, AND RETURN your Proxy Card promptly in the enclosed postage-paid envelope.
The Directors, officers, and employees of Portland General Corporation look
forward to seeing you at the meeting.
Sincerely,
/s/ KEN L. HARRISON
Ken L. Harrison
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
[PORTLAND GENERAL LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 1995
To the Shareholders:
You are invited to be present, either in person or by proxy, at the Annual
Meeting of Shareholders of Portland General Corporation to be held on Tuesday,
May 2, 1995 at 1:30 p.m. to take action on:
1. Election of Four Class III members of the Board of Directors to hold
office until the 1998 Annual Meeting or until their successors are
elected and qualified.
2. Ratification of the appointment of Arthur Andersen LLP as independent
public accountants for the year 1995.
3. A shareholder proposal to require that new independent public
accountants be appointed every four years commencing 1996.
4. Any other business as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record of Common Stock at the close of business on
March 14, 1995 will be entitled to notice of and to vote on these items at the
Annual Meeting. If you have shares registered in the name of a brokerage firm or
trustee and plan to attend the meeting, please obtain from the firm or trustee a
letter, account statement, or other evidence of your beneficial ownership of
those shares to facilitate your admittance to the meeting. The stock transfer
books will not be closed.
Shareholders planning to attend the meeting in person are requested to
arrive shortly after 1:00 p.m. This will permit registration and admittance in
ample time to begin the meeting promptly at 1:30 p.m.
Portland, Oregon
March 31, 1995
By Order of the Board of Directors
LEONARD A. GIRARD
Senior Vice President,
General Counsel, and Secretary
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YOUR VOTE IS IMPORTANT
Your vote is important, regardless of the number of shares you own, and is
necessary to ensure a quorum for the meeting. Therefore, whether you expect to
attend the meeting in person or not, please mark, date, sign, and return your
Proxy Card promptly in the enclosed postage-paid envelope. This will also help
expedite the counting of votes. If you attend the meeting and prefer to vote in
person, you may revoke your proxy.
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<PAGE> 4
PROXY STATEMENT
OF
PORTLAND GENERAL CORPORATION
(FIRST MAILED MARCH 31, 1995)
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Portland General Corporation ("Portland
General" or "Company"), an Oregon corporation, for use at the Annual Meeting of
Shareholders to be held Tuesday, May 2, 1995, and any adjournment thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders.
To ensure that your shares will be voted, please mark, sign, and return the
form of proxy enclosed with this Proxy Statement. Shareholders who execute
proxies may revoke them before they are voted by attending the meeting and
voting in person, by providing a written notice of revocation, or by returning a
duly executed proxy bearing a later date to the Company's Transfer Agent, First
Chicago Trust Company of New York, PO Box 8626, Edison, NJ 08818-9133. All valid
proxies received, unless revoked, will be voted at the meeting as directed by
the shareholder. If no direction is given, proxies received will be voted FOR
the Directors who are up for election, FOR the ratification of the appointment
of Arthur Andersen LLP as independent public accountants for the year 1995, and
AGAINST the Shareholder proposal to replace the Company's independent public
accountants every 4 years.
Solicitation of proxies will be primarily by mail. Directors, officers, and
employees of Portland General or its subsidiaries, or of its Transfer Agent, may
also solicit proxies by telephone, by mail, and in person. In addition, Portland
General has engaged Beacon Hill Partners, Inc. at a cost of $4,500.00, plus
reasonable out-of-pocket expenses, to solicit proxies in the same manner. The
expenses of solicitation, including the cost of preparing and mailing this Proxy
Statement and enclosures, will be paid by Portland General. Solicitation costs
will include reimbursement to brokerage firms and others for their reasonable
expenses in forwarding material to beneficial owners of stock, in accordance
with the New York Stock Exchange schedule of charges.
A copy of Portland General's 1994 Annual Report accompanies this Notice and
Proxy Statement or was previously mailed under separate cover beginning on or
about March 31, 1995.
VOTING
Only holders of Common Stock of record at the close of business on March
14, 1995 will be entitled to notice of and to vote at the meeting, either in
person or by proxy. On that date, Portland General had 50,611,832 shares of
Common Stock issued and outstanding, including shares owned beneficially by
participants in the Dividend Reinvestment and Optional Cash Payment Plan, the
Employee Stock Purchase Plan, and the Retirement Savings Plan. Each share
outstanding is entitled to one vote.
A majority of the shares of Common Stock outstanding must be represented at
the meeting, in person or by proxy, to constitute a quorum for the transaction
of business. Under Oregon law a favorable vote by a plurality of shares of
Common Stock voting on the Directors is required to elect the Directors, and a
favorable vote by a majority of shares of Common Stock voting is required to
ratify the appointment of the independent public accountants and to approve the
shareholder proposal. Abstentions and broker non-votes are counted in
determining if a quorum exists, but are not counted in determining the outcome
of the vote for the election of Directors, the ratification of the appointment
of independent auditors, or the shareholder proposal.
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<PAGE> 5
NOTE TO PARTICIPANTS IN THE DIVIDEND REINVESTMENT AND
OPTIONAL CASH PAYMENT PLAN AND EMPLOYEE BENEFIT PLANS
The enclosed proxy includes power to vote the number of shares of Common
Stock registered in your name, according to the books of Portland General's
Transfer Agent, and the number of shares of Common Stock beneficially owned by
you in the Dividend Reinvestment and Optional Cash Payment Plan ("DRP"). In
addition, if you are a participant in the Retirement Savings Plan ("RSP") or the
Employee Stock Purchase Plan ("ESPP"), the proxy also serves as your voting
instructions to the Trustee and Plan Administrator of those plans to vote the
shares of Common Stock beneficially owned by you in those Plans.
Portland General will mail this Proxy Statement and a proxy to all persons
who, according to the books of Portland General's Transfer Agent and the books
of the Trustee and Plan Administrator of the RSP and ESPP, beneficially hold
shares of Common Stock in the DRP, RSP or ESPP.
ELECTION OF DIRECTORS
The four Class III Directors elected at this Annual Meeting will serve a
three-year term ending at the time of the Annual Meeting in 1998, or until their
successors are elected and qualified.
In the absence of contrary instruction, it is the intention of the persons
named in the proxy to vote such proxy FOR the persons listed, all of whom are
presently members of the Board of Directors. Should any nominee be unable to
serve, the persons named in the proxy will have discretionary authority to
nominate and vote for a suitable substitute or substitutes.
Except as specifically noted, each Director and nominee has been employed
for more than five years in the capacity indicated. No family relationships
exist among the Directors, nominees, or Portland General's officers.
NAME, AGE, PRINCIPAL OCCUPATION
AND OTHER DIRECTORSHIPS (1)
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CLASS III
(NOMINEES FOR ELECTION FOR A TERM OF THREE YEARS EXPIRING IN 1998)
GWYNETH GAMBLE BOOTH, age 58. Director since 1981 (2)
Ms. Booth is a television producer/reporter, media consultant, and
community activist. She is also Chairman of the Board of Neighborhood
Partnership Fund of Oregon Community Foundation. (3)
PETER J. BRIX, age 58. Director since 1983 (2)
Mr. Brix is President, Hayden Investment Corporation, a marine
transportation and petroleum sales and investments company located in
Portland, Oregon. He was Chairman of the Board and Chief Executive Officer,
Brix Maritime Company until September 1993. Mr. Brix is also a Director of
Idaho Forest Industries; a Trustee of Willamette University; and a Director
of Totem Resources Corporation.
JOHN W. CREIGHTON, age 62. Director since 1990
Mr. Creighton is President, Chief Executive Officer and a Director,
Weyerhaeuser Company, a forest products company located in Tacoma,
Washington. Mr. Creighton is also a Director of Washington Energy Company;
MIP Properties, Inc.; and Quality Food Centers, Inc.
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<PAGE> 6
NAME, AGE, PRINCIPAL OCCUPATION
AND OTHER DIRECTORSHIPS (1)
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RANDOLPH L. MILLER, age 47. Director since 1987
Mr. Miller is President, Milcor, Inc., dba The Moore Company, a wholesale
distributor of consumer electronics, computer and office products, and
appliances located in Portland, Oregon. Mr. Miller is also a Director of
the Automobile Association of America, Oregon and Vice Chairman of the
National Computing Technology Industry Association.
CLASS II
(TERM EXPIRING IN 1997)
CAROLYN S. CHAMBERS, age 63. Director since 1993
Ms. Chambers is President and Chief Executive Officer, Chambers
Communication Corporation, a television and broadcasting company located in
Eugene, Oregon. Ms. Chambers is also a Director of U.S. National Bank of
Oregon; Chambers Construction Company; Sacred Heart General Hospital
Medical Services Organization; McKenzie River Motors; University of Oregon
Foundation; and C-Span.
KEN L. HARRISON, age 52. Director since 1987
Mr. Harrison is Chairman of the Board and Chief Executive Officer, Portland
General and Portland General Electric Company, and President of Portland
General.
WARREN E. McCAIN, age 69. Director since 1989
Mr. McCain has served since February 1991 as a Director and Chairman of the
Executive Committee of Albertson's, Inc., a retail food and drug chain
headquartered in Boise, Idaho and operating in 17 western and southern
states. He is a retired Chairman of the Board and Chief Executive Officer,
Albertson's, Inc. Mr. McCain is also a Director of West One Bancorp; and
Pope & Talbot, Inc.
JEROME J. MEYER, age 57. Director since 1993
Mr. Meyer is Chairman and Chief Executive Officer and a Director, Tektronix
Inc., an electronics manufacturer located in Wilsonville, Oregon. Prior to
joining the electronics firm in November 1990, he served as President of
Honeywell, Inc.'s Industrial Group in Minneapolis, Minnesota. Mr. Meyer is
also a Director of Oregon Joint Graduate School of Engineering; Solutronix,
Inc.; Esterline Technologies; and Oregon Business Council.
CLASS I
(TERM EXPIRING IN 1996)
JERRY E. HUDSON, age 57. Director since 1984 (2)
Dr. Hudson is President, Willamette University, Salem, Oregon.
RICHARD G. REITEN, age 55. Director since 1990
Mr. Reiten has served as President and Chief Operating Officer, Portland
General Electric Company, since August 1992. From January 1989 until August
1992 he was President, Portland General. Mr. Reiten is also a Director of
West One Bank, Oregon; West One Bank, Oregon, S.B.; and Blue Cross Blue
Shield, Oregon.
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NAME, AGE, PRINCIPAL OCCUPATION
AND OTHER DIRECTORSHIPS (1)
--------------------------------------------------------------------------------
BRUCE G. WILLISON, age 46. Director since 1989
Mr. Willison has served as Chairman, President, Chief Executive Officer and
a Director, First Interstate Bank of California, a subsidiary of First
Interstate Bancorp, Los Angeles, California, since January 1991. Mr.
Willison served as Chairman of the Board, Chief Executive Officer and a
Director, First Interstate Bank of Oregon, N.A., Portland, Oregon from July
1986 to January 1991.
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(1) All Directors of Portland General are also Directors of Portland General
Electric Company, a wholly owned subsidiary of Portland General.
(2) Includes time served on the Board of Portland General Electric Company prior
to the formation of Portland General in 1985.
(3) During 1994, Portland General and its subsidiaries retained the legal
services of Tonkon, Torp, Galen, Marmaduke & Booth. Ms. Booth's husband is a
partner in that firm. Portland General and its subsidiaries have retained
that firm for services to be rendered in 1995 and may retain the firm in the
future.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors has established standing audit, compensation and
nominating committees. The names of these committees, their current membership,
and a brief statement of their principal responsibilities are presented below.
MEETINGS OF THE BOARD OF PORTLAND GENERAL DURING 1994
During 1994, the Board of Directors of Portland General held six meetings.
All Directors attended 75 percent or more of the aggregate of the meetings of
the Board and the Committees on which they serve, except Mr. Creighton, who
attended 69 percent.
BOARD COMMITTEES
The Audit Committee held three meetings during 1994. Functions of this
Committee are to ensure adequate, appropriate, and responsive auditing services;
recommend independent auditors; review financial statements; review the
effectiveness of existing systems of control; review reports issued by the
Internal Audit Department; review policies concerning business practices; and
undertake other responsibilities deemed appropriate by the Board of Directors.
The members of this Committee are Bruce G. Willison, Chair; John W. Creighton;
Jerome J. Meyer; and Randolph L. Miller.
The Human Resources Committee held four meetings in 1994. Functions of this
Committee are to advise the Board of Directors on executive and employee
compensation and benefit plans, establish investment policy for certain employee
benefit trusts, and address other related matters. The members of this Committee
are Warren E. McCain, Chair; Gwyneth Gamble Booth; John W. Creighton; Jerome J.
Meyer; and Randolph L. Miller.
The Nominating Committee did not hold any meetings during 1994. Functions
of this Committee are to plan for, identify, evaluate, and recommend candidates
for vacancies on the Board of Directors. The members of this Committee are Jerry
E. Hudson, Chair; Peter J. Brix; Warren E. McCain; and Richard G. Reiten.
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Under the Bylaws, to nominate a Director at the Annual Meeting a
shareholder must give written notice of intent to make the nomination either by
personal delivery or by mail, to the Secretary, not later than 90 days prior to
the anniversary date of the immediately preceding Annual Meeting. Each notice
must include: (a) the name and address of the shareholder making the nomination
and the nominee; (b) a representation that the shareholder is a holder of record
of Common Stock and intends to appear in person or by proxy at the meeting to
make the nomination; (c) a description of all arrangements or understandings
between the shareholder and each nominee and any other persons (naming them)
pursuant to which the nomination is to be made; (d) such other information
regarding each nominee as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission; and
(e) the consent of each nominee to serve as a Director if elected. Unless this
procedure has been followed, the presiding officer of the meeting may refuse to
acknowledge the nomination. There is no formal procedure if a shareholder merely
wants to submit a recommendation to the Company for consideration.
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The shares of Common Stock beneficially owned by each Director, the
executive officers named in the table on page 11, and all Directors and
executive officers of the Company as a group as of January 31, 1995 are given in
the following table. No Director or executive officer owns more than 1 percent
of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OF BENEFICIAL
OWNER OWNERSHIP
--------------------- -----------------
<S> <C>
Gwyneth Gamble Booth 8,167(1)(3)
Peter J. Brix 10,354(1)
Carolyn S. Chambers 2,415(1)
John W. Creighton 5,552(1)
Ken L. Harrison 29,965(2)(4)
Jerry E. Hudson 6,447(1)
Warren E. McCain 6,790(1)
Jerome J. Meyer 2,415(1)
Randolph L. Miller 8,803(1)
Richard G. Reiten 19,253(2)(4)
Bruce G. Willison 6,894(1)
Richard E. Dyer 12,216(2)(4)
Leonard A. Girard 13,346(2)(4)
Joseph M. Hirko 12,630(2)(4)
All executive 203,929(5)
officers and
Directors as a group
(21 persons)
</TABLE>
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(1) Includes shares under the Outside Directors' Stock Compensation Plan.
(2) Includes shares held in the Retirement Savings Plan as of December 31, 1994.
(3) Does not include 500 shares of Common Stock held by spouse for which
beneficial interest is disclaimed.
(4) Includes shares held under the Performance Accelerated Restricted Stock
Program.
(5) For executive officers not named above, shares reported include shares held
in the Retirement Savings Plan and under the Performance Accelerated
Restricted Stock Program as of December 31, 1994.
OUTSIDE DIRECTORS' COMPENSATION
Compensation for nonemployee Directors in 1994 was an annual cash retainer
of $20,000, plus an additional $2,500 for serving as Chair of a standing Board
Committee. There are no additional per meeting fees. The retainers are paid
quarterly in equal installments. In order to receive payment of the fourth
quarter
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<PAGE> 9
retainer installment, Directors are required to have attended at least 75
percent of the total of all (i) Board meetings, (ii) meetings of Board
Committees on which the Director serves and (iii) individual or group meetings
with the Chairman that the Chairman designates as applying toward the 75 percent
test. All Directors received fourth quarter retainers.
In addition to the cash retainers, each nonemployee Director participates
in the Outside Directors' Stock Compensation Plan. Under the Plan, each
nonemployee Director was granted, at Plan inception or upon election as a
Director, $50,000 of Common Stock, one-fifth of which vests each year over the
succeeding five-year period. Nonemployee Directors having fewer than five years
of service remaining before retirement are granted $10,000 of stock for each
remaining year, an equal portion of which will vest each year until retirement.
Any shares that are not vested will be forfeited and returned to Portland
General if the recipient ceases to be a nonemployee Director for any reason
except death, in which case the shares scheduled to vest on the next anniversary
date will vest immediately. Dividends paid on unvested shares are reinvested for
each Director under the Portland General Dividend Reinvestment and Optional Cash
Payment Plan, which is available to all common shareholders. Shares acquired
through reinvested dividends are fully vested immediately to the Director. New
grants to incumbent Directors will be made each five years unless the Board
terminates the Plan. Upon the removal of a nonemployee Director from the Board
of Portland General by shareholders during a current term of office and within
three (3) years following a Change in Control (as defined on page 15), shares
will vest up to the number that would have vested had the Director completed the
current term of office. Mr. Willison was paid $3,959 for serving as Chair of a
special Board committee.
Nonemployee Directors may elect to defer up to 100 percent of their cash
retainer to be paid during the year. Interest is credited at a rate equal to a
three calendar month average of Moody's Average Corporate Bond Yield Index plus
three percent. Deferred amounts may not be withdrawn from the Plan before
retirement except for limited cases of hardship. Payments will be made in a lump
sum, or in a series of monthly payments over a period of up to 15 years, in the
event of death or retirement. Payments will be made in a lump sum in the event
of a Change in Control (as defined on page 15). During 1994, the amount of
interest credited under the Plan was $25,524 for Mr. Brix; $3,081 for Mr.
Creighton; $26,237 for Mr. Hudson; $14,237 for Mr. McCain; $829 for Mr. Meyer;
and $1,034 for Mr. Willison. Prior to their retirement from the Board on May 3,
1994, Mr. Clark and Mr. Roth were credited with $11,090 and $10,552 in interest,
respectively.
Nonemployee Directors participate in split-dollar arrangements which
provide life insurance benefits of $200,000 for each Director. Portland General
and the participant share the cost of the premium. However, Portland General
advances to the participant his/her share of the premium and treats it as
compensation. The participant's cost is thereby limited to the amount of tax
owed on the income generated by the compensation advance. Upon surrender or
cancellation of the policy, the participant is entitled to the balance of the
cash value of the policy after Portland General has recovered its share of the
premiums paid. In the event of a Change in Control (as defined on page 15),
Portland General will release its collateral interest in the policies and pay
each participant the amount required to maintain the level of death benefit
provided under the policies. The amounts paid by Portland General for the
Directors' share of the premiums in 1994 were $921 for Mr. McCain; $516 for Mr.
Creighton; $424 for Ms. Booth and Mr. Brix; $396 for Mr. Hudson; $214 for Mr.
Miller; $188 for Mr. Willison; $356 for Ms. Chambers; and $234 for Mr. Meyer.
Prior to their retirement from the Board on May 3, 1994, $585 was paid for
Messrs. Clark, Knudsen, and Roth.
Nonemployee Directors who retire after 10 or more years of continuous
service as a Director, or retire at age 70, receive a retirement benefit equal
to a percentage of the greater of compensation actually received during the last
12 months of service or one-third of the compensation actually received in the
last 36 months of service. The percentage is equal to five percent for each of
the first 10 years of service, plus two and one-half percent for each additional
year of service up to a maximum of 75 percent for 20 years or more of service.
In
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<PAGE> 10
the event a Director is removed from the Board within three years of a Change in
Control (as defined on page 15), the Plan provides for immediate vesting, the
crediting of additional years of service equal to those which would have been
credited had the Director completed the term of service and a lump sum benefit
payment within 60 days of removal.
HUMAN RESOURCES COMMITTEE AND
COMMITTEE UNDER THE LONG-TERM INCENTIVE PLAN
REPORT ON EXECUTIVE COMPENSATION
The objective of the Company's executive compensation program is to provide
competitive compensation which will attract, retain, and reward executives who
are capable of helping Portland General and Portland General Electric Company
("PGE") achieve their business objectives. Compensation is both market based and
performance driven. Total direct executive compensation consists of three
components: base pay, annual incentives and long-term incentives. These
executive pay programs are strongly linked to Company performance.
BASE PAY
Annually, the Human Resources Committee ("Committee") reviews and
recommends to the Board of Directors executive base pay for the Portland General
and PGE executives named on page 11. Current market compensation for similar
positions, Company performance and individual performance are reviewed by the
Committee before setting executive compensation. The Committee uses market data
from three different sources to assure that the compensation decisions for the
named executive officers are competitive and fair. For the Chief Executive
Officer ("CEO"), the PGE President, and the Vice President of Power Resources
and Marketing, a Committee-selected group of 14 national electric utilities and
utility holding companies is used as the market for making compensation
decisions. These utilities, whose selection is annually affirmed by the
Committee, are a subset of the Edison Electric Institute 100 Index of utilities
utilized in the performance graph on page 13. These utilities were chosen based
on their comparability, including historical performance records, to Portland
General and its principal electric utility subsidiary, PGE. Compensation for the
General Counsel is determined by reviewing the comparator group of 14 utilities
and general utility industry data for the position. The comparator group of
utilities is expanded to Edison Electric Institute's survey of over 100
utilities as the benchmark for setting the Chief Financial Officer's
compensation. Actual base compensation varies above or below
middle-of-the-market compensation depending upon corporate performance and the
individual executive's long-term contributions to the Company's business. The
CEO sets the compensation for executive officers other than the executive
officers named on page 11. In making the compensation decision, factors of
market data for each position, executive responsibilities, and individual and
internal comparability are reviewed by the CEO.
As a result of the Committee's review of the Company's 1993 earnings
performance and the market compensation for a CEO of a utility of comparable
size to the Company, the Committee adjusted the CEO's base pay upward to the
fiftieth percentile effective January 1, 1994. For 1994, compensation for
officers other than the CEO was also influenced by the expected strategic impact
of the position in the coming year, 1993 performance and internal equity.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation is totally dependent upon performance under
the Company's Annual Incentive Master Plan. The objectives of the plan are to
provide competitive management compensation and stimulate and reinforce
outstanding performance by participants to contribute substantially to the
achievement
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<PAGE> 11
of annual financial and strategic objectives of the Company. Superior
performance is encouraged by setting the annual incentive pay opportunity at
approximately the 75th percentile of compensation of the Edison Electric
Institute's survey of over 100 utilities. In general, an award of annual
incentive compensation is based on achieving a corporate financial goal and key
corporate, strategic and individual goals. Any annual incentive compensation
awards made are based on individual participant and Company achievement as
measured against the established targets. The award is paid in cash.
The 1994 annual incentive compensation program was designed to pay for good
earnings performance. The 1994 award target range for the earnings goal was from
one-half of the annual incentive pay opportunity when earnings per share are 90
percent of targeted earnings per share and up to two times the annual incentive
pay opportunity for earnings per share at 120 percent of the targeted earnings
per share. Both the Annual Incentive Program and the Company's broad-based
employee incentive program incorporate a provision whereby no performance awards
will be paid through these programs, regardless of individual goal achievement,
unless the Company's earnings per share are at least equal to its common stock
dividend.
In 1994, awards for the CEO and PGE President were entirely dependent upon
achieving targeted earnings per share. For the other named executive officers
listed on page 11, 70 percent of annual incentive compensation was based on
achieving the earnings per share goal and 30 percent was based on individual
achievement of strategic goals. The strategic goals and weightings were: Senior
Vice President, General Counsel and Secretary -- legal effectiveness and cost
management, 35 percent; rates and regulatory affairs, 35 percent; corporate
secretary and corporate governance responsibilities, 20 percent; implementation
of management development program, 10 percent; Chief Financial
Officer -- strategic planning support; corporate finance; cost
accounting/management reporting; management development and external reporting,
without regard to weighting; Vice President, Power Resources and
Marketing -- transition plan implementation, 50 percent; operations performance,
40 percent; personal fitness, 10 percent. Incentive compensation awards for
achieving strategic goals for all other executive officers ranged from zero to
one and one-half times the target strategic incentive compensation award.
Earnings-per-share performance in 1994 was above target, resulting in the
CEO receiving an award at 1.128 times the target award. Continued customer
growth, nuclear cost savings, efficient use of PGE generating resources, and
active wholesale marketing made positive contributions to 1994 earnings.
LONG-TERM INCENTIVE COMPENSATION
The Company's 1990 Long-Term Incentive Master Plan ("LTIP") is designed to
ensure executive focus on long-term shareholder value and Common Stock
performance. The objective of the LTIP is to motivate executives to make
decisions that will enhance the long-term financial performance of the business,
thereby positively affecting the long-term total return to shareholders. The
LTIP, approved by shareholders in 1991, permits the granting by the Committee
under the LTIP ("LTIP Committee") of several different types of stock-based
awards. Although the LTIP Committee is a separate committee from the Human
Resources Committee, members are presently the same as the Human Resources
Committee. To date, two types of awards -- Nonqualified Stock Options ("NQSO")
and Performance Accelerated Restricted Stock -- have been granted to executive
officers.
The NQSO program will provide rewards to the executives only when the price
of the Company's Common Stock increases above the price at which the executive
has an option to buy the stock. The option price was set at fair market value at
the date of the grant. NQSO grants may be exercised five years after the grant
date. None of the named executive officers listed on page 11 have received NQSO
grants since 1991.
In 1993, the LTIP Committee retained an independent executive compensation
consultant to explore and recommend a long-term incentive program for
executives. Upon the recommendation of the consultant, the
8
<PAGE> 12
LTIP Committee approved a Performance Accelerated Restricted Stock program for
executive officers. The objectives of the Performance Accelerated Restricted
Stock program are to focus management attention on building long-term
shareholder and customer value by tying accelerated vesting to achievement of
goals that are in the interests of those constituents and by increasing
executive ownership of Common Stock. The risk of forfeiture inherent in the
Performance Accelerated Restricted Stock program will also assist in retaining
the management team. The stock granted under the Performance Accelerated
Restricted Stock program vests seven years from the date of the grant, subject
to certain forfeiture restrictions. Recipients of a Performance Accelerated
Restricted Stock grant receive dividends on the stock starting with the first
regular dividend after the grant date. Officers have received two grants under
the program. To encourage executive focus on shareholder value, accelerated
vesting will occur at the end of each of years three, four, and five as follows:
(1) Accelerated vesting of 75 percent of the stock will occur if the
Company's cumulative three-year total shareholder return is in the top
30 percent of approximately 90 national electric utilities. Nearly all
of these 90 utilities are included in the Edison Electric Utilities 100
Index performance graph on page 13. Total shareholder return
encompasses both stock price appreciation and reinvested dividends.
(2) An additional 25 percent of the stock will vest if the cumulative
three-year total shareholder return is met and, at the end of the
second year of the cumulative three-year cycle, PGE's cost per
kilowatt-hour is in the top 30 percent of lowest costs of approximately
33 Western regional investor-owned and public utility districts.
In 1993, the CEO received a Performance Accelerated Restricted Stock award
at the median of the Edison Electric Institute's trend line for the comparator
group. Awards for the other named executive officers listed on page 11 were set
as a percentage of the CEO's target. In 1994, the CEO's Performance Accelerated
Restricted Stock award was increased to the 58th percentile to increase the
CEO's ownership in the Company. Other officers received a reduced number of
shares compared to the previous year, at the discretion of the LTIP Committee.
To strengthen the focus on shareholder value, the LTIP Committee has
adopted a policy whereby no Performance Accelerated Restricted Stock grants will
be awarded in the event that the Annual Incentive Program's earnings per share
goal is not achieved at the threshold level or greater for the previous year.
SUMMARY
The goal of the Company's executive compensation program is to strengthen
management focus on creating shareholder value by targeting base pay at the
middle of the market and targeting annual and long-term compensation incentives
above the middle of the market. Annual incentive targets for the CEO and the
other executive officers are set at the 75th percentile of compensation of the
Edison Electric Institute's survey of over 100 utilities. Long-term incentives
are targeted between the median and 75th percentile of the comparator group for
the CEO. The target for the other executive officers is set at the discretion of
the Committee. Goals for incentive plans are established annually and are not
tied to the one-year total shareholder graph shown on page 13. Base pay, annual
incentives and long-term incentives all fluctuate depending upon Company
performance. The CEO's annual incentive compensation and long-term incentive
compensation represented 45 percent and 46 percent, respectively, of the CEO's
base compensation in 1994.
PHILOSOPHY ON QUALIFYING COMPENSATION FOR DEDUCTIBILITY UNDER IRC SECTION 162(m)
Qualifying compensation for deductibility under IRC Section 162(m) is one
of many factors the Committee considers in determining executive compensation
arrangements. Deductibility will be maintained when it does not conflict with
overall compensation objectives. Present arrangements include the ability for
9
<PAGE> 13
executives to defer base salary and bonuses and the incorporation of a provision
in the Performance Accelerated Restricted Stock agreement to ensure the
corporate tax deductibility of the Performance Accelerated Restricted Stock
awards.
HUMAN RESOURCES COMMITTEE AND LONG-TERM INCENTIVE PLAN COMMITTEE:
<TABLE>
<S> <C>
Warren E. McCain, Chairman Jerome J. Meyer
Gwyneth Gamble Booth Randolph L. Miller
John W. Creighton
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Harrison is CEO of Portland General and PGE. He is also a Director and
a nonvoting ex-officio member of the Human Resources Committee of each company.
Mr. Reiten, President of PGE, is an executive officer and Director of both
Portland General and PGE. Mr. Harrison did not participate in any discussions or
decisions regarding his own compensation as an executive officer. He did
participate in discussions, but not in any decisions, with regard to the
compensation of the other named executive officers listed on page 11. The
members of the Human Resources Committee are: Warren E. McCain, Gwyneth Gamble
Booth, John W. Creighton, Jerome J. Meyer, and Randolph L. Miller.
10
<PAGE> 14
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation earned for each year
ended December 31, 1994, 1993, and 1992 by the Chief Executive Officer and the
four most highly compensated executive officers of the Company and PGE.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------ ---------------- ALL OTHER
SALARY ($) BONUS ($) RESTRICTED STOCK COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (1) (1) AWARDS ($)(2) ($)(3)
------------------------------------- ---- ---------- --------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
Ken L. Harrison 1994 $ 465,228 $ 198,096 $202,500 $57,500
Chairman of the Board and 1993 438,719 178,472 200,000 56,010
Chief Executive Officer 1992 385,776 249,882 0 72,205
Richard G. Reiten 1994 311,340 118,050 118,125 23,152
President, PGE 1993 280,357 103,740 160,000 25,357
1992 264,831 132,750 0 34,950
Leonard A. Girard 1994 205,000 68,889 50,625 35,641
Senior Vice President, 1993 200,000 70,386 120,000 28,273
General Counsel, and Secretary 1992 185,000 96,311 0 44,031
Joseph M. Hirko 1994 183,027 63,363 67,500 20,063
Vice President, Chief Financial
Officer, 1993 174,447 58,029 120,000 16,800
Chief Accounting Officer, and
Treasurer 1992 160,740 65,548 0 27,792
Richard E. Dyer 1994 180,833 52,061 50,625 12,386
Vice President, Power Resources 1993 158,549 43,203 120,000 19,362
and Marketing, PGE 1992 129,253 44,008 0 18,953
</TABLE>
---------------
(1) Amounts shown include cash compensation earned and received by the executive
officer, as well as amounts earned but deferred at the election of the
officer. Years 1992 and 1993 adjusted to include amounts in lieu of unused
vacation not previously reported.
(2) Restricted stock awards are valued at the closing price of $16.875 per share
for the October 4, 1994 grant and at $20.00 per share for the December 6,
1993 grant. The number and value of the aggregate restricted stock holdings
for the officers listed in the Summary Compensation Table are outlined in
the table below. Dividends on the restricted stock are paid to the officer
as declared. The seven-year vesting period can be accelerated by the
achievement of performance goals, as discussed in the Report on Executive
Compensation on page 7. In the event of a change in control, all nonvested
shares immediately vest. Aggregate restricted stock holdings are valued at
$19.25 per share, the closing price of the Common Stock on December 30,
1994.
<TABLE>
<CAPTION>
AGGREGATE SHARES(#) VALUE($)
-------------------- ---------
<S> <C> <C>
Ken L. Harrison................ 22,000 $ 423,500
Richard G. Reiten.............. 15,000 288,750
Leonard A. Girard.............. 9,000 173,250
Joseph M. Hirko................ 10,000 192,500
Richard E. Dyer................ 9,000 173,250
</TABLE>
11
<PAGE> 15
(3) The table below includes 1994 amounts shown in this column: (i) Company-paid
split dollar insurance premiums; (ii) the dollar value of life insurance
benefits as determined under the SEC methodology for valuing such benefits;
(iii) Company contributions to the Retirement Savings Plan and Management
Deferred Compensation Plan ("MDCP"); and (iv) earnings on amounts in the
MDCP which are greater than 120 percent of the federal long-term rate which
was in effect at the time the rate was set for 1994. Amounts in lieu of
unused vacation previously included in this column are included in the
Salary column.
<TABLE>
<CAPTION>
SPLIT DOLLAR DOLLAR VALUE CONTRIBUTIONS ABOVE MARKET
INSURANCE OF LIFE TO 401(K) AND INTEREST ON
PREMIUM INSURANCE MDCP MDCP
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Ken L. Harrison........ $1,360 $ 16,784 $16,901 $ 22,455
Richard G. Reiten...... 1,290 424 13,484 7,954
Leonard A. Girard...... 1,020 15,093 15,384 4,144
Joseph M. Hirko........ 300 6,960 10,476 2,327
Richard E. Dyer........ 680 1,698 9,103 905
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END (FY) OPTION VALUES
The table below displays the number and value of options for the named
executive officers. No options are presently exercisable.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
AT FY-END (#) EXERCISABLE/ OPTIONS AT FY-END ($) EXERCISABLE/
NAME UNEXERCISABLE(1) UNEXERCISABLE(2)
-------------------------------------- ----------------------------- ----------------------------------
<S> <C> <C>
Ken L. Harrison....................... 0/120,000 $0/$420,000
Richard G. Reiten..................... 0/60,000 $0/$210,000
Leonard A. Girard..................... 0/50,000 $0/$175,000
Richard E. Dyer....................... 0/32,500 $0/$121,250
Joseph M. Hirko....................... 0/30,000 $0/$115,000
</TABLE>
---------------
(1) Options were granted under Portland General's LTIP. No options have been
granted to the named executive officers since 1991. Options granted in
previous years were granted at fair market value. These options vest five
years after the grant date and are exercisable for five years subsequent to
vesting. In the event of a Change in Control, all remaining nonvested
options will immediately vest.
(2) Value of unexercised in-the-money options is based on the difference between
the Common Stock price of $19.25 on December 30, 1994 and the exercise
option price.
12
<PAGE> 16
FIVE-YEAR SHAREHOLDER RETURN
The following graphs compare the cumulative five-year and the one-year
total shareholder return of the Company on an indexed basis with the S&P 500
Stock Index and the EEI 100 Index of Investor-Owned Electrics, an index of 100
electric utilities prepared by Edison Electric Institute ("EEI"). The five-year
line graph assumes an investment of $100 was made at the close of business on
December 31, 1989 in the Company's Common Stock and in each index. Total return
assumes reinvestment of dividends and is determined as of December 31 of each
year.
CUMULATIVE TOTAL SHAREHOLDER RETURN
1990 TO 1994
[GRAPH]
COMPARISON OF FIVE-YEAR TOTAL RETURN
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
Portland General...... $100 $ 90 $ 85 $106 $125 $126
S&P 500............... 100 97 126 136 150 152
EEI 100 Electric...... 100 101 131 141 156 138
[GRAPH]
ONE-YEAR TOTAL RETURN
Portland General...... $100
S&P 500............... 101
EEI................... 88
A list of the electric utilities included in the EEI Index will be provided upon
request to the Shareholder Services Department, 121 SW Salmon Street, Portland,
Oregon 97204.
13
<PAGE> 17
EXECUTIVE ANNUAL RETIREMENT BENEFIT
Estimated annual retirement benefits payable upon normal retirement at age
65 for the executive officers named in the table on page 11 are shown in the
table below. Amounts in the table reflect payments from the Portland General
Pension Plan and Supplemental Executive Retirement Plan ("SERP") combined.
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFIT
STRAIGHT-LIFE ANNUITY, AGE 65
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE ------------------------------------------
EARNINGS OF: 15 20 25+
------------- -------- -------- --------
<S> <C> <C> <C>
$ 125,000 $ 56,250 $ 65,625 $ 75,000
150,000 67,500 78,750 90,000
175,000 78,750 91,875 105,000
200,000 90,000 105,000 120,000
225,000 101,250 118,125 135,000
250,000 112,500 131,250 150,000
300,000 135,000 157,500 180,000
400,000 180,000 210,000 240,000
450,000 202,500 236,250 270,000
500,000 225,000 262,500 300,000
</TABLE>
Compensation used to calculate benefits under the combined Pension Plan and
SERP is based on a three-year average of base salary and bonus amounts earned
(the highest 36 consecutive months within the last 10 years), as reported in the
Summary Compensation Table on page 11. SERP participants may retire without
age-based reductions in benefits when their age plus years of service equals 85.
Surviving spouses receive one half the participant's retirement benefit from the
SERP plus the joint and survivor benefit, if any, from the Pension Plan. In
addition to the aforementioned annual retirement benefit, an additional
temporary Social Security Supplement is paid until the participant is eligible
for Social Security retirement benefits. Retirement benefits are not subject to
any deduction for Social Security.
The executive officers named in the table on page 11 have had the following
number of service years with the Company: Ken L. Harrison, 20; Richard G.
Reiten, 9; Leonard A. Girard, 7; Richard E. Dyer, 28; Joseph M. Hirko, 15. Under
the Company's SERP, the named executives are eligible to retire without a
reduction in benefits upon attainment of the following ages: Ken L. Harrison,
59; Richard G. Reiten, 62; Leonard A. Girard, 62; Richard E. Dyer, 55; Joseph M.
Hirko, 55.
CHANGE IN CONTROL SEVERANCE AGREEMENT
Each of the executive officers named in the table on page 11 has entered
into an agreement under which payments will be made upon his termination (unless
for death, disability, or cause) or resignation (following a change in or
ability to perform his authority or duties) within three years of a Change in
Control of Portland General or PGE. The amount payable under the agreement is
equal to 2.99 times the individual's average compensation over the prior five
years reduced by any amounts paid under the Change in Control provisions of
certain other benefit plans in which the individual participates, which could
result in no payment under these agreements. Any benefit payable would be made
30 days following the date of termination or resignation. The
14
<PAGE> 18
definition of Change in Control for these agreements is the same as described
below, with the addition of the following:
The stockholders of Portland General or Portland General Electric
approve a merger or consolidation of Portland General or Portland General
Electric with any other corporation, other than (a) a merger or
consolidation which would result in the voting securities of Portland
General or Portland General Electric outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 80
percent of the combined voting power of the voting securities of Portland
General or Portland General Electric or any surviving entity outstanding
immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of Portland General
or Portland General Electric (or similar transaction) in which no person
acquires more than 30 percent of the combined voting power of Portland
General's or Portland General Electric's then outstanding securities; or
The stockholders of Portland General or Portland General Electric
approve a plan of complete liquidation of Portland General or Portland
General Electric or an agreement for the sale or disposition by Portland
General or Portland General Electric of all or substantially all of
Portland General's or Portland General Electric's assets.
DEFINITION OF CHANGE IN CONTROL
Change in Control occurs if:
(a) any person or group becomes the beneficial owner of more than 30
percent of the then outstanding voting stock of Portland General, otherwise
than through a transaction arranged by, or consummated with the prior
approval of, the Board of Directors, or (b) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board of Directors (and any new Director whose election by
the Board or whose nomination for election by the stockholders was approved
by a vote of at least two-thirds of the Directors then still in office who
either were Directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority thereof.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16 of the Securities Exchange Act of 1934 requires Portland
General's Directors and executive officers and persons who own more than 10
percent of a registered class of Portland General's equity securities to file
various reports with the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange concerning their holdings of, and transactions in,
securities of Portland General. Copies of those filings must be furnished to the
Company.
Portland General offers assistance to its Directors and executive officers
in meeting their obligations under Section 16 with regard to information
concerning the applicable law and the completion and filing of the required
reports.
Based on a review of the copies of the reports received by Portland General
and written representations from certain reporting persons that they have
complied with the relevant filing requirements, Portland General believes that
all filing requirements applicable to its Directors and executive officers were
complied with as of December 31, 1994, except for two late filings by Mr.
Calvert Knudsen with regard to transactions that took place following his
retirement as Director.
15
<PAGE> 19
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has served in the capacity of independent
public accountants for Portland General and its subsidiaries for many years.
Services rendered during 1994 in connection with their audit function included
the examination of annual financial statements, review of unaudited quarterly
financial information, and consultation in connection with filing certain
reports with the Securities and Exchange Commission and other governmental and
regulatory agencies.
RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed the firm of Arthur Andersen LLP as independent public accountants for
the year 1995. Such appointment is proposed for ratification by the
shareholders. In the absence of contrary instructions, it is the intention of
the persons named in the proxy to vote such proxy FOR ratification. If the
reappointment is not ratified, the Audit Committee and the Board of Directors
will consider such vote in subsequent appointments.
A representative of Arthur Andersen LLP plans to attend the Annual Meeting
of Shareholders. The representative will have an opportunity to make a statement
if so desired and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT.
SHAREHOLDER PROPOSAL
Mr. Emil Rossi, PO Box 249, Boonville, California 95415, holder of 1,933
shares of Common Stock, has given notice that he will present the following
proposal for action at the Annual Meeting:
PROPOSAL
"The shareholders of Portland General request the Board of Directors
take the necessary steps to amend the Company's governing instruments to
adopt the following: Beginning on the 1996 Portland General fiscal year,
the present auditing firm, Arthur Anderson, will be changed, and every four
(4) years a new auditing firm will be hired."
The shareholder's statement in support of the proposal is as follows:
"I know of no other subject more important to share holders than to
know that the figures on various reports from your Company are truthful,
accurate, and honest. Any one who says auditors are always correct are
living in a dream world. All one has to do is look at the recent savings
and loan scandal.
The reason we put term limits and have elections between two or more
candidates is to keep them from getting entrenched. It is just natural when
we are immune to go astray and do any bidding of management. Our
forefathers who wrote the constitution knew this and incorporated checks
and balances thru out our government. It is way past the time to put this
check into our corporations. This proposal will do that."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
This proposal would require Portland General to replace its independent
public accounting firm every four years. Your Company believes that there is
nothing to be gained by this proposal.
16
<PAGE> 20
- Auditors, including Arthur Andersen LLP, rotate personnel regularly and, in
accordance with rules of the Securities and Exchange Commission, rotate the
engagement partner at least every seven years. This reduces the likelihood of
too close a relationship between the auditor and management and provides for
a "fresh look" by new personnel, while retaining the accounting firm's
institutional knowledge and experience with the Company.
- Every three years public accounting firms, including Arthur Andersen LLP,
undergo a review by another independent public accounting firm that
critically evaluates its processes and procedures to ensure objectivity,
independence and professional behavior.
- Auditing problems are much more likely to occur when auditors lack a solid
base of experience with the Company's business, operations and systems.
Rotating auditors is likely to result in poorer, not better audits.
- Rotating auditors is expensive. The Company would have to pay the
considerable start-up and learning costs necessary for a new accounting firm
to become familiar with the Company and its operations, procedures and
systems. Those expenses would be repeated every four years. Moreover,
efficiencies developed by the prior auditor would be lost, resulting in
costly duplication of effort.
- Although not required to do so, for many years the Company has sought
shareholder ratification of the appointment of its auditors. This offers you
the opportunity to make your concerns known through your vote.
- The Company has an Audit Committee made up entirely of outside Directors.
This Committee oversees the Company's relationship with the auditors and the
auditing process. The Audit Committee regularly meets with Arthur Andersen
LLP in private to address concerns, including objectivity.
Your Company believes that the best way to ensure accurate, timely and
independent audits by the Company's auditors is through oversight by the Audit
Committee, not through mandatory rotation.
For all of these reasons, the Board of Directors recommends that
shareholders reject this proposal.
Adoption of the proposal will require the approval of a majority of the
shares of Common Stock voting on the proposal. In the absence of contrary
instructions, it is the intention of persons named in the proxy to vote such
proxy AGAINST the proposal.
SHAREHOLDER PROPOSALS FOR THE 1996 ANNUAL MEETING
Proposals of shareholders which may be proper subjects for inclusion in
proxy material for the Annual Meeting of Shareholders to be held in 1996 must be
received no later than December 1, 1995 and should be mailed to the Secretary of
Portland General Corporation at the Company's principal executive office, One
World Trade Center, 121 SW Salmon Street, Portland, Oregon 97204.
OTHER MATTERS
Under Portland General's Bylaws, in order to bring business before the
Annual Meeting of Shareholders, written notice to the Secretary must be
delivered or mailed and received at the Company's executive offices not more
than 70 days nor less than 35 days prior to the Annual Meeting. However, if
notice or public disclosure of the date of the Annual Meeting is made less than
50 days in advance, the notice to the Secretary must be received no later than
15 days after the announcement. If the Annual Meeting date is announced less
than 15 days before the meeting, the notice must be received no later than the
day before the Annual Meeting.
17
<PAGE> 21
The notice must (a) briefly describe the business to be presented and the
reason for presenting it at the Annual Meeting, (b) state the name and address
of the shareholder proposing the business, (c) state the class and number of
shares of stock owned by the shareholder, and (d) describe any material interest
the shareholder has in the business.
For this 1995 Annual Meeting, notice must be received by no later than 15
days after the date of this Proxy Statement.
Management is not aware of any business which may properly come before the
meeting other than the matters listed in the accompanying Notice of Annual
Meeting of Shareholders and in this Proxy Statement. If other matters should
properly come before the meeting, the persons named in the proxy, or their
substitutes, will vote the shares represented by the proxies, to the extent
permitted by law, in accordance with their best judgment.
By Order of the Board of Directors
LEONARD A. GIRARD
Senior Vice President,
General Counsel, and Secretary
Portland, Oregon
March 31, 1995
18
<PAGE> 22
[MAP SHOWING LOCATION OF ANNUAL MEETING]
19
<PAGE> 23
PORTLAND GENERAL CORPORATION
One World Trade Center 121 S.W. Salmon Street Portland, OR 97204
COMMON STOCK PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement and hereby appoints Gwyneth Gamble Booth, Peter J. Brix and Ken L.
Harrison, or any of them as Proxies, each with the power to appoint a
substitute, and hereby authorizes them to represent and to vote, as designated
on the reverse side, all the shares of Common Stock of Portland General
Corporation held of record by the undersigned on March 14, 1995, at the Annual
Meeting of Shareholders to be held on May 2, 1995, or any adjournment thereof.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
SEE REVERSE SIDE
FOLD AND DETACH HERE
ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 2, 1995 1:30 P.M.
[MAP APPEARS HERE]
FOR ADDITIONAL DIRECTIONS TO THE MEETING, REFER TO PAGE 19 OF THE PROXY
STATEMENT.
<PAGE> 24
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF
DIRECTORS, FOR PROPOSAL 2 AND AGAINST PROPOSAL 3.
1. Election of Class III Directors (terms expiring in 1998).
FOR AGAINST ABSTAIN
a. Gwyneth Gamble Booth [ ] [ ] [ ]
b. Peter J. Brix [ ] [ ] [ ]
c. John W. Creighton [ ] [ ] [ ]
d. Randolph L. Miller [ ] [ ] [ ]
2. Ratification of the appointment of
public accountants for the year
1995. [ ] [ ] [ ]
3. Shareholder proposal to require new
public accountants every four years. [ ] [ ] [ ]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
_______________________________________________
_______________________________________________
SIGNATURE(S) DATE
FOLD AND DETACH HERE
PORTLAND GENERAL CORPORATION [LOGO]
Dear Shareholder:
The Annual Meeting of Shareholders of Portland General Corporation will
be held on May 2, 1995. Your vote is very important. We urge you to promptly
SIGN, DATE, AND RETURN the above proxy card in the envelope provided.
KEN HARRISON
Chairman of the Board and
Chief Executive Officer
