_____________________________________________________________________________
As filed with the Securities and Exchange Commission on November 26, 1997
Registration No. 333-_________
_____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
PUGET SOUND ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Washington
(State or Other Jurisdiction of Incorporation or Organization)
91-0374630
(I.R.S. Employer Identification No.)
411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515
(Address of Principal Executive Offices) (Zip Code)
PUGET SOUND ENERGY, INC. NONEMPLOYEE DIRECTOR STOCK PLAN
(Full Title of the Plan)
WILLIAM S. WEAVER
President and Chairman of Unregulated Subsidiaries
Puget Sound Energy, Inc.
411 - 108th Avenue N.E.
Bellevue, Washington 98004-5515
(206) 454-6363
(Name, Address and Telephone Number,
Including Area Code, of Agent For Service)
___________________
Copy to:
J. Sue Morgan
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
<PAGE>
____________________________________________________________________________
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________________
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
To Be To Be Price Per Offering Registration
Registered Registered Share(1) Price(1) Fee
________________________________________________________________________
Common Stock
(without par 100,000(3) $26.969 $2,696,900 $818
value)
_____________________________________________________________________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended. The price
per share is estimated to be $26.969, based on the average of the high sales
price ($27.125) and the low sales price ($26.813) for the Registrant's Common
Stock as reported on the New York Stock Exchange on November 19, 1997.
(2) Includes associated Preference Stock Purchase Rights. Prior to the
occurrence of certain events, the Preference Stock Purchase Rights will not
be evidenced or traded separately from the Common Stock.
(3) Includes an indeterminate number of additional shares that may be
necessary to adjust the number of shares reserved for issuance pursuant to
such employee benefit plan as the result of any future stock split, stock
dividend or similar adjustment of the Registrant's outstanding Common Stock.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-4393);
(b) The Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "Commission") under Section 13(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on
October 24, 1997, which contains certified financial statements for the most
recent fiscal year for which such statements have been filed;
(c) All other reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Current Report on Form 8-K referred to in (b) above; and
(d) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission under Section
12(b) of the Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that the securities
offered hereby have been sold or which deregisters the securities covered
hereby then remaining unsold shall also be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof commencing
on the respective dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended.
Article VIII of the Registrant's Bylaws provides for the indemnification of
the Registrant's directors, officers, employees and agents to the maximum
extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation act authorizes
a corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except
in certain circumstances involving intentional misconduct, or a knowing
violation of law, approval of distribution in violation of Section 23B.06.400
of the Washington Business Corporation Act, or any transaction from which the
director will personally receive a benefit in money, property or services to
which the director is not legally entitled. Article X of the Registrant's
Restated Articles of Incorporation contains provisions implementing to the
fullest extent permitted by Washington law, such limitations on a director's
liability to the Registrant and its shareholders.
II-1
<PAGE>
The Registrant also maintains an insurance policy insuring its directors
and officers against liability for certain acts or omissions while acting in
their official capacities.
ITEM 8. EXHIBITS
Exhibit
Number Description
_______ ___________________________________________________________________
5.1 Opinion of Perkins Coie regarding legality of the Common Stock
being registered.
23.1 Consent of Coopers & Lybrand L.L.P. (see page II-6)
23.2 Consent of Arthur Andersen LLP (see page II-7)
23.3 Consent of Perkins Coie (included in its Opinion filed as Exhibit
5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Puget Sound Energy, Inc. Nonemployee Director Stock Plan
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(b) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(c) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination
of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
II-2
<PAGE>
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Commission, such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bellevue, State of Washington, on
the 7th day of October, 1997.
PUGET SOUND ENERGY, INC.
By R.R. Sonstelie
___________________________
R.R. Sonstelie
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes R.R. Sonstelie,
William S. Weaver and James P. Torgerson, and each of them, as attorneys-in-
fact, with full power of substitution, to execute in the name and on behalf
of such person, individually and in each capacity stated below, and to file,
any or all amendments (including pre-effective and post-effective amendments)
to this registration statement, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on the
7th day of October, 1997, in the capacities indicated.
Signature Title
R. R. Sonstelie
___________________________ Chairman and Chief Executive Officer
(R. R. Sonstelie) (Principal Executive Officer)
William S. Weaver
___________________________ President, Chairman of Unregulated
(William S. Weaver) Subsidiaries and Director
James P. Torgerson
___________________________ Vice President and Chief Financial Officer
(James P. Torgerson) (Principal Financial Officer)
James W. Eldredge
___________________________ Corporate Secretary, Controller and
(James W. Eldredge) Chief Accounting Officer
Douglas P. Beighle
___________________________ Director
(Douglas P. Beighle)
Charles W. Bingham
___________________________ Director
(Charles W. Bingham)
II-4
<PAGE>
Signatures, continued
Phyllis J. Campbell
___________________________ Director
(Phyllis J. Campbell)
Donald J. Covey
___________________________ Director
(Donald J. Covey)
Robert L. Dryden
___________________________ Director
(Robert L. Dryden)
John D. Durbin
___________________________ Director
(John D. Durbin)
John W. Ellis
___________________________ Director
(John W. Ellis)
Daniel J. Evans
___________________________ Director
(Daniel J. Evans)
Tomio Moriguchi
___________________________ Director
(Tomio Moriguchi)
Sally G. Narodick
___________________________ Director
(Sally G. Narodick)
R. Kirk Wilson
___________________________ Director
(R. Kirk Wilson)
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
____________________________________________________________
We consent to the incorporation by reference in the registration statement of
Puget Sound Energy, Inc. on Form S-8 of our reports dated February 12, 1997,
on our audits of the consolidated financial statements and financial
statement schedule of Puget Sound Energy, Inc. (formerly Puget Sound Power &
Light Company) as of December 31, 1996 and 1995 and for the years ended
December 31, 1996, 1995, and 1994, which reports are included in the
Company's Current Report on Form 8-K, dated October 23, 1997 and in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.
Coopers & Lybrand L.L.P.
Seattle, Washington
November 24, 1997
II-6
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
____________________________________________________________
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement, as it relates to Washington Energy
Company and Washington Natural Gas Company (the Companies), of our reports
dated October 31, 1996 included in Puget Sound Energy, Inc.'s Form 8-K dated
October 24, 1997 and to all references to our Firm included in this
registration statement. It should be noted that we have not audited any
financial statements of the Companies subsequent to September 30, 1996 or
performed any audit procedures subsequent to the date of our report.
Arthur Andersen LLP
Seattle, Washington
November 24, 1997
II-7
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
_______ _________________________________________________________________
5.1 Opinion of Perkins Coie regarding legality of Common Stock being
registered
23.1 Consent of Coopers & Lybrand L.L.P. (see Page II-6)
23.2 Consent of Arthur Andersen LLP (see Page II-7)
23.3 Consent of Perkins Coie (included in its Opinion filed as Exhibit
5.1)
24.1 Power of Attorney (see Signature Page)
99.1 Puget Sound Energy, Inc. Nonemployee Director Stock Plan
EXHIBIT 5.1
(Perkins Coie Letterhead)
November 24, 1997
Puget Sound Energy, Inc.
411 - 108th Avenue N.E.
Bellevue, WA 98004-5515
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended ("the Act"), which you are filing with the
Securities and Exchange Commission with respect to 100,000 shares of Common
Stock, without par value (the "Shares"), which may be issued pursuant to the
Puget Sound Energy, Inc. Nonemployee Director Stock Plan (the "Plan"). We
have examined the Registration Statement and such documents and records of
the Company and other documents as we have deemed necessary for the purpose
of this opinion.
Based upon and subject to the foregoing, we are of the opinion that any
original issuance Shares that may be issued pursuant to the Plan have been
duly authorized and that, upon the due execution by the Company and the
registration by its registrar of such Shares and the sale thereof by the
Company in accordance with the terms of the Plan, and the receipt of
consideration therefor in accordance with the terms of the Plan, such Shares
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
Perkins Coie
<PAGE>
EXHIBIT 99.1
PUGET SOUND ENERGY, INC.
NONEMPLOYEE DIRECTOR STOCK PLAN
1. Establishment, Purpose and Duration of the Plan
(a) The purpose of the Plan is to provide ownership of Puget Sound Energy,
Inc. Common Stock to nonemployee members of the Board of Directors in
order to strengthen the commonality of interest between directors and
stockholders and to improve the Company's ability to attract and retain
highly qualified individuals to serve as directors of the Company.
(b) The Plan shall become effective as of January 1, 1998.
(c) The Plan shall remain in effect, subject to the right of the Board
to terminate the Plan at any time pursuant to Section 14, until all shares
subject to the Plan have been purchased or acquired according to the Plan's
provisions.
2. Definitions
When used herein, the following terms shall have the respective meanings set
forth below:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(b) "Common Stock" means the common stock, without par value, of the
Company.
(c) "Company" means Puget Sound Energy, Inc., a Washington corporation,
or any successor corporation as provided in Section 15.
(d) "Deferred Stock Account" has the meaning set forth in Section 8(b).
(e) "Employee" means any officer or employee of the Company or of any
Subsidiary. Directors who are not otherwise employed by the Company or any
Subsidiary shall not be considered employees for purposes of the Plan.
(f) "Market Price" means the average of the daily high and low per
share trading prices for the Common Stock as reported daily by the New York
Stock Exchange in the Wall Street Journal or similar readily available public
source for a single trading day.
(g) "Nonemployee Director" or "Participant" means any person who is
elected or appointed to the Board of Directors and who is not an Employee.
(h) "Plan" means the Company's Nonemployee Director Stock Plan as set
forth herein, as it may be amended from time to time.
(i) "Plan Administrator" means the Board or a committee whose members
meet the requirements of Section 4(a), appointed from time to time by the
Board to administer the Plan.
(j) "Quarterly Retainer" means the quarterly retainer payable to all
Nonemployee Directors (exclusive of any per-meeting fees, committee chair
fees or expense reimbursements). The Quarterly Retainer shall be prorated
based on the number of calendar months (including partial calendar months) a
director has served as a Nonemployee Director during the fiscal quarter for
which the Quarterly Retainer is payable.
(k) "Stock Payment" means the fixed portion of the Quarterly Retainer
to be paid to Nonemployee Directors in shares of Common Stock rather than
cash for services rendered as a director of the Company as provided in
Section 6 and that portion of the Quarterly Retainer to be paid to
Nonemployee Directors in shares of Common Stock resulting from the election
specified in Section 7.
(l) "Subsidiary" means any corporation that is a "subsidiary
corporation" of the Company, as that term is defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended.
(m) "Trust" and "Trustee" have the meanings set forth in Section 4(b).
(n) "Trustee Shares" has the meaning set forth in Section 9.
3. Shares of Common Stock Subject to the Plan
Subject to Section 11, the maximum aggregate number of shares of Common Stock
that may be purchased by the Trustee as Trustee Shares for purposes of the
Plan shall be 100,000 shares. The Common Stock shall be purchased by the
Trustee on the open market. The Company shall not issue any Common Stock
under the Plan to the Trust or to any Participant, nor shall the Company
purchase any Trustee Shares from the Trust.
4. Administration of the Plan
(a) The Plan will be administered by the Board or by a committee
appointed by the Board consisting of one or more persons who are not eligible
to participate in the Plan. Members of such committee need not be members of
the Board. The Company shall pay all costs of administration of the Plan.
(b) Subject to the express provisions of the Plan, the Plan
Administrator has and may exercise such powers and authority of the Board as
may be necessary or appropriate for the Plan Administrator to carry out its
functions under the Plan. Without limiting the generality of the foregoing,
the Plan Administrator shall have full power and authority to (i) determine
all questions of fact that may arise under the Plan; (ii) interpret the Plan
and make all other determinations necessary or advisable for the
administration of the Plan; (iii) prescribe, amend and rescind rules and
regulations relating to the Plan, including, without limitation, any rules
the Plan Administrator determines are necessary or appropriate to ensure that
the Company and the Plan will be able to comply with all applicable
provisions of any federal, state or local law, including securities laws; and
(iv) authorize the Trustee (the "Trustee" of the Puget Sound Energy, Inc.
Stock Plan Trust, a trust established under the laws of the state of
Washington (the "Trust"), to make Stock Payments to the Participants. All
interpretations, determinations and actions by the Plan Administrator will be
final, conclusive and binding upon all parties. Any action of the Plan
Administrator with respect to the administration of the Plan shall be taken
pursuant to a majority vote at a meeting of the Plan Administrator (at which
members may participate by telephone) or by the unanimous written consent of
its members.
5. Participation in the Plan
All Nonemployee Directors shall participate in the Plan, subject to the
conditions and limitations of the Plan, so long as they remain eligible to
participate in the Plan as set forth below.
6. Determination of Quarterly Retainers and Stock Payments
(a) The Board, in its sole discretion, shall determine the Quarterly
Retainer for all Nonemployee Directors.
(b) Each director of the Company who is a Nonemployee Director at any
time during a calendar year shall receive a Stock Payment as a portion of the
Quarterly Retainer payable to such director. The Stock Payment shall be made
as soon as possible following a fiscal quarter end. The number of shares of
Common Stock to be issued to each Participant as a Stock Payment shall be
determined by dividing the Market Price of the Common Stock for the last
business day of a fiscal quarter into 40% of the Quarterly Retainer payable
to such Participant for that fiscal quarter; provided, however, that no
fractional shares shall be issued, and in lieu thereof the number of shares
in the Stock Payment shall be rounded to the nearest whole number of shares.
Certificates evidencing the shares of Common Stock constituting Stock
Payments shall be registered in the respective names of, or as directed by,
the Participants and shall be issued to each Participant.
(c) The cash portion of the Quarterly Retainer shall be paid to
Nonemployee Directors at such times and in such manner as may be determined
by the Board.
7. Election to Increase Amount of Stock Payment
(a) In lieu of receiving the cash portion of his or her Quarterly
Retainer, a Participant may make a written election to reduce up to 100% of
the cash portion of the Quarterly Retainers to be paid during a calendar year
by a specified percentage or dollar amount and have such amount applied to
purchase additional shares of Common Stock.
(b) The election shall be made on a form provided by the Plan
Administrator and must be returned to the Plan Administrator on a date the
Plan Administrator shall establish, but in any case no later than the first
day of the calendar year to which the election relates or within 60 days
after the Participant first becomes a Nonemployee Director. The election
form shall state the amount by which the Participant desires to reduce the
cash portion of his or her Quarterly Retainers for the calendar year, which
shall be applied toward the purchase of Common Stock in the same manner and
on the same dates that the Stock Payments are made pursuant to Section 6;
provided, however, that no fractional shares may be purchased, and in lieu
thereof the number of shares in the Stock Payment shall be rounded to the
nearest whole number of shares. No Participant shall be allowed to change or
revoke any election for the relevant calendar year, but may change his or her
election for any subsequent calendar year.
8. Election to Defer Receipt of Stock Payment
Any director of the Company who may become entitled to a Stock Payment may
elect to have issuance of the shares deferred in accordance with the
provisions of this Section 8.
(a) Any such election shall be made on a form provided by the Plan
Administrator and must be returned to the Plan Administrator on a date the
Plan Administrator shall establish, but in any case no later than the last
day of the calendar year prior to the calendar year to which the election
relates or within 60 days after the date the participant first becomes a
Nonemployee Director. Any such election shall be effective for all Stock
Payments in calendar years following the calendar year in which it is filed;
provided, however, that any such election filed within 60 days after a
Participant first becomes a Nonemployeee Director shall be effective on the
first day of the month following the month in which the Participant files the
election form. An election may specify a distribution option for purposes of
Section 8(c). A deferral election may be revoked by written notice filed
with the Plan Administrator. Any such revocation shall be effective for all
Stock Payments in calendar years following the calendar year in which it is
filed. Following any such revocation, a director may subsequently elect to
again have issuance of future Stock Payments deferred in accordance with the
provisions of this Section 8. Any such new election shall comply with the
procedures of this Section 8(a) and shall be effective for all Stock Payments
in calendar years following the calendar year in which it is filed.
(b) For each Nonemployeee Director for whom one or more Stock Payments
are deferred under this Section 8, the Company shall maintain an unfunded
account (the "Deferred Stock Account") as follows:
(i) The Deferred Stock Account shall be credited with the number
of shares of Common Stock that are from time to time deferred. The number of
shares credited to the Deferred Stock Account (which number may be
fractional) shall be determined by dividing (A) the dollar amount of the
Quarterly Retainer that otherwise would be paid in Common Stock pursuant to
Sections 6 and 7 by (B) the Market Price of the Common Stock for the last
business day of the fiscal quarter for which the deferral is made.
(ii) Whenever cash dividends are declared on shares of Common
Stock, a dividend equivalent shall be computed with respect to each Deferred
Stock Account. The amount of the dividend equivalent shall be the product of
(A) the number of credited shares in the Deferred Stock Account on the date
as of which the Company determines the holders of record of the Common Stock
who are entitled to receive the dividend and (B) the per share dividend
amount. The dividend equivalent shall be deemed reinvested in additional
shares of Common Stock by crediting to the Deferred Stock Account, effective
on the date the cash dividend is paid, the number of shares (which number may
be fractional) obtained by dividing (1) the amount of the dividend equivalent
by (2) the Market Price of the Common Stock for the dividend payment date.
Dividend equivalents shall be credited and deemed reinvested under this
Section 8(b), until all shares of Common Stock credited to the Deferred Stock
Account have been issued to the Nonemployee Director or to his or her estate.
(iii) The Deferred Stock Account shall be debited for any
shares of Common Stock that are issued under Sections 8(c), 8(d) or 11.
(iv) The Deferred Stock Account shall be subject to any
adjustment required or permitted pursuant to Section 11.
(c) A Participant may elect, in a manner determined by the Plan
Administrator, to receive the shares issuable to him or her from the Deferred
Stock Account in a lump sum payment or in substantially equal annual
installments of not more than five years. The election may be changed to an
allowable alternative payment period by submitting a new election to the Plan
Administrator, provided that any such election is submitted at least one year
before the Participant ceases to be a director of the Company. The election
most recently accepted by the Plan Administrator shall govern the
distribution of all shares issuable to the Participant from his or her
Deferred Stock Account. If a Participant does not make any election with
respect to the distribution of shares from the Participant's Deferred Stock
Account, then such shares shall be issued in a lump sum payment. The lump
sum payment shall be made, or installment payments shall commence, no later
than January 15 of the calendar year following the calendar year in which
such individual ceases to be a director of the Company.
(d) Notwithstanding the provisions of Section 8(c), if a Nonemployeee
Director should die prior to issuance of all shares of Common Stock that have
been credited to his or her Deferred Stock Account, the number of shares of
Common Stock remaining in the Deferred Stock Account shall be issued to the
Nonemployeee Director's estate as soon as practicable following the date of
death.
(e) No fractional shares of Common Stock shall be issued under this
Section 8, and in lieu thereof, the number of shares to be distributed shall
be rounded to the nearest whole number of shares.
9. Nonemployeee Director Stock Plan Trust
The Company shall pay to the Trustee sufficient amounts of cash to enable the
Trustee to purchase shares of the Common Stock (the "Trustee Shares") to fund
the Stock Payments to the Participants.
10. Stockholder Rights
Nonemployee Directors shall not be deemed for any purpose to be, or have
rights as, shareholders of the Company with respect to any shares of Common
Stock except as and when such shares are issued and then only from the date
of the certificate therefor. No adjustment shall be made for dividends or
distributions or other rights for which the record date precedes the date of
such stock certificate.
11. Adjustment for Changes in Capitalization
If the outstanding shares of Common Stock of the Company are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or
other securities, through merger, consolidation, sale of all or substantially
all of the property of the Company, reorganization or recapitalization,
reclassification, stock dividend, stock split, reverse stock split,
combinations of shares, rights offering or other distribution with respect to
such shares of Common Stock or other securities or other change in the
corporate structure or shares of Common Stock, the maximum number of shares
and/or the kind of shares that may be issued under the Plan and the number
and/or the kind of shares that are credited to Deferred Stock Accounts may be
appropriately adjusted by the Plan Administrator. Any determination by the
Plan Administrator as to any such adjustment will be final, binding and
conclusive. The maximum number of shares issuable under the Plan as a result
of any such adjustment shall be rounded down to the nearest whole share.
12. Continuation of Directors in Same Status
Nothing in the Plan or in any instrument executed pursuant to the plan, and
no action taken pursuant to the Plan, shall be construed as creating or
constituting evidence of any agreement or understanding, express or implied,
that a Nonemployee Director will have any right to continue as a director or
in any other capacity for any period of time or at a particular retainer or
other rate of compensation.
13. Nontransferability of Rights
No Participant shall have the right to assign the right to receive any Stock
Payment or any other right of interest under the Plan, contingent or
otherwise, or to cause or permit any encumbrance, pledge or charge of any
nature to be imposed on any such Stock payment (prior to the issuance of
stock certificates evidencing such Stock Payment) or any such right or
interest.
14. Amendment and Termination of Plan
(a) The Board will have the power, in its discretion, to amend, suspend
or terminate the Plan at any time.
(b) No amendment, suspension or termination of the Plan will, without
the consent of the Participant, alter, terminate, impair or adversely affect
any right or obligations under any Stock Payment previously granted under the
Plan to such Participant, unless such amendment, suspension or termination is
required by applicable law.
(c) Notwithstanding the foregoing, and to the extent required to
qualify the Plan as a formula plan for purposes of exemption from Section
16(b) of the Securities Exchange Act of 1934, as amended, any provision of
the Plan that either states the amount and price of securities to be issued
under the Plan and specifies the price and timing of such issuances, or sets
forth a formula that determines the amount, price and timing of such
issuances, shall not be amended more than once every six months, other than
to comport with changes in the Internal Revenue Code of 1986, as amended, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.
15. Successors
All obligations of the Company under the plan shall be binding on any
successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or otherwise,
of all or substantially all of the business and/or assets of the Company.
16. Severability
In the event any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as if the illegal
or invalid provision had not been included.
17. Governing Law
The Plan shall be construed in accordance with, and governed by, the laws of
the state of Washington.
