EXHIBIT 10.1

SUMMARY DESCRIPTION OF THE

PORTLAND GENERAL ELECTRIC COMPANY

2005 ANNUAL CASH INCENTIVE PLAN

 

 

 

 

Plan Administration

The 2005 Annual Cash Incentive Plan (Plan) is administered by the President and
Chief Executive Officer (CEO) of Portland General Electric Company (PGE, or the
Company). The CEO may alter policies and rules for the proper and effective
administration of the Plan. Changes in Plan operations and funding levels
require the approval of the Board of Directors of PGE (Board). Such changes may
alter any participant's right to an unpaid award.

Eligibility

The CEO is automatically eligible to participate.

The CEO approves participants annually. Participants must be current employees
of the Company. Participants should have a direct, significant, and measurable
impact on the attainment of the Company's growth and profitability objectives.
Participants may be added during the year at the discretion of the CEO. The CEO
is not bound by selections made for prior years.

Participants are not eligible to participate in any other annual incentive plan
of the Company without the specific approval of the CEO.

 

Allocation and Determination of Awards

Each year, the Compensation Committee of the Board of Directors of PGE
(Compensation Committee) determines the CEO's target award opportunity. The CEO
determines the target award opportunity for each other participant, subject to
approval by the Compensation Committee. Awards are based upon pre-established
annual strategic and individual performance goals established by the
Compensation Committee. Cash awards are calculated by multiplying the
participant's base salary paid for the year by the product of the target award
opportunity (expressed as a percentage of base salary), incentive performance
rating percentage and a percentage based upon net income, normalized for
non-routine items. The Compensation Committee approves the incentive performance
rating percentage and sets the net income target.

However, if the Compensation Committee determines at any time during the year
that the established net income measure is no longer suitable to Company
objectives due to a change in the Company's business, operations, corporate
structure, capital structure, or other conditions deemed by the Compensation
Committee to be material, the Compensation Committee has the discretion to
modify that objective.

Such modifications, as well as final corporate funding levels, may alter or
affect any participant's right to an unpaid award.

Payment of Awards Earned

Awards will be paid as soon as administratively possible following the close of
the year. Cash payments may be deferred pursuant to the Company's deferred
compensation plans, if eligible.

The amount of award payment is dependent upon funding levels approved by the
Board.

Termination of Employment

In the event of a participant's retirement, death, disability, or termination
prior to award payment, the participant will forfeit all rights to any award.

Amendment, Suspension, or Termination of the Plan

The Board may amend, suspend, or terminate the Plan at any time.

The Board may amend, suspend, or terminate any or all unpaid awards under the
Plan upon a finding of current or threatened financial hardship for the Company,
which shall be final and binding upon all participants.

If the sale of PGE is approved and completed, the dates, actions and incentive
plans may change. Human Resources will notify participants of any changes.