Exhibit 10.1

 

 

 

 

 

 

 

 

PORTLAND GENERAL ELECTRIC COMPANY

2006 STOCK INCENTIVE PLAN

Effective as of March 31, 2006

PORTLAND GENERAL ELECTRIC COMPANY

2006 STOCK INCENTIVE PLAN

 

 

1. Purpose.

The Portland General Electric Company 2006 Stock Incentive Plan (the "Plan") is
intended to provide incentives which will attract, retain and motivate highly
competent persons as officers, directors and key employees of Portland General
Electric Company (the "Company") and its subsidiaries and Affiliates, by
providing them with appropriate incentives and rewards in the form of rights to
earn shares of the common stock of the Company ("Common Stock") and cash
equivalents.

2. Definitions.

A listing of the defined terms utilized in the Plan is set forth in Appendix A.

3.

Effective Date of Plan. The Plan is effective on March 31, 2006.

4. Administration.

(a) Committee. The Plan will be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board of Directors")
from among its members (which may be the Compensation and Human Resources
Committee) and shall be comprised, solely of not less than two (2) members who
shall be (i) "non-employee directors" within the meaning of Rule 16b-3(b)(3) (or
any successor rule) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and (ii) "outside directors" within the meaning of
Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code").

(b) Authority. The Committee is authorized, subject to the provisions of the
Plan, to establish such rules and regulations as it deems necessary for the
proper administration of the Plan and, in its sole discretion, to make such
determinations, valuations and interpretations and to take such action in
connection with the Plan and any Awards (as hereinafter defined) granted
hereunder as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants and their legal representatives.

(c) Indemnification. No member of the Committee and no employee of the Company
shall be liable for any act or failure to act hereunder, or for any act or
failure to act hereunder by any other member or employee or by any agent to whom
duties in connection with the administration of this Plan have been delegated,
except in circumstances involving his or her bad faith or willful misconduct.
The Company shall indemnify members of the Committee and any agent of the
Committee who is an employee of the Company, or of a subsidiary or an Affiliate
against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person's bad faith or willful
misconduct. For purposes of this Plan, "Affiliate(s) " means any entity that
controls, is controlled by or is under common control with the Company;
provided, however, that neither the Disputed Claims Reserve, the Disputed Claims
Overseers, the Plan Administrator nor the Disbursing Agent, as those terms are
defined in Fifth Amended Joint Plan of Affiliated Debtors In Re Enron Corp. et
al., shall be an Affiliate.

(d) Delegation and Advisers. The Committee may delegate to one or more of its
members, or to one or more employees or agents, such duties and authorities as
it may deem advisable including the authority to make grants as permitted by
applicable law, the rules of the Securities and Exchange Commission (the "SEC")
and any requirements of the New York Stock Exchange (the "NYSE"), and the
Committee, or any person to whom it has delegated duties or authorities as
aforesaid, may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel, consultant
or agent shall be paid by the Company, or the subsidiary or Affiliate whose
employees have benefited from the Plan, as determined by the Committee.

5. Type of Awards.

Awards under the Plan may be granted in any one or a combination of (a) Stock
Options, (b) Stock Appreciation Rights, (c) Restricted Stock Awards, and (d)
Stock Units (each as described below, and collectively, the "Awards"). Awards
may, as determined by the Committee in its discretion, constitute
Performance-Based Awards, as described in Section 13 hereof.

6. Participants.

Participants will consist of (i) such officers and key employees of the Company
and its subsidiaries and Affiliates as the Committee in its sole discretion
determines to be significantly responsible for the success and future growth and
profitability of the Company and whom the Committee may designate from time to
time to receive Awards under the Plan and (ii) each director of the Company who
is not otherwise an employee of the Company or any of its subsidiaries and whom
the Committee may designate from time to time to receive Awards under the Plan.
Designation of a participant in any year shall not require the Committee to
designate such person to receive an Award in any other year or, once designated,
to receive the same type or amount of Award as granted to the participant in any
other year. The Committee shall consider such factors as it deems pertinent in
selecting participants and in determining the type and amount of their
respective Awards.

7. Grant Agreements.

(a) Awards granted under the Plan shall be evidenced by an agreement ("Grant
Agreement") that shall provide such terms and conditions, as determined by the
Committee in its sole discretion, provided, however, that in the event of any
conflict between the provisions of the Plan and any such Grant Agreement, the
provisions of the Plan shall prevail.

(b) The Grant Agreement will determine the effect on an Award of the disability,
death, retirement, involuntary termination, termination for cause or other
termination of employment or service of a participant and the extent to which,
and the period during which, the participant's legal representative, guardian or
beneficiary may receive payment of an Award or exercise rights thereunder. If
the relevant Grant Agreement does not provide otherwise, however, the following
default rules shall apply:

(i) vested Stock Option and Stock Appreciation Rights held by a participant
shall be exercisable for a period of 90 days following the date the participant
ceases to be an employee or director of the Company, its subsidiaries and
Affiliates;

(ii) unvested Stock Option, Stock Appreciation Rights, Restricted Stock Awards
and Stock Units held by a participant shall be forfeited on the date the
participant ceases to be an employee or director of the Company, its
subsidiaries and Affiliates.

(c) Subject to Section 13(e), the Committee, in its sole discretion, may modify
a Grant Agreement, provided any such modification will not materially adversely
affect the economic interests of the participant unless the Committee shall have
obtained the written consent of the participant. Notwithstanding the foregoing,
the Committee shall not reduce the exercise price of a Stock Option or Stock
Appreciation Right (other than under Section 15) without the approval of the
Company's shareholders.

(d) Grant Agreements under the Plan need not be identical.

8. Stock Options.

(a) Generally. At any time, the Committee may grant, in its discretion, awards
of stock options that will enable the holder to purchase a number of shares of
Common Stock from the Company, at set terms (a "Stock Option"). Stock Options
may be incentive stock options ("Incentive Stock Options"), within the meaning
of Section 422 of the Code, or Stock Options which do not constitute Incentive
Stock Options ("Nonqualified Stock Options"). The Committee will have the
authority to grant to any participant one or more Incentive Stock Options and/or
Nonqualified Stock Options. Each Stock Option shall be subject to such terms and
conditions, including vesting, consistent with the Plan as the Committee may
provide in the Grant Agreement, subject to the following limitations:

(b) Exercise Price. Each Stock Option granted hereunder shall have such
per-share exercise price as the Committee may determine in the Grant Agreement,
but such exercise price may not be less than "Fair Market Value" (as defined in
Section 8(g) below) on the date the Stock Option is granted, except as provided
in Section 11(c).

(c) Payment of Exercise Price. The option exercise price may be paid in cash or,
in the discretion of the Committee and in accordance with any requirements
established by the Committee, by the delivery of shares of Common Stock of the
Company then owned by the participant. In the discretion of the Committee and in
accordance with any requirements established by the Committee, payment may also
be made by delivering a properly executed exercise notice to the Company
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the exercise price.

(d) Exercise Period. Stock Options granted under the Plan shall be exercisable
at such time or times and subject to such terms and conditions, including
vesting, as shall be determined by the Committee in the Grant Agreement.

(e) Limitations on Incentive Stock Options. Incentive Stock Options may be
granted only to participants who are employees of the Company or of a "Parent
Corporation" or "Subsidiary Corporation" (as defined in Sections 424(e) and (f)
of the Code, respectively) at the date of grant. The aggregate "Fair Market
Value" (as defined and determined as of the time the Stock Option is granted in
accordance with Section 8(g) below) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under all option plans of the Company and of any
Parent Corporation or Subsidiary Corporation) shall not exceed one hundred
thousand dollars ($100,000). For purposes of the preceding sentence, Incentive
Stock Options will be taken into account in the order in which they are granted.
The per-share exercise price of an Incentive Stock Option shall not be less than
one hundred percent (100%) of the Fair Market Value of the Common Stock on the
date of grant, and no Incentive Stock Option may be exercised later than ten
(10) years after the date it is granted.

(f) Additional Limitations on Incentive Stock Options for Ten Percent
Shareholders. Incentive Stock Options may not be granted to any participant who,
at the time of grant, owns stock possessing (after the application of the
attribution rules of Section 424(d) of the Code) more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary Corporation, unless the exercise price of the
option is fixed at not less than one hundred ten percent (110%) of the Fair
Market Value of the Common Stock on the date of grant and the exercise of such
option is prohibited by its terms after the expiration of five (5) years from
the date of grant of such option.

(g) Fair Market Value. For purposes of this Plan and any Awards granted
hereunder, "Fair Market Value" shall be the closing price of the Common Stock on
the relevant date (or on the last preceding trading date if Common Stock was not
traded on such date) if the Common Stock is readily tradable on a national
securities exchange or other market system, and if the Common Stock is not
readily tradable, Fair Market Value shall mean the amount determined in good
faith by the Committee as the fair market value of the Common Stock.

9. Stock Appreciation Rights.

(a) Generally. At any time, the Committee may, in its discretion, grant stock
appreciation rights with respect to Common Stock ("Stock Appreciation Rights"),
including a concurrent grant of Stock Appreciation Rights in tandem with any
Stock Option grant. A Stock Appreciation Right means a right to receive a
payment in cash or in Common Stock of an amount equal to the excess of (i) the
Fair Market Value of a share of Common Stock on the date the right is exercised
over (ii) the Fair Market Value of a share of Common Stock on the date the right
is granted, all as determined by the Committee. Each Stock Appreciation Right
shall be subject to such terms and conditions, including vesting, as the
Committee shall impose in the Grant Agreement.

(b) Exercise Period. Stock Appreciation Rights granted under the Plan shall be
exercisable at such time or times and subject to such terms and conditions,
including vesting, as shall be determined by the Committee in the Grant
Agreement.

10. Restricted Stock Awards.

(a) Generally. At any time, the Committee may, in its discretion, grant Awards
of Common Stock, subject to restrictions determined by the Committee (a
"Restricted Stock Award"). Such Awards may include mandatory payment of any
bonus in stock consisting of Common Stock issued or transferred to participants
with or without other payments therefor and may be made in consideration of
services rendered to the Company or its subsidiaries or Affiliates. A Restricted
Stock Award shall be construed as an offer by the Company to the participant to
purchase the number of shares of Common Stock subject to the Restricted Stock
Award at the purchase price, if any, established therefore.

(b) Payment of the Purchase Price. If the Restricted Stock Award requires
payment therefor, the purchase price of any shares of Common Stock subject to a
Restricted Stock Award may be paid in any manner authorized by the Committee,
which may include any manner authorized under the Plan for the payment of the
exercise price of a Stock Option.

(c) Restrictions. Restricted Stock Awards shall be subject to such terms and
conditions, including without limitation time based vesting and/or performance
based vesting, restrictions on the sale or other disposition of such shares,
and/or the right of the Company to reacquire such shares for no consideration
upon termination of the participant's employment within specified periods, as
the Committee determines appropriate. The Committee may require the participant
to deliver a duly signed stock power, endorsed in blank, relating to the Common
Stock covered by such an Award. The Committee may also require that the stock
certificates evidencing such shares be held in custody or bear restrictive
legends until the restrictions thereon shall have lapsed.

(d) Rights as a Shareholder. The Restricted Stock Award shall specify whether
the participant shall have, with respect to the shares of Common Stock subject
to a Restricted Stock Award, all of the rights of a holder of shares of Common
Stock of the Company, including the right to receive dividends and to vote the
shares.

11. Common Stock Available Under the Plan.

(a) Basic Limitations. The aggregate number of shares of Common Stock that may
be subject to Awards shall be 4,687,500, subject to any adjustments made in
accordance with Section 15 hereof. The maximum number of shares of Common Stock
that may be:

(i) the subject of an Award with respect to any individual participant under the
Plan during the term of the Plan shall not exceed 2,000,000 (subject to
adjustments made in accordance with Section 15 hereof);

(ii) covered by Awards issued under the Plan during a year shall be limited
during the first calendar year of the Plan to1,250,000 and during any year
thereafter to 1% of the Company's outstanding Common Stock at the beginning such
year; and

(iii) issued pursuant to Incentive Stock Options awarded under the Plan shall be
1,000,000.

(b) Additional Shares. Any shares of Common Stock subject to a Stock Option or
Stock Appreciation Right which for any reason is cancelled or terminated without
having been exercised, or any shares of Common Stock subject to Restricted Stock
Awards or Stock Units which are forfeited, and any shares delivered to the
Company as part or full payment for an Award or, to the extent the Committee
determines that the availability of Incentive Stock Options under the Plan will
not be compromised, to satisfy the Company's withholding obligation with respect
to an Award granted under this Plan as payment of a withholding obligation,
shall again be available for Awards under the Plan under 11(a). The preceding
sentence shall apply only for purposes of determining the aggregate number of
shares of Common Stock subject to Awards but shall not apply for purposes of
determining the maximum number of shares of Common Stock with respect to which
Awards may be granted to any individual participant under the Plan.

(c) Acquisitions. In connection with the acquisition of any business by the
Company or any of its subsidiaries or Affiliates, any outstanding grants or
awards of options, restricted stock or other equity-based compensation
pertaining to such business may be assumed or replaced by Awards under the Plan
upon such terms and conditions as the Committee determines, including granting
of Stock Options or Stock Appreciation Rights with an exercise price below Fair
Market Value at the date of the replacement grant.

12. Stock Units.

(a) Generally. The Committee may, in its discretion, grant "Stock Units" (as
defined in subsection (c) below) to participants hereunder. Stock Units may be
subject to such terms and conditions, including time based vesting and/or
performance based vesting, as the Committee determines appropriate. A Stock Unit
granted by the Committee shall provide payment in shares of Common Stock at such
time as the Grant Agreement shall specify. Shares of Common Stock issued
pursuant to this Section 12 may be issued with or without other payments
therefor as may be required by applicable law or such other consideration as may
be determined by the Committee. The Committee shall determine whether a
participant granted a Stock Unit shall be entitled to a Dividend Equivalent
Right (as defined in subsection (c) below).

(b) Settlement of Stock Units. Shares of Common Stock representing the Stock
Units shall be distributed to the participant upon settlement of the Award
pursuant to the Grant Agreement.

(c) Definitions. A "Stock Unit" means a notional account representing one (1)
share of Common Stock. A "Dividend Equivalent Right" means the right to receive
the amount of any dividend paid on the share of Common Stock underlying a Stock
Unit, which shall be payable in cash or in the form of additional Stock Units,
in the discretion of the Committee.

13. Performance-Based Awards.

(a) Generally. Any Award granted under the Plan may be granted in a manner such
that the Award qualifies for the performance-based compensation exemption of
Section 162(m) of the Code ("Performance-Based Awards"). As determined by the
Committee in its sole discretion, either the vesting and/or payment of such
Performance-Based Awards shall be based on achievement of hurdle rates and/or
growth rates in one or more business criteria that apply to the individual
participant, one or more business units, or the Company as a whole.

(b) Business Criteria. The business criteria shall be as follows, individually
or in combination: (1) net earnings; (2) earnings per share; (3) net sales
growth; (4) market share; (5) operating profit; (6) earnings before interest and
taxes (EBIT); (7) earnings before interest, taxes, depreciation and amortization
(EBITDA); (8) gross margin; (9) expense targets; (10) working capital targets
relating to inventory and/or accounts receivable; (11) operating margin; (12)
return on equity; (13) return on assets; (14) planning accuracy (as measured by
comparing planned results to actual results); (15) market price per share; (16)
total return to stockholders; (17) cash flow and/or cash flow return on equity;
(18) recurring after-tax net income; (19) gross revenues; (20) return on
invested capital; (21) safety; (22) cost management; (23) productivity ratios;
(24) operating efficiency; (25) accomplishment of mergers, acquisitions,
dispositions or similar extraordinary business transactions; (26) bond ratings;
(27) economic value added; (28) book value per share; (29) strategic
initiatives; (30) employee satisfaction; (31) cash management or asset
management metrics; (32) regulatory performance; (33) dividend yield; (34)
dividend payout ratio; (35) pre-tax interest coverage; (36) P/E ratio; (37)
capitalization targets; (38) customer value/satisfaction; (39) inventory; (40)
inventory turns; (41) availability and/or reliability of generation; (42) outage
duration; (43) outage frequency; (44) trading floor earnings; (45)
budget-to-actual performance; (46) customer growth; (47) funds from operations;
(48) interest coverage; (49) funds from operations/average total debt; (50)
funds from operations/capital expenditures; (51) total debt/total capital; (52)
electric service power quality and reliability, (53) resolution and/or
settlement of litigation and other legal proceedings and (54) total equity/
total capital. In addition, Performance-Based Awards may include comparisons to
the performance of other companies, such performance to be measured by one or
more of the foregoing business criteria.

(c) Establishment of Performance Goals. With respect to Performance-Based
Awards, the Committee shall establish in writing (i) the performance goals
applicable to a given period, and such performance goals shall state, in terms
of an objective formula or standard, the method for computing the portion of an
Award that vests or the number of shares to be delivered to a participant under
an Award if such performance goals are obtained, and (ii) the individual
employees or class of employees to which such performance goals shall apply, in
each case no later than ninety (90) days after the commencement of the
applicable performance period (but in no event after twenty-five percent (25%)
of such performance period has elapsed).

(d) Certification of Performance. No Performance-Based Awards shall be payable
to or vest with respect to, as the case may be, any participant for a given
period until the Committee certifies in writing that the objective performance
goals (and any other material terms) applicable to such period have been
satisfied.

(e) Modification of Performance-Based Awards. Subject to Section 15(b), with
respect to any Awards intended to qualify as Performance-Based Awards, after
establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder upon
the attainment of such performance goal (in accordance with the requirements of
Section 162(m) of the Code and the regulations thereunder). Notwithstanding the
preceding sentence, (i) the Committee may reduce or eliminate the number of
shares of Common Stock or cash granted or the number of shares of Common Stock
vested upon the attainment of such performance goal, and (ii) the Committee
shall disregard or offset the effect of "Extraordinary Items" in determining the
attainment of performance goals. For this purpose, "Extraordinary Items" means
extraordinary, unusual and/or non-recurring items, including but not limited to,
(i) regulatory disallowances or other adjustments, (ii) restructuring or
restructuring-related charges, (iii) gains or losses on the disposition of a
business or major asset, (iv) changes in regulatory, tax or accounting
regulations or laws, (v) resolution and/or settlement of litigation and other
legal proceedings or (vi) the effect of a merger or acquisition.

14. Foreign Laws.

The Committee may grant Awards to individual participants who are subject to the
tax laws of nations other than the United States, which Awards may have terms
and conditions as determined by the Committee as necessary to comply with
applicable foreign laws. The Committee may take any action which it deems
advisable to obtain approval of such Awards by the appropriate foreign
governmental entity; provided, however, that no such Awards may be granted
pursuant to this Section 14 and no action may be taken which would result in a
violation of the Exchange Act, the Code or any other applicable law.

15. Adjustment Provisions.

(a) Adjustment Generally. If there shall be any change in the Common Stock of
the Company, through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split up, spin-off,
combination of shares, exchange of shares, dividends or other changes in capital
structure, in the sole discretion of the Committee, an adjustment may be made as
provided below in (b) to each outstanding Award.

(b) Modification of Awards. In the event of any change or distribution described
in subsection (a) above, the Committee may appropriately adjust the number of
shares of Common Stock which may be issued pursuant to the Plan, the other
limits on Common Stock issuable under the Plan under Section 11, and the number
of shares covered by, and the exercise price of, each outstanding Award;
provided, however, that any such adjustment to a Performance-Based Award shall
not cause the amount of compensation payable thereunder to be increased from
what otherwise would have been due upon attainment of the unadjusted award.

16. Nontransferability, Title and Other Restrictions. Except as otherwise
specifically provided by the Committee in a Grant Agreement or modification of a
Grant Agreement that provides for transfer, each Award granted under the Plan to
a participant shall not be transferable otherwise than by will or the laws of
descent and distribution, and shall be exercisable, during the participant's
lifetime, only by the participant. In the event of the death of a participant,
each Award granted to him or her shall be exercisable during such period after
his or her death as the Committee shall in its discretion set forth in the Grant
Agreement at the date of grant and then only by the executor or administrator of
the estate of the deceased participant or the person or persons to whom the
deceased participant's rights under the Stock Option or Stock Appreciation Right
shall pass by will or the laws of descent and distribution.

17. Acceleration of Awards.

(a) In order to preserve a participant's rights under an Award in the event of a
Change in Control of the Company or in the event of a fundamental change in the
business condition or strategy of the Company, the Committee, in its sole
discretion, may, at the time an Award is made or at any time thereafter, take
one or more of the following actions: (i) provide for the acceleration of any
time period relating to the exercise or payment of the Award, (ii) provide for
payment to the participant of cash or other property with a fair market value
equal to the amount that would have been received upon the exercise or payment
of the Award had the Award been exercised or paid upon such event, (iii) adjust
the terms of the Award in a manner determined by the Committee to reflect such
event, (iv) cause the Award to be assumed, or new rights substituted therefor,
by another entity, or (v) make such other adjustments in the Award as the
Committee may consider equitable to the participant and in the best interests of
the Company. Further, any Award shall be subject to such conditions as necessary
to comply with federal and state securities laws, the performance based
exception of Section 162(m) of the Code, or understandings or conditions as to
the participant's employment in addition to those specifically provided for
under the Plan.

(b) A "Change in Control" shall be mean any of the following events:

(i) Any person (as such term is used in Section 14(d) of the Exchange Act)
becomes the "beneficial owner" (as determined pursuant to Rule 14d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
more than thirty percent (30%) of the combined voting power of the Company's
then outstanding voting securities; or

(ii) During any period of two (2) consecutive years (not including any period
prior to the execution of this Plan), individuals who at the beginning of such
period constitute the members of the Board of Directors and any new director
whose election to the Board of Directors or nomination for election to the Board
of Directors by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board of Directors; or

(iii) The Company shall merge with or consolidate into any other corporation or
entity, other than a merger or consolidation which would result in the holders
of the voting securities of the Company outstanding immediately prior thereto
holding immediately thereafter securities representing more than fifty percent
(50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or

(iv) The stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

Notwithstanding any of the foregoing, the issuance of shares to or the
distribution of shares from the "Disputed Claims Reserve" pursuant to the Fifth
Amended Joint Plan of Affiliated Debtors In Re Enron Corp. et al. shall not
constitute a Change in Control.

18. Withholding. All payments or distributions of Awards made pursuant to the
Plan shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Stock pursuant to the Plan, it may require
the recipient to remit to it or to the corporation or entity that employs such
recipient an amount sufficient to satisfy such tax withholding requirements
prior to the delivery of any certificates for such Common Stock. In lieu
thereof, the Company or the employing corporation or entity shall have the right
to withhold the amount of such taxes from any other sums due or to become due
from such corporation to the recipient as the Committee shall prescribe. The
Committee may, in its discretion and subject to such rules as it may adopt
(including any as may be required to satisfy applicable tax and/or non-tax
regulatory requirements), permit an optionee or award or right holder to pay all
or a portion of the federal, state and local withholding taxes arising in
connection with any Award consisting of shares of Common Stock by electing to
have the Company withhold shares of Common Stock having a Fair Market Value
equal to the amount of tax to be withheld, such tax calculated at minimum
statutory withholding rates.

19. Employment. A participant's right, if any, to continue to serve the Company
or any of its subsidiaries or Affiliates as a director, officer, employee, or
otherwise, shall not be enlarged or otherwise affected by his or her designation
as a participant under the Plan.

20. Unfunded Plan. Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to
be subject to the Employee Retirement Income Security Act of 1974, as amended.

21. No Fractional Shares. No fractional shares of Common Stock shall be issued
or delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, or Awards, or other property shall be issued or paid in lieu of
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

22. Duration, Amendment and Termination. No Award shall be granted more than ten
(10) years after the effective date of the Plan. The Committee may amend the
Plan from time to time or suspend or terminate the Plan at any time. No
amendment of the Plan may be made without approval of the stockholders of the
Company if such approval is required under the Code, the rules of a stock
exchange, or any other applicable laws or regulations.

23. Award Deferrals.

Participants may elect to defer receipt of shares of Common Stock or amounts
payable under an Award in accordance with procedures established by the
Committee.

24. Effect of Code Section 409A.

To the extent that any Award under this plan is or may be considered to involve
a nonqualified deferred compensation plan or deferral subject to Section 409A of
the Code, the terms and administration of such Award shall comply with the
provisions of such Section, applicable IRS guidance and good faith reasonable
interpretations thereof and, to the extent necessary, shall be modified,
replaced, or terminated in the discretion of the Committee.

25. Compliance with Securities Laws.

Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Common Stock under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the applicable requirements of
any securities exchange or similar entity.

26. Governing Law.

This Plan, Awards granted hereunder and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the state of
Oregon.

Executed as of the 21st day of February, 2006

PORTLAND GENERAL ELECTRIC COMPANY

By:

/s/ Arleen N. Barnett

 

Vice President, Administration, Corporate Compliance Officer

Appendix A

 

Index of Defined Terms

 

Term Section

Where Defined

                                  ___________________________________________

Affiliate(s) 4(c)

Awards 5

Board of Directors 4(a)

Change in Control 17(b)

Code 4(a)

Committee 4(a)

Common Stock 1

Company 1

Dividend Equivalent Right 12(c)

Exchange Act 4(a)

Fair Market Value 8(g)

Grant Agreement 7(a)

Incentive Stock Options 8(a)

Nonqualified Stock Options 8(a)

Parent Corporation 8(e)

Performance-Based Awards 13(a)

Plan 1

Restricted Stock Award 10(a)

Stock Appreciation Rights 9(a)

Stock Option 8(a)

Stock Unit 12(c)

Subsidiary Corporation 8(e)