EXHIBIT 10.18

 

PORTLAND GENERAL ELECTRIC COMPANY

2005 MANAGEMENT DEFERRED COMPENSATION PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective as of January 1, 2005

 

TABLE OF CONTENTS

Page

ARTICLE I PURPOSE 1

1.1 Purpose 1

1.2 Effective Date 1

1.3 Plan Sponsor 1

ARTICLE II DEFINITIONS 2

2.1 Account 2

2.2 Administrative Committee 2

2.3 Base Salary 2

2.4 Beneficiary 2

2.5 Board 2

2.6 Bonuses 2

2.7 Company 2

2.8 Code 2

2.9 Compensation 3

2.10 Compensation Committee 3

2.11 Deferral Election 3

2.12 Determination Date 3

2.13 Direct Subsidiary 3

2.14 Eligible Employee 3

2.15 ERISA 4

2.16 Incentive Compensation 4

2.17 Indirect Subsidiary 4

2.18 Interest 4

2.19 Key Employee 5

2.20 Paid Time Off 5

2.21 Paid Time Off Cancellation 5

2.22 Participant 5

2.23 Participating Employer 5

2.24 Pension Plan 5

2.25 Plan 5

2.26 Policies 5

2.27 President 6

2.28 Separation from Service or Separate from Service 6

2.29 Unforeseeable Emergency 6

ARTICLE III ELIGIBILITY AND DEFERRALS 6

3.1 Eligibility 6

3.2 Deferral Elections 6

3.3 Limits on Elective Deferrals 7

3.4 Matching Contributions 8

3.5 Welfare Benefits 8

ARTICLE IV DEFERRED COMPENSATION ACCOUNT 8

4.1 Crediting to Account 8

4.2 Determination of Accounts 8

4.3 Vesting of Accounts 8

4.4 Statement of Accounts 9

ARTICLE V PLAN BENEFITS 9

5.1 Benefits 9

5.2 Withdrawals for Unforeseeable Emergency 9

5.3 Form of Benefit Payment 10

5.4 Withholding; Payroll Taxes 11

5.5 Commencement of Payments 11

5.6 Full Payment of Benefits 11

5.7 Payment to Guardian 12

ARTICLE VI RESTORATION OF PENSION PLAN BENEFITS 12

6.1 Pension Plan 12

6.2 Restoration of Pension Plan Benefits 12

ARTICLE VII BENEFICIARY DESIGNATION 13

7.1 Beneficiary Designation 13

7.2 Amendments 13

7.3 No Beneficiary Designation 13

7.4 Effect of Payment 13

ARTICLE VIII ADMINISTRATION 13

8.1 Administrative Committee; Duties 13

8.2 Agents 14

8.3 Binding Effect of Decisions 14

8.4 Indemnity of Administrative Committee; Compensation Committee 14

8.5 Availability of Plan Documents 14

8.6 Cost of Plan Administration 14

ARTICLE IX CLAIMS PROCEDURE 14

9.1 Claim 14

9.2 Denial of Claim 15

9.3 Review of Claim 15

9.4 Decision Upon Review 16

9.5 Finality of Determinations; Exhaustion of Remedies 16

ARTICLE X AMENDMENT AND TERMINATION OF PLAN 16

10.1 Amendment 16

10.2 Termination 17

10.3 Payment at Termination 17

ARTICLE XI MISCELLANEOUS 17

11.1 Legal Determinations 17

11.2 Liability 18

11.3 Trust Fund 18

11.4 Nonassignability 19

11.5 Not a Contract of Employment 19

11.6 Protective Provisions 19

11.7 Governing Law 19

11.8 Terms 19

11.9 Validity 19

11.10 Notice 20

11.11 Successors 20

 

PORTLAND GENERAL ELECTRIC COMPANY

2005 MANAGEMENT DEFERRED COMPENSATION PLAN

 

ARTICLE I

PURPOSE

1.1 Purpose

The purpose of this 2005 Management Deferred Compensation Plan is to provide
elective deferred compensation in excess of the limits on elective deferrals
under qualified cash or deferred arrangements. It is intended that the Plan will
aid in attracting and retaining personnel of exceptional ability.

The Plan is intended (1) to comply with section 409A of the Internal Revenue
Code of 1986, as amended (the "Code") and official guidance issued thereunder,
and (2) to be "a plan which is unfunded and is maintained by an employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees" within the meaning of sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). Notwithstanding any other provision of this Plan,
this Plan shall be interpreted, operated and administered in a manner consistent
with these intentions.

1.2 Effective Date

Prior to January 1, 2005, the Portland General Electric Company (the "Company")
maintained the Management Deferred Compensation Plan, which was frozen as of
December 31, 2004. The Plan is hereby established by the Company effective
January 1, 2005 and is intended to replace the frozen plan on a prospective
basis.

1.3 Plan Sponsor

The Plan is adopted for the benefit of selected employees of the Company and
selected employees of any corporations or other entities affiliated with or
subsidiary to it, if such corporations or entities are selected by the Board.
The Company assumes no liability for the payment of any Plan benefit owed by any
other Participating Employer, as defined herein, by reason of its Plan
sponsorship.

ARTICLE II

DEFINITIONS

2.1 Account

"Account" means the account maintained by a Participating Employer in accordance
with ARTICLE IV with respect to any deferral of Compensation or Paid Time Off
Cancellation pursuant to this Plan.

2.2 Administrative Committee

"Administrative Committee" means the persons designated by the Board to
administer the Plan.

2.3 Base Salary

"Base Salary" means the Eligible Employee's actual base pay in the pay period
and, except as provided herein, excluding any bonuses and/or overtime pay.

2.4 Beneficiary

"Beneficiary" means the person, persons or entity entitled under ARTICLE VII to
receive any Plan benefits payable after a Participant's death.

2.5 Board

"Board" means the Board of Directors of Portland General Electric Company.

2.6 Bonuses

"Bonuses" means Corporate Incentive Plan Awards, Notable Achievement Awards, and
any other form of cash Incentive Compensation explicitly designated as
deferrable pursuant to this Plan by the Deferral Election form approved by the
Administrative Committee.

2.7 Company

"Company" means Portland General Electric Company, an Oregon corporation.

 

2.8 Code

"Code" means the Internal Revenue Code of 1986, as amended.

 

2.9 Compensation

"Compensation" means the total of the following, before reduction for elective
deferrals under this Plan or a Participating Employer's tax qualified retirement
savings plan or any other flexible benefit plan:

2.9-1 Base Salary;

2.9-2 Bonuses;

2.9-3 Any interest on the above payments credited by a Participating Employer
for the benefit of an Eligible Employee prior to the date of payment, without
respect to any deferral of Compensation made pursuant to this Plan, by a
Participating Employer.

Compensation, for purposes of this Plan, may include any new form of cash
remuneration paid by a Participating Employer to any Eligible Employee which is
explicitly designated as deferrable pursuant to this Plan by the Deferral
Election form approved by the Administrative Committee. Compensation for
purposes of this Plan, does not include expense reimbursements, imputed income,
or any form of noncash compensation or benefits.

2.10 Compensation Committee

"Compensation Committee" means the Compensation Committee of the Board.

2.11 Deferral Election

"Deferral Election" means the election completed by Participant in a form
approved by the Administrative Committee which indicates Participant's
irrevocable election to defer Compensation as designated in the Deferral
Election, pursuant to ARTICLE III.

2.12 Determination Date

"Determination Date" means the last day of each calendar month.

2.13 Direct Subsidiary

"Direct Subsidiary" means any corporation of which a Participating Employer owns
at least eighty percent (80%) of the total combined voting power of all classes
of its stock entitled to vote.

2.14 Eligible Employee

"Eligible Employee" means an employee of a Participating Employer who:

2.14-1 Is exempt;

2.14-2 Is not covered by a collective bargaining agreement; and

2.14-3 If employed for the entire calendar year, receives or, is expected to
receive, Base Salary and an annual bonus from one or more Participating
Employers in the calendar year, in an amount equal to or in excess of the
threshold amount described in 2.14-5 below, or

2.14-4 If employed for a part of the calendar year, receives or, based on an
annualized level of pay would have received, Base Salary and an annual bonus
from one or more Participating Employers in the calendar year, in an amount
equal to or in excess of the threshold amount described in 2.14-5 below.
Notwithstanding the above, eligibility is at the discretion of the
Administrative Committee.

2.14-5 The threshold amount in calendar year 2005 and any subsequent year shall
be one hundred and twenty-five thousand dollars ($125,000). Such amount may be
adjusted by the Administrative Committee each subsequent calendar year at the
same time and in not less than the percentage ratio as the cost of living
adjustment in the dollar limit on defined benefits under Code section 415(d).

2.15 ERISA

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

2.16 Incentive Compensation

"Incentive Compensation" means payments made to a Participant in recognition of
meritorious work performance but shall not include, without limitation, any
payment received as moving expense, mortgage expense or mortgage interest
reimbursement.

2.17 Indirect Subsidiary

"Indirect Subsidiary" means any corporation of which a Participating Employer
directly and constructively owns at least eighty percent (80%) of the total
combined voting power of all classes of its stock entitled to vote. In
determining the amount of stock of a corporation that is constructively owned by
a Participating Employer, stock owned, directly or constructively, by a
corporation shall be considered as being owned proportionately by its
shareholders according to such shareholders' share of voting power of all
classes of its stock entitled to vote.

2.18 Interest

"Interest" means the interest yield computed at the monthly equivalent of an
annual yield that is one-half (0.5) percentage point higher than the annual
yield on Moody's Average Corporate Bond Yield Index for the three (3) calendar
months preceding the immediately prior month as published by Moody's Investors
Service, Inc. (or any successor thereto), or, if such index is no longer
published, a substantially similar index selected by the Board.

2.19 Key Employee

"Key Employee" means an Employee treated as a "specified employee" under Code
section 409A(a)(2)(B)(i), i.e., a key employee (as defined in Code section
416(i) without regard to paragraph (5) thereof) of a corporation any stock in
which is publicly traded on an established securities market or otherwise.

2.20 Paid Time Off

"Paid Time Off" means those vacation and holiday days for which the Employer
pays employees for time not worked.

2.21 Paid Time Off Cancellation

"Paid Time Off Cancellation" means cash payments made in lieu of Paid Time Off
earned by an Eligible Employee.

2.22 Participant

"Participant" means any Eligible Employee who has elected to make deferrals
under this Plan.

2.23 Participating Employer

"Participating Employer" means the Company or any affiliated or subsidiary
company designated by the Board as a Participating Employer under the Plan, as
long as such designation has become effective and continues to be in effect. The
designation as a Participating Employer shall become effective only upon the
acceptance of such designation and the formal adoption of the Plan by a
Participating Employer. A Participating Employer may revoke its acceptance of
designation as a Participating Employer at any time, but until it makes such
revocation, all of the provisions of this Plan and any amendments thereto shall
apply to the Eligible Employees of the Participating Employer and their
Beneficiaries.

2.24 Pension Plan

"Pension Plan" means the Participating Employer's Pension Plan, as may be
amended from time to time, and any successor defined benefit retirement income
plan or plans maintained by the Participating Employer which qualify under Code
section 401(a).

2.25 Plan

"Plan" means the Portland General Electric Company 2005 Management Deferred
Compensation Plan, as may be amended from time to time.

 

 

 

2.26 Policies

"Policies" means any life insurance policies, annuity contracts or the proceeds
therefrom owned or which may be acquired by Participating Employer.

 

2.27 President

"President" means the President of the Company.

2.28 Separation from Service or Separate from Service means a "separation from
service" within the meaning of Code section 409A. Generally, a separation from
service occurs when an individual ceases to provide services for the Company and
any corporations or other entities that are treated as a single employer with
the Company under Code section 414.

2.29 Unforeseeable Emergency

"Unforeseeable Emergency" means a severe financial hardship to a Participant
resulting from an illness or accident of the Participant, the Participant's
spouse, or a dependent (as defined in Code section 152(a)) of the Participant,
loss of the Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.

 

ARTICLE III

ELIGIBILITY AND DEFERRALS

3.1 Eligibility

3.1-1 General. An Eligible Employee who has completed one year of continuous
employment with one or more Participating Employers shall be eligible to
participate by making a Deferral Election under Section 3.2 below. The
Administrative Committee shall notify Eligible Employees about the Plan and the
benefits provided under it. The requirement of one year of continuous employment
may be waived by the Administrative Committee.

3.1-2 Cessation of Eligibility. An Eligible Employee who ceases to be an
employee of a Participating Employer or to satisfy condition 2.14-1, 2.14-2 or
2.14-3 of the definition of Eligible Employee shall cease participating as to
new deferrals immediately.

 

 

 

3.2 Deferral Elections

3.2-1 Time of Elections. An Eligible Employee may elect to participate in the
Plan with respect to any Compensation and/or Paid Time Off Cancellation
designated in a Deferral Election in a form approved by the Administrative
Committee. The Deferral Election must be filed with the Administrative Committee
no later than December 15 of the year preceding the year in which the
Compensation and/or Paid Time Off Cancellation is earned, or such shorter period
as is designated in the Deferral Election form, provided all such elections must
be made by the deadline imposed by Code section 409A. A Deferral Election for a
new form of cash remuneration may be made at such other time before a
Participant becomes entitled to receipt thereof, as may be approved by the
Administrative Committee and within the deadline imposed by Code section 409A.

3.2-2 Mid-Year Eligibility. If an individual first becomes eligible to
participate during a calendar year and wishes to defer Compensation and/or Paid
Time Off Cancellation during the remainder of the year, a Deferral Election may
be filed no later than thirty (30) days after becoming eligible to participate
in the Plan. Such Deferral Election shall be effective only with regard to
Compensation and/or Paid Time Off Cancellation earned after it is filed with the
Administrative Committee and otherwise to the extent permitted by Code section
409A.

3.2-3 Performance-based Compensation. Notwithstanding the foregoing, if the
Administrative Committee determines that an item of Compensation qualifies as
"performance-based compensation" under Code section 409A, an Eligible Employee
may elect to defer a portion of the performance-based compensation by filing a
Deferral Election at such later time as permitted by the Administrative
Committee and permitted under Code section 409A.

3.2-4 Irrevocability. A Deferral Election for amounts earned in the following
calendar year shall become irrevocable on the December 15 by which it is due
under Section 3.2-1 and a Deferral Election for amounts earned in the current
calendar year shall become irrevocable upon filing with the Administrative
Committee under Section 3.2-2 or, if applicable, Section 3.2-3.

3.2-5 Transfer to a Participating Employer. If a Participant transfers
employment from one Participating Employer to another Participating Employer,
the Participant's Deferral Election shall remain in effect for the remainder of
the calendar year with respect to Compensation and/or Paid Time Off Cancellation
earned by the individual after the transfer to the new Participating Employer.

3.3 Limits on Elective Deferrals

A Participant may elect to defer up to eighty percent (80%) of Base Salary and
up to one hundred percent (100%) of Bonuses or other form of cash remuneration
as approved by the Administrative Committee. The level of deferral elected in
either case must be in one percent (1%) increments. A Participant may elect to
defer up to one hundred twenty (120) hours per year of Paid Time Off
Cancellation in one-tenth (1/10) hour increments, but may not defer any Paid
Time Off Cancellation earned in prior calendar years, or the first two hundred
(200) hours of Paid Time Off Cancellation earned in the calendar year to which
the Deferral Election relates.

3.4 Matching Contributions

The Participating Employer shall provide a matching contribution for each
Participant who is making deferrals of Base Salary under this Plan. The matching
contribution shall be three percent (3%) of the Participant's annual elective
Base Salary deferral under this Plan. For purposes of this provision, Base
Salary shall not include amounts received as a Nuclear Regulatory Commission
licensing bonus.

3.5 Welfare Benefits

Compensation deferred under this Plan shall constitute compensation for purposes
of any welfare plans, (as defined by ERISA), sponsored by the Participating
Employer.

 

 

 

ARTICLE IV

DEFERRED COMPENSATION ACCOUNT

4.1 Crediting to Account

The amount of the elective deferrals and matching contributions for a
Participant under this Plan shall be credited to an Account for the Participant
on the books of the Participating Employer at the time the Compensation and/or
Paid Time Off Cancellation would have been paid in cash. Any taxes or other
amounts due from the Participant with respect to the deferred Compensation under
federal, state or local law, such as a Participant's share of FICA, shall be
withheld from nondeferred Compensation payable to the Participant at the time
the deferred amounts are credited to the Account. If at the time of such credit,
there is not sufficient nondeferred compensation to make the required tax
withholding, the amount deferred shall be reduced to allow the Company to comply
with the tax withholding required.

4.2 Determination of Accounts

The last day of each calendar month shall be a Determination Date. Each
Participant's Account as of each Determination Date shall consist of the balance
of the Account as of the immediately preceding Determination Date, plus the
Participant's elective deferrals, matching contributions, and Interest credited
under this Plan, minus the amount of any distributions made from this Plan since
the immediately preceding Determination Date. Interest credited shall be
calculated as of each Determination Date based upon the average daily balance of
the Account since the preceding Determination Date.

4.3 Vesting of Accounts

Account balances in this Plan shall be fully vested at all times.

4.4 Statement of Accounts

The Administrative Committee shall submit to each Participant, after the close
of each calendar quarter and at such other times as determined by the
Administrative Committee a statement setting forth the balance of the Account
maintained for the Participant.

 

ARTICLE V

PLAN BENEFITS

5.1 Benefits

5.1-1 Entitlement to Benefits at Separation from Service. Benefits under this
Plan shall be payable to a Participant on Separation from Service, or on such
subsequent date elected by a Participant and approved by the Administrative
Committee on the Participant's Deferral Election. The amount of the benefit
shall be the balance of the Participant's Account including Interest to the date
of payment, in the form elected under Section 5.3 below.

Notwithstanding the above or any other provision of this Plan, distributions may
not be made to a Key Employee upon a Separation from Service before the date
which is six months after the date of the Key Employee's Separation from Service
(or, if earlier, the date of death of the Key Employee).

5.1-2 Entitlement to Benefits at Death. As soon as administratively practicable
following the death of a Participant for whom an Account is held under this
Plan, a death benefit shall be payable to the Participant's Beneficiary in the
same form as the Participant elected for payments at Separation from Service,
under Section 5.3 below. The amount of the benefit shall be the balance of the
Participant's Account including Interest to the date of payment.

5.2 Withdrawals for Unforeseeable Emergency

A Participant may withdraw all or any portion of his Account balance for an
Unforeseeable Emergency. The amounts distributed with respect to an
Unforeseeable Emergency may not exceed the amounts necessary to satisfy such
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant's
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship).

5.2-1 Determination. The existence of an Unforeseeable Emergency and the amount
to be withdrawn shall be determined by the Administrative Committee.

5.2-2 Suspension. A Participant who makes a withdrawal for Unforeseeable
Emergency or financial hardship from any company-sponsored deferral plan,
whether qualified or nonqualified, shall be suspended from participation in this
Plan for twelve (12) months from the date of such withdrawal, to the extent such
suspension is permissible under Code section 409A. Compensation and/or Paid Time
Off Cancellation payable during such suspension that would have been deferred
under this Plan shall instead be paid to the Participant. No matching
contribution shall be credited to a Participant's Account under this Plan during
any period of suspension.

5.3 Form of Benefit Payment

5.3-1 The Plan benefits attributable to the elective deferrals for any calendar
year shall be paid in one of the forms set out below, as elected by the
Participant in the form of payment designation filed with the Deferral Election
for that year. The forms of benefit payment are:

(a) A lump-sum payment;

(b) Monthly installment payments in substantially equal payments of principal
and Interest over a period of up to one hundred eighty (180) months. The amount
of the installment payment shall be redetermined on the first day of the month
coincidental with or next following the anniversary of the date of Separation
from Service each year, based upon the then current rate of Interest, the
remaining Account balance, and the remaining number of payment periods; or

(c) For Participants designated by the President to the Administrative
Committee, monthly installment payments over a period of up to one hundred
eighty (180) months, consisting of interest only payments for up to one hundred
twenty (120) months and principal and interest payments of the remaining Account
balance over the remaining period. The amount of the installment payment shall
be redetermined on the first day of the month coincidental with or next
following the anniversary of the date of Separation from Service each year,
based upon the then current rate of Interest, the remaining Account balance, and
the remaining number of payment periods.

(d) In the event the Account balance is ten thousand dollars ($10,000) or less,
that benefit will be paid out in a lump sum notwithstanding the form of benefit
payment elected by the Participant.

5.3-2 A Participant may elect to file a change of payment designation which
shall supersede all prior form of payment designations with respect to the
Participant's entire Account. The Participant may redesignate a combination of
lump sum and monthly installments if approved by the Administrative Committee,
but only if such redesignation does not result in an acceleration of payments
under Code section 409A. Any change of payment designation must comply with Code
section 409A, which generally means that the designation must (1) not take
effect until at least twelve (12) months after the date of the change of payment
designation, (2) provide an additional deferral for the first payment for a
period of at least five years from the date such payment would otherwise have
been made, except in the case of elections relating to distributions on death or
Unforeseeable Emergency, and (3) if related to a payment at a specified time or
pursuant to a fixed schedule, be made at least twelve (12) months prior to the
date of the first scheduled payment.

5.3-3 Participants designated by the President to the Administrative Committee
may elect to file a change of payment designation which shall supersede all
prior form of payment designations with respect to the Participant's entire
Account. The Participant may redesignate monthly installment payments over a
period of up to one hundred eighty (180) months, consisting of interest only
payments for up to one hundred twenty (120) months and principal and interest
payments of the remaining Account balance over the remaining period, but only if
such redesignation does not result in an acceleration of payments under Code
section 409A. To be effective, such designation must be approved by the
President and the Administrative Committee. Any change of payment designation
must comply with Code section 409A, which generally means that the designation
must (1) not take effect until at least twelve (12) months after the date of the
change of payment designation, (2) provide an additional deferral for the first
payment for a period of at least five years from the date such payment would
otherwise have been made, except in the case of elections relating to
distributions on death or Unforeseeable Emergency, and (3) if related to a
payment at a specified time or pursuant to a fixed schedule, be made at least
twelve (12) months prior to the date of the first scheduled payment.

5.4 Withholding; Payroll Taxes

Each Participating Employer shall withhold from payments made hereunder any
taxes required to be withheld from a Participant's wages for the federal or any
state or local government. Withholding shall also apply to payments to a
Beneficiary unless an election against withholding is made under Code section
3405(a)(2).

5.5 Commencement of Payments

Subject to the rule for Key Employees in Section 5.1-1, payment shall commence
as soon as administratively practicable, but not later than sixty-five (65) days
after the end of the month in which a Participant Separates from Service unless
the Participant's Deferral Election, approved by the Administrative Committee,
provides for a later commencement date. All payments shall be made as of the
first day of the month, and shall commence within the time required by section
409A.

5.6 Full Payment of Benefits

Notwithstanding any other provision of this Plan, all benefits shall be paid no
later than one hundred eighty (180) months following the date payment to a
Participant commences.

5.7 Payment to Guardian

If a Plan benefit is payable to a minor or a person declared incompetent or
deemed to be legally incapable of handling the disposition of property, the
Administrative Committee may direct payment of such Plan benefit to the
guardian, legal representative or person having the care and custody of such
minor or incompetent person. The Administrative Committee may require such proof
of incompetency, minority, incapacity or guardianship as he may deem appropriate
prior to distribution of the Plan benefit. Such distribution shall completely
discharge the Administrative Committee, the Participating Employer, and the
Company from all liability with respect to such benefit.

 

ARTICLE VI

RESTORATION OF PENSION PLAN BENEFITS

6.1 Pension Plan

If a Participating Employer maintains a tax qualified Pension Plan for the
benefit of eligible employees, and the Pension Plan provides benefits determined
under a formula that is based in part on the employee's nondeferred
compensation, a Participant in this Plan may receive a smaller benefit under the
Pension Plan as a result of electing deferrals under this Plan.

6.2 Restoration of Pension Plan Benefits

In addition to the benefits payable under Section 5.1 above, a Participating
Employer shall pay to any Participant whose Pension Plan benefit is not restored
under any other employee or executive benefit plan maintained by a Participating
Employer, a benefit payment equal to the excess of (b) over (a) as follows:

(a) The actuarial equivalent lump sum present value of the retirement income (or
death benefit) payable (either immediately or deferred) under the Pension Plan;
and

(b) the actuarial equivalent lump sum present value of the retirement income (or
death benefit) that would have been payable under the Pension Plan if
Participant had made no Deferral Elections in any calendar year under this Plan.
The actuarial equivalent lump sum present values shall be calculated in the same
manner and using the same factors as are used to calculate lump-sum
distributions under the Pension Plan. If Participant Separates from Service
prior to attaining the age of fifty-five (55), payment of the restoration of
Pension Plan benefits shall be made as if Participant had made a lump-sum
election pursuant to Subsection (a) above with respect to the payment of the
restoration of Pension Plan benefits. If Participant Separates from Service upon
or after attaining the age of fifty-five (55), payment of the restoration of
Pension Plan benefits shall be made as if Participant had made an election to
receive monthly installment payments in substantially equal payments of
principal and Interest over a period of one hundred twenty (120) months pursuant
to Section 5.3-1(b) above with

respect to the payment of the restoration of Pension Plan benefits.
Notwithstanding the foregoing, in the event the actuarial equivalent lump sum
present value is ten thousand dollars ($10,000) or less when the Participant
Separates from Service, that benefit will be paid out in a lump sum.

 

 

ARTICLE VII

BENEFICIARY DESIGNATION

7.1 Beneficiary Designation

Each Participant shall have the right, at any time, to designate one or more
persons or entities as the Participant's Beneficiary, primary as well as
secondary, to whom benefits under this Plan shall be paid in the event of the
Participant's death prior to complete distribution to the Participant of the
benefits due under the Plan. Each Beneficiary designation shall be in a written
form prescribed by the Administrative Committee and will be effective only when
filed with the Administrative Committee during the Participant's lifetime.

7.2 Amendments

Any Beneficiary designation may be changed by a Participant without the consent
of any Beneficiary by filing a new Beneficiary designation with the
Administrative Committee. If a Participant's compensation is community property
under applicable law, any Beneficiary designation shall be valid or effective
only as permitted under such a law.

7.3 No Beneficiary Designation

In the absence of an effective Beneficiary designation, or if all Beneficiaries
predecease a Participant, the Participant's estate shall be the Beneficiary. If
a Beneficiary dies after a Participant and before payment of benefits under this
Plan has been completed, the remaining benefits shall be payable to the
Beneficiary's estate.

7.4 Effect of Payment

Payment to the Beneficiary shall completely discharge the Participating
Employer's obligations under this Plan.

ARTICLE VIII

ADMINISTRATION

8.1 Administrative Committee; Duties

This Plan shall be administered by the Administrative Committee appointed by the
Board. Members of the Administrative Committee may be Participants under this
Plan who are actively employed by the Company. The Administrative Committee
shall have the authority to make, amend, interpret, and enforce all appropriate
rules and regulations for the administration of this Plan and decide or resolve
any and all questions, including interpretations of this Plan, as may arise in
connection with the Plan. The Administrative Committee shall report to the
Compensation Committee regarding Plan activity on an annual basis and at such
other times as may be requested by the Compensation Committee.

8.2 Agents

In the administration of this Plan, the Administrative Committee may, from time
to time, employ agents and delegate to such agents, including employees of any
Participating Employer, such administrative duties as it sees fit, and may from
time to time consult with counsel, who may be counsel to any Participating
Employer.

8.3 Binding Effect of Decisions

The decision or action of the Administrative Committee in respect of any
question arising out of or in connection with the administration, interpretation
and application of the Plan and the rules and regulations promulgated hereunder
shall be final and conclusive and binding upon all persons having any interest
in the Plan.

8.4 Indemnity of Administrative Committee; Compensation Committee

Each Participating Employer shall indemnify and hold harmless the Administrative
Committee and the Compensation Committee, and their individual members, against
any and all claims, loss, damage, expense or liability arising from any action
or failure to act with respect to this Plan, except in the case of gross
negligence or willful misconduct.

8.5 Availability of Plan Documents

Each Participant shall receive a copy of this Plan, and the Administrative
Committee shall make available for inspection by any Participant a copy of the
rules and regulations used in administering the Plan.

8.6 Cost of Plan Administration

The Company shall bear all expenses of administration of this Plan. However, a
ratable portion of the expense shall be charged back to each Participating
Employer.

 

ARTICLE IX

CLAIMS PROCEDURE

9.1 Claim

A Participant or his authorized representative may file a claim for benefits
under the Plan. Any claim must be in writing and submitted to the Administrative
Committee at such address as may be specified from time to time. Claimants will
be notified in writing of approved claims, which will be processed as filed. A
claim is considered approved only if its approval is communicated in writing to
a claimant.

9.2 Denial of Claim

In the case of the denial of a claim respecting benefits paid or payable with
respect to a Participant, a written notice will be furnished to the claimant
within 90 days of the date on which the claim is received by the Administrative
Committee. If special circumstances (such as for a hearing) require a longer
period, the claimant will be notified in writing, prior to the expiration of the
90-day period, of the reasons for an extension of time; provided, however, that
no extensions will be permitted beyond 90 days after the expiration of the
initial 90-day period. A denial or partial denial of a claim will be dated and
signed by the Administrative Committee and will clearly set forth:

(i) the specific reason or reasons for the denial;

(ii) specific reference to pertinent Plan provisions on which the denial is
based;

(iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

(iv) an explanation of the procedure for review of the denied or partially
denied claim set forth below, including the claimant's right to bring a civil
action under ERISA section 502(a) following an adverse benefit determination on
review.

9.3 Review of Claim

Upon denial of a claim, in whole or in part, a claimant or his duly authorized
representative will have the right to submit a written request to the
Administrative Committee for a full and fair review of the denied claim by
filing a written notice of appeal with the Administrative Committee within 60
days of the receipt by the claimant of written notice of the denial of the
claim. A claimant or the claimant's authorized representative will have, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claimant's claim for benefits and
may submit issues and comments in writing. The review will take into account all
comments, documents, records, and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

If the claimant fails to file a request for review within 60 days of the denial
notification, the claim will be deemed abandoned and the claimant precluded from
reasserting it. If the claimant does file a request for review, his request must
include a description of the issues and evidence he deems relevant. Failure to
raise issues or present evidence on review will preclude those issues or
evidence from being presented in any subsequent proceeding or judicial review of
the claim.

9.4 Decision Upon Review

The Administrative Committee will provide a prompt written decision on review.
If the claim is denied on review, the decision shall set forth:

(i) the specific reason or reasons for the adverse determination;

(ii) specific reference to pertinent Plan provisions on which the adverse
determination is based;

(iii) a statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claimant's claim for benefits; and

(iv) a statement describing any voluntary appeal procedures offered by the Plan
and the claimant's right to obtain the information about such procedures, as
well as a statement of the claimant's right to bring an action under ERISA
section 502(a).

A decision will be rendered no more than 60 days after the Administrative
Committee's receipt of the request for review, except that such period may be
extended for an additional 60 days if the Administrative Committee determines
that special circumstances (such as for a hearing) require such extension. If an
extension of time is required, written notice of the extension will be furnished
to the claimant before the end of the initial 60-day period.

9.5 Finality of Determinations; Exhaustion of Remedies

To the extent permitted by law, decisions reached under the claims procedures
set forth in this Article shall be final and binding on all parties. No legal
action for benefits under the Plan shall be brought unless and until the
claimant has exhausted his remedies under this Article. In any such legal
action, the claimant may only present evidence and theories which the claimant
presented during the claims procedure. Any claims which the claimant does not in
good faith pursue through the review stage of the procedure shall be treated as
having been irrevocably waived.

ARTICLE X

AMENDMENT AND TERMINATION OF PLAN

10.1 Amendment

The Administrative Committee may amend the Plan from time to time as may be
necessary for administrative purposes and legal compliance of the Plan,
provided, however, that no such amendment shall affect the benefit rights of
Participants or Beneficiaries in the Plan. The Compensation Committee may amend
the Plan at any time, provided, however, that no amendment shall be effective to
decrease or restrict the accrued rights of Participants and Beneficiaries to the
amounts in their Accounts at the time of the amendment. Such amendments shall be
subject to the following:

10.1-1 Preservation of Account Balance. No amendment shall reduce the amount
accrued in any Account to the date such notice of the amendment is given.

10.1-2 Changes in Interest Rate. No amendment shall reduce the rate of Interest
to be credited, after the date of the amendment, on the amount already accrued
in any Account or on the deferred amounts credited to any Account under Deferral
Elections already in effect on the date of the amendment.

10.2 Termination

The board of directors of each Participating Employer may at any time, in its
sole discretion, terminate or suspend the Plan in whole or in part for that
Participating Employer. However, no such termination or suspension shall
adversely affect the benefits of Participants which have accrued prior to such
action, the benefits of any Participant who has previously Separated from
Service, the benefits of any Beneficiary of a Participant who has previously
died, or already accrued Plan liabilities between Participating Employers.

10.3 Payment at Termination

If the Plan is terminated, payment of each Account to a Participant or a
Beneficiary for whom it is held shall commence pursuant to Section 5.5 and be
paid in the form designated by the Participant, to the extent permitted under
Code section 409A.

ARTICLE XI

MISCELLANEOUS

11.1 Legal Determinations

11.1-1 Compliance with Code. This Plan is intended to comply with Code section
409A and official guidance issued thereunder. Notwithstanding any other
provision of this Plan, this Plan shall be interpreted, operated, and
administered to achieve this intent.

11.1-2 Unfunded Plan. This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of sections 201,
301, and 401 of ERISA, and therefore to be exempt from the provisions of Parts
2, 3 and 4 of Title I of ERISA. Accordingly, the Administrative Committee may
terminate the Plan and commence termination payout under Section 10.3 above for
all or certain Participants, to the extent permitted under Code section 409A, or
remove certain employees as Participants, if the United States Department of
Labor or a court of competent jurisdiction determines that the Plan constitutes
an employee pension benefit plan within the meaning of section 3(2) of ERISA
which is not so exempt. This Plan is not intended to create an investment
contract, but to provide retirement benefits to eligible individuals who have
elected to participate in the Plan. Eligible individuals are select employees
who, by virtue of their position with a Participating Employer, are uniquely
informed as to the Participating Employer's operations and have the ability to
materially affect the Participating Employer's profitability and operations.

11.2 Liability

11.2-1 Liability for Benefits. Except as otherwise provided in this paragraph,
liability for the payment of a Participant's benefit pursuant to this Plan shall
be borne solely by the Participating Employer that employs the Participant and
reports the Participant as being on its payroll during the accrual or increase
of the Plan benefit, and no liability for the payment of any Plan benefit shall
be incurred by reason of Plan sponsorship or participation except for the Plan
benefits of a Participating Employer's own employees. Provided, however, that
each Participating Employer, by accepting the Board's designation as a
Participating Employer under the Plan and formally adopting the Plan, agrees to
assume secondary liability for the payment of any benefit accrued or increased
while a Participant is employed and on the payroll of a Participating Employer
that is a Direct Subsidiary or Indirect Subsidiary of the Participating Employer
at the time such benefit is accrued or increased. Such liability shall survive
any revocation of designation as a Participating Employer with respect to any
liabilities accrued at the time of such revocation. Nothing in this paragraph
shall be interpreted as prohibiting any Participating Employer or any other
person from expressly agreeing to the assumption of liability for a Plan
Participant's payment of any benefits under the Plan.

11.2-2 Unsecured General Creditor. Participants and their Beneficiaries, heirs,
successors, and assigns shall have no secured legal or equitable rights,
interest or claims in any property or assets of a Participating Employer, nor
shall they be beneficiaries of, or have any rights, claims or interests in any
Policies or the proceeds therefrom owned or which may be acquired by a
Participating Employer. Except as provided in Section 11.3, such Policies or
other assets of a Participating Employer shall not be held under any trust for
the benefit of Participants, their Beneficiaries, heirs, successors or assigns,
or held in any way as collateral security for the fulfilling of the obligations
of a Participating Employer under this Plan. Any and all of a Participating
Employer's assets and Policies shall be, and remain, the general, unpledged,
unrestricted assets of the Participating Employer. A Participating Employer's
obligation under the Plan shall be that of an unfunded and unsecured promise to
pay money in the future.

11.3 Trust Fund

At its discretion, each Participating Employer, jointly or severally, may
establish one or more trusts, with such trustee as the Board may approve, for
the purpose of providing for the payment of such benefits. Such trust or trusts
may be irrevocable, but the assets thereof shall be subject to the claims of the
Participating Employer's creditors. To the extent any benefits provided under
the Plan are actually paid from any such trust, the Participating Employer shall
have no further obligation with respect thereto, but to the extent not so paid,
such benefits shall remain the obligation of, and shall be paid by the
Participating Employer.

11.4 Nonassignability

Neither a Participant nor any other person shall have any right to sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, hypothecate or
convey in advance of actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are, expressly declared to
be nonassignable and nontransferable. No part of the amounts payable shall,
prior to actual payment, be subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a Participant
or any other person, nor shall such amounts be transferable by operation of law
in the event of a Participant's or any other person's bankruptcy or insolvency.

11.5 Not a Contract of Employment

The terms and conditions of this Plan shall not be deemed to constitute a
contract of employment between a Participating Employer and a Participant, and
neither a Participant nor a Participant's Beneficiary shall have any rights
against a Participating Employer except as may otherwise be specifically
provided herein. Moreover, nothing in this Plan shall be deemed to give a
Participant the right to be hired or retained in the service of a Participating
Employer or to interfere with the right of a Participating Employer at any time
to discipline or discharge a Participant who is an employee.

11.6 Protective Provisions

A Participant will cooperate with a Participating Employer by furnishing any and
all information requested by a Participating Employer, in order to facilitate
the payment of benefits hereunder, and by taking such physical examinations as a
Participating Employer may deem necessary and taking such other action as may be
requested by a Participating Employer.

11.7 Governing Law

The provisions of this Plan shall be construed and interpreted according to the
laws of the State of Oregon, except as preempted by federal law.

11.8 Terms

In this Plan document, unless the context clearly indicates the contrary, the
masculine gender will be deemed to include the female gender, and the singular
shall include the plural.

11.9 Validity

In case any provisions of this Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.

11.10 Notice

Any notice or filing required or permitted to be given to the Administrative
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail to the Administrative Committee or to
the Secretary of Participating Employer. Notice to the Administrative Committee,
if mailed, shall be addressed to the principal executive offices of
Participating Employer. Notice mailed to the Participant shall be at such
address as is given in the records of the Participating Employer. Notices shall
be deemed given as of the date of delivery or, if delivery is made by mail, as
of the date shown on the postmark on the receipt for registration or
certification.

11.11 Successors

The provisions of this Plan shall bind and inure to the benefit of each
Participating Employer and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of a Participating Employer, and
successors of any such corporation or other business entity.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
officers thereunto duly authorized this 4th day of March, 2005.

ADMINISTRATIVE COMMITTEE

PORTLAND GENERAL ELECTRIC COMPANY

2005 MANAGEMENT DEFERRED COMPENSATION PLAN

 

/s/ James F. Lobdell

James F. Lobdell

   

/s/ James J. Piro

James J. Piro

   

/s/ Arleen N. Barnett

Arleen N. Barnett