EXHIBIT 10.1

UPDATED SUMMARY DESCRIPTION OF THE

PORTLAND GENERAL ELECTRIC COMPANY

ANNUAL CASH INCENTIVE MASTER PLAN FOR 2004

 

 

Plan Administration

The Annual Cash Incentive Master Plan for 2004 (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 (PGE
Compensation Committee) determines the CEO's target award opportunity. The CEO
determines each remaining participant's target award opportunity, subject to
approval by the Compensation Committee. Awards will be based upon
pre-established annual strategic and individual performance goals established by
the PGE Compensation Committee. See Attachment A for additional information
regarding 2004 performance criteria for the CEO and the four other most
highly-compensated officers of PGE (Executive Officers). Incentive cash awards
are calculated by multiplying base salary paid for the year by the product of
the target award opportunity, incentive performance rating percentage and a
percentage based upon Net Income, as those terms are described in Attachment A.

 

However, if the PGE Compensation Committee determines that the established
financial measures are 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 PGE Compensation Committee to be material, the
PGE Compensation Committee will have discretion during the year to modify the
performance objectives.

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.

ATTACHMENT A

2004 EXECUTIVE OFFICER PERFORMANCE CRITERIA

Net Income Target

Net Income for purposes of the performance criteria is based upon available
earnings information presented to the PGE Compensation Committee on
January 27, 2005, normalized for non-routine items. Threshold, Target and
Maximum Net Income levels for determining the funding level of the 2004 awards
is as follows:

Net Income Achieved:

Funding Level

Below threshold

0%

 

Threshold

50%

 

Target

100%

 

Maximum

167%

 

Percentages are interpolated for actual levels of Net Income achieved between
levels above Threshold. If Threshold Net Income is not achieved, awards paid, if
any, are at the discretion of the Board. The Net Income target is applicable to
all the Executive Officers.

Strategic and Individual Performance Goals

The strategic and individual performance goals for the Executive Officers are a
combination of one or more of the following: (i) customer value, (ii) trust,
(iii) supply position, (iv) economic growth, (v) employer / employee
relationship and (vi) operational excellence. The attainment of these goals
results in a performance rating, which is aligned with an incentive performance
rating percentage ranging from 0% to 120%. Performance ratings of 1 (significant
performance issues) aligns with 0%, 2 (meets some expectations) aligns with 50%,
3 (meets all or most expectations) aligns with 100%, 4 (exceeds some
expectations) aligns with 110% and 5 (exceeds all expectations) aligns with
120%. Below is a description of each goal and the applicable performance
measurement:

Customer value - Increase the level of customer satisfaction and experience of
value principally measured through customer surveys.

Trust - Earn the trust of co-workers, customers and the communities served.
Measurements include customer and employee surveys, employee ethics and
compliance training participation and employee volunteerism.

Supply position - Design and maintain an energy resource portfolio with cost
effective resources that provides reliable electricity supply at reasonable and
stable prices. Measurements include capacity and energy position, change in
supply costs and fuel source diversity.

Economic growth - Exert a positive influence on the long-term economic strength
of PGE's service territory. Measurements include involvement in job creation,
retention and expansion of customers, and key customer surveys.

Employer / employee relationship - Improve employee unity, work-life
satisfaction, performance and accountability. Measurements include employee
surveys and compensation benchmarking results.

Operational excellence - Maintain high performance levels in safety,
reliability, plant availability, customer service and regulatory and
environmental compliance. Measurements include customer at-fault complaints,
service reliability (outage duration and frequency), generation plant
availability and efficiency, time and cost to connect new customers, safety
incidents and regulatory compliance violations.

2004 Executive Officer Target Award Opportunity

The PGE Compensation Committee determined the CEO's target award opportunity.
The CEO determined the target award opportunity of the other Executive Officers,
subject to approval by the Compensation Committee. The amount of target award
opportunity for 2004 is expressed as a percentage of base salary paid and ranges
from 60% to 100% for the Company's Executive Officers as indicated below:

Executive Officer:

Target Award Opportunity

Peggy Y. Fowler

Chief Executive Officer and President

100%

 

James J. Piro

Executive Vice President, Finance, Chief Financial Officer and Treasurer

60%

 

Douglas R. Nichols

Vice President, General Counsel and Secretary

60%

 

Stephen M. Quennoz

Vice President, Nuclear & Power Supply/Generation

60%

 

Stephen R. Hawke

Vice President, Customer Service & Delivery

60%