EMPLOYMENT AGREEMENT
DATED: December 4, 1998
BETWEEN: PacifiCorp, an Oregon corporation,
000 XX Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000 "Company"
AND: Xxxxx X. XxXxxxxx
0000 XX Xxxxx, Xx. 0000
Xxxxxxxx, XX 00000 "Executive"
The parties agree as follows:
1. GENERAL. This Agreement sets forth the terms upon which the Executive
shall be employed by the Company. The Company hereby enters into this Agreement
with the Executive and offers the compensation and benefits identified for the
term specified herein. In consideration of the Executive's acceptance of
employment with the Company under the terms and conditions set forth in this
Agreement, this Agreement shall replace the provisions addressing annual
compensation received by the Executive for service as a Director and Chairman of
the Board of Directors of the Company ("Board") set forth in the Compensation
Agreement effective February 9, 1994, as amended, between Executive and the
Company. The Executive acknowledges that the compensation provided under this
Agreement is in lieu of and not in addition to annual compensation under the
Compensation Agreement and hereby waives any right to compensation thereunder
during the term of this Agreement.
2. TERM OF AGREEMENT.
The term of this Agreement shall be for three (3) years from
September 2, 1998 unless the Agreement is terminated earlier in accordance with
the following:
2.1 At any time after September 1, 1999, this Agreement may be
terminated by either party for any reason upon written notice to the other
party.
2.2 This Agreement shall automatically terminate in the event of
the Executive's disability or death. For purposes of this Agreement,
"disability" shall mean inability to perform all or substantially all of the
Executive's responsibilities for a continuous period of at least six (6)
months.
2.3 This Agreement shall automatically terminate upon expiration
of its term.
3. EMPLOYMENT.
3.1 EMPLOYMENT AND POSITION. The Executive commenced employment
with the Company September 2, 1998 upon his election to the office of Chief
Executive Officer by the Board. The Executive shall be employed by the
Company on a full-time basis to perform duties of the Chief Executive
Officer, unless removed by the Board. The Executive agrees to comply with all
applicable policies and procedures of PacifiCorp, and if applicable, its
affiliates, and to devote his full-time efforts, energy and skill to his
employment as the Company considers reasonably necessary for the performance
of the Executive's duties.
3.2 WORK LOCATION. During the term of this Agreement, the
principal work location for the Executive shall be Portland, Oregon.
3.3 EFFECT OF EMPLOYMENT TERMINATION UPON POSITION AS CHAIRMAN OF
THE BOARD. The parties acknowledge that Executive currently serves a
Chairman of the Board. The parties contemplate that, at the conclusion of his
term, Executive may terminate his employment with the Company but continue in
his role as Chairman of the Board. The termination of this Agreement shall
have no effect upon his service as Chairman, provided, however, the Board
retains the right to remove Executive from the office of Chairman (or any
other office) at any time.
4. PAYMENTS UPON TERMINATION OF EMPLOYMENT. In the event the
Executive's employment is terminated by the Company for any reason, the
Company shall pay the Executive amounts due for services rendered through the
date the Agreement terminated. The Company shall have no liability to the
Executive after the date this Agreement terminates pursuant to Section 2.
The Executive hereby waives any right to participate in the Company's
Executive Severance Plan and any claim to benefits thereunder.
5. COMPENSATION.
5.1 SALARY. For services performed during the term of the
Executive's employment with the Company during the term of this Agreement,
the Company shall pay the Executive an annualized salary (prorated for any
portion of a year), payable in equal monthly installments, not less than
$780,000, subject to annual review by the Board.
5.2 EMPLOYEE BENEFITS. In addition to the Executive's base
compensation, the Executive will be eligible to receive employee benefits on
the same basis as Company executives generally, except as expressly provided
for herein. The Executive will be subject to the policies concerning
holidays and vacation as applicable to other executives. All
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employee benefits are provided subject to the terms and conditions of any
applicable plans or policies and in accordance with applicable law.
5.3 INCENTIVE BONUS. The Executive's annual guideline-bonus
opportunity under the Executive Incentive Program or its successor shall be
set at the following percentage of base salary for each of the following
calendar years:
1998 20%
1999 40%
2000 50%
2001 60%
Any bonus award is subject to the terms of the Executive Incentive Plan. This
provision is not intended to establish a guideline bonus for the Executive for
any time period after the term of this Agreement.
6. OTHER BENEFITS.
6.1 THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Executive
shall not participate in PacifiCorp's Supplemental the Executive Retirement
Plan established for certain executives, effective October 1, 1998.
6.2 COMPENSATION REDUCTION PLAN. The Executive will be eligible to
participate in the Company's deferred compensation plan, known as the
Compensation Reduction Plan.
6.3 STOCK INCENTIVE PLAN. The Executive will be eligible to
participate in PacifiCorp's Stock Incentive Plan under which he may be
provided grants of restricted stock, stock options or other awards under
conditions specified in the plan and subject to Board approval. Any
restricted stock, stock option or other awards will be determined
periodically by the Board and memorialized in an Employee Stock Option
Agreement between the Executive and the Company.
6.4 AUTOMOBILE. The Company will provide the Executive at the
Company's expense with an automobile allowance of not be less than $900 per
month.
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7. CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION; RETURN OF
PROPERTY.
7.1 NON-COMPETITION AGREEMENT. The Executive agrees not to compete
with the Company through the term of this Agreement and to sign the Company's
the Executive Confidentiality/Invention Ownership Non-Competition Agreement.
7.2 PRESERVATION AND NON-USE OF CONFIDENTIAL INFORMATION. The
Executive acknowledges that upon execution of this Agreement and thereafter
the Executive will have a fiduciary duty as an officer and employee of the
Company not to discuss Confidential Information obtained during the
Executive's employment with the Company.
7.3 RETURN OF PROPERTY. On or before the Executive's last day of
employment with PacifiCorp, except as agreed to by the Company, the Executive
will return all property belonging to the Company, including, but not limited
to, all documents, business machines, computers, computer hardware and
software programs, computer data, equipment, keys, card keys, credit cards
and other Company-owned property.
8. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT.
8.1 The rights and benefits of the Executive under this Agreement
are personal to him and, except as may be set forth herein, may not be
transferred or assigned voluntarily or involuntarily.
8.2 This Agreement shall be binding on the Company, its successors
and assigns, including any person acquiring control of the Company's business
and operations.
8.3 In the event any provision of this Agreement shall be held
invalid or unenforceable by reason of law, such invalidity or inability to
enforce shall attach only to such provision(s) and shall not affect or render
invalid or unenforceable any other provision of this Agreement.
8.4 This Agreement contains the entire agreement and understanding
by and between the Executive and the Company with respect to the employment
of the Executive and supersedes and replaces any earlier understandings or
agreements, written or oral. The payments provided for in this Agreement
shall be in lieu of any other claims of the Executive relating to his
employment or benefits, including claims relating to termination of
employment.
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9. APPLICABLE LAW.
This Agreement shall be governed and construed in all respects in
accordance with the laws of the State of Oregon (without regard to the conflicts
of laws provisions thereof). Each of the parties hereby submits to the
jurisdiction of the courts of Oregon as regards any claim or matter arising
under it and agree that venue shall lie in the United States District Court for
the District of Oregon.
PACIFICORP
By /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Chairman, Personnel Committee of the Board
Date 12/21/98
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/s/ Xxxxx X. XxXxxxxx
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Xxxxx X. XxXxxxxx
Date 12/18/98
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