-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FeNNN4+oP6RS3v1VU7kN4cO+qF+iTBoRtSGBwcg9sTLeTd1uisWROUUYlS2OYOJW afBDV4ZS+vZVHkK6cH1mqA== 0001032210-01-000007.txt : 20010122 0001032210-01-000007.hdr.sgml : 20010122 ACCESSION NUMBER: 0001032210-01-000007 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010102 EFFECTIVENESS DATE: 20010102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUGET ENERGY INC /WA CENTRAL INDEX KEY: 0001085392 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: SEC FILE NUMBER: 333-23393-99 FILM NUMBER: 1500632 BUSINESS ADDRESS: STREET 1: 411 108TH AVENUE N E 3RD FLOOR CITY: BELLEVUE STATE: WA ZIP: 980045515 BUSINESS PHONE: 4254623751 MAIL ADDRESS: STREET 1: 411 108TH AVENUE N E 34RD FLOOR CITY: BELLEVUE STATE: WA ZIP: 980045515 S-8 POS 1 0001.txt POST EFFECTIVE AMENDMENT #1 As filed with the Securities and Exchange Commission on January 2, 2001 Registration No. 333-23393 ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ______________________ PUGET ENERGY, INC. (Exact name of registrant as specified in its charter) Washington 91-1969407 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
411 - 108th Avenue N.E. Bellevue, Washington 98004-5515 (425) 454-6363 (Address, including zip code, and telephone number, including area code of principal executive offices) AMENDED AND RESTATED 1995 LONG-TERM INCENTIVE COMPENSATION PLAN (Full title of the plan) STEPHEN A. MCKEON Vice President and General Counsel Puget Energy, Inc. 411 - 108th Avenue N.E. Bellevue, Washington 98004-5515 (425) 454-6363 (Name, address and telephone number, including area code, of agent for service) ______________________ Copies to: ANDREW BOR Perkins Coie LLP 1201 Third Avenue, Suite 4800 Seattle, Washington 98101-3099 (206) 583-8888 ______________________ CALCULATION OF REGISTRATION FEE
==================================================================================================================================== Title of Securities Amount to Be Proposed Maximum Proposed Maximum Amount of To Be Registered Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee - ------------------------------------------------------------------------------------------------------------------------------------ Common Stock, par value $.01 per share, under the Amended and Restated 1995 Long-Term Incentive Compensation Plan (1) (1) (1) (1) ====================================================================================================================================
(1) Puget Energy, Inc. as the successor issuer to Puget Sound Energy, Inc. adopts this Registration Statement on Form S-8 as described in "Adoption of Predecessor Issuer's Registration Statement on Form S-8." The applicable registration fees were paid at the time of the original filing of this registration statement, and, therefore, no further fee is required. ADOPTION OF PREDECESSOR ISSUER'S REGISTRATION STATEMENT ON FORM S-8 This Post-Effective Amendment No. 1 to Form S-8 is filed by Puget Energy, Inc., a Washington corporation (the "Registrant"), in order to expressly adopt the Registration Statement on Form S-8 (No. 333-23393) (the "Registration Statement") filed by Puget Sound Energy, Inc., a Washington corporation ("PSE") in accordance with Rule 414(d) of the Securities Act of 1933, as amended (the "1933 Act"), for all purposes of the 1933 Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Registration Statement relates to shares of common stock issuable upon the exercise of stock options granted under the Amended and Restated 1995 Long-Term Incentive Compensation Plan (the "Plan"). The Registrant is adopting the Registration Statement pursuant to a Plan of Exchange, dated as of April 28, 1999, between PSE and the Registrant (the "Plan of Exchange") and filed as Appendix A to the Registrant's Registration Statement on Form S-4 (No. 333-77491). The Plan of Exchange was approved by the shareholders at the annual meeting of the shareholders held on June 23, 1999. Pursuant to the Plan of Exchange, each outstanding share of PSE common stock, no par value, was exchanged for one (1) share of the Registrant's common stock, par value $.01 per share, and PSE became a wholly-owned subsidiary of the Registrant. Pursuant to the Plan of Exchange, the shares of PSE common stock previously issued and outstanding under the Plan were converted into an equivalent number of shares of common stock of the Registrant. In addition, investments or contributions in PSE common stock were converted into a right or option to receive an equivalent number of shares of common stock of the Registrant upon the same terms and conditions. From and after the effective time of the Plan of Exchange, common stock of the Registrant will be used in lieu of PSE common stock whenever stock is required to be issued in connection with the Plan. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. There is hereby incorporated by reference in this Registration Statement the following documents heretofore filed with the Securities and Exchange Commission: (a) PSE's Annual Report on Form 10-K for the year ended December 31, 1999, filed on March 14, 2000, which contains audited financial statements for the most recent fiscal year for which such statements have been filed. (b) PSE's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and September 30, 2000. (c) PSE's Current Reports on Form 8-K filed on February 11, 2000, May 25, 2000, July 3, 2000 and July 21, 2000. (d) The description of the Registrant's common stock contained in the Registrant's Registration Statement on Form S-4 (No. 333-77491) filed on April 30, 1999, including any amendments or reports filed for the purpose of updating such description. (e) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 1999. All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof, and prior to the filing of a post-effective amendment which indicates that the securities offered hereby have been sold or which deregisters the securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF COMMON STOCK. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation Act authorize a court to award, or a corporation's board of directors to grant, indemnification to directors and officers on terms sufficiently broad to permit indemnification under certain circumstances for liabilities arising under the 1933 Act. Section 6 of the Registrant's bylaws provides for indemnification of the Registrant's directors and officers to the maximum extent permitted by Washington law. Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or limit a director's personal liability to the corporation or its shareholders for monetary damages for conduct as a director, except in certain circumstances involving acts or omissions, intentional misconduct by a director or knowing violations of law by a director or distributions illegal under Washington law, or any transaction from which the director will personally receive a benefit in money, property or services to which the director is not legally entitled. Article X of the Registrant's articles of incorporation contains provisions implementing, to the fullest extent permitted by Washington law, such limitations on a director's liability to the Registrant and its shareholders. Officers and directors of the Registrant are covered by insurance (with certain exceptions and certain limitations) that indemnifies them against losses and liabilities arising from certain alleged "wrongful acts," including alleged errors or misstatements, or certain other alleged wrongful acts or omissions constituting neglect or breach of duty. The above discussion of the WBCA and the bylaws and articles of incorporation is not intended to be exhaustive and is qualified in its entirety by reference to such statute, the bylaws and the articles of incorporation. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not applicable. ITEM 8. EXHIBITS. EXHIBIT NO. DESCRIPTION - ------- ------------------------------------------------------------------- 5.1 Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered 23.1 Consent of PricewaterhouseCoopers LLP 23.2 Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.1) 24.1 Power of Attorney 99.1 Amended and Restated 1995 Long-Term Incentive Compensation Plan ITEM 9. UNDERTAKINGS. A. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefits plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Post-Effective Amendment No. 1 to Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Bellevue, State of Washington, on the 2nd day of January, 2001. PUGET ENERGY, INC. By: /s/ RICHARD L. HAWLEY --------------------- Richard L. Hawley Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Post- Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities indicated below on the 2nd day of January, 2001.
SIGNATURE TITLE *WILLIAM S. WEAVER President, Chief Executive Officer, and - ---------------------------------- Director (Principal Executive Officer) William S. Weaver /s/ RICHARD L. HAWLEY Vice President and Chief Financial Officer - ---------------------------------- (Principal Accounting and Financial Officer) Richard L. Hawley *DOUGLAS P. BEIGHLE Director - ---------------------------------- Douglas P. Beighle *CHARLES W. BINGHAM Director - ---------------------------------- Charles W. Bingham *PHILLIS J. CAMPBELL Director - ---------------------------------- Phillis J. Campbell *CRAIG W. COLE Director - ---------------------------------- Craig W. Cole *DONALD J. COVEY Director - ---------------------------------- Donald J. Covey *ROBERT L. DRYDEN Director - ---------------------------------- Robert L. Dryden
*JOHN D. DURBIN Director - ---------------------------------- John D. Durbin *JOHN W. ELLIS Director - ---------------------------------- John W. Ellis *TOMIO MORIGUCHI Director - ---------------------------------- Tomio Moriguchi *SALLY G. NARODICK Director - ---------------------------------- Sally G. Narodick *By /s/ RICHARD L. HAWLEY ------------------------------ Richard L. Hawley Attorney-in-fact
INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ------- ------------------------------------------------------------------ 5.1 Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered 23.1 Consent of PricewaterhouseCoopers LLP 23.2 Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.1) 24.1 Power of Attorney 99.1 Amended and Restated 1995 Long-Term Incentive Compensation Plan EX-5.1 2 0002.txt OPINION OF PERKINS COIE EXHIBIT 5.1 [LETTERHEAD OF PERKINS COIE LLP] January 2, 2001 Puget Energy, Inc. 411-108th Avenue N.E. Bellevue, WA 98004-5515 Re: Post-Effective Amendment No. 1 to Registration Statement No. 333-23393 on Form S-8 Ladies and Gentlemen: We have acted as counsel to Puget Energy, Inc. (the "Company") in connection with the preparation of a Post-Effective Amendment No. 1 to Registration Statement No. 333-23393 on Form S-8 (the "Registration Statement"), which is being filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"). The Registration Statement is being filed for shares of the Company's common stock, $.01 par value, which may be issued pursuant to the Company's Amended and Restated 1995 Long-Term Incentive Compensation Plan (the "Plan"). We have examined the Registration Statement and such documents and records of the Company and other documents as we have deemed relevant and necessary for the purpose of this opinion. In giving this opinion, we are assuming the authenticity of all instruments presented to us as originals, the conformity with originals of all instruments presented to us as copies, and the genuineness of all signatures. Based on and subject to the foregoing, we are of the opinion that any shares that may be issued pursuant to the Plan which are original issuance shares have been duly authorized and that, upon the due execution by the Company and the registration by its registrar of such shares, the issuance thereof by the Company in accordance with the terms of each Plan and the receipt of consideration therefor in accordance with the terms of the Plan, such shares will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, /s/ Perkins Coie LLP EX-23.1 3 0003.txt CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement of Form S-8 (Registration No. 333-23393) of our report dated February 10, 2000 relating to the financial statements and financial statement schedule, which appears in Puget Sound Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999. PRICEWATERHOUSECOOPERS LLP Seattle, Washington January 2, 2001 EX-24.1 4 0004.txt POWER OF ATTORNEY EXHIBIT 24.1 POWER OF ATTORNEY The undersigned directors and/or officers of Puget Energy, Inc., a Washington corporation ("Puget Energy"), hereby authorize and appoint William S. Weaver and Richard L. Hawley, or either of them (with full power to each of them to act alone), as attorneys-in-fact with full power of substitution, to execute in the name and on the behalf of each person individually and in each capacity stated below, and to file, with the Securities and Exchange Commission under the provision of the Securities Act of 1933, as amended (the "Securities Act") the following registration statement and post-effective amendments, in each case granting to said attorneys, and each of them or their substitutes or substitute, full power and authority to do and perform each and every act and thing requisite and necessary to be done in order to effectuate the foregoing: (a) the Registration Statement on Form S-3 to be filed by Puget Energy, Inc. with the Securities and Exchange Commission for the registration under the Securities Act of not to exceed five million shares of Puget Energy's common stock (which shares are to be offered pursuant to Puget Energy's Stock Purchase and Dividend Reinvestment Plan), and any and all amendments of such Registration Statement, with all exhibits and other documents in connection therewith; and (b) any and all post-effective amendments to Registration Statement Nos. 33-52127 (Investment Plan for Employees), 33-61851 (Long-Term Incentive Compensation Plan), 333-23393 (Long-Term Incentive Compensation Plan), 333-41113 (Employee Stock Purchase Plan) and 333- 41157 (Non-employee Director Stock Plan) of Puget Sound Energy, Inc., and any and all other documents required to be filed with respect thereto, with all exhibits and other documents in connection therewith. IN WITNESS WHEREOF, the undersigned directors and/or officers have executed this Power of Attorney on the 23rd day of October, 2000.
SIGNATURE TITLE /s/ WILLIAM S. WEAVER President, Chief Executive Officer, and - ------------------------------------ Director (Principal Executive Officer) William S. Weaver /s/ RICHARD L. HAWLEY Vice President and Chief Financial Officer - ------------------------------------ (Principal Accounting and Financial Officer) Richard L. Hawley /s/ DOUGLAS P. BEIGHLE Director - ------------------------------------ Douglas P. Beighle /s/ CHARLES W. BINGHAM Director - ------------------------------------ Charles W. Bingham /s/ PHILLIS J. CAMPBELL Director - ------------------------------------- Phillis J. Campbell /s/ CRAIG W. COLE Director - ------------------------------------- Craig W. Cole /s/ DONALD J. COVEY Director - ------------------------------------- Donald J. Covey /s/ ROBERT L. DRYDEN Director - ------------------------------------- Robert L. Dryden /s/ JOHN D. DURBIN Director - ------------------------------------- John D. Durbin /s/ JOHN W. ELLIS Director - ------------------------------------- John W. Ellis /s/ TOMIO MORIGUCHI Director - ------------------------------------- Tomio Moriguchi /s/ SALLY G. NARODICK Director - ------------------------------------- Sally G. Narodick
EX-99.1 5 0005.txt AMENDED & RESTATED 1995 COMPENSATION PLAN EXHIBIT 99.1 AMENDED AND RESTATED 1995 LONG-TERM INCENTIVE COMPENSATION PLAN SECTION 1. PURPOSE The purpose of the Puget Energy, Inc. Amended and Restated 1995 Long-Term Incentive Compensation Plan (the "Plan") is to enhance the long-term profitability and shareholder value of Puget Energy, Inc., a Washington corporation (the "Company"), by offering incentives and rewards to those employees of the Company and its Subsidiaries (as defined in Section 5 of the Plan) who are key to the Company's growth and success, and to encourage them to remain in the service of the Company and its Subsidiaries and to acquire and maintain stock ownership in the Company. SECTION 2. ADMINISTRATION 2.1 Plan Administrator The Plan shall be administered by a committee or committees (the "Plan Administrator") (which term includes subcommittees) appointed by, and consisting of one or more members of, the Company's Board of Directors (the "Board"). The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible Participants (as defined in Section 3 of the Plan) to different committees, subject to such limitations as the Board deems appropriate. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time. The composition of any committee responsible for administering the Plan with respect to officers and directors of the Company who are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to securities of the Company shall comply with the requirements of Rule 16b-3 under Section 16(b) of the Exchange Act. 2.2 Administration and Interpretation by the Plan Administrator Except for the terms and conditions explicitly set forth in the Plan, the Plan Administrator shall have exclusive authority, in its discretion, to determine all matters relating to Awards (as defined in Section 3 of the Plan) under the Plan, including the selection of individuals to be granted Awards, the type of Awards, the number of shares of the Company's common stock, par value $.01 per share (the "Common Stock"), subject to an Award, all terms, conditions, restrictions and limitations, if any, of an Award and the terms of any instrument that evidences the Award, and to authorize the Trustee (the "Trustee") of the 1995 Long-Term Incentive Compensation Plan Trust, a trust established under the laws of the State of Washington (the "Trust"), to grant Awards. The Plan Administrator shall also have exclusive authority to interpret the Plan and may from time to time adopt, and Administrator's interpretation of the Plan and its rules and regulations, and all actions taken and determinations made by the Plan Administrator pursuant to the Plan, shall be conclusive and binding on all parties involved or affected. The Plan Administrator may delegate administrative duties to such of the Company's officers as it so determines. SECTION 3. AWARDS 3.1 Form and Grant of Awards The Plan Administrator shall have the authority, in its sole discretion, to determine the type or types of awards (an "Award") to be made under the Plan, which may include, but are not limited to, Stock Awards, Performance Awards, Other Stock-Based Awards (including any Dividend Equivalent Rights granted in connection with such Awards) as those terms are defined in Sections 6, 7, 8 and 9, respectively, of the Plan. Awards may be granted singly, in combination or in tandem so that the settlement or payment of one automatically reduces or cancels the other. Awards may also be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for, grants or rights under any other employee or compensation plan of the Company. For purposes of the Plan, a "Participant" means an individual who is a Holder of an Award or, as the context may require, any employee of the Company or a Subsidiary who has been designated by the Plan Administrator as eligible to participate in the Plan, and a "Holder" means the Participant to whom an Award is granted, or the personal representative of a Holder who has died. 3.2 Acquired Company Awards Notwithstanding anything in the Plan to the contrary, the Plan Administrator may grant Awards under the Plan in substitution for awards issued under other plans, or assume under the Plan awards issued under other plans, if the other plans are or were plans of other entities ("Acquired Entities") (or the parent of the Acquired Entity) and the new Award is substituted, or the old award is assumed, by reason of a merger, consolidation, acquisition of property or of stock, reorganization or liquidation (the "Acquisition Transaction"). In the event that a written agreement pursuant to which the Acquisition Transaction is completed is approved by the Board and said agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, said terms and conditions shall be deemed to be the action of the Plan Administrator without any further action by the Plan Administrator, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such Awards shall be deemed to be Participants and Holders. 3.3 1995 Long-Term Incentive Compensation Plan Trust Awards may be, but need not be, paid to the Trustee, such payments to be used by the Trustee to purchase shares of the Common Stock. Shares purchased by the Trustee pursuant to the terms of the Trust ("Trustee Shares") shall be held for the benefit of Participants, and shall be distributed to Participants or their beneficiaries by the Trustee at the direction of the Plan Administrator in accordance with the terms and conditions of the Awards. Awards may also be made in units that are redeemable (in whole or part) in Trustee Shares. SECTION 4. STOCK SUBJECT TO THE PLAN 4.1 Authorized Number of Shares Subject to adjustment from time to time as provided in Section 11.1 of the Plan, the maximum number of shares of Common Stock that may be purchased by the Trustee as Trustee Shares for purposes of the Plan shall be 1,200,000. Common Stock shall be purchased by the Trustee on the open market. The Company shall not issue any Common Stock under the Plan to the Trust or to any Participant, nor shall the Company purchase any Trustee Shares from the Trust. 4.2 Limitations Subject to adjustment from time to time as provided in Section 11.1 of the Plan, no Awards denominated in stock that constitute more than 40,000 shares of Common Stock shall be payable to any individual Participant in any one fiscal year of the Company, and no Awards denominated in cash that have an aggregate maximum dollar value in excess of $400,000 shall be payable to any individual Participant in any one fiscal year of the Company, such limitations to be applied in a manner consistent with the requirements of, and only to the extent required for compliance with, the exclusion from the limitation on deductibility of compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). 4.3 Reuse of Shares Any shares of Common Stock that have been made subject to an Award that cease to be subject to the Award (other than by reason of exercise or payment of the Award to the extent it is exercised for or settled in shares), including, without limitation, in connection with the cancellation of an Award and the grant of a replacement Award, shall again be available for issuance in connection with future grants of Awards under the Plan. Shares that are subject to tandem Awards shall be counted only once. SECTION 5. ELIGIBILITY Awards may be granted under the Plan to those officers and key employees (including directors who are also employees) of the Company and its Subsidiaries as the Plan Administrator from time to time selects. For purposes of the Plan, "Subsidiary," except as expressly provided otherwise, means any entity that is directly or indirectly controlled by the Company or in which the Company has a significant ownership interest, as determined by the Plan Administrator, and any entity that may become a direct or indirect parent of the Company. SECTION 6. STOCK AWARDS 6.1 Grant of Stock Awards The Plan Administrator is authorized to grant Awards of Common Stock ("Stock Awards") to Participants on such terms and conditions, and subject to such restrictions, if any (whether based on performance standards, periods of service or otherwise), as the Plan Administrator shall determine, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award (shares subject to such restrictions are referred to herein as "Restricted Stock"). The terms, conditions and restrictions that the Plan Administrator shall have the power to determine shall include, without limitation, the manner in which shares subject to Stock Awards are held during the periods they are subject to restrictions and the circumstances under which forfeiture of Restricted Stock shall occur by reason of termination of the Holder's employment. 6.2 Issuance of Shares Upon the satisfaction of any terms, conditions and restrictions prescribed in respect to a Stock Award, or upon the Holder's release from any terms, conditions and restrictions of a Stock Award, as determined by the Plan Administrator, the Company shall deliver, as soon as practicable, to the Holder or, in the case of the Holder's death, to the personal representative of the Holder's estate or as the appropriate court directs, a stock certificate for the appropriate number of shares of Common Stock. 6.3 Waiver of Restrictions Notwithstanding any other provisions of the Plan, the Plan Administrator may, in its sole discretion, waive the forfeiture period and any other terms, conditions and restrictions on any Restricted Stock under such circumstances and subject to such terms and conditions as the Plan Administrator shall deem appropriate. SECTION 7. PERFORMANCE AWARDS 7.1 Plan Administrator Authority Awards made under this Section 7 ("Performance Awards") may be denominated in cash, shares of Common Stock or any combination thereof. The Plan Administrator is authorized to grant Performance Awards and shall determine the nature, length and starting date of the performance period for each Performance Award and the performance objectives to be used in valuing Performance Awards and determining the extent to which such Performance Awards have been earned. Performance objectives and other terms may vary from Participant to Participant and between groups of Participants. Performance objectives shall be based on profits, profit growth, profit-related return ratios, cash flow or total shareholder return, whether applicable to the Company or any relevant Subsidiary or business unit, comparisons with competitor companies or groups and with stock market indices, or any combination thereof, as the Plan Administrator deems appropriate. Additional performance measures may be used to the extent their use would comply with the exclusion from the limitation on deductibility of compensation under Section 162(m) of the Code. Performance periods may overlap and Participants may participate simultaneously with respect to Performance Awards that are subject to different performance periods and different performance factors and criteria. The Plan Administrator shall determine for each Performance Award the range of dollar values or number of shares of Common Stock (which may, but need not, be shares of Restricted Stock pursuant to Section 6 of the Plan), or a combination thereof, to be received by the Participant at the end of the performance period if and to the extent that the relevant measures of performance for such Performance Awards are met. The performance measures must include a minimum performance standard below which no payment will be made and a maximum performance level above which no increased payment will be made, such limitation to be applied in a manner consistent with the requirements of, and to the extent required for compliance with, the exclusion from the limitation on deductibility of compensation under Section 162(m) of the Code. The earned portion of a Performance Award may be paid currently or on a deferred basis with such interest or earnings equivalent as may be determined by the Plan Administrator. Payment shall be made in the form of cash, whole shares of Common Stock (which may, but need not, be shares of Restricted Stock pursuant to Section 6 of the Plan), or any combination thereof, either in a single payment or in annual installments, all as the Plan Administrator shall determine. 7.2 Adjustment of Awards The Plan Administrator may adjust the performance goals and measurements applicable to Performance Awards to take into account changes in law and accounting and tax rules and to make such adjustments as the Plan Administrator deems necessary or appropriate to reflect the inclusion or exclusion of the impact of extraordinary or unusual items, events or circumstances, except that, to the extent required for compliance with the exclusion from the limitation on deductibility of compensation under Section 162(m) of the Code, no adjustment shall be made that would result in an increase in the compensation of any Participant whose compensation is subject to such limitation for the applicable year. The Plan Administrator also may adjust the performance goals and measurements applicable to Performance Awards and thereby reduce the amount to be received by any Participant pursuant to such Awards if and to the extent that the Plan Administrator deems it appropriate. 7.3 Payout Upon Termination The Plan Administrator shall establish and set forth in each instrument that evidences a Performance Award whether the Award will be payable, and the terms and conditions of such payment, if a Holder ceases to be employed by the Company or its Subsidiaries, which provisions may be waived or modified by the Plan Administrator at any time. If not so established in the instrument evidencing the Performance Award, the Award will be payable according to the following terms and conditions, which may be waived or modified by the Plan Administrator at any time. If during a performance period a Participant's employment with the Company terminates by reason of the Participant's Retirement, Early Retirement at the Company's request, Disability, position elimination or death, such Participant shall be entitled to a payment with respect to each outstanding Performance Award at the end of the applicable performance period (a) based, to the extent relevant under the terms of the Performance Award, on the Participant's performance for the portion of such performance period ending on the date of termination and (b) prorated for the portion of the performance period during which the Participant was employed by the Company, all as determined by the Plan Administrator. For purposes of the Plan, "Retirement" and "Disability" mean "retirement" and "disability" as those terms are defined in the Company's Investment Plan for Employees or other similar successor plan applicable to salaried employees, and "Early Retirement" means "early retirement" as that term is defined by the Plan Administrator from time to time for purposes of the Plan. The Plan Administrator may provide for an earlier payment in settlement of such Performance Award discounted at a reasonable interest rate and otherwise in such amount and under such terms and conditions as the Plan Administrator deems appropriate. Except as otherwise provided in Section 11 of the Plan or in the instrument evidencing the Performance Award, if during a performance period a Participant's employment with the Company terminates other than by reason of the Participant's Retirement, Early Retirement at the Company's request, Disability, position elimination or death, then such Participant shall not be entitled to any payment with respect to the Performance Awards relating to such performance period, unless the Plan Administrator shall otherwise determine. In case of termination of the Holder's employment for Cause, the Performance Award shall automatically terminate upon first notification to the Holder of such termination, unless the Plan Administrator determines otherwise. For purposes of the Plan, "Cause" means dishonesty, fraud, misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conviction or confession of a crime punishable by law (except minor violations), in each case as determined by the Plan Administrator, whose determination shall be conclusive and binding. If a Holder's employment with the Company is suspended pending an investigation of whether the Holder shall be terminated for Cause, all of the Holder's rights under any Performance Award likewise shall be suspended during the period of investigation. A transfer of employment between or among the Company and its Subsidiaries shall not be considered a termination of employment. Unless the Plan Administrator determines otherwise, a leave of absence approved in accordance with Company procedures shall not be considered a termination of employment. SECTION 8. OTHER STOCK-BASED AWARDS The Plan Administrator may grant other Awards under the Plan ("Other Stock- Based Awards") pursuant to which shares of Common Stock (which may, but need not, be shares of Restricted Stock pursuant to Section 6 of the Plan) are or may in the future be acquired, or Awards denominated in stock units, including Awards valued using measures other than market value. Such Other Stock-Based Awards may be granted alone or in addition to or in tandem with any Award of any type granted under the Plan and must be consistent with the Plan's purpose. SECTION 9. DIVIDEND EQUIVALENT RIGHTS Any Awards under the Plan may, in the Plan Administrator's discretion, earn Dividend Equivalent Rights ("Dividend Equivalent Rights"). In respect of any Award that is outstanding on the dividend record date for Common Stock, the Participant may be credited with an amount equal to the cash or stock dividends or other distributions that would have been paid on the shares of Common Stock covered by such Award had such covered shares been issued and outstanding on such dividend record date. The Plan Administrator shall establish such rules and procedures governing the crediting of Dividend Equivalent Rights, including the timing, form of payment and payment contingencies of such Dividend Equivalent Rights, as it deems are appropriate or necessary. SECTION 10. ASSIGNABILITY No Performance Award, Other Stock-Based Award or Dividend Equivalent Right granted under the Plan may be assigned or transferred by the Holder other than by will or by the laws of descent and distribution and, during the Holder's lifetime, such Awards may be exercised only by the Holder. Notwithstanding the foregoing, and to the extent permitted by Rule 16b-3 under the Exchange Act, the Plan Administrator, in its sole discretion, may permit such assignment, transfer and exercisability and may permit a Holder of such Awards to designate a beneficiary who may exercise the Award or receive compensation under the Award after the Holder's death. SECTION 11. ADJUSTMENTS 11.1 Adjustment of Shares In the event that at any time or from time to time a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to shareholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of securities of the Company or of any other corporation or (b) new, different or additional securities of the Company or of any other corporation being received by the holders of shares of Common Stock, then the Plan Administrator, in its sole discretion, shall make such equitable adjustments as it shall deem appropriate under the circumstances in (i) the maximum number of and class of securities subject to the Plan as set forth in Section 4.1 of the Plan, (ii) the maximum number and class of securities and dollar amount subject to Awards that may be paid to any individual Participant as set forth in Section 4.2 of the Plan, and (iii) the number and class of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor. The determination by the Plan Administrator as to the terms of any of the foregoing adjustments shall be conclusive and binding. 11.2 Corporate Transaction Except as otherwise provided in the instrument that evidences an Award, in the event of any Corporate Transaction (as defined below), each Stock Award that is at the time outstanding shall automatically accelerate so that each such Award shall, immediately prior to the specified effective date for the Corporate Transaction, become 100% vested, except that such acceleration will not occur if in the opinion of the Company's accountants it would render unavailable "pooling of interest" accounting for a Corporate Transaction that would otherwise qualify for such accounting treatment. Such Award shall not so accelerate, however, if and to the extent: (a) such Award is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with a comparable award for the purchase of shares of the capital stock of the successor corporation or its parent corporation, (b) such Award is to be replaced with a cash incentive program of the successor corporation that preserves the value existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award, or (c) the acceleration of such Award is subject to other limitations imposed by the instrument evidencing the Award. The determination of Award comparability under clause (a) above shall be made by the Plan Administrator, and its determination shall be conclusive and binding. All such Awards shall terminate and cease to remain outstanding immediately following the consummation of the Corporate Transaction, except to the extent assumed by the successor corporation or its parent corporation. Any such Awards that are assumed or replaced in the Corporate Transaction and do not otherwise accelerate at that time shall be accelerated in the event the Holder's employment should subsequently terminate within two years following such Corporate Transaction, unless such employment is terminated by the Company for Cause or by the Holder voluntarily without Good Reason (as defined below). For purposes of the Plan, "Corporate Transaction" means any of the following events: (a) Approval by the holders of Common Stock of any merger or consolidation of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock are converted into cash, securities or other property, other than a merger of the Company in which the holders of Common Stock immediately prior to the merger have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the merger; (b) Approval by the holders of Common Stock of any sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the Company's assets other than a transfer of the Company's assets to a majority-owned subsidiary (as the term "subsidiary" is defined for purposes of Section 422 of the Code) of the Company; or (c) Approval by the holders of Common Stock of any plan or proposal for the liquidation or dissolution of the Company. Also for purposes of the Plan, "Good Reason" means the occurrence of any of the following events or conditions: (a) a change in the Holder's status, title, position or responsibilities (including reporting responsibilities) that, in the Holder's reasonable judgment, represents a substantial reduction of the status, title, position or responsibilities as in effect immediately prior thereto; the assignment to the Holder of any duties or responsibilities that, in the Holder's reasonable judgment, are inconsistent with such status, title, position or responsibilities; or any removal of the Holder from or failure to reappoint or reelect the Holder to any of such positions, except in connection with the termination of the Holder's employment for Cause, for Disability or as a result of his or her death, or by the Holder other than for Good Reason; (b) a reduction in the Holder's annual base salary; (c) the Company's requiring the Holder (without the Holder's consent) to be based at any place outside a 35-mile radius of his or her place of employment prior to a Corporate Transaction, except for reasonably required travel on the Company's business that is not materially greater than such travel requirements prior to the Corporate Transaction; (d) the Company's failure to (i) continue in effect any material compensation or benefit plan (or the substantial equivalent thereof) in which the Holder was participating at the time of a Corporate Transaction, including, but not limited to, the Plan, or (ii) provide the Holder with compensation and benefits at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each employee benefit plan, program and practice as in effect immediately prior to the Corporate Transaction (or as in effect following the Corporate Transaction, if greater); (e) any material breach by the Company of any provision of the Plan; or (f) any purported termination of the Holder's employment for Cause by the Company that does not comply with the terms of the Plan. 11.3 Further Adjustment of Awards Without limiting the preceding Section 11.2 of the Plan, and subject to the limitations set forth in Section 7 of the Plan, the Plan Administrator shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation or change in control of the Company, as defined by the Plan Administrator, to take such further action as it determines to be necessary or advisable, and fair and equitable to Participants, with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, payment or settlement or lifting restrictions, differing methods for calculating payments or settlements, alternate forms and amounts of payments and settlements and other modifications, and the Plan Administrator may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants. The Plan Administrator may take such actions before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation or change in control that is the reason for such action. 11.4 Limitations The grant of Awards will in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. SECTION 12. WITHHOLDING OF TAXES The Company may require the Holder to pay to the Company the amount of any withholding taxes that the Company is required to withhold with respect to the grant, exercise, payment or settlement of any Award. In such instances, the Plan Administrator may, in its discretion and subject to the Plan and applicable law, permit the Holder to satisfy withholding obligations, in whole or in part, by paying cash, by electing to have the Company withhold shares of Common Stock or by transferring shares of Common Stock to the Company, in such amounts as are equivalent to the Fair Market Value of the withholding obligation. For purposes of the Plan, "Fair Market Value" means the mean of the high and low per share trading prices for the Common Stock as reported in The Wall Street Journal for the New York Stock Exchange --Composite Transactions (or similar successor consolidated transactions reports) for a single trading day. SECTION 13. AMENDMENT AND TERMINATION OF PLAN 13.1 Amendment of Plan The Plan may be amended by the shareholders of the Company. The Board may also amend the Plan in such respects as it shall deem advisable; however, to the extent required for compliance with Rule 16b-3 under the Exchange Act or any applicable law or regulation, shareholder approval will be required for any amendment that will (a) increase the total number of shares that may be used in payment of Awards under the Plan, (b) materially modify the class of persons eligible to receive Awards, (c) materially increase the benefits accruing to Participants under the Plan, or (d) otherwise require shareholder approval under any applicable law or regulation. 13.2 Termination of Plan The Company's shareholders or the Board may suspend or terminate the Plan at any time. The Plan will have no fixed expiration date. 13.3 Consent of Holder The amendment or termination of the Plan shall not, without the consent of the Holder of any Award under the Plan, alter or impair any rights or obligations under any Award theretofore granted under the Plan. SECTION 14. GENERAL 14.1 Notification The Plan Administrator shall promptly notify a Participant of an Award, and a written grant shall promptly be executed and delivered by or on behalf of the Company. 14.2 Continued Employment; Rights in Awards Neither the Plan, participation in the Plan as a Participant nor any action of the Plan Administrator taken under the Plan shall be construed as giving any Participant or employee of the Company any right to be retained in the employ of the Company or limit the Company's right to terminate the employment of the Participant. 14.3 Registration; Certificates for Shares The Company shall be under no obligation to any Participant to register for offering or resale under the Securities Act of 1933, as amended, or register or qualify under state securities laws, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan. The Company may issue certificates for shares with such legends and subject to such restrictions on transfer and stop-transfer instructions as counsel for the Company deems necessary or desirable for compliance by the Company with federal and state securities laws. 14.4 No Rights as a Shareholder No Performance Award, Other Stock-Based Award or Dividend Equivalent Right shall entitle the Holder to any dividend (except to the extent provided in an Award of Dividend Equivalent Rights), voting or other right of a shareholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award, free of all applicable restrictions. 14.5 Compliance With Laws and Regulations It is the Company's intention that, so long as any of the Company's equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply in all respects with Rule 16b-3 under the Exchange Act and, if any Plan provision is later found not to be in compliance with Rule 16b-3, the provision shall be deemed null and void, and in all events the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3. Notwithstanding anything in the Plan to the contrary, the Board, in its sole discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan to Participants who are officers or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Participants. 14.6 Unfunded Plan The Plan is intended to constitute an "unfunded" plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company. 14.7 Governing Law The Plan and all interpretations of its provisions shall be governed by the laws of the state of Washington and applicable federal laws. 14.8 Severability If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Plan Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Plan Administrator's determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. SECTION 15. EFFECTIVE DATE The Plan's effective date is February 10, 1997. -----END PRIVACY-ENHANCED MESSAGE-----