20060420Compliance re benefits changes.pdf

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900 sow. Fifth Avenue. Suile 2600
Portland. Oregon 97204
main 503.224.3380
fax [phone]
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April 19, 2006
JAMES M. V AN NOSTRAND
Direct [phone]
jmvannostrand~stoel. com
VIA OVERNIGHT DELIVERY
Ms. Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ill 83702-0074
Re:Case No. PAC-O5-
Joint Application of MidAmerican Energy Holdings Company and PacifiCorp
d/b/a Utah Power & Light Company for an Order Authorizing Proposed
Transaction
Dear Ms. Jewell:
Under the terms of Commitment I 6 in the final Idaho commitments attached to and incorporated
in the Commission s Order No. 29998 issued on March 14, 2006 in this proceeding, PacifiCorp
committed to provide a written list of changes that were made to employee benefit plans between
the announcement of the transaction and the close of the transaction. In compliance with
Commitment I 6, enclosed is a list of changes that were made to employee benefit plans between
the announcement of the transaction and the close of the transaction.
Please contact us if you have any questions. Thank you for your assistance.
JMV :knp
Attachmentcc: Service List
Oregon
Washington
California
Utah
Portlnd3-1548536.20051851-00005 Idaho
LIST OF CHANGES THAT WERE MADE TO EMPLOYEE BENEFITS BETWEEN 13itE
ANNOUNCEMENT OF THE TRANSACTION AND THE CLOSE OF THE TRANSACTION
Compensation Plan Chan2es:
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On September 20, 2005, PacifiCorp approved an amendment to the Compensation Reduction Plan. This
amended the plan to address how to treat the investment option currently in the form of Company Stock in
the event such investment option was no long viable. The following is the language added to the plan:
Section 10.
Subject to 10., effective upon the closing of any merger, acquisition, share exchange, recapitalization
reorganization or any other transaction that causes ADS Shares to become unavailable to the Company or to
become impracticable for purposes of providing benefits under the Plan, the balance of the Participants
Stock Accounts shall be transferred to the Credit Accounts for the Participants. The Committee, in its
discretion, shall determine whether or not ADS Shares are reasonably available or impracticable and shall
determine the value of ADS Shares for purposes of transferring the Stock Account balances to the Credit
Accounts. ADS Shares shall, in any event, be presumed to be impracticable if the Company is not affiliated
with Scottishpower pIc. If Stock Account balances are transferred to Credit Accounts, Trust investments
shall be adjusted and provisions for distribution of ADS Shares to Participants shall be ineffective. The
provisions of 10.5 shall not limit the Company s ability to amend the Plan to provide for an arrangement
similar to Stock Awards and Stock Accounts under the Plan with respect to shares or similar securities of the
Company, or an affiliate of the Company, in place of the arrangements related to ADS Shares.
Benefit Plan Chan2es:
The Executive Severance Plan and PacifiCorp Severance Plan were both amended in October 2005 pursuant
to requirements of the Stock Purchase Agreement to change the definition of a Change in Control to the date
of the signing of the Stock Purchase Agreement. Previously, each Plan defined the effective date of a
Change in Control as the actual effective date of the acquisition. The Executive Severance Plan was also
amended to remove rights of certain participants (limited to the Chief Executive Officer, Chief Financial
Officer and Chief Operating Officer) to unilaterally resign from the Company and receive benefits under the
Plan.
The following matters were approved by management prior to close, but formal amendments are still in the
process of being finalized:
The Active Employee Health Plan and Retiree Health Plan are in the process of being amended to reflect
plan design changes and contribution changes for the 2006 calendar year. Included in the amendments were
decreases in the amount of reimbursement for brand name drugs when generic drugs are available, an
increase in the maximum out of pocket limit for prescription drug benefits, an increase in the annual limit on
employee contributions to Health Care Flexible Spending Accounts, an increase in the annual limit on
annual physical exam reimbursement and the addition of asthma and cancer to the Disease Management
program. The Retiree Health Plan amendment will also include changes pursuant to earlier negotiations
with two separate mEW unions (mEW Locals 125 and 659) to incorporate implementation of a health
reimbursement account for certain employees retiring under each of those bargaining agreements. The
amendment will also include a change in retiree health plan eligibility for certain employees represented by
Local 125 pursuant to changes ratified by that membership.
The PacifiCorp Retirement Plan and K Plus Savings Plan will be amended to incorporate changes required
as the result of recent labor negotiations with Local 125. Each of the changes has been ratified by a vote of
the membership prior to close of the acquisition. The Retirement Plan amendment will include an
improvement to the retirement formula for employees covered by the bargaining unit on April I , 2006, past
service credit for periods while receiving benefits under the Company s Long Term Disability plan and
provide for a pre-retirement death benefit for non-married participants. Employees hired after April I and
covered under the 125 bargaining agreement will not be eligible to participate in the Retirement Plan, but
will receive a dollar for dollar match under the Savings Plan on the first 6% of participant contributions, as
well as a 2% company contribution regardless of the amount contributed by the participant.
The amendment to the PacifiCorp Retirement Plan will also include language formalizing a reduction in the
amount of incentive plan payments recognized in compensation under the Plan from a maximum of 100% of
base pay to 30% of base pay over a two year period. This change will impact approximately 50-
employees. This change was approved by management in early 2005.
Additional changes to the Retirement, K Plus and Retiree Health Plans have been negotiated by the
Company and Locals 127 and 197 to be effective January 1 2007. Amendments for each of these plans will
be drafted and approved during 2006.