EXHIBIT 10.1

 

NW Natural

 

Board of Directors Compensation

 

Effective January 1, 2005

 

Effective January 1, 2005, compensation paid to the non-management members of
the Board of Directors of Northwest Natural Gas Company (the Company) includes
the following components:

 

Annual Cash Retainer (New Board members and all after 12/31/08):    $ 55,000 (1)
Extra Annual Cash Retainer for Committee Chairs:    $ 5,000   Extra Annual Cash
Retainer for Audit Committee Chair:    $ 10,000   Board Meeting Fees:    $ 1,500
  Committee Meeting Fees:    $ 1,000  

 

Example: Assuming 14 meetings per year (7 Board and 7 committee), for a Board
member who chairs one committee, the expected total annual compensation would be
$77,500.

 

Stock Ownership. The Board of Directors confirmed the importance of continuing
the Stock Ownership Guidelines for Directors, as described in Company’s
Corporate Governance Standards, which require that all Board members own Company
shares valued at five times the annual retainer fee (including vested and
unvested shares awarded under the Non-Employee Directors Stock Compensation Plan
(NEDSCP)) within five years of joining the Board.

 

Amended NEDSCP. In connection with the revised compensation structure, the Board
of Directors amended the NEDSCP such that no additional awards of cash or stock
will be granted under the NEDSCP after January 1, 2005. All existing grants will
vest according to the terms of the plan.

 

Deferred Compensation. Directors may defer fees in accordance with the terms of
the Company’s Deferred Compensation Plan for Directors and Executives, effective
January 1, 2005.

 

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1 As of December 31, 2004, all non-management Board members have approximately
$80,000 worth of stock left to vest, which will continue to vest at about
$20,000 worth of stock per year for the next four years. During that time, their
annual cash retainer will be $35,000 such that the increased cash retainer will
be fully implemented beginning in 2009.