Exhibit 10.e

NORTHWEST NATURAL GAS COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

2009 RESTATEMENT

Effective January 1, 1987

Restated as of February 26, 2009

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          PAGE

ARTICLE I

  

PURPOSE

   1

1.1

  

Restatement

   1

1.2

  

Purpose

   1

ARTICLE II

  

DEFINITIONS

   1

2.1

  

Account

   1

2.2

  

Acquiror Stock

   1

2.3

  

Base Annual Salary

   1

2.4

  

Beneficiary

   1

2.5

  

Board

   2

2.6

  

Bonus

   2

2.7

  

Cash Compensation

   2

2.8

  

Change in Control

   2

2.9

  

Committee

   2

2.10

  

Common Stock

   2

2.11

  

Compensation

   2

2.12

  

Corporate Transaction

   3

2.13

  

Corporation

   3

2.14

  

Deferral Commitment

   3

2.15

  

Deferral Deadline

   3

2.16

  

Deferred Cash Compensation

   3

2.17

  

Deferred Compensation Account Benefit

   3

2.18

  

Determination Date

   4

2.19

  

Disability

   4

2.20

  

Executive

   4

2.21

  

Financial Hardship

   4

2.22

  

Interest

   4

2.23

  

LTIP Compensation

   4

2.24

  

Matching Contribution

   5

2.25

  

Participation Agreement

   5

2.26

  

Plan Benefits

   5

2.27

  

Retirement

   5

2.28

  

Retirement Plan

   5

2.29

  

Supplemental Retirement Benefit

   5

2.30

  

Trust

   5

ARTICLE III

  

DEFERRAL COMMITMENTS

   5

3.1

  

Participation

   5

3.2

  

Deferral Election

   5

 

i

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(Continued)

 

          PAGE

ARTICLE IV

  

DEFERRED COMPENSATION ACCOUNTS

   6

4.1

  

Accounts

   6

4.2

  

Matching Contribution

   6

4.3

  

Stock Account

   7

4.4

  

Cash Account

   7

4.5

  

Effect of Corporate Transaction on Stock Accounts

   7

4.6

  

Statement of Account

   8

ARTICLE V

  

PLAN BENEFITS

   8

5.1

  

Plan Benefit

   8

5.2

  

Commencement of Payments

   8

5.3

  

Lump Sum or Installment Payments

   9

5.4

  

Form of Benefit Payment

   9

5.5

  

Hardship Distributions

   9

5.6

  

Death Benefit

   9

5.7

  

Supplemental Retirement Benefit

   10

5.8

  

Withholding; Payroll Taxes

   11

5.9

  

Payment to Guardian

   11

5.10

  

Accelerated Distribution

   11

ARTICLE VI

  

BENEFICIARY DESIGNATION

   11

6.1

  

Beneficiary Designation

   11

6.2

  

Amendments

   11

6.3

  

No Beneficiary Designation

   11

6.4

  

Effect of Payment

   12

ARTICLE VII

  

ADMINISTRATION

   12

7.1

  

Committee; Duties

   12

7.2

  

Agents

   12

7.3

  

Binding Effect of Decisions

   12

7.4

  

Indemnity of Committee

   12

ARTICLE VIII

  

CLAIMS PROCEDURE

   12

8.1

  

Claim

   12

8.2

  

Denial of Claim

   12

8.3

  

Review of Claim

   13

8.4

  

Final Decision

   13

 

ii

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(Continued)

 

          PAGE

ARTICLE IX

  

AMENDMENT AND TERMINATION OF THE PLAN

   13

9.1

  

Amendment

   13

9.2

  

Corporation’s Right to Terminate

   13

ARTICLE X

  

MISCELLANEOUS

   14

10.1

  

Unfunded Plan

   14

10.2

  

Unsecured General Creditor

   14

10.3

  

Trust Fund

   15

10.4

  

Nonassignability

   15

10.5

  

Not a Contract of Employment

   15

10.6

  

Protective Provision

   15

10.7

  

Governing Law

   15

10.8

  

Validity

   15

10.9

  

Notice

   15

10.10

  

Successors

   15

 

iii

--------------------------------------------------------------------------------

NORTHWEST NATURAL GAS COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of January 1, 1987

Restated as of February 26, 2009

ARTICLE I

PURPOSE

1.1 Restatement. Northwest Natural Gas Company adopted an Executive Deferred
Compensation Plan (the “Plan”) effective January 1, 1987, which was previously
restated effective as of January 1, 2001, January 1, 2003, December 15,
2005, January 1, 2007 and February 28, 2008. The Plan was partially terminated
in accordance with Paragraph 9(b)(i) effective December 31, 2004, so deferrals
of compensation are no longer being made under the Plan. The Plan is now amended
and restated by this 2009 Restatement, effective as of February 26, 2009.

1.2 Purpose. The purpose of this Executive Deferred Compensation Plan is to
provide an unfunded deferred compensation plan for a select group of top
management personnel.

ARTICLE II

DEFINITIONS

For purposes of this Plan, the following words and phrases shall have the
meanings indicated, unless the context clearly indicates otherwise:

2.1 Account. “Account” means the record or records maintained by the Corporation
for each Executive in accordance with Article IV with respect to any deferral of
Compensation pursuant to this Plan. An Account shall be either a “Stock Account”
as described in Section 4.3 or a “Cash Account” as described in Section 4.4.

2.2 Acquiror Stock. “Acquiror Stock” is defined in Section 4.5.

2.3 Base Annual Salary. “Base Annual Salary” means the annual compensation
payable to an Executive, excluding bonuses, commissions, LTIP Compensation and
other noncash compensation.

2.4 Beneficiary. “Beneficiary” means the person, persons or entity designated
under Article VI to receive any Plan Benefits payable after an Executive’s
death.

 

PAGE 1 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

2.5 Board. “Board” means the Board of Directors of Northwest Natural Gas Company
or any successor thereto.

2.6 Bonus. “Bonus” means the compensation derived under the Corporation’s
Executive Annual Incentive Plan or other similar incentive plan and payable in
any year in a lump sum to an Executive.

2.7 Cash Compensation. “Cash Compensation” means the total Base Annual Salary
and Bonus remuneration payable by the Corporation to the Executive for services.

2.8 Change in Control. “Change in Control” means the occurrence of any of the
following events:

(a) The consummation of:

(i) any consolidation, merger or plan of share exchange involving the
Corporation (a “Merger”) as a result of which the holders of outstanding
securities of the Corporation ordinarily having the right to vote for the
election of directors (“Voting Securities”) immediately prior to the Merger do
not continue to hold at least 50% of the combined voting power of the
outstanding Voting Securities of the surviving corporation or a parent
corporation of the surviving corporation immediately after the Merger,
disregarding any Voting Securities issued to or retained by such holders in
respect of securities of any other party to the Merger; or

(ii) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, the assets of the
Corporation;

(b) At any time during a period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of the Corporation
(“Incumbent Directors”) shall cease for any reason to constitute at least a
majority thereof; provided, however, that the term “Incumbent Director” shall
also include each new director elected during such two-year period whose
nomination or election was approved by two-thirds of the Incumbent Directors
then in office; or

(c) Any person (as such term is used in Section 14(d) of the Securities Exchange
Act of 1934, other than the Corporation or any employee benefit plan sponsored
by the Corporation) shall, as a result of a tender or exchange offer, open
market purchases or privately negotiated purchases from anyone other than the
Corporation, have become the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of Voting
Securities representing twenty percent (20%) or more of the combined voting
power of the then outstanding Voting Securities.

2.9 Committee. “Committee” means the Organization and Executive Compensation
Committee, or such other Committee as may be designated by the Board.

2.10 Common Stock. “Common Stock” means common stock of the Corporation.

2.11 Compensation. “Compensation” means Cash Compensation and LTIP Compensation.

 

PAGE 2 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

2.12 Corporate Transaction. “Corporate Transaction” means any of the following:

(a) any consolidation, merger or plan of share exchange involving the
Corporation pursuant to which shares of Common Stock would be converted into
cash, securities or other property; or

(b) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, the assets of the
Corporation.

2.13 Corporation. “Corporation” means Northwest Natural Gas Company, an Oregon
corporation, or any successor thereto, and any corporations or other entities
affiliated with or subsidiary to it that may be selected by the Board from time
to time and which take action to adopt and implement this Plan.

2.14 Deferral Commitment. “Deferral Commitment” means a Deferral Commitment made
by an Executive pursuant to Article III and for which a Participation Agreement
has been submitted by the Executive to the Committee.

2.15 Deferral Deadline. “Deferral Deadline” means, for any Compensation payable
to an Executive, the last day on which the Executive can submit a Participation
Agreement to make a Deferral Commitment with respect to such Compensation. The
Deferral Deadlines for various forms of Compensation shall be as follows:

(a) For Base Annual Salary payable in any calendar year, the Deferral Deadline
shall be the last day of the previous calendar year; provided, however, that for
a person who becomes an eligible Executive during a year, the Deferral Deadline
for Base Annual Salary payable for the remainder of the year shall be 30 days
after the person becomes an Executive and the Deferral Commitment shall only
apply to Base Annual Salary payable after the Participation Agreement is
submitted.

(b) For Bonus payable in any calendar year, including Bonus payable with respect
to the Executive’s or the Corporation’s performance in the previous calendar
year, the Deferral Deadline shall be the last day of the previous calendar year.

(c) For LTIP Compensation payable at any time, the Deferral Deadline shall be
the date one year prior to the vesting date for time-based awards and the date
one year prior to the last day of the award period for performance-based awards;
provided, however, that the Deferral Deadline for any LTIP Compensation that
becomes payable in any calendar year on an accelerated basis as a result of a
Change in Control shall be the last day of the previous calendar year.

2.16 Deferred Cash Compensation. “Deferred Cash Compensation” means the amount
of Cash Compensation that the Executive elects to defer pursuant to a Deferral
Commitment.

2.17 Deferred Compensation Account Benefit. “Deferred Compensation Account
Benefit” means the benefit payable to an Executive as calculated pursuant to
Article IV and payable under Sections 5.1 through 5.6.

 

PAGE 3 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

2.18 Determination Date. “Determination Date” means the last day of each
calendar quarter.

2.19 Disability. “Disability” means a physical or mental condition that, in the
opinion of the Committee, prevents the Executive from satisfactorily performing
the Executive’s usual duties for the Corporation. The Committee’s decision as to
Disability will be based upon medical reports and/or other evidence satisfactory
to the Committee.

2.20 Executive. “Executive” means one of a select group of management or highly
compensated employees of the Corporation, which shall consist of all executive
officers of the Corporation and any other employee of the Corporation designated
in writing by the Chief Executive Officer of the Corporation for participation
in the benefits of the Plan.

2.21 Financial Hardship. “Financial Hardship” means a severe financial hardship
to the Executive resulting from a sudden and unexpected illness or accident of
the Executive or of a dependent of the Executive, loss of the Executive’s
property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Executive.
Financial Hardship shall be determined by the Committee on the basis of
information supplied by the Executive in accordance with uniform guidelines
promulgated from time to time by the Committee.

2.22 Interest. “Interest” is credited to Cash Accounts under the Plan and means
the quarterly equivalent of an annual yield that is two percentage points
(2%) higher than the annual yield on Moody’s Average Corporate Bond Yield for
the preceding quarter, as published by Moody’s Investors Service, Inc. (or any
successor thereto), or, if such index is no longer published, a substantially
similar index selected by the Board. At no time shall such Interest rate be less
than six percent (6%) annually.

Notwithstanding the foregoing provisions of this Section 2.22, effective as of
January 1, 2017, the Interest rate shall equal the rate of interest for interest
credited to cash accounts under the Corporation’s Deferred Compensation Plan for
Directors and Executives, as such plan may be amended from time to time (the
“DCPDE”), regardless of whether or not such rate of interest shall be more or
less than six percent (6%) annually; provided, however, that if at any time on
or after January 1, 2017 there is no interest credited to cash accounts under
the DCPDE because the DCPDE shall have ceased to operate or for any other
reason, then, at such time on or after January 1, 2017, the Interest rate shall
equal the quarterly equivalent of an annual yield that is equal to the annual
yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as
published by Moody’s Investors Service, Inc. (or any successor thereto), or, if
such index is no longer published, a substantially similar index selected by the
Board, regardless of whether or not such Interest rate shall be more or less
than six percent (6%) annually. Any change in the Interest rate that occurs on
January 1, 2017 or thereafter pursuant to the provisions of this paragraph shall
not constitute a “change in the definition of Interest” within the meaning of
Section 9.1(b) below.

2.23 LTIP Compensation. “LTIP Compensation” means compensation paid to an
Executive pursuant to an award under the Corporation’s Long Term Incentive Plan.
LTIP

 

PAGE 4 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

Compensation may be payable to the Executive either in Common Stock (“Stock LTIP
Compensation”) or in cash (“Cash LTIP Compensation”).

2.24 Matching Contribution. “Matching Contribution” means the contribution made
by the Corporation and credited to the Executive’s Account under Section 4.2.

2.25 Participation Agreement. “Participation Agreement” means the agreement
submitted by an Executive to the Committee no later than the applicable Deferral
Deadline with respect to one or more Deferral Commitments.

2.26 Plan Benefits. “Plan Benefits” mean the Deferred Compensation Account
Benefit and the Supplemental Retirement Benefit.

2.27 Retirement. “Retirement” means either early retirement, normal retirement,
or disability retirement under the Retirement Plan.

2.28 Retirement Plan. “Retirement Plan” means the Corporation’s Retirement Plan
for Non-Bargaining Unit Employees.

2.29 Supplemental Retirement Benefit. “Supplemental Retirement Benefit” means
the benefit payable to an Executive under Section 5.7.

2.30 Trust. “Trust” means the Northwest Natural Gas Company Umbrella Trust™ For
Executives established by the Corporation in connection with this Plan.

ARTICLE III

DEFERRAL COMMITMENTS

3.1 Participation. An eligible Executive may elect to participate in the Plan by
submitting a Participation Agreement to the Committee no later than the
applicable Deferral Deadline. An election to defer Compensation by the Executive
shall continue from year to year and shall be irrevocable with respect to
Compensation once the Deferral Deadline for that Compensation has passed, but
may be modified or terminated by written notice from the Executive at any time
on or prior to the Deferral Deadline for that Compensation.

3.2 Deferral Election.

(a) Election to Defer Cash Compensation. An Executive may, no later than the
applicable Deferral Deadline, elect to defer receipt of a certain whole
percentage, up to fifty percent (50%), of the Base Annual Salary and a certain
whole percentage, up to one hundred percent (100%), of any Bonus payable to the
Executive as an employee of the Corporation.

(b) Election to Defer LTIP Compensation. An Executive may, no later than the
applicable Deferral Deadline, elect to defer receipt of a certain whole
percentage, up to one hundred percent (100%), of any Stock LTIP Compensation and
a certain whole percentage, up to one hundred percent (100%), of any Cash LTIP
Compensation that becomes payable to the Executive.

 

PAGE 5 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

(c) FICA Withholding. Under current law, all Compensation and Matching
Contributions credited to an Executive’s Accounts will be treated as wages
subject to FICA tax, and the Corporation will be required to withhold FICA tax
from the Executive. The amount required to be withheld for FICA tax with respect
to any amount of deferred Compensation or related Matching Contribution shall be
withheld from the non-deferred portion, if any, of the same Compensation;
provided, however, that if the non-deferred portion of the Compensation is
insufficient to cover the full required withholding, the Corporation shall
withhold the remaining amount from other non-deferred Compensation payable to
the Executive unless the Executive otherwise pays such remaining amount to the
Corporation.

(d) Financial Hardship. Termination of the Executive’s election to defer may,
solely in the Committee’s discretion, become applicable as soon as practicable
after the Committee’s determination that the Executive has incurred Financial
Hardship, as evidenced by the Executive to the Committee.

ARTICLE IV

DEFERRED COMPENSATION ACCOUNTS

4.1 Accounts. The Corporation shall establish on its books one or two separate
Accounts for each Executive who elects to defer Compensation under the Plan: a
Cash Account and/or a Stock Account. Compensation deferred by an Executive shall
be credited to the Stock Account or the Cash Account as elected by the Executive
at the time the Executive elects to defer Compensation. Such election may be
divided between the two Accounts in increments of twenty-five percent (25%) of
the deferred Compensation covered by the election. An Executive may change the
allocation of new deferrals of Compensation between the Stock Account and the
Cash Account, but such change shall apply to new deferrals only if it is
submitted on or prior to the Deferral Deadline for such new deferrals. Once
Compensation has been credited to the Stock Account or the Cash Account, no
transfers between the Stock Account and the Cash Account shall be permitted
except as otherwise provided in Section 4.5(d). The credit for deferred
Compensation shall be entered on the Corporation’s books of account at the time
that Compensation not deferred is paid or payable to the Executive.

4.2 Matching Contribution. The Corporation shall credit a Matching Contribution
to an Executive’s Account based on the amount of Deferred Cash Compensation
elected by the Executive; provided, however, that no Matching Contributions
shall be made to the Account of any Executive who is not eligible to participate
in the Corporation’s Retirement K Savings Plan until such time of eligibility.
The amount of the Matching Contribution shall be equal to the excess of (a) the
lesser of (i) sixty percent (60%) of the Executive’s Deferred Cash Compensation
during the calendar year, or (ii) three and six-tenths percent (3.6%) of the
Executive’s Cash Compensation during such calendar year, over (b) the amount, if
any, the Corporation has contributed for such calendar year as a matching
contribution for the Executive to the Retirement K Savings Plan. Matching
Contributions shall be credited to the Executive’s Account on the last day of
the calendar year in which the Matching Contribution was earned, and shall be
allocated between the Executive’s Cash Account and Stock Account in the same
ratio as Deferred Cash Compensation is allocated for the year.

 

PAGE 6 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

4.3 Stock Account. An Executive’s Stock Account shall be denominated in shares
of Common Stock, including fractional shares. With respect to Stock LTIP
Compensation deferred to an Executive’s Stock Account, the number of deferred
shares shall be credited to the Stock Account. With respect to each amount of
Cash Compensation, Cash LTIP Compensation or Matching Contribution deferred to
an Executive’s Stock Account, the amount of cash deferred shall be divided by
the closing market price of the Common Stock reported for the last trading day
preceding the date on which the Stock Account is to be credited, and the
resulting number of shares (including fractional shares) shall be credited to
the Executive’s Stock Account. As of each date for payment of dividends on the
Common Stock, the Stock Accounts shall be credited with an additional number of
shares (including fractional shares) equal to the amount of dividends that would
be paid on the number of shares recorded as the balance of the Stock Account as
of the record date for such dividend divided by closing market price of the
Common Stock reported for such payment date or, if such day is not a trading
day, the next trading day.

4.4 Cash Account. An Executive’s Cash Account shall be denominated in dollars.
With respect to each amount of Cash Compensation, Cash LTIP Compensation or
Matching Contribution deferred to an Executive’s Cash Account, an equal amount
of dollars shall be credited to the Executive’s Cash Account. With respect to
Stock LTIP Compensation deferred to an Executive’s Cash Account, the number of
deferred shares shall be multiplied by the closing market price of the Common
Stock reported for the last trading day preceding the date on which the Cash
Account is to be credited, and the resulting number of dollars shall be credited
to the Executive’s Cash Account. Interest on each Cash Account shall be
calculated as of each Determination Date based upon the average daily balance of
the Cash Account since the preceding Determination Date and shall be credited to
the Cash Account at that time.

4.5 Effect of Corporate Transaction on Stock Accounts. At the time of
consummation of a Corporate Transaction, if any, the amount credited to an
Executive’s Stock Account shall be converted into a credit for cash or common
stock of the acquiring company (“Acquiror Stock”) based on the consideration
received by shareholders of the Corporation in the Corporate Transaction, as
follows:

(a) Stock Transaction. If holders of Common Stock receive Acquiror Stock in the
Corporate Transaction, then (i) the amount credited to each Executive’s Stock
Account shall be converted into a credit for the number of shares of Acquiror
Stock that the Executive would have received as a result of the Corporate
Transaction if the Executive had actually held the Common Stock credited to his
or her Stock Account immediately prior to the consummation of the Corporate
Transaction, and (ii) Stock Accounts will thereafter be denominated in shares of
Acquiror Stock and ongoing deferrals of Compensation shall continue to be made
in accordance with outstanding Deferral Commitments into the Stock Accounts as
so denominated.

(b) Cash or Other Property Transaction. If holders of Common Stock receive cash
or other property in the Corporate Transaction, then (i) the amount credited to
an Executive’s Stock Account shall be transferred to the Executive’s Cash
Account and converted into a cash credit for the amount of cash or the value of
the property that the Executive would have received as a result of the Corporate
Transaction if the Executive had actually held the Common Stock credited to his
or her Stock Account immediately prior to the consummation of

 

PAGE 7 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

the Corporate Transaction, and (ii) Stock Accounts shall no longer exist under
the Plan and all ongoing deferrals shall thereafter be made into Cash Accounts.

(c) Combination Transaction. If holders of Common Stock receive Acquiror Stock
and cash or other property in the Corporate Transaction, then (i) the amount
credited to each Executive’s Stock Account shall be converted in part into a
credit for Acquiror Stock under Section 4.5(a) and in part into a credit for
cash under Section 4.5(b) in the same proportion as such consideration is
received by shareholders, and (ii) ongoing deferrals into Stock Accounts
pursuant to outstanding Deferral Commitments shall continue to be made into
Stock Accounts in accordance with Section 4.5(a).

(d) Election Following Stock Transaction. For a period of 12 months following
the consummation of any Corporate Transaction which results in Executives having
Stock Accounts denominated in Acquiror Stock, each Executive shall have a
one-time right to elect to transfer the entire amount in the Executive’s Stock
Account into the Executive’s Cash Account; provided, however, that this election
shall not be available if the Corporate Transaction results in holders of Common
Stock becoming holders of all of the outstanding common stock of a parent
corporation of the Corporation. Such election shall be made by written notice to
the Corporation and shall be effective on the date received by the Corporation.
If such an election is made, the amount of cash to be credited to the
Executive’s Cash Account shall be determined by multiplying the number of shares
of Acquiror Stock in the Executive’s Stock Account by the closing market price
of the Acquiror Stock reported for the last trading day preceding the effective
date of the election.

4.6 Statement of Account. As soon as practicable after each Determination Date,
a report shall be issued by the Corporation to each participating Executive
setting forth the balances of the Executive’s Accounts under the Plan as of the
immediately preceding Determination Date.

ARTICLE V

PLAN BENEFITS

5.1 Plan Benefit. The Corporation shall pay Plan Benefits to each Executive
pursuant to this Article V equal to the Executive’s Accounts.

5.2 Commencement of Payments.

(a) Payment of any Deferred Compensation Account Benefits under the Plan shall
commence as of the earlier of:

(i) A date elected by the Executive as specified in the applicable Participation
Agreement between the Corporation and the Executive; or

(ii) A day in January of the year following the year of the Executive’s
Retirement, total Disability or other termination of employment, with the
specific day to be determined by the Corporation.

 

PAGE 8 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

(b) Supplemental Retirement Benefits under Section 5.7 shall be made as of, or
commence as of, the earliest date for which a monthly payment is payable to or
for the Executive under the Retirement Plan.

5.3 Lump Sum or Installment Payments.

(a) At the time the Executive elects to defer Compensation, the Executive may
also elect to receive Deferred Compensation Account Benefits either:

(i) In equal or approximately equal annual installments (the number of such
installments not to exceed fifteen (15)) as designated by the Executive, with
the amount of the installments being adjusted over the installment period to
reflect changes in Interest or dividends credited to the Executive’s Accounts;

(ii) In a single sum payment; or

(iii) In a combination of partial lump sum payment, and remainder in
installments.

(b) An Executive may elect to modify such election by filing a change of payment
designation which shall supersede the prior form of payment designation in the
Participation Agreement for Compensation deferred in any one (1) or more
calendar years. If the Executive’s most recent change of payment designation has
not been filed one (1) full calendar year prior to the year of Executive’s
Retirement, Disability, other termination of employment or earlier date selected
for commencement of payments, the prior election shall be used to determine the
form of payment. For example, an Executive retiring in 2003 must file a written
request with the Committee by December 31, 2001 to change the Executive’s form
of payment designation.

5.4 Form of Benefit Payment. Benefits payable to an Executive from a Stock
Account shall only be paid to such Executive as a distribution of Common Stock
(or Acquiror Stock, if applicable) plus cash for fractional shares. Benefits
payable to an Executive from a Cash Account shall only be paid to such Executive
in cash.

5.5 Hardship Distributions. Notwithstanding the foregoing provisions of this
Article V, payment from the Executive’s Accounts may be made to the Executive in
the sole discretion of the Committee based upon a finding that an Executive has
suffered a Financial Hardship. The amount of such a withdrawal shall be limited
to the amount reasonably necessary to meet the Executive’s needs resulting from
the Financial Hardship. If payment is made due to Financial Hardship under this
Plan, the Executive’s deferrals shall cease for a twelve (12) month period. Any
resumption of the Executive’s deferrals under the Plan after such twelve
(12) month period shall be made only at the election of the Executive in
accordance with Article III herein.

5.6 Death Benefit. Upon the death of the Executive or a former Executive prior
to the receipt of the full amount of Deferred Compensation Account Benefits, the
balance of such benefits shall be paid by the Corporation to the applicable
surviving designated Beneficiary or Beneficiaries as soon as practicable in the
manner elected in writing by the Executive, or, if no such election is made, by
single sum payment.

 

PAGE 9 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

5.7 Supplemental Retirement Benefit. Any Executive who elects to defer
Compensation under this Plan and who also satisfies the eligibility requirements
for payment of any benefit under the Retirement Plan shall qualify for further
payment by the Corporation of Supplemental Retirement Benefits payable as an
annuity under this Plan, as provided below:

(a) Amount. The amount payable by the Corporation each month during the time an
annuity benefit is payable to the Executive or Executive’s Beneficiary(ies)
under the Retirement Plan shall be:

(i) The amount that would be payable at such time under the Retirement Plan
determined under Section 5.7(c) by treating all accrued benefits under the
Retirement Plan as being payable only in the annuity form and by treating all
Cash Compensation deferred by the Executive under this Plan as though it had
been “paid” to or “received” by Executive in the year when the deferral was
made, provided that all such deferred amounts shall be subject to the other
applicable definitions and rules of the Retirement Plan relating to benefit
determination; plus

(ii) The reduction, if any, in the amount of the “primary Social Security
Benefit” which will actually be payable to the Executive, provided that such
reduction results from the fact that Compensation deferred under this Plan
causes the primary Social Security Benefit payable to the Executive to be
reduced and that such reduction is not otherwise payable under Section 5.7(a)(i)
above; minus

(iii) The amount actually payable at such time under the Retirement Plan as
determined under Section 5.7(c) by treating all accrued benefits under the
Retirement Plan as being payable only in the annuity form.

(b) Form and Duration. The form of Supplemental Retirement Benefit payable by
the Corporation shall be the same annuity form, and shall be paid by the
Corporation for the same duration, as the annuity benefit actually payable under
the Retirement Plan. Such annuity benefit forms include (subject to any change
in the Retirement Plan at the time payment begins) a standard life annuity (no
survivorship benefit); a half (50%) or full (100%) joint and survivor annuity to
the Executive and surviving spouse with or without a “pop-up” if the spouse dies
before the Executive; a ten (10) year certain annuity which can provide death
benefits to any surviving designated beneficiary; and a full (100%) joint and
survivor benefit for the spouse of a vested married Executive who dies before
retirement; and payees include the Executive and, if the operative form provides
for payment after the Executive’s death, the Executive’s surviving spouse or
other surviving designated Beneficiary(ies) or estate.

(c) Retirement Plan Lump Sum Election Ignored. Notwithstanding any election by
an Executive to receive a portion of Executive’s Retirement Plan benefit as a
lump sum, the amount of the Supplemental Retirement Benefit as determined under
Section 5.7(a) and the form and duration of the Supplemental Retirement Benefit
as determined under Section 5.7(b) shall be calculated and determined as if
Executive were to receive Executive’s entire Retirement Plan accrued benefit in
the same annuity form that applies to the annuity portion of Executive’s
Retirement Plan benefit.

 

PAGE 10 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

5.8 Withholding; Payroll Taxes. The Corporation shall withhold from payments
made hereunder any taxes required to be withheld from such payments under
federal, state or local law. However, a Beneficiary may elect in writing not to
have withholding for federal income tax purposes pursuant to Section 3405(a)(2)
of the Internal Revenue Code, or any successor provision thereto.

5.9 Payment to Guardian. If a Plan Benefit is payable to a minor or a person
declared incompetent or to a person incapable of handling the disposition of his
or her property, the Committee may direct payment of such Plan Benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or person. The Committee may require proof of incompetence,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the Plan Benefit. Such distribution shall completely discharge
the Committee and the Corporation from all liability with respect to such
benefit.

5.10 Accelerated Distribution. Notwithstanding any other provision of the Plan,
an Executive shall be entitled to receive, upon written request to the
Committee, a lump sum distribution equal to ninety percent (90%) of the balance
in the Executive’s Accounts as of the Determination Date immediately preceding
the date on which the Committee receives the written request. The remaining
balance shall be forfeited by the Executive. An Executive who receives a
distribution under this section shall be suspended from participation in the
Plan for twelve (12) months. The amount payable under this section shall be paid
in a lump sum within sixty-five (65) days following the receipt of the notice by
the Committee from the Executive.

ARTICLE VI

BENEFICIARY DESIGNATION

6.1 Beneficiary Designation. Each Executive shall have the right, at any time,
to designate any person or persons as the Executive’s Beneficiary or
Beneficiaries (both primary as well as secondary) to whom benefits under this
Plan shall be paid in the event of the Executive’s death prior to complete
distribution of the benefits due under the Plan. If greater than fifty percent
(50%) of the benefit is designated to a Beneficiary other than the Executive’s
spouse, such Beneficiary designation shall be consented to by the Executive’s
spouse. Each Beneficiary designation shall be in written form prescribed by the
Committee and will be effective only when filed with the Committee during the
Executive’s lifetime.

6.2 Amendments. Any Beneficiary designation may be changed by the Executive
without the consent of any designated Beneficiary by the filing of a new
Beneficiary designation with the Committee, subject to the spousal consent
required in Section 6.1 above. The filing of a new Beneficiary designation form
will cancel all Beneficiary designations previously filed.

6.3 No Beneficiary Designation. In the absence of an effective Beneficiary
designation, or if all designated Beneficiaries predecease the Executive or die
prior to complete distribution of the Executive’s benefits, then the Executive’s
designated Beneficiary shall be deemed to be the Executive’s estate.

 

PAGE 11 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

6.4 Effect of Payment. The payment to the deemed Beneficiary shall completely
discharge the Corporation’s obligations under this Plan.

ARTICLE VII

ADMINISTRATION

7.1 Committee; Duties. This Plan shall be administered by the Committee. The
Committee shall have such powers as may be necessary to discharge its
responsibilities. These powers shall include, but not be limited to,
interpretation of the Plan provisions, determination of amounts due to any
Executive, the rights of any Executive or Beneficiary under this Plan, the right
to require any necessary information from any Executive, determine the amounts
credited to Executive’s Accounts and Interest earned, and any other activities
deemed necessary or helpful.

7.2 Agents. The Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Corporation.

7.3 Binding Effect of Decisions. The decision or action of the Committee with
respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

7.4 Indemnity of Committee. To the extent permitted by applicable law, the
Corporation shall indemnify, hold harmless and defend the members of the
Committee against any and all claims, loss, damage, expense or liability arising
from any action or failure to act with respect to this Plan, provided that the
members of the Committee were acting in accordance with the applicable standard
of care.

ARTICLE VIII

CLAIMS PROCEDURE

8.1 Claim. Any person claiming a benefit, requesting an interpretation or ruling
under the Plan, or requesting information under the Plan shall present the
request in writing to the Committee, which shall respond in writing as soon as
practicable.

8.2 Denial of Claim. If the claim or request is denied, the written notice of
denial shall state:

(a) The reasons for denial, with specific reference to the Plan provisions on
which the denial is based;

(b) A description of any additional material or information required and an
explanation of why it is necessary; and

(c) An explanation of the Plan’s claim review procedure.

 

PAGE 12 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

8.3 Review of Claim. Any person whose claim or request is denied or who has not
received a response within thirty (30) days may request review by notice given
in writing to the Committee. The claim or request shall be reviewed by the
Committee who may, but shall not be required to, grant the claimant a hearing.
On review, the claimant may have representation, examine pertinent documents,
and submit issues and comments in writing.

8.4 Final Decision. The decision on review shall normally be made within sixty
(60) days. If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the
reasons and the relevant Plan provisions. All decisions on review shall be final
and bind all parties concerned.

ARTICLE IX

AMENDMENT AND TERMINATION OF THE PLAN

9.1 Amendment. The Board may at any time amend the Plan in whole or in part,
subject to the following:

(a) Upon a Change in Control, no amendment shall be effective to change the
payout schedule in Section 9.2(b).

(b) No amendment shall be effective to decrease or restrict the amount credited
to any Account maintained under the Plan as of the date of the amendment.
Changes in the definition of Interest shall be subject to the following
restrictions:

(i) Notice. A change shall not become effective before the first day of the
calendar year which follows the adoption of the amendment and at least thirty
(30) days written notice of the amendment to the Executive.

(ii) Change in Control. Any change in the definition of Interest after a Change
in Control shall apply only to those amounts credited to the Executive’s Account
after the Change in Control.

9.2 Corporation’s Right to Terminate. The Board may at any time partially or
completely terminate the Plan, if, in its judgment, the tax, accounting, or
other effects of the continuance of the Plan, or potential payments thereunder,
would not be in the best interests of the Corporation.

(a) Partial Termination. The Board may partially terminate the Plan by
instructing the Committee not to accept any additional Deferral Commitments. In
the event of such a partial termination, the Plan shall continue to operate and
be effective with regard to Deferral Commitments entered into prior to the
effective date of such partial termination.

(b) Complete Termination. The Board may completely terminate the Plan by
instructing the Committee not to accept any additional Deferral Commitments, and
terminating all ongoing Deferral Commitments. The Plan shall cease to operate
and the Committee shall pay out to each Executive the balance in the Executive’s
Accounts in a lump sum or in equal annual

 

PAGE 13 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

installments amortized over the period listed in the payout schedule below based
on the total balance in the Executive’s Accounts at the time of such complete
termination:

PAYOUT SCHEDULE

 

Total Balance of Accounts

  

Payout Period

Less than $10,000

  

Lump sum

$10,000 but less than $50,000

  

Lesser of 5 years or period elected in Participation Agreement

More than $50,000

  

Period elected in Participation Agreement

Interest earned on the unpaid balance in the Executive’s Cash Account shall be
the applicable Interest rate on the Determination Date immediately preceding the
effective date of such complete termination.

ARTICLE X

MISCELLANEOUS

10.1 Unfunded Plan. This Plan is intended to be an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
“management or highly-compensated employees” within the meaning of Sections 201,
301, and 401 of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3 and 4 of
Title I of ERISA. Accordingly, the Plan shall terminate and no further benefits
shall accrue hereunder in the event it is determined by a court of competent
jurisdiction or by an opinion of counsel that the Plan constitutes an employee
pension benefit plan within the meaning of Section 3(2) of ERISA which is not so
exempt. In the event of a termination under this Section 10.1, all ongoing
Deferral Commitments shall terminate, no additional Deferral Commitments will be
accepted by the Committee, and the amount of each Executive’s Account balance
shall be distributed to such Executive at such time and in such manner as the
Committee, in its sole discretion, determines.

10.2 Unsecured General Creditor. The Accounts shall be established solely for
the purpose of measuring the amounts owed to Executives or their Beneficiaries
under this Plan. Executives and their Beneficiaries, heirs, successors and
assigns shall have no legal or equitable rights, interest or claims in any
property or assets of the Corporation, nor shall they be Beneficiaries of, or
have any rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by the
Corporation. Except as may be provided in Section 10.3, such policies, annuity
contracts or other assets of the Corporation shall not be held under any trust
for the benefit of the Executives, their Beneficiaries, heirs, successors or
assigns, or held in any way as collateral security for the fulfilling of the
obligations of the Corporation under this Plan. Any and all of the Corporation’s
assets and policies shall be, and remain, the general, unpledged, unrestricted
assets of the Corporation. The Corporation’s obligation under the Plan shall be
that of an unfunded and unsecured promise to pay money in the future.

 

PAGE 14 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

10.3 Trust Fund. The Corporation shall be responsible for the payment of all
benefits provided under the Plan. The Corporation shall establish the Trust,
with such trustee or trustees as the Board may approve, for the purpose of
providing for the payment of such benefits. The Trust shall be irrevocable, but
the assets thereof shall be subject to the claims of the Corporation’s
creditors. To the extent any benefits provided under the Plan are actually paid
from the Trust, the Corporation shall have no further obligation with respect
thereto, but to the extent not so paid, such benefits shall remain the
obligation of, and shall be paid by, the Corporation.

10.4 Nonassignability. Neither an Executive nor any other person shall have the
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by an Executive or any other person, nor be
transferable by operation of law in the event of an Executive’s or any other
person’s bankruptcy or insolvency.

10.5 Not a Contract of Employment. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Corporation and
the Executive, and the Executive (or the Executive’s Beneficiary) shall have no
rights against the Corporation except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give an Executive the
right to be retained in the service of the Corporation or to interfere with the
right of the Corporation to discipline or discharge the Executive at any time.

10.6 Protective Provision. An Executive will cooperate with the Corporation by
furnishing any and all information requested by the Corporation, in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as the Corporation may deem necessary and taking such other actions
as may be requested by the Corporation.

10.7 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of Oregon, except as preempted by
federal law.

10.8 Validity. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provisions had never been inserted herein.

10.9 Notice. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to any member of the Committee or the
Secretary of the Corporation. Such notice shall be deemed given as of the date
of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.

10.10 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Corporation and its successors and assigns. The term successors
as used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or

 

PAGE 15 – EXECUTIVE DEFERRED COMPENSATION PLAN

--------------------------------------------------------------------------------

otherwise, acquire all or substantially all of the business and assets of the
Corporation, and successors of any such corporation or other business entity.

 

NORTHWEST NATURAL GAS COMPANY By:     Attest:    

 

PAGE 16 – EXECUTIVE DEFERRED COMPENSATION PLAN