Exhibit 10.(o)

                     , 2008

 

 

 

 

Re: Change in Control Severance Agreement

Dear                     :

Northwest Natural Gas Company, an Oregon corporation (the “Company”), considers
the establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company. In this
connection, the Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company, its customers and its shareholders.
Accordingly, the Board of Directors of the Company (the “Board”) has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s management to their
assigned duties without distraction in circumstances arising from the
possibility of a change in control of the Company.

In order to induce you to remain in the employ of the Company, this letter
agreement, which has been approved by the Board, sets forth severance benefits
which the Company agrees will be provided to you in the event your employment
with the Company is terminated in connection with a Change in Control (as
defined in Section 3 hereof) under the circumstances described below. The
Company and you have entered into a prior letter agreement regarding change in
control severance benefits dated December 14, 2006. Upon your signature of this
letter agreement, the prior agreement shall be amended and restated in its
entirety in the form of this agreement.

1. Agreement to Provide Services; Right to Terminate.

(i) Except as otherwise provided in paragraph (ii) below, the Company or you may
terminate your employment at any time, subject to the Company’s providing the
benefits hereinafter specified in accordance with the terms hereof.

(ii) In the event of a Potential Change in Control (as defined in Section 3
hereof), you agree that you will not leave the employ of the Company (other than
as a result of Disability, as such term is hereinafter defined) and will render
the services contemplated in the

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recitals to this Agreement until the earliest of (a) a date which is 270 days
from the occurrence of such Potential Change in Control, or (b) a termination of
your employment pursuant to which you become entitled under this Agreement to
receive the benefits provided in Section 5(iii) below.

2. Term of Agreement. This Agreement shall commence on the date hereof and shall
continue in effect until December 31, 2009; provided, however, that commencing
on January 1, 2010 and each January 1 thereafter, the term of this Agreement
shall automatically be extended for one additional year unless at least 90 days
prior to such January 1 date, the Company or you shall have given notice that
this Agreement shall not be extended (provided that no such notice may be given
by the Company during the pendency of a Potential Change in Control); and
provided, further, that this Agreement shall continue in effect for a period of
twenty-four (24) months beyond the term provided herein if a Change in Control
shall have occurred during such term. Notwithstanding anything in this Section 2
to the contrary, this Agreement shall terminate automatically if you or the
Company terminate your employment prior to the earlier of Shareholder Approval
(as defined in Section 3 hereof), if applicable, or the Change in Control. In
addition, the Company may terminate this Agreement during your employment if,
prior to the earlier of Shareholder Approval, if applicable, or the Change in
Control, you cease to hold your current position with the Company, except by
reason of a promotion.

3. Change in Control; Potential Change in Control; Shareholder Approval; Person.

(i) For purposes of this Agreement, a “Change in Control” shall mean the
occurrence of any of the following events:

(A) The consummation of:

(1) any consolidation, merger or plan of share exchange involving the Company (a
“Merger”) as a result of which the holders of outstanding securities of the
Company 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

(2) 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
Company;

(B) At any time during a period of two consecutive years, individuals who at the
beginning of such period constituted the Board (“Incumbent Directors”) shall
cease

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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 hereinafter defined) shall, as a result of a tender or
exchange offer, open market purchases or privately negotiated purchases from
anyone other than the Company, 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.

Notwithstanding anything in the foregoing to the contrary, unless otherwise
determined by the Board, no Change in Control shall be deemed to have occurred
for purposes of this Agreement if (1) you acquire (other than on the same basis
as all other holders of shares of Common Stock of the Company) an equity
interest in an entity that acquires the Company in a Change in Control otherwise
described under subparagraph (A) above, or (2) you are part of a group that
constitutes a Person which becomes a beneficial owner of Voting Securities in a
transaction that otherwise would have resulted in a Change in Control under
subparagraph (C) above.

(ii) For purposes of this Agreement, a “Potential Change in Control” shall be
deemed to have occurred if:

(A) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change in Control;

(B) any Person (including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would constitute a Change in
Control; or

(C) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

(iii) For purposes of this Agreement, “Shareholder Approval” shall be deemed to
have occurred if the shareholders of the Company approve an agreement entered
into by the Company, the consummation of which would result in the occurrence of
a Change in Control.

(iv) For purposes of this Agreement, the term “Person” shall mean and include
any individual, corporation, partnership, group, association or other “person,”
as such term is used in Section 14(d) of the Securities Exchange Act of 1934
(the “Exchange Act”), other than the Company or any employee benefit plan
sponsored by the Company.

4. Termination Following Shareholder Approval or Change in Control. If a Change
in Control occurs, you shall be entitled to the benefits provided in
Section 5(iii) hereof in the event that (x) a Date of Termination (as defined in
Section 4(v) below) of your employment with

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the Company occurred or occurs after the earlier of Shareholder Approval, if
applicable, or the Change in Control and no later than twenty-four (24) months
after the Change in Control, or (y) your employment with the Company is
terminated by you for Good Reason (as defined below) based on an event occurring
concurrent with or subsequent to the earlier of Shareholder Approval, if
applicable, or the Change in Control and your Notice of Termination (as defined
in Section 4(iv) below) in connection therewith shall have been given no later
than twenty-four (24) months after the Change in Control; provided, however,
that if any such termination is (a) because of your death, (b) by the Company
for Cause (as defined below) or Disability, or (c) by you other than for Good
Reason based on an event occurring concurrent with or subsequent to the earlier
of Shareholder Approval, if applicable, or the Change in Control, then you shall
not be entitled to the benefits provided in Section 5(iii) hereof.

(i) Disability. Termination by the Company of your employment based on
“Disability” shall mean termination because of your absence from your duties
with the Company on a full-time basis for one hundred eighty (180) consecutive
days as a result of your incapacity due to physical or mental illness, unless
within thirty (30) days after Notice of Termination is given to you following
such absence you shall have returned to the full-time performance of your
duties.

(ii) Cause. Termination by the Company of your employment for “Cause” shall mean
termination upon (a) the willful and continued failure by you to perform
substantially your assigned duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness) after a demand
for substantial performance is delivered to you by the Chairman of the Board or
President of the Company which specifically identifies the manner in which such
executive believes that you have not substantially performed your duties or
(b) the willful engaging by you in illegal conduct which is materially and
demonstrably injurious to the Company. For purposes of this paragraph (ii), no
act, or failure to act, on your part shall be considered “willful” unless done,
or omitted to be done, by you in knowing bad faith and without reasonable belief
that your action or omission was in, or not opposed to, the best interests of
the Company. Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or based upon the advice of counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
you in good faith and in the best interests of the Company. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of the conduct set forth above in (a) or (b) of this
paragraph (ii) and specifying the particulars thereof in detail.

(iii) Good Reason. Termination by you of your employment with the Company for
“Good Reason” shall mean termination by you of your employment with the Company
based on any of the following events provided you give Notice of Termination
after

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the occurrence of any of the following events and no later than 30 days after
the later of (1) notice to you of such event, or (2) the Change in Control:

(A) a change in your status, title, position(s) or responsibilities as an
officer of the Company which does not represent a promotion from your status,
title, position(s) and responsibilities as in effect immediately prior to the
earlier of Shareholder Approval, if applicable, or the Change in Control, or the
assignment to you of any duties or responsibilities which are inconsistent with
such status, title or position(s), or any removal of you from or any failure to
reappoint or reelect you to such position(s), except in connection with the
termination of your employment for Cause or Disability or as a result of your
death or by you other than for Good Reason;

(B) a reduction by the Company in your base salary as in effect immediately
prior to the earlier of Shareholder Approval, if applicable, or the Change in
Control;

(C) the failure by the Company to continue in effect any Plan (as hereinafter
defined) in which you are participating immediately prior to the earlier of
Shareholder Approval, if applicable, or the Change in Control (or Plans
providing you with at least substantially similar benefits) other than as a
result of the normal expiration of any such Plan in accordance with its terms as
in effect immediately prior to the earlier of Shareholder Approval, if
applicable, or the Change in Control, or the taking of any action, or the
failure to act, by the Company which would adversely affect your continued
participation in any of such Plans on at least as favorable a basis to you as is
the case immediately prior to the earlier of Shareholder Approval, if
applicable, or the Change in Control or which would materially reduce your
benefits in the future under any of such Plans or deprive you of any material
benefit enjoyed by you immediately prior to the earlier of Shareholder Approval,
if applicable, or the Change in Control;

(D) the failure by the Company to provide and credit you with the number of paid
vacation days to which you are then entitled in accordance with the Company’s
normal vacation policy as in effect immediately prior to the earlier of
Shareholder Approval, if applicable, or the Change in Control;

(E) the Company’s requiring you to be based more than 30 miles from where your
office is located immediately prior to the earlier of Shareholder Approval, if
applicable, or the Change in Control except for required travel on the Company’s
business to an extent substantially consistent with the business travel
obligations which you undertook on behalf of the Company prior to the earlier of
Shareholder Approval, if applicable, or the Change in Control;

(F) the failure by the Company to obtain from any Successor (as hereinafter
defined) the assent to this Agreement contemplated by Section 7 hereof;

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(G) any purported termination by the Company of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
paragraph (iv) below (and, if applicable, paragraph (ii) above); and for
purposes of this Agreement, no such purported termination shall be effective; or

(H) the failure by the Company to pay you any portion of your current
compensation, to credit your Deferred Compensation Plan account in accordance
with your previous election, or to pay you any portion of an installment of
deferred compensation under any Plan in which you participated, within seven
(7) days of the date such compensation is due.

For purposes of this Agreement, “Plan” shall mean any compensation plan such as
an incentive, stock option or restricted stock plan or any employee benefit plan
such as a thrift, pension, profit sharing, deferred compensation, medical,
disability, accident, life insurance, or relocation plan or policy or any other
plan, program or policy of the Company intended to benefit employees.

(iv) Notice of Termination. Any purported termination by the Company or by you
(other than termination due to your death, which shall terminate your employment
automatically) following the earlier of Shareholder Approval, if applicable, or
a Change in Control shall be communicated by Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.

(A) With respect to any Notice of Termination given by you for Good Reason, such
Notice of Termination may indicate that such termination for Good Reason shall
be conditioned upon, and postponed until, the date on which it is finally
determined, either by mutual written agreement of the parties or by the
arbitrators in a proceeding as provided in Section 13 hereof, that Good Reason
exists for such termination. If a Notice of Termination given by you for Good
Reason indicates that such termination shall be so conditioned and postponed,
then, if the Company disputes the existence of Good Reason, the Company shall,
within thirty (30) days after the Notice of Termination is given, notify you
that a dispute exists concerning the termination, whereupon Section 13 hereof
shall apply to such dispute. If no such notice is given by the Company within
such 30-day period, then a final determination that Good Reason exists shall be
deemed to have occurred on the date thirty (30) days after the Notice of
Termination for Good Reason is given.

(B) Notwithstanding anything to the contrary in this Agreement:

(1) if, at any time before the Date of Termination determined pursuant to this
Agreement with respect to any purported termination by you of your employment
with the Company, there exists a basis for the Company to terminate

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your employment for Cause, then the Company may, regardless of whether or not
you have given Notice of Termination for Good Reason and regardless of whether
or not Good Reason exists, terminate your employment for Cause, in which event
you shall not be entitled to the benefits provided in Section 5(iii) hereof, and

(2) if you die or your employment is terminated based on Disability after you
have given Notice of Termination for Good Reason and before the Date of
Termination determined under this Agreement with respect to that Notice of
Termination, and it is subsequently finally determined that Good Reason existed
at the time your employment terminated, then termination of your employment
shall be deemed to have occurred for Good Reason (and not due to your death or
Disability) and you shall be entitled to the benefits provided in Section 5(iii)
hereof.

(v) Date of Termination. “Date of Termination” shall mean the date your
employment with the Company is terminated following the earlier of Shareholder
Approval, if applicable, or a Change in Control, which date shall be determined
as follows:

(A) if your employment is to be terminated for Disability, thirty (30) days
after Notice of Termination is given (provided that, if you shall have returned
to the performance of your duties on a full-time basis during such thirty
(30) day period, then the termination for Disability contemplated by the Notice
of Termination shall not occur),

(B) if your employment is terminated due to your death, the date of your death,

(C) if your employment is to be terminated by the Company other than for
Disability, or if your employment is to be terminated by you without a claim of
Good Reason, the date specified in the Notice of Termination, and

(D) if your employment is to be terminated by you for Good Reason, the date
ninety (90) days after the date on which a Notice of Termination is given,
unless either:

(1) an earlier date has been agreed to by the Company either in advance of, or
after, receiving such Notice of Termination (in which case such earlier date
shall be the Date of Termination),

(2) pursuant to and in accordance with Section 4(iv) you have indicated in your
Notice of Termination that you are conditioning your termination upon (and
postponing such termination until) the date on which it is finally determined
that Good Reason exists for such termination (in which case the later of such
date as determined in accordance with Section 4(iv) above, or the date otherwise
determined under this Section 4(v)(D), shall be the Date of Termination),

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(3) the Company shall not have notified you within fifteen (15) days after a
Notice of Termination for Good Reason is given that it intends to fully correct
the circumstances giving rise to Good Reason (in which case the date fifteen
(15) days after the Notice of Termination shall be the Date of Termination), or

(4) if the Company gives notice as provided in Section 4(v)(D)(3) and if the
circumstances giving rise to Good Reason are fully corrected on or prior to the
date that is ninety (90) days after such Notice of Termination was given, then
the termination for Good Reason contemplated by such Notice of Termination shall
not occur.

(E) You shall not be obligated to perform any services after the Date of
Termination that would prevent the termination of your employment on such Date
of Termination from qualifying as a “separation from service” as defined in
Treasury Regulations §1.409A-1(h).

5. Compensation Upon Termination or During Disability.

(i) During any period following the earlier of Shareholder Approval, if
applicable, or a Change in Control that you fail to perform your duties as a
result of incapacity due to physical or mental illness, you shall continue to
receive your full base salary at the rate then in effect and any benefits or
awards under any Plans shall continue to accrue during such period, to the
extent not inconsistent with such Plans, until your employment is terminated
pursuant to and in accordance with Sections 4(i) and 4(v) hereof. Thereafter,
your benefits shall be determined in accordance with the Plans then in effect.

(ii) If your employment shall be terminated for Cause or as a result of death
following the earlier of Shareholder Approval, if applicable, or a Change in
Control, the Company shall pay you your full base salary through the Date of
Termination at the rate in effect just prior to the time a Notice of Termination
is given plus any benefits or awards which pursuant to the terms of any Plans
have been earned or become payable, but which have not yet been paid to you.
Thereupon the Company shall have no further obligations to you under this
Agreement.

(iii) If a Change in Control occurs and either (a) after the earlier of
Shareholder Approval, if applicable, or the Change in Control and no later than
twenty-four (24) months after the Change in Control, a Date of Termination of
your employment with the Company occurred or occurs as a result of a termination
by the Company other than for Cause or Disability, or (b) your employment with
the Company is terminated by you for Good Reason based on an event occurring
concurrent with or subsequent to the earlier of Shareholder Approval, if
applicable, or the Change in Control and your Notice of Termination in
connection therewith shall have been given no later than twenty-four (24) months
after the Change in Control, then, by no later than the fifth day following the
later of the Date of Termination or the Change in Control (except as

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may otherwise be provided), you shall be entitled, without regard to any
contrary provisions of any Plan, to a severance benefit as follows:

(A) the Company shall pay your full base salary through the Date of Termination
at the rate in effect just prior to the time a Notice of Termination is given
plus any benefits or awards which pursuant to the terms of any Plans have been
earned or become payable, but which have not yet been paid to you; provided,
however, that with respect to a termination of your employment for Good Reason
based on a reduction by the Company in your base salary as in effect immediately
prior to the earlier of Shareholder Approval, if applicable, or the Change in
Control, the Company shall pay your full base salary through the Date of
Termination at the rate in effect just prior to such reduction plus any benefits
or awards which pursuant to the terms of any Plans have been earned or become
payable, but which have not yet been paid to you;

(B) as severance pay and in lieu of any further salary for periods subsequent to
the Date of Termination, the Company shall pay to you in a single payment an
amount in cash equal to                 (            ) times the sum of (1) the
greater of (i) your annual rate of base salary in effect on the Date of
Termination or (ii) your annual rate of base salary in effect immediately prior
to the earlier of Shareholder Approval, if applicable, or the Change in Control
and (2) the greater of (i) the average of the last three annual bonuses
(annualized in the case of any bonus paid with respect to a partial year) paid
to you preceding the Date of Termination or (ii) the average of the last three
annual bonuses (annualized in the case of any bonus paid with respect to a
partial year) paid to you preceding the earlier of Shareholder Approval, if
applicable, or the Change in Control; provided, however, that if your age on the
Date of Termination (your “Age”) is more than 61, the amount payable to you
under this subparagraph (B) shall be reduced by multiplying the amount otherwise
determined as set forth above by 90% if your Age is 62, by 60% if your Age is
63, by 30% if your Age is 64, and by 0% if your Age is 65 or more; and

(C) for a                 (            ) month period after the Date of
Termination (specifically including a Date of Termination that occurs after
Shareholder Approval and prior to a Change in Control), the Company shall
arrange to provide you, your spouse and your dependents with life, accident and
health insurance benefits substantially similar to those which you were
receiving immediately prior to the earlier of Shareholder Approval, if
applicable, or the Change in Control. Notwithstanding the foregoing, the Company
shall not provide any benefit otherwise receivable by you pursuant to this
subparagraph (C) to the extent that a similar benefit is actually received by
you from a subsequent employer during such                 (            ) month
period, and any such benefit actually received by you shall be reported to the
Company.

(iv) The amount of any payment provided for in this Section 5 shall not be
reduced, offset or subject to recovery by the Company by reason of any
compensation earned by you as the result of employment by another employer after
the Date of Termination, or

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otherwise. Your entitlements under Section 5(iii) are in addition to, and not in
lieu of, any rights, benefits or entitlements you may have under the terms or
provisions of any Plan.

6. Parachute Payments. Notwithstanding any other provision in this Agreement or
any other agreement or arrangement between the Company and you with respect to
compensation or benefits (each an “Other Arrangement”), in the event that the
provisions of Sections 280G and 4999 of the Internal Revenue Code of 1986, as
amended, or any successor provisions (the “Code”), would cause you to receive a
greater after-tax benefit from the Capped Benefit (as defined below) than from
the amounts (including the monetary value of any non-cash benefits) otherwise
payable pursuant to this Agreement or any Other Arrangement (the “Specified
Benefits”), the Capped Benefit shall be paid to you in lieu of the Specified
Benefits. The “Capped Benefit” shall equal the Specified Benefits, reduced by
the amount necessary to prevent any portion of the Specified Benefits from being
a “parachute payment” as defined in Section 280G(b)(2) of the Code. The Capped
Benefit would therefore equal 2.99 multiplied by your applicable “base amount”
as defined in Section 280G(b)(3) of the Code. For purposes of determining
whether you would receive a greater after-tax benefit from the Capped Benefit
than from the Specified Benefits, there shall be taken into account any excise
tax that would be imposed under Section 4999 of the Code and all federal, state
and local taxes required to be paid by you in respect of the receipt of such
payments. The parties acknowledge that the application of Section 280G is
uncertain in many respects and agree that the Company shall make all
calculations and determinations under this section (including application and
interpretation of the Code and related regulatory, administrative and judicial
authorities) in good faith, which calculations and determinations shall be
conclusive absent manifest error. The Company shall provide you with a
reasonable opportunity to review and comment on the Company’s calculations of
the Capped Benefit and to request which of the Specified Benefits shall be
reduced. If, after payment of any amount under this Agreement or any Other
Arrangement, it is determined that the calculation of the Capped Benefit was
calculated incorrectly, the amount of the Capped Benefit will be adjusted, the
Company shall pay to you any additional amount that should have been paid to
you, and you shall repay to the Company any amount that should not have been
paid to you, in each case with interest at the discount rate applicable under
Section 280G(d)(4) of the Code.

7. Successors; Binding Agreement.

(i) Upon your written request, the Company will seek to have any Successor (as
hereinafter defined), by agreement in form and substance satisfactory to you,
assent to the fulfillment by the Company of its obligations under this
Agreement. For purposes of this Agreement, “Successor” shall mean any Person
that succeeds to, or has the practical ability to control (either immediately or
with the passage of time), the Company’s business directly, by merger,
consolidation or purchase of assets, or indirectly, by purchase of the Company’s
Voting Securities or otherwise.

(ii) This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs,
distributees,

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devisees and legatees. If you should die while any amount would still be payable
to you hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or, if there be no such
designee, to your estate.

8. Fees and Expenses. The Company shall pay to you all legal fees and related
expenses incurred by you in good faith as a result of (i) your termination
following the earlier of Shareholder Approval, if applicable, or a Change in
Control (including all such fees and expenses, if any, incurred in contesting or
disputing in good faith any such termination) or (ii) your seeking to obtain or
enforce in good faith any right or benefit provided by this Agreement.

9. Survival. The respective obligations of, and benefits afforded to, the
Company and you as provided in Sections 5, 6, 7(ii), 8 and 13 of this Agreement
shall survive termination of this Agreement, but only with respect to a Change
in Control occurring during the term of this Agreement.

10. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid and addressed to the
address of the respective party set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention of
the Chairman of the Board or President of the Company, with a copy to the
Secretary of the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

11. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a
writing signed by you and the Chairman of the Board or President of the Company.
No waiver by either party hereto at any time of any breach by the other party
hereto of, or of compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Oregon.

12. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

13. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Portland, Oregon
by three arbitrators in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrators’ award,
which award shall be a final and binding determination of

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the dispute or controversy, in any court having jurisdiction; provided, however,
that you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement. The Company shall bear all
costs and expenses of the arbitrators arising in connection with any arbitration
proceeding pursuant to this Section 13.

14. Related Agreements. To the extent that any provision of any other agreement
between the Company or any of its subsidiaries and you shall limit, qualify or
be inconsistent with any provision of this Agreement, then for purposes of this
Agreement, while the same shall remain in force, the provision of this Agreement
shall control and such provision of such other agreement shall be deemed to have
been superseded, and to be of no force or effect, as if such other agreement had
been formally amended to the extent necessary to accomplish such purpose.

15. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.

If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.

 

Sincerely, NORTHWEST NATURAL GAS COMPANY By  

 

 

Mark S. Dodson

 

President and CEO

Agreed to this              day

of                     , 2008.