Exhibit 10

 

RETIREMENT AGREEMENT

AND

MUTUAL RELEASE OF ALL CLAIMS

 

THIS RETIREMENT AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS (the “Agreement”) is
entered into between Bruce R. DeBolt (“DeBolt”) and Northwest Natural Gas
Company dba NW Natural (the “Company”) on the dates acknowledged below in order
to provide for an orderly and mutually satisfactory transfer of
responsibilities, for internal and external communications, and for separation
from employment. This is a negotiated agreement establishing the terms and
conditions of DeBolt’s retirement and separation from employment with the
Company and it terminates, extinguishes and supersedes the benefits, terms and
conditions of employment between DeBolt and the Company except to the extent
prohibited by law.

 

1. Meaning of Terms.

 

(a) As used in this Agreement, the “Company” shall mean Northwest Natural Gas
Company dba NW Natural, its past, present and future parents, subsidiaries and
current or former related entities, and all of its and their past, present, and
future officers, directors, agents, successors and assigns.

 

(b) As used in this Agreement, “DeBolt” shall mean Bruce R. DeBolt.

 

(c) As used in this Agreement, “Retirement Date” shall mean the close of
business September 30, 2004.

 

(d) As used in this Agreement, “Resignation Date” shall mean August 10, 2004.

 

2. Consideration.

 

The parties acknowledge that this Agreement is entered into in consideration of
the mutual promises and covenants herein. DeBolt acknowledges that it is
supported by consideration over and above any separation or other benefits due
him as a result of his employment with the Company. DeBolt also acknowledges
that, except as provided for in this Agreement and any terms incorporated into
this Agreement, he has no right to any employment related benefits including
salary, vacation, banked vacation, compensation, benefits and perquisites of
whatever kind, and that the payments made under this Agreement fully satisfy any
wages or other payments due to him.

 

3. Resignation as Officer.

 

Effective on the Resignation Date, DeBolt will resign as an officer of the
Company. DeBolt acknowledges that he has been and is subject to certain laws
governing trading by corporate insiders, and will engage in no trading
activities in violation of those laws.

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Nothing herein shall affect any right DeBolt may have to indemnification for
acts as an officer of the Company available to him under federal or Oregon law,
the Company’s bylaws, and/or Company acquired liability coverage for directors
and officers to the extent that coverage was in place at the time this Agreement
is signed.

 

4. Retirement.

 

Effective August 10, 2004 and continuing to the close of business September 30,
2004, DeBolt will be employed by the Company, but will not be an Officer of the
Company. Effective the close of business September 30, 2004 DeBolt’s employment
with the Company will end with his retirement. DeBolt acknowledges that the
employment relationship with the Company will then be permanently and
irrevocably severed, that his entitlement to any employment related benefits
will then cease, except as expressly granted by the terms of this Agreement and
the applicable plans for post-employment and retirement benefits which are
vested or to which DeBolt is entitled by virtue of this Agreement. He
acknowledges that the Company has no obligation, contractual or otherwise, to
rehire or re-employ him in the future. He waives any right to reinstatement or
re-employment with the Company. Except as provided in this Agreement, DeBolt’s
compensation, rights (if any) to any bonus payments, incentive awards,
restricted stock and any accrual of additional, unvested benefits under the
Company’s benefit programs including but not limited to 401k, executive deferred
compensation plan, ESRIP, employee stock purchase plans, stock option programs,
life and disability insurance, auto and other expense allowances cease upon
termination of employment. DeBolt shall, however, retain all vested rights in
any and all benefit plans or programs to the extent those rights vested before
the Retirement Date, subject to the terms of the applicable plans.

 

5. Use of Accrued Vacation.

 

During the period August 10, 2004 through September 30, 2004 DeBolt will use,
and thereby be compensated for, as much of his accrued paid vacation as is
practicable, unless required to perform duties related to the transition of his
former job responsibilities. Any unused accrued vacation will be paid as soon as
practicable following the Retirement Date.

 

6. Equipment.

 

DeBolt may retain his Company provided chair.

 

7. Compensation.

 

A. In consideration for his future services to the Company, effective the
Retirement Date, DeBolt shall be provided an enhanced supplemental retirement
benefit calculated so that the present value of the benefit is $280,000 as of
Oct. 1, 2004 assuming a 6.25% discount rate and the UP 84(+1) mortality table.
The benefit shall be payable as a 50% Joint and Survivor annuity resulting in a
benefit of $1922.57 per month payable to

 

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DeBolt and his spouse for their joint lives, subject to applicable tax
withholding, commencing on October 1, 2004. DeBolt acknowledges that the
employee portion of FICA Medicare tax with respect to the enhanced supplemental
retirement benefit becomes payable with respect to the entire present value of
the benefit ($280,000) on the Retirement Date, and that such tax will be
withheld by the Company from other compensation owed to him on or after the
Retirement Date. DeBolt’s rights under this Paragraph 7.A are personal to him
(and his spouse, if she survives him) and may not be assigned, alienated,
pledged, encumbered, or subjected to the claims of Debolt’s creditors in any
way. The enhanced supplemental retirement benefit shall constitute a pension
plan that is exempt from most requirements of the Employee Retirement Income
Security Act of 1974 (“ERISA”) as a plan maintained for the purpose of providing
deferred compensation to a select highly compensated employee. Such plan shall
be administered by Company’s Corporate Secretary, who shall process any claim
for benefits in accordance with the requirements of Section 503 of ERISA and
regulations issued thereunder.

 

B. In consideration for his future services to the Company, DeBolt shall be paid
a total of $100,000 (as a social security deduction offset) payable in equal
monthly installments of $1666.67 commencing January 2005 and continuing for a
period of sixty months.

 

C. In consideration of this Agreement DeBolt shall be paid $86,000 on January
15, 2005 and $81,000 on July 31, 2005 provided that he has satisfactorily
completed the transfer of his duties and responsibilities by the Resignation
Date in all material respects (collectively, the “Transition Duties”) and has
complied in all material respects with all other terms and conditions of this
Agreement (including but not limited to Paragraphs 10-13). The Company and
DeBolt have developed a list of actions necessary for DeBolt to transfer his
duties and responsibilities. If further actions are required, the Company will
notify DeBolt in writing. If the Company believes that DeBolt is not
satisfactorily completing or has breached his Transition Duties, the Company
will notify DeBolt in writing, provide a reasonable description of the claimed
deficiencies or breach, and, if the matter is capable of being cured, provide
DeBolt with a reasonable opportunity to cure such deficiencies or breach.
Subject to the foregoing, the final determination of whether DeBolt has
satisfactorily completed or complied with his Transition Duties, or cured any
deficiency or breach, shall be in the Company’s sole discretion and shall be
subject to the provisions of Paragraph 21 (Resolution of Disputes) only to the
extent of whether the Company’s decision was an abuse of its discretion.

 

D. In consideration of this Agreement, the Company shall purchase
post-employment transition assistance services for DeBolt at a mutually agreed
upon service provider in an amount not to exceed $15,000, with payments to be
made directly to the service provider, and provided that DeBolt shall commence
these services no later than December 1, 2004.

 

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8. Stock.

 

A. DeBolt has been the recipient from time to time of grants of stock options.
Nothing in this Agreement is intended to affect any rights he may have, or in
any way alter the rights and obligations specified in the option agreements and
plan.

 

B. In consideration of this Agreement, DeBolt waives, forfeits and foregoes any
rights he may have had to benefits or to future rights which are or may have
accrued to him pursuant to the Long Term Incentive Plan, to any Long Term
Incentive Plan Agreements, and to the August 1, 2001 Restricted Stock Retention
Agreement or any similar Agreement granting any retention incentive.

 

9. Benefit Plans.

 

DeBolt’s entitlement to any other benefits afforded by any Company benefit plans
including, without limitation, employee stock purchase plans, executive
supplemental retirement, and executive deferred compensation are governed solely
by their applicable plans and policies.

 

10. Cooperation.

 

A. The parties recognize that DeBolt may have specialized information and
knowledge that is or may be important to the Company in the event it is involved
in disputes, claims or litigation, or may have been involved in incidents or
events which relate to disputes, claims or litigation. For the twelve months
following the Retirement Date, DeBolt agrees that he will make himself
reasonably available to consult or assist the Company in any such matters. The
Company will make a good faith effort to schedule events requiring DeBolt’s
cooperation at times that do not interfere with DeBolt’s vacation plans or other
scheduled activities. Any such request will be made and scheduled through Mark
S. Dodson. The Company will reimburse any reasonable out-of-pocket expenses
DeBolt incurs. Time devoted to such cooperation after September 30, 2005 shall
be compensated at the rate of $100 per hour.

 

B. For a period of twelve (12) months from the Retirement Date DeBolt shall
provide future services in the form of advice and consultation relative to the
Company’s reporting processes and procedures.

 

11. Non-disparagement and Public Communication.

 

(a) DeBolt will not make statements that disparage or malign the reputation or
abilities of the Company as it is defined in this Agreement.

 

(b) The Company will not make statements that disparage or malign the reputation
or abilities of DeBolt.

 

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(c) Neither party shall be in breach of this provision as a result of giving
truthful testimony in a matter in which the Company is a party or related to a
party.

 

(d) The parties agree that in publicly discussing DeBolt’s separation (other
than through the Company’s formal press release) they will use their best
efforts to conform all information communicated to the general public and within
the Company to the following only: that DeBolt has worked hard, been devoted to
advancing the company through a wide variety of responsibilities, and that on a
personal level the timing is right for taking time for himself and his family.

 

12. Non-solicitation.

 

DeBolt will not, for a period of 24 months from the Retirement Date, directly or
indirectly, solicit, divert or hire away (or attempt to do so) any employee of
the Company, nor shall he directly or indirectly encourage any employee of the
Company to leave the Company’s employ. This shall apply to any employee of the
Company, whether full-time or temporary employee, whether such employment is
pursuant to a written or oral agreement, and whether such employment is for a
determined period or is at will.

 

13. Confidentiality.

 

(a) DeBolt agrees that he will not disclose, disseminate, or publicize, or cause
or permit to be disclosed, disseminated, or publicized: (i) Confidential or
proprietary information including business and strategic plans, financial
planning and details, payroll and personnel information, and other business
information to which DeBolt had access as an officer of the Company and was
under an obligation to keep confidential; and (ii) any of the terms of this
Agreement. For purposes of this Agreement, information is not confidential or
proprietary if it is available to the public for reasons unrelated to a breach
by DeBolt, if it is non-Company information known by DeBolt before his
employment by Company, or if it was provided to him by a source unrelated to
Company and not obtained from Company by any person through a wrongful act.

 

(b) These obligations are subject to the following exceptions only (i) to the
extent necessary to represent the Company’s interests in claims or litigation
where the Company authorizes disclosure; (ii) to the extent necessary to report
income to appropriate taxing authorities; (iii) in response to an order or
subpoena of a court or governmental agency of competent jurisdiction, provided,
however, that notice of receipt of such order or subpoena shall be immediately
communicated to the Company telephonically and in writing, so that the Company
shall have an opportunity to intervene and assert what rights it has to
nondisclosure prior to DeBolt’s response to such order or subpoena; (iv) to the
extent necessary to enforce this Agreement. DeBolt may also disclose the terms
of this Agreement to his lawyers, accountants and financial advisers, and as
required to lenders or lending institutions for consideration in applications
for loans or credit provided any person to whom the information is disclosed
shall also be bound by this confidentiality provision.

 

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(c) The Company agrees that, except on a business need-to-know basis, it will
not disclose, disseminate or publicize, or cause or permit to be disclosed,
disseminated or publicized, any of the terms of this Agreement. These
obligations are subject to the following exceptions only (i) to the extent
necessary to represent its interests in claims or litigation, (ii) to the extent
necessary to comply with government reporting obligations or necessary
communications with government entities, including but not limited to the
company’s proxy statements where required, (iii) in response to an order or
subpoena of a court or governmental agency of competent jurisdiction, provided,
however, that notice of receipt of such order or subpoena shall be immediately
communicated to DeBolt telephonically and in writing so that DeBolt shall have
an opportunity to intervene and assert what rights he has to nondisclosure prior
to the Company’s response to such order or subpoena; (iv) to the extent
necessary to enforce this Agreement; (v) to the extent required by public filing
obligations of any law.

 

(d) DeBolt’s obligation to keep the terms of this Agreement confidential as
described in this Agreement shall continue notwithstanding that the Company has
complied with any requirement for public filing under any law including but not
limited with the SEC.

 

14. Releases.

 

(a) DeBolt hereby waives any legal rights and releases and forever discharges
the Company from any and all liability, demands, claims, suits, actions,
charges, damages, judgments, levies or executions, whether known or unknown,
liquidated, fixed, contingent, direct or indirect, which have been, could have
been or could be raised against the Company which relate in any way to DeBolt’s
employment by the Company or termination of that employment, except to the
extent waiver or release is specifically prohibited by law, except claims for
indemnity arising from DeBolt’s employment by the Company, and except for his
right to enforce this Agreement according to its terms (including enforcement of
rights under any benefit plans that survive DeBolt’s separation from
employment). This is a full and final waiver and release of all such claims
which he has or may have against the Company, specifically including but not
limited to all claims for relief or remedy of any type under any state or
federal laws, including but not limited to claims based upon Title VII of the
Civil Rights Act of 1964, the Post-Civil War Civil Rights Acts, the Civil Rights
Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act, The
Older Workers Benefit Protection Act, the Workers Adjustment and Retraining
Notification Act, the Americans with Disabilities Act, the Rehabilitation Act of
1973, the Vietnam Era Veterans Readjustment Assistance Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act (except to the extent
of claims related to vested benefits in qualified plans), Executive Order 11246,
as amended, the

 

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civil rights, employment and labor laws of any state or the United States, all
as amended, and any regulations under such authorities; including but not
limited to claims based on alleged breach of employment contract or any other
tort, contract or other common law theories; and including but not limited to
any claims for additional compensation, back pay or benefits of any type (except
in accordance with the terms of the Agreement); and including but not limited to
any claim for attorney fees or costs, for reinstatement to active employment or
reemployment (except to the extent specifically prohibited by law), or for
compensatory or punitive damages under any applicable statutes or common law
theories.

 

(b) The Company hereby waives any legal rights and releases and forever
discharges DeBolt from all liability, demands, claims, suits, actions, charges,
damages, judgments, levies or executions, whether known or unknown, liquidated,
fixed, contingent, direct or indirect, which have been, could have been or could
be raised against DeBolt which relate in any way to DeBolt’s employment by the
Company or termination of that employment, except to the extent waiver or
release is specifically prohibited by law and except for Company’s right to
enforce the Agreement according to its terms.

 

15. Acknowledgements.

 

A. DeBolt acknowledges that the payments made to the date of this Agreement, and
payments identified in this Agreement represent payment of all compensation
owing to him by virtue of his employment, and further include sums in addition.

 

B. Each party acknowledges that the parties have made certain assumptions and
characterizations regarding the ultimate tax effects of this Agreement and that
no party has relied upon any statement made by any other party concerning such
tax effects. No party warrants any particular tax consequences arising out of
this Agreement and, to the extent the ultimate tax effects of the Agreement
might differ from that contemplated by the parties, that fact shall have no
effect upon the finality of this Agreement.

 

16. No further claims.

 

The parties promise that they will not prosecute, maintain or institute any
action, suit, administrative charge or complaint, or proceeding of any kind or
nature whatsoever against the other for any reason arising out of DeBolt’s
employment or the termination of his employment, except to enforce the Agreement
according to its terms.

 

17. Compliance with Older Workers Benefit Protection Act of 1990.

 

This Agreement is subject to the terms of the Older Workers Benefit Protection
Act of 1990 (“OWBPA”). The OWBPA provides that an individual cannot waive a
right or claim under the Age Discrimination in Employment Act (“ADEA”) unless
the waiver is knowing and voluntary. Pursuant to the terms of the OWBPA, DeBolt
acknowledges and agrees that he has executed this Agreement voluntarily, and
with full knowledge of its consequences. In addition, DeBolt hereby acknowledges
and agrees as follows:

 

a. This Agreement has been written in a manner that is calculated to be
understood, and is understood, by DeBolt;

 

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b. The release provisions of this Agreement apply to any rights DeBolt may have
under the ADEA;

 

c. The release provisions of this Agreement do not apply to any rights or claims
DeBolt may have under the ADEA that arise after the date he executes this
Agreement;

 

d. The Company hereby advises DeBolt to consult with an attorney prior to
executing this Agreement;

 

e. The Company is giving DeBolt a period of twenty-one (21) days to consider
this Agreement. DeBolt may accept and sign this Agreement before the expiration
of the twenty-one (21) day time-period, but he is not required to do so by the
Company; and

 

f. For a period of seven (7) days following the signing of this Agreement,
DeBolt may revoke this Agreement in its entirety. DeBolt will provide written
notice of any such revocation to the Company. This Agreement shall become
effective on the eighth day after DeBolt signs it, if it has not been revoked
during the revocation period.

 

18. Integration.

 

This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto and their respective executors, administrators, heirs, personal
representatives and successors, and assigns. The Parties agree that this
Agreement (together with the documents incorporated by reference or otherwise
identified) states the entire agreement of the Parties and supersedes all prior
and contemporaneous negotiations and agreements, oral or written. Each Party
expressly acknowledges that the other Party did not, directly or indirectly,
make any promises, representations, or warranties whatsoever, express or
implied, other than those contained in this Agreement. The Parties further agree
that this Agreement may be amended only by a subsequent writing signed by both
of the Parties.

 

19. Severability and Governing Law.

 

The Parties agree that any provision of this Agreement that is held to be
illegal, invalid, or unenforceable under present or future laws shall be fully
severable. The Parties further agree that this Agreement shall be construed and
enforced as if the illegal, invalid, or unenforceable provision had never been a
part of this Agreement and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be

 

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affected by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement. Furthermore, a provision as similar to the illegal,
invalid, or unenforceable provision as is possible and legal, valid, and
enforceable shall be automatically added to this Agreement in lieu of the
illegal, invalid, or unenforceable provision. The Parties also agree that Oregon
law shall govern the validity and enforceability of this Agreement.

 

20. No Admission.

 

The Parties agree that, by entering into this Agreement, neither party admits,
and specifically denies, any violation of any local, state, or federal law,
common or statutory. The Parties recognize that this Agreement has been entered
into in order to achieve an orderly separation and nothing contained herein
shall be construed to be an admission of liability or a concession of any kind.

 

21. Resolution of disputes.

 

Any dispute between the Parties concerning the interpretation, application, or
claimed breach of this Agreement shall be submitted to binding, confidential
arbitration in Portland, Oregon. Such arbitration shall be conducted pursuant to
the rules of the American Arbitration Association governing employment disputes,
before an arbitrator licensed to practice law in Oregon and familiar with
employment law disputes. Prior to submitting the matter to arbitration, the
parties shall first attempt to resolve the matter by the claimant notifying the
other party in writing of the claim; by giving the other party the opportunity
to respond in writing to the claim within ten (10) days of receipt of the claim;
and by giving the other party the opportunity to meet and confer. If the matter
is not resolved in this manner, the dispute may then proceed to arbitration at
the request of either party. The parties shall bear equally the arbitrator’s
fees and expenses, as well as the administrative costs, if any, assessed by the
American Arbitration Association. The prevailing party in any such proceeding
shall be entitled to recover costs, expenses, and attorney’s fees incurred as a
result of such arbitration or as awarded by the arbitrator. Should any party
institute any court action against the other with respect to any claim released
by this Agreement, or pursue any arbitrable dispute by any method other than
arbitration as provided for in this paragraph, the responding party shall be
entitled to recover from the initiating party all damages, costs, expenses, and
attorney’s fees incurred as a result of such action. Notwithstanding anything in
this Paragraph 21, however, this proceeding shall be available to challenge the
Company’s determination made pursuant to Paragraphs 7 C only to determine
whether the Company abused its discretion.

 

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DEBOLT HAS READ THE FOREGOING AND UNDERSTANDS THE EFFECT OF THIS AGREEMENT. HE
ACKNOWLEDGES HE IS RELEASING LEGAL RIGHTS.

 

   

/s/ Bruce R. DeBolt

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June 25, 2004

    (date)

Northwest Natural Gas Company

By:

 

/s/ Mark S. Dodson

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June 25, 2004

    (date)

 

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WAIVER OF 21-DAY REVIEW

 

I, Bruce. R. DeBolt, understand that I may take up to 21 days from receipt of
the Settlement Agreement and Mutual Release of All Claims to review the document
and determine whether to accept it. I hereby knowingly and voluntarily waive the
21-day review provision of the Agreement. I acknowledge and understand that this
Waiver is part of the Settlement Agreement and Release of All Claims between
myself and COMPANY, as such includes all rights and claims arising prior to or
on the effective date of the Settlement Agreement and Release, including, but
not limited to, the Age Discrimination in Employment Act of 1967, Title VII of
the Civil Rights Act of 1964, and any public policies of the State of Oregon.

 

I have consulted with my attorney prior to executing this Waiver and the
Settlement Agreement Release of All Claims, and I acknowledge that I fully
understand the terms of this Waiver and the Agreement. I have not been compelled
into signing it by anyone associated with COMPANY, and have entered into the
Agreement and Waiver voluntarily and of my own free will.

 

 

June 25, 2004

 

 

/s/ Bruce R. DeBolt

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Date

 

Bruce R. DeBolt

 

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