Exhibit 10.11

NORTHWEST NATURAL GAS COMPANY

UMBRELLA TRUST™ FOR DIRECTORS

EFFECTIVE JANUARY 1, 1991

RESTATED AS OF OCTOBER 1, 2018

 

NORTHWEST NATURAL GAS COMPANY

One Pacific Square

220 N.W. 2nd

Portland, Oregon 97209

   Company

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

Wells Fargo Institutional Retirement and Trust 100 North Main Street

Winston-Salem, North Carolina 27101

   Trustee

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TABLE OF CONTENTS

 

              Page   Preamble         ARTICLE I  

Effective Date; Duration

     2     1.01   

Effective Date.

     2     1.02   

Duration.

     2     1.03   

Revocability.

     3     1.04   

Change in Control.

     3   ARTICLE II  

Trust Fund

     5     2.01   

Contributions.

     5     2.02   

Investments.

     6     2.03   

Recapture of Excess Assets.

     9     2.04   

Subtrusts.

     9     2.05   

Substitution of Other Property.

     9     2.06   

Administrative Powers of Trustee.

     10   ARTICLE III  

Administration

     13     3.01   

Committee.

     13     3.02   

Payment of Benefits.

     13     3.03   

Records.

     14     3.04   

Accountings.

     14     3.05   

Expenses and Fees.

     15   ARTICLE IV  

Liability

     15     4.01   

Indemnity.

     15     4.02   

Bonding.

     15   ARTICLE V  

Insolvency

     15     5.01   

Determination of Insolvency.

     15     5.02   

Insolvency Administration.

     16     5.03   

Termination of Insolvency Administration.

     16     5.04   

Creditors’ Claims During Solvency.

     17   ARTICLE VI  

Successor Trustees

     17     6.01   

Resignation and Removal.

     17     6.02   

Appointment of Successor.

     18     6.03   

Accountings; Continuity.

     18  

 

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              Page   ARTICLE VII  

General Provisions

     18     7.01   

Interests Not Assignable.

     18     7.02   

Amendment.

     18     7.03   

Applicable Law.

     19     7.04   

Agreement Binding on All Parties.

     19     7.05   

Notices and Directions.

     19     7.06   

No Implied Duties.

     19   EXHIBIT A        

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INDEX OF TERMS

 

TERM

   PROVISION    PAGE   Acquiror Stock    2.02-3      7   Act    1.04-2(c)      4
  Board    1.02-3      2   Cash Benefits    2.01-1      5   Change in Control   
1.04-2      4   Code    1.02-3      2   Committee    Preamble      1   Company
   Heading      1   Contract(s)    2.02-1      6   Corporate Transaction   
1.04-3      4   DDCP    Preamble      1   DRSPP    2.02-2      7   ERISA Funding
   1.02-4      3   Excess Assets    2.03-2      9   Experts    2.06-2      11  
Incumbent Directors    1.04-2(b)      3   Insolvency Administration    5.01-3   
  16   Insolvent    5.01-1      15   Insurer    2.02-1      6   Merger   
1.04-2(a)      4   NEDSCP    2.01-2      5   Parent    Preamble      1   Parent
Common Stock    Preamble      1   Plans    Preamble      1   Potential Change In
Control    2.01-3      6   Retirement Bylaw    Preamble      1   Solvency   
5.04-2      17   Subtrusts    2.04      9   Tax Funding    1.02-5      3  
Triggering Event    2.01-3      5   Trustee    Heading      1   Voting
Securities    1.04-2(a)      4   Written Consent of Participants    1.02-6     
3  

 

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NORTHWEST NATURAL GAS COMPANY

UMBRELLA TRUST™ FOR DIRECTORS

EFFECTIVE JANUARY 1, 1991

RESTATED AS OF OCTOBER 1, 2018

 

NORTHWEST NATURAL GAS COMPANY

One Pacific Square

220 N.W. 2nd

Portland, Oregon 97209

   Company

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

Wells Fargo Institutional Retirement and Trust

100 North Main Street

Winston-Salem, North Carolina 27101

   Trustee

The Company has adopted the following plans (the “Plans”) for the benefit of
directors of the Company and its affiliates:

Northwest Natural Gas Directors Deferred Compensation Plan (“DDCP”)

Bylaws Article III, Section 5 on Directors Retirement Benefits (“Retirement
Bylaw”)

The Plans are administered by an administrative committee (the “Committee”)
appointed by the Company. If the Plans are administered by more than one
(1) Committee at any time, references in this Trust Agreement to the Committee
which relate to a particular Plan shall refer to the Committee which administers
that Plan, and, if the reference does not relate to a particular Plan, shall
refer to all of such Committees. The purpose of this trust is to give Plan
participants greater security by placing assets in trust for use only to pay
benefits or, if the Company becomes insolvent, to pay creditors. The trust is
intended to be a grantor trust, the income of which is taxable to the Company.
No contribution to or income of the trust is to be taxable to Plan participants
until benefits are distributed to them.

The Company and the original trustee of this trust established this trust
effective as of January 1, 1991 pursuant to a Trust Agreement dated as of that
date. The Company and the Trustee restated this trust effective as of
December 1, 2001, amended it effective as of February 27, 2003 pursuant to an
Amendment No. 1 dated as of that date and amended it again effective as of
February 24, 2005 pursuant to an Amendment No. 2 dated as of that date. The
Company and the Trustee amended and restated this trust effective as of
December 15, 2005.

 

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Effective October 1, 2018, the Company became a wholly-owned subsidiary of
Northwest Natural Holding Company (“Parent”) and holders of Company common stock
became holders of Parent common stock (“Parent Common Stock”). To make
appropriate changes to the Trust in relation to the foregoing corporate
transaction, the Company and the Trustee now hereby amend and restate the Trust
effective as of October  1, 2018 on the following terms:

ARTICLE I

Effective Date; Duration

1.01    Effective Date.

This trust shall be effective January 1, 1991. The trust year shall coincide
with the Company’s fiscal year, which is the calendar year.

1.02    Duration.

1.02-1    This trust shall continue in effect until all the assets of the trust
fund are exhausted through distribution of benefits to participants,
reimbursement of benefits paid by the Company pursuant to Section 3.02-5,
payment to general creditors in the event of insolvency, payment of fees and
expenses of the Trustee, and return of remaining funding of a Subtrust pursuant
to 1.02-2.

1.02-2    Except as provided in 1.03, the trust shall be irrevocable with
respect to amounts contributed to it for a Plan until all benefit rights covered
by the Subtrust for that Plan are satisfied. The Trustee shall then return to
the Company any assets remaining in the Subtrust for that Plan.

1.02-3    If the existence of this trust is held to be ERISA Funding or Tax
Funding by a federal court and appeals from that holding are no longer timely or
have been exhausted, this trust shall terminate. The board of directors of
Parent (the “Board”) may also terminate this trust if it determines, based on an
opinion of legal counsel which is satisfactory to the Trustee, that either
(i) judicial authority or the opinion of the U.S. Department of Labor, Treasury
Department or Internal Revenue Service (as expressed in proposed or final
regulations, advisory opinions or rulings, or similar administrative
announcements) creates a significant risk that the trust will be held to be
ERISA Funding or Tax Funding, or (ii) ERISA or the Internal Revenue Code (the
“Code”) requires the trust to be amended in a way that creates a significant
risk that the trust will be held to be ERISA Funding or Tax Funding, and failure
to so amend the trust could subject the Company to material penalties. Upon such
determination, the assets of each Subtrust remaining after payment of the
Trustee’s fees and expenses shall be distributed as follows:

(a)    Such assets shall be transferred to a new trust established by the
Company which is not deemed to be ERISA Funding or Tax Funding, but which is
similar in all other respects to this trust, if the Company determines that it
is possible to establish such a trust.

(b)    If the Company determines that it is not possible to establish the trust
in (a) above, then the assets shall be distributed to the Company if the Written
Consent of Participants, as defined in 1.02-6, is obtained for such
distribution.

 

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(c)    If the Company determines that it is not possible to establish the trust
in (a) above and the Written Consent of Participants is not obtained to
distribute the assets to the Company, then the assets shall be allocated in
proportion to the accrued and vested benefits of the participants and
distributed to them in lump sums. Any assets remaining shall be distributed to
the Company.

(d)    Notwithstanding the foregoing, the Trustee shall distribute funds to a
participant to the extent that a federal court has held that the interest of the
participant in this trust is includible for federal income tax purposes in the
gross income of the participant prior to actual payment of Plan benefits to the
participant and appeals from that holding are no longer timely or have been
exhausted. This provision shall also apply to any beneficiary of a participant.

1.02-4    This trust is “ERISA Funding” if it prevents any of the Plans from
meeting the “unfunded” criterion of the exceptions to various requirements of
Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) for
plans that are unfunded and maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees.

1.02-5    This trust is “Tax Funding” if it causes the interest of a participant
in this trust to be includible for federal income tax purposes in the gross
income of the participant prior to actual payment of Plan benefits to the
participant.

1.02-6    “Written Consent of Participants” means, for the purposes of this
trust, consent in writing by participants who (i) are a majority in number and
(ii) have at least sixty-six and two-thirds percent (66-2/3%) in value of the
accrued benefits of all participants in the Plans which are subject to this
trust on the date of such consent.

1.03    Revocability.

1.03-1    This trust shall become irrevocable upon the issuance by the Internal
Revenue Service of a private letter ruling establishing that its existence and
ownership of assets do not cause the benefit rights of participants under the
Plans to be taxable currently. If such a ruling is denied or if the Internal
Revenue Service declines to issue such a ruling, the Company may revoke the
trust and take possession of all assets held by the Trustee for the trust.

1.03-2    Notwithstanding the provisions of 1.03-1, if any of the events
described in 2.01-4 has occurred, the Company may declare the trust to be
irrevocable.

1.04    Change in Control.

1.04-1    On a Change in Control described in 1.04-2, the trust assets shall be
held for participants who had benefit rights under the Plans before the Change
in Control occurred. If the Company makes contributions for benefits owed to new
participants under a Plan following a Change in Control, such contributions and
any insurance contracts or other assets purchased with them shall be held in a
new Subtrust separate from the existing Subtrust for previous participants. The
existing Subtrust shall cover all the benefits provided by the Plan for a
previous participant, including benefits accrued after the Change in Control.

 

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1.04-2    A “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 Parent (a
“Merger”) as a result of which the holders of outstanding securities of Parent
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;

(ii)    any consolidation, merger, plan of share exchange or other transaction
involving the Company as a result of which Parent does not continue to hold,
directly or indirectly. at least 50% of the outstanding securities of the
Company ordinarily having the right to vote for the election of directors; or

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

(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 Parent
(“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 (the “Act”), other than Parent or the Company or any
employee benefit plan sponsored by Parent or the Company) shall, as a result of
a tender or exchange offer, open market purchases or privately negotiated
purchases from anyone other than Parent, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Act), directly or indirectly, of
Voting Securities representing twenty percent (20%) or more of the combined
voting power of the then outstanding Voting Securities.

1.04-3    “Corporate Transaction” means any of the following:

(a)    any consolidation, merger or plan of share exchange involving Parent
pursuant to which shares of Parent 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
Parent.

 

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ARTICLE II

Trust Fund

2.01    Contributions.

2.01-1    The Company shall contribute to the trust such amounts as the
Committee shall reasonably decide are necessary to provide for all benefits
payable under the Plans in cash (“Cash Benefits”). The time of payment of such
contributions shall be decided by the Committee, except as provided in 2.01-3.

2.01-2    If a participant in the DDCP elects under the DDCP to defer shares of
Parent Common Stock awarded to the participant under the Company’s Non-Employee
Directors Stock Compensation Plan (the “NEDSCP”), promptly after the deferral
election becomes irrevocable the Administrator of the NEDSCP shall cause the
Parent Common Stock subject to such irrevocable deferral to be transferred to
the Trustee as a contribution to this trust. The Parent Common Stock so
contributed shall nevertheless remain subject to forfeiture under the terms of
the NEDSCP prior to vesting under the NEDSCP. If a participant in the DDCP
elects under the DDCP to defer Fees (as defined in the DDCP) into the
participant’s Stock Account (as defined in the DDCP), the amount of such Fees
deferred to the participant’s Stock Account shall be contributed by the Company
to the trust at the time that Fees are paid to other directors who do not elect
to defer the payment of such Fees. As soon as practicable after January 1, 1998,
the Company shall contribute to the trust a number of shares of Parent Common
Stock equal to the number of shares of Parent Common Stock credited to the
Retirement Benefit Accounts (as defined in the DDCP) of all Directors under the
DDCP.

2.01-3    The Company shall, upon the occurrence of any of the events described
in 2.01-4 (“Triggering Event”) and annually thereafter if the Triggering Event
results in a Change in Control, contribute to the trust the sum of the
following:

(a)    The present value of the remaining premiums and the interest on any
policy loan on insurance contracts held in the trust.

(b)    The amount by which the present value of all Cash Benefits payable under
the Plans exceeds the value of all trust assets other than those required under
2.02-2 or 2.02-3 to be invested in Parent Common Stock or Acquiror Stock. Each
participant’s Cash Benefit for purposes of calculating present value shall be
the highest Cash Benefit the participant would have under the Plan within the
twenty-four (24) months following the Triggering Event, assuming that no changes
are made in the participant’s level of income or deferral, that service on the
Board continues for twenty-four (24) months at the same rate of compensation,
and that the participant receives any benefit enhancement provided by the Plans
upon a Change in Control. The insurance contracts shall be valued at cash
surrender value, and other assets of the trust shall be valued at their fair
market value.

(c)    A reasonable estimate provided by the Trustee of its fees due over the
remaining duration of the trust.

 

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Any contribution to the trust under 2.01-3 due to a Triggering Event shall be
returned to the Company one (1) year after delivery of such contribution to the
Trustee unless a Change in Control shall have occurred during such one (1) year
period, if the Company requests such return within forty-five (45) days after
such one (1) year period. If no such request is made within the forty-five
(45) day period, then, subject to 2.03-1, the contribution shall become a
permanent part of the trust fund. The one (1) year period shall start over again
in the event of and upon the date of any subsequent Potential Change in Control.
A “Potential Change in Control” shall include the events described in 2.01-4(a)
or (b).

2.01-4    The events referred to in 2.01-3 shall include the following:

(a)    The Company becomes aware that preliminary or definitive copies of a
proxy statement and information statement or other information have been filed
with the Securities and Exchange Commission pursuant to Rule 14a-6, Rule 14c-5,
or Rule 14f-1 under the Act relating to a Potential Change in Control of Parent.

(b)    The delivery to Parent pursuant to Rule 14d-3 under the Act of a Tender
Offer Statement relating to Voting Securities of Parent.

(c)    The termination of any of the Plans by the Company or any amendment to
any of the Plans which would reduce the accrued benefits currently provided for
under any of such Plans.

(d)    Failure by the Company to contribute, within sixty (60) days of receipt
of a written notice from the Trustee, the full amount of any insufficiency in
trust assets that is required to pay any benefit that is payable upon a
direction from the Committee pursuant to 3.02-2.

2.01-5    The calculations required under 2.01-3 shall be based on the actuarial
assumptions set forth in the attached Exhibit A, which, prior to a Change in
Control, may be revised by the Committee from time to time. For purposes of
2.01-3(a), the discount rate shall be the same as the rate applied to determine
the present value of all Cash Benefits payable under the Plans.

2.01-6    The Trustee shall accept the contributions made by the Company and
shall hold them as a trust fund for the payment of benefits under the Plans. The
Trustee shall not be responsible for determining the required amount of
contributions or for collecting any contribution not voluntarily paid.
Contributions may be in cash or in kind.

2.02    Investments.

2.02-1    Except as provided in 2.02-2 or 2.02-3, the trust fund may be invested
in insurance contracts (“Contracts”). Such Contracts may be purchased by the
Company and transferred to the Trustee as in-kind contributions or may be
purchased by the Trustee with the proceeds of cash contributions. The purchase
and holding of such Contracts shall be an investment directed by the Company,
pursuant to 2.02-5. The Trustee shall have the power to exercise all rights,
privileges, options and elections granted by or permitted under any Contract or
under the rules of the insurance company (“Insurer”). Prior to the occurrence of
any of the events referred to in 2.01-4, the exercise by the Trustee of any
incidents of ownership under any Contract shall be subject to the direction of
the Committee.

 

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Notwithstanding anything contained herein to the contrary, neither the Company
nor the Trustee shall be liable for the refusal of any Insurer to issue or
change any Contract or Contracts or to take any other action requested by the
Trustee; nor for the form, genuineness, validity, sufficiency or effect of any
Contract or Contracts held in the trust; nor for the act of any person or
persons that may render any such Contract or Contracts null and void; nor for
failure of any Insurer to pay the proceeds of any such Contract or Contracts as
and when the same shall become due and payable; nor for any delay in payment
resulting from any provision contained in any such Contract or Contracts; nor
for the fact that for any reason whatsoever (other than its own negligence or
willful misconduct) any Contract or Contracts shall lapse or otherwise become
uncollectible.

2.02-2    To the extent that contributions of Parent Common Stock are made to
this trust under 2.01-2, the trust fund shall continue to be invested in such
shares of Parent Common Stock. Any cash contributions made to this trust under
2.01-2 shall be invested by the Trustee in Parent Common Stock by purchasing
Parent Common Stock under Parent’s Dividend Reinvestment and Direct Stock
Purchase Plan (the “DRSPP”) on the next Investment Date (as defined in the
DRSPP). All dividends received on Parent Common Stock held in the trust under
this 2.02-2 shall be reinvested in Parent Common Stock pursuant to the DRSPP.
The purchase and holding of Common Stock under this 2.02-2 shall be an
investment directed by the Company, pursuant to 2.02-5.

2.02-3    Notwithstanding 2.02-2, following a Corporate Transaction, the trust
fund shall no longer be invested in Parent Common Stock. Except as provided
below, if Parent Common Stock is converted or exchanged in the Corporate
Transaction in whole or in part for common stock of the acquiring company
(“Acquiror Stock”), then (a) the trust fund shall continue to be invested in
such shares of Acquiror Stock, (b) any cash contributions thereafter made to
this trust under 2.01-2 shall be invested by the Trustee in Acquiror Stock by
purchasing Acquiror Stock in the public market as soon as practicable, with
related brokerage commissions paid by the Company, and (c) the purchase and
holding of Acquiror Stock under this 2.02-3 shall be an investment directed by
the Company, pursuant to 2.02-5. If a participant elects pursuant to Paragraph
3(g)(iv) of the DDCP to transfer the amount credited in the participant’s Stock
Account and Retirement Benefit Account to the participant’s Cash Account, then
the Trustee shall sell the number of shares of Acquiror Stock equal to the
number of shares then credited to the participant’s Stock Account and Retirement
Benefit Account, in the public market as soon as practicable following the
effectiveness of such election, with related brokerage commissions paid by the
Company.

2.02-4    If the Trustee is required to invest cash contributions by purchasing
Parent Common Stock or Acquiror Stock in the public market or is required to
sell Parent Common Stock or Acquiror Stock in the public market, the following
provisions shall apply:

(a)    Purchases and sales of Parent Common Stock or Acquiror Stock shall be
made on the date on which the Trustee receives from the Company in good order
all information and documentation necessary to accurately effect such purchases
and sales (or, in the case of purchases, the subsequent date on which the
Trustee has received a wire transfer of the funds necessary to make such
purchases). Purchases and sales of Parent Common Stock or Acquiror Stock shall
be made on the open market on such day unless the following applies:

(i)    The Trustee is unable to determine the number of shares required to be
purchased or sold on such day; or

 

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(ii)    If the Trustee is unable to purchase or sell the total number of shares
required to be purchased or sold on such day as a result of market conditions;
or

(iii)    If the Trustee is prohibited by the Securities and Exchange Commission,
the New York Stock Exchange, or any other regulatory body from purchasing or
selling any or all of the shares required to be purchased or sold on such day.

(b)    In the event of the occurrence of the circumstances described in (i),
(ii) or (iii) above, the Trustee shall purchase or sell such shares as soon as
possible thereafter and shall determine the price of such purchases or sales to
be the average purchase or sale price of all such shares purchased or sold. The
Trustee may follow written directions from the Company to deviate from the above
purchase procedures.

2.02-5    Except as otherwise required by 2.02-2 or 2.02-3, the Trustee shall
invest the trust fund in accordance with written directions by the Committee.
The Trustee shall act only as an administrative agent in carrying out the
directed investment transactions and shall not be responsible for the investment
decision. If a directed transaction violates the duty to diversify, to maintain
liquidity or to meet any other investment standard under this trust or
applicable law, the entire responsibility shall rest upon the Company. The
Trustee shall be fully protected in acting upon or complying with any investment
objectives, guidelines, restrictions or directions provided in accordance with
this paragraph.

2.02-6    If the Trustee does not receive instructions from the Committee for
the investment of part or all of the trust fund, the Trustee shall invest it in
securities or other property in accordance with applicable law. Permissible
investments shall include, but not be limited to, the following:

(a)    Preferred or common stocks, notes, debentures, bonds or other securities.

(b)    Mutual funds, money market funds, commercial paper, savings and loan
accounts, certificates of deposit and savings accounts, including deposits
bearing a reasonable rate of interest in the savings department of the Trustee.

(c)    Real estate or mortgages.

2.02-7    The Company shall be responsible for filing appropriate registration
forms and all other reports required under Federal or state securities laws with
respect to the ownership by this trust of Parent Common Stock, including,
without limitation, any reports required under Section 13 or 16 of the Act, and
shall immediately notify the Trustee in writing of any requirement to stop
purchases of Parent Common Stock pending the filing of any report. The Company
shall be responsible for the registration of any Plan interests required under
Federal or state securities laws.

 

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2.03    Recapture of Excess Assets.

2.03-1    In the event any Subtrust shall hold Excess Assets, the Committee, at
its option, may direct the Trustee to return part or all of such Excess Assets
to the Company.

2.03-2    “Excess Assets” are (a) assets of any Subtrust (other than those
required under 2.02-2 or 2.02-3 to be invested in Parent Common Stock or
Acquiror Stock) exceeding one hundred twenty-five percent (125%) of the present
value of the Cash Benefits due participants in such Subtrust, (b) shares of
Parent Common Stock required by 2.02-2 to be held in any Subtrust in excess of
the number of shares of Parent Common Stock then credited to the Stock Accounts
and Retirement Benefit Accounts of all participants under the DDCP, and
(c) shares of Acquiror Stock required by 2.02-3 to be held in any Subtrust in
excess of the number of shares of Acquiror Stock then credited to the Stock
Accounts and Retirement Benefit Accounts of all participants under the DDCP.

2.03-3    The calculation required by 2.03-2 shall be based on the terms of the
Plans and the actuarial assumptions set forth in Exhibit A. Before a Change in
Control, the calculations shall be made by an actuary selected by the Company.
After a Change in Control, the calculations shall be made by an actuary selected
by the Trustee, provided the Committee may select the actuary with the Written
Consent of Participants.

2.04    Subtrusts.

2.04-1    The Trustee shall establish a Subtrust for each Plan to which it shall
credit contributions for that Plan. The account shall reflect an undivided
interest in assets of the trust fund and shall not require any segregation of
particular assets, except that an insurance contract covering benefits of a
particular Plan shall be held in the Subtrust for that Plan and Parent Common
Stock or Acquiror Stock covering benefits of a particular Plan shall be held in
the Subtrust for that Plan.

2.04-2    The Trustee shall allocate investment earnings and losses of the trust
fund among the Subtrusts in proportion to their balances, except that changes in
the value of an insurance contract shall be allocated to the Subtrust for which
it is held and changes in the value of, and dividends paid on, Parent Common
Stock or Acquiror Stock shall be allocated to the Subtrust for which it is held.
Payments to general creditors during Insolvency Administration under 5.02 shall
be charged against the Subtrusts in proportion to their balances, except that
the payment of benefits to a Plan participant as a general creditor shall be
charged against the Subtrust for that Plan.

2.05    Substitution of Other Property.

2.05-1    The Company shall have the power to reacquire part or all of the trust
fund (other than fund assets required under 2.02-2 or 2.02-3 to be invested in
Common Stock or Acquiror Stock) at any time, by substituting for it other
property of equivalent value. Such power is exercisable in a nonfiduciary
capacity.

 

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2.05-2    The value of any insurance contracts reacquired under 2.05-1 shall be
the present value of future projected cash flow of benefits payable under the
Contract. The projection shall include death benefits based on reasonable
mortality assumptions. The value of all other assets in the trust fund shall be
at their fair market value. Values shall be determined by the Trustee.

2.06    Administrative Powers of Trustee.

2.06-1    Subject in all respects to applicable provisions of this Trust
Agreement and the Plans, the Trustee shall have the rights, powers and
privileges of an absolute owner when dealing with property of the trust,
including (without limiting the generality of the foregoing) the powers listed
below:

(a)    To sell, convey, transfer, exchange, partition, lease, and otherwise
dispose of any of the assets of the trust at any time held by the Trustee under
this Trust Agreement;

(b)    To exercise any option, conversion privilege or subscription right given
the Trustee as the owner of any security held in the trust; to vote any
corporate stock, including Parent Common Stock or Acquiror Stock, either in
person or by proxy, with or without power of substitution; to consent to or
oppose any reorganization, consolidation, merger, readjustment of financial
structure, sale, lease or other disposition of the assets of any corporation or
other organization, the securities of which may be an asset of the trust; and to
take any action in connection therewith and receive and retain any securities
resulting therefrom;

(c)    To deposit any security with any protective or reorganization committee,
and to delegate to such committee such power and authority with respect thereto
as the Trustee may deem proper, and to agree to pay out of the trust such
portion of the expenses and compensation of such committee as the Trustee, in
its discretion, shall deem appropriate;

(d)    To cause any property of the trust to be issued, held or registered in
the name of the Trustee as trustee, or in the name of one (1) or more of its
nominees, or one (1) or more nominees of any system for the central handling of
securities, or in such form that title will pass by delivery, provided that the
records of the Trustee shall in all events indicate the true ownership of such
property;

(e)    To renew or extend the time of payment of any obligation due or to become
due;

(f)    To commence or defend lawsuits or legal or administrative proceedings; to
compromise, arbitrate or settle claims, debts or damages in favor of or against
the trust; to deliver or accept, in either total or partial satisfaction of any
indebtedness or other obligation, any property; to continue to hold for such
period of time as the Trustee may deem appropriate any property so received; and
to pay all costs and reasonable attorneys’ fees in connection therewith out of
the assets of the trust;

(g)    To grant options to purchase or to acquire options to purchase any real
property;

 

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(h)    To foreclose any obligation by judicial proceeding or otherwise;

(i)    To manage any real property in the trust in the same manner as if the
Trustee were the absolute owner thereof, including the power to lease the same
for such term or terms within or beyond the existence of the trust and upon such
conditions, including (but not by way of limitation) agreements for the purchase
or disposal of buildings thereon and options to the tenant to renew such lease
from time to time, or to purchase such property, as the Trustee may deem proper;

(j)    To borrow money from any person in such amounts, upon such terms and for
such purposes as the Trustee, in its discretion, may deem appropriate; and in
connection therewith, to execute promissory notes, mortgages or other
obligations and to pledge or mortgage any trust assets as security; and to lend
money on a secured or unsecured basis to any person other than a party in
interest;

(k)    To appoint one (1) or more persons or entities as ancillary trustee or
sub-trustee for the purpose of investing in and holding title to real or
personal property or any interest therein located outside the State of North
Carolina; provided that any such ancillary trustee or sub-trustee shall act with
such power, authority, discretion, duties, and functions of the Trustee as shall
be specified in the instrument establishing such ancillary or sub-trust,
including (without limitation) the power to receive, hold and manage property,
real or personal, or undivided interests therein; and the Trustee may pay the
reasonable expenses and compensation of such ancillary trustees or sub-trustees
out of the trust;

(l)    To deposit any securities held in the trust with a securities depository;

(m)    To hold such part of the assets of the trust uninvested for such limited
periods of time as may be necessary for purposes of orderly account
administration or pending required directions, without liability for payment of
interest;

(n)    To determine how all receipts and disbursements shall be credited,
charged or apportioned as between income and principal, and the decision of the
Trustee shall be final and not subject to question by any participant or
beneficiary of the trust; and

(o)    Generally to do all acts, whether or not expressly authorized, which the
Trustee may deem necessary or desirable for the orderly administration or
protection of the trust fund.

2.06-2    The Trustee may engage one (1) or more independent attorneys,
accountants, actuaries, appraisers or other experts (the “Experts”) for any
purpose, including the determination of Excess Assets. The determination of the
Experts shall be final and binding on the Company, the Trustee, and all of the
participants unless within thirty (30) days after receiving a determination
deemed by any participant to be adverse, any participant initiates suit in a
court of competent jurisdiction seeking appropriate relief. The Trustee shall
have no duty to oversee or independently evaluate the determination of the
Experts. The Trustee shall be authorized to pay the fees and expenses of any
Experts out of the assets of the trust fund.

 

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2.06-3    The Company shall from time to time pay taxes (references in this
Trust Agreement to the payment of taxes shall include interest and applicable
penalties) of any and all kinds whatsoever which at any time are lawfully levied
or assessed upon or become payable in respect of the trust fund, the income or
any property forming a part thereof, or any security transaction pertaining
thereto. To the extent that any taxes levied or assessed upon the trust fund are
not paid by the Company or contested by the Company pursuant to the last
sentence of this paragraph, the Trustee shall pay such taxes out of the trust
fund, and the Company shall upon demand by the Trustee deposit into the trust
fund an amount equal to the amount paid from the trust fund to satisfy such tax
liability. If requested by the Company, the Trustee shall, at the Company’s
expense, contest the validity of such taxes in any manner deemed appropriate by
the Company or its counsel, but only if it has received an indemnity bond or
other security satisfactory to it to pay any expenses of such contest.
Alternatively, the Company may itself contest the validity of any such taxes,
but any such contest shall not affect the Company’s obligation to reimburse the
trust fund for taxes paid from the trust fund.

2.06-4    In the event a participant’s beneficiary designation results in a
participant or the participant’s spouse being deemed to have made a
“generation-skipping transfer” as defined in Section 2611 of the Code, then to
the extent that the participant or participant’s “executor,” as said term is
defined in the Code (or the spouse of the participant or said spouse’s statutory
executor in the case of a generation-skipping transfer deemed to have been made
by a participant’s spouse), have not previously used the total
generation-skipping transfer exemption that is available under Section 2631 of
the Code to such transferor, such unused exemption shall be allocated in the
manner prescribed by Section 2632 of the Code, except that (a) any
generation-skipping transfer resulting from said beneficiary designation shall
be excluded from the allocation; and (b) the method of allocation under
Section 2632 shall be reversed so that such unused portion of said transferor’s
exemption shall be applied first to trusts or trust equivalents of which
transferor is the deemed transferor and from which taxable distributions occur
and, second, to direct skips occurring at said transferor’s death. Any portion
of said transferor’s total generation-skipping transfer exemption not used
pursuant to the provisions of the previous sentence shall be allocated to the
transfer resulting from the beneficiary designation that gives rise to the
generation-skipping transfer hereunder.

Notwithstanding any provisions in the Plans or this Trust Agreement to the
contrary, the Company and the Trustee may withhold any benefits payable to a
beneficiary as a result of the death of the participant or any other beneficiary
until such time as (a) the Company or Trustee is able to determine whether a
generation-skipping transfer tax, as defined in Chapter 13 of the Code, or any
substitute provision therefor, is payable by the Company or Trustee; and (b) the
Company or Trustee has determined the amount of generation-skipping transfer tax
that is due, including interest thereon. If any such tax is payable, the Company
or Trustee shall reduce the benefits otherwise payable hereunder to such
beneficiary by the amount necessary to provide said beneficiary with a benefit
equal to the amounts that would have been payable if the original benefits had
been calculated on the basis of a present value at the time of the generation
skipping transfer equal to the then present value of the originally contemplated
benefit less an amount equal to the generation-skipping transfer tax and any
interest thereon that is payable as a result of

 

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the death in question. The Company or Trustee may also withhold from
distribution by further reduction of the then net present value of benefits
calculated in accordance with the terms of the previous sentence such amounts as
the Company or Trustee feels are reasonably necessary to pay additional
generation-skipping transfer tax and interest thereon from amounts initially
calculated to be due. Any amounts so withheld shall be payable as soon as there
is a final determination of the applicable generation-skipping tax and interest
thereon. No interest shall be payable by the Company or Trustee to any
beneficiary for the period of time that is required from the date of death to
the time when the aforementioned generation-skipping transfer tax determinations
are made and the amount of benefits payable to a beneficiary can be fully
determined.

ARTICLE III

Administration

3.01    Committee.

3.01-1    The Committee is the plan administrator for the Plans and has general
responsibility to interpret the Plans and determine the rights of participants
and beneficiaries.

3.01-2    The Trustee shall be given the names and specimen signatures of the
Chairman, Secretary and members of the Committee. The Trustee shall accept and
rely upon the names and signatures until notified of change. Instructions to the
Trustee shall be signed for the Committee by the Chairman or such other person
as the Committee may designate.

3.02    Payment of Benefits.

3.02-1    Except as provided in 3.02-5, the Trustee shall pay benefits to
participants and beneficiaries on behalf of the Company in satisfaction of its
obligations under the Plans. Benefit payments from a Subtrust shall be made in
full until the assets of the Subtrust are exhausted. Payments due on the date
the Subtrust is exhausted shall be covered pro rata. The Company’s obligation
shall not be limited to the trust fund and a participant shall have a claim
against the Company for any payment not made by the Trustee.

3.02-2    The Trustee shall make payments in accordance with the written
direction from the Committee. The Trustee shall make any required income tax
withholding and shall pay amounts withheld to taxing authorities on the
Company’s behalf or determine that such amounts have been paid by the Company.

3.02-3    A participant’s entitlement to benefits under the Plans shall be
determined by the Committee. Any claim for such benefits shall be considered and
reviewed under the claims procedures set out in the Plans.

3.02-4    The Trustee shall use the assets of the trust or any Subtrust to make
benefit payments or other payments in the following order of priority:

(a)    Parent Common Stock shall be used to pay any benefits required under the
Plans to be paid in Parent Common Stock and Acquiror Stock shall be use to pay
any benefits required under the Plans to be paid in Acquiror Stock;

 

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(b)    All assets of the trust or Subtrust other than Contracts with Insurers,
in such order as the Committee may request;

(c)    Cash contributions from the Company; and the Company hereby agrees to
make cash contributions to the trust to enable the Trustee to make all benefit
payments and other payments when due, unless the Company makes such payments
directly, whenever the Trustee advises the Company that the assets of the trust
or Subtrust, other than Contracts with Insurers, are insufficient to make such
payments; and

(d)    Contracts with Insurers held in the trust or Subtrust; and in using any
such Contracts, the Trustee shall first borrow the cash surrender value of each
such Contract, proceeding in order of Contracts from the Contracts which have
been in force for the longest times (and in alphabetical order based on the last
name of the insured for Contracts placed in force on the same date) to the
Contracts which have most recently been placed in force; and thereafter the
Trustee shall surrender Contracts in the same order of priority as set forth
above.

Notwithstanding the foregoing, the Trustee may use the assets of the trust or
any Subtrust in any other order of priority directed by the Committee with the
Written Consent of Participants affected thereby.

3.02-5    With respect to any benefit payments due to participants and
beneficiaries under the Plans, the Committee may direct by notice in advance to
the Trustee that the Company shall make such payments and that the Trustee
shall, upon receipt of evidence of such payments satisfactory to the Trustee,
reimburse the Company for such payments from the applicable Subtrust. In such
cases, the Company shall make any required income tax withholding and reporting,
and shall pay amounts withheld to taxing authorities.

3.03    Records.

The Trustee shall keep complete records on the trust fund open to inspection by
the Company and the Committee at all reasonable times. In addition to
accountings required below, the Trustee shall furnish to the Company and
Committee any information requested about the trust fund.

3.04    Accountings.

3.04-1    The Trustee shall furnish the Committee with a complete statement of
accounts annually within sixty (60) days after the end of the trust year showing
assets and liabilities and income and expense for the year of each Subtrust. The
form and content of the account shall be sufficient for the Company to include
in computing its taxable income and credits the income, deductions and credits
against tax that are attributable to the trust fund.

3.04-2    The Committee may object to an accounting within sixty (60) days after
it is furnished and require that it be settled by audit by a qualified,
independent certified public accountant. The auditor shall be chosen by the
Trustee from a list of at least five (5) such accountants furnished by the
Committee at the time the audit is requested. Either the Committee or the
Trustee may require that the account be settled by a court of competent
jurisdiction, in lieu of or in conjunction with the audit. All expenses of any
audit or court proceedings, including reasonable attorneys’ fees, shall be
allowed as administrative expenses of the trust.

 

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3.04-3    If the Committee does not object to an accounting within the time
provided, the account shall be settled for the period covered by it.

3.04-4    When an account is settled, it shall be final and binding on all
parties, including all participants and persons claiming through them.

3.05    Expenses and Fees.

3.05-1    The Trustee shall be reimbursed for all expenses and shall be paid a
reasonable fee fixed by it from time to time. No increase in the fee shall be
effective before sixty (60) days after the Trustee gives notice to the Company
of the increase. The Trustee shall notify the Committee periodically of expenses
and fees.

3.05-2    The Company shall pay administrative fees or expenses. If not so paid,
the fees and expenses shall be paid from the trust fund. The Company shall
reimburse the trust fund for any fees and expenses paid out of it.

ARTICLE IV

Liability

4.01    Indemnity.

The Company shall indemnify and defend the Trustee from any claim, loss,
liability or expense arising from any action or inaction in administration of
this trust based on direction or information from the Committee, absent willful
misconduct or bad faith.

4.02    Bonding.

The Trustee need not give any bond or other security for performance of its
duties under this trust.

ARTICLE V

Insolvency

5.01    Determination of Insolvency.

5.01-1    The Company is “Insolvent” for purposes of this trust if:

(a)    The Company is unable to pay its debts as they come due; or

(b)    The Company is the subject of a pending proceeding as a debtor under the
Bankruptcy Code.

 

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5.01-2    The Chief Executive Officer and the Board of Directors of the Company
shall promptly give notice to the Trustee upon becoming Insolvent. If the
Trustee receives such notice or receives from any other person claiming to be a
creditor of the Company a written allegation that the Company is Insolvent, the
Trustee shall independently determine whether such insolvency exists. The
expenses of such determination shall be allowed as administrative expenses of
the trust.

5.01-3    The Trustee shall continue making payments from the trust fund to
participants under the Plans while it is determining the existence of
insolvency. Such payments shall cease and the Trustee shall commence “Insolvency
Administration” under 5.02 upon the earlier of:

(a)    A determination by the Trustee that the Company is Insolvent; or

(b)    Thirty (30) days after the notice or allegation of insolvency is received
under 5.01-2, unless the Trustee has determined that the Company is not
Insolvent since receipt of such notice or allegation.

5.01-4    The Trustee shall have no obligation to investigate the financial
condition of the Company prior to receiving a notice or allegation of insolvency
under 5.01-2.

5.02    Insolvency Administration.

5.02-1    During Insolvency Administration, the Trustee shall hold the trust
fund for the benefit of the general creditors of the Company and make payments
only in accordance with 5.02-2. The Trustee shall continue the investment of the
trust fund in accordance with 2.02.

5.02-2    The Trustee shall make payments out of the trust fund in one (1) or
more of the following ways:

(a)    To general creditors in accordance with instructions from a court, or a
person appointed by a court, having jurisdiction over the Company’s condition of
insolvency;

(b)    To Plan participants and beneficiaries in accordance with such
instructions; or

(c)    In payment of its own fees or expenses.

5.02-3    The Trustee shall be a secured creditor with a priority claim to the
trust fund with respect to its own fees and expenses.

5.03    Termination of Insolvency Administration.

5.03-1    Insolvency Administration shall terminate when the Trustee determines
that the Company:

(a) Is not Insolvent, in response to a notice or allegation of insolvency under
5.01-2; or

 

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(b)    Has ceased to be Insolvent.

5.03-2    Upon termination of Insolvency Administration under 5.03-1, the trust
fund shall continue to be held for the benefit of the participants in the Plans.
Benefit payments due during the period of Insolvency Administration shall be
made as soon as practicable, together with interest from the due dates at the
following rates:

(a)    For the DDCP, the rate credited on the participant’s account under the
DDCP.

(b)    For the Retirement Bylaw, a rate equal to the interest rate fixed by the
Pension Benefit Guaranty Corporation for valuing immediate annuities in the
preceding month for terminated single employer plans.

5.04    Creditors’ Claims During Solvency.

5.04-1    During periods of Solvency, the Trustee shall hold the trust fund
exclusively to pay benefits and fees and expenses until all have been paid.
Creditors of the Company shall not be paid during Solvency from the trust fund,
which may not be seized by or subjected to the claims of such creditors in any
way.

5.04-2    A period of “Solvency” is any period not covered by 5.02.

ARTICLE VI

Successor Trustees

6.01    Resignation and Removal.

6.01-1    The Trustee may resign at any time by notice to the Committee, which
shall be effective in sixty (60) days unless the Committee and the Trustee agree
otherwise.

6.01-2    The Trustee may be removed by the Committee on sixty (60) days’ notice
or shorter notice accepted by the Trustee.

6.01-3    When resignation or removal is effective, the Trustee shall begin
transfer of assets to the successor Trustee immediately. The transfer shall be
completed within sixty (60) days, unless the Committee extends the time limit.

6.01-4    If the Trustee resigns or is removed, the Committee shall appoint a
successor by the effective date of resignation or removal under 6.01-1 or
6.01-2. If no such appointment has been made, the Trustee may apply to a court
of competent jurisdiction for appointment of a successor or for instructions.
All expenses of the Trustee in connection with the proceeding shall be allowed
as administrative expenses of the trust.

 

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6.02    Appointment of Successor.

6.02-1    The Committee may appoint any bank or trust company that has total
assets in excess of $5 million as a successor to replace the Trustee upon
resignation or removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of the
former Trustee including ownership rights in the trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by the
Committee or the successor Trustee to evidence the transfer.

6.02-2    The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing trust assets, subject to
Article II. The successor Trustee shall not be responsible for and the Company
shall indemnify and defend the successor Trustee from any claim or liability
because of any action or inaction of any prior Trustee or any other past event,
any existing condition or any existing assets.

6.03    Accountings; Continuity.

6.03-1    A Trustee who resigns or is removed shall submit a final accounting to
the Committee as soon as practicable. The accounting shall be received and
settled as provided in 3.04 for regular accountings.

6.03-2    No resignation or removal of the Trustee or change in identity of the
Trustee for any reason shall cause a termination of the Plans or this trust.

ARTICLE VII

General Provisions

7.01    Interests Not Assignable.

7.01-1    The interest of a participant in the trust fund may not be assigned,
seized by legal process, transferred or subjected to the claims of the
participant’s creditors in any way.

7.01-2    The Company may not create a security interest in the trust fund in
favor of any of its creditors. The Trustee shall not make payments from the
trust fund of any amounts to creditors of the Company who are not Plan
participants, except as provided in 5.02.

7.01-3    The participants shall have no interest in the assets of the trust
fund beyond the right to receive payment of Plan benefits and reimbursement of
expenses from such assets subject to the instructions for Insolvency
Administration referred to in 5.02-2. During Insolvency Administration the
participants’ rights to trust assets shall not be superior to those of any other
general creditor of the Company.

7.02    Amendment.

The Company and the Trustee may amend this trust at any time by a written
instrument executed by both parties and with the Written Consent of
Participants. Notwithstanding the foregoing, any amendment may be made by
written agreement of the Company and the Trustee without the Written Consent of
Participants if such amendment will not have a material adverse effect on the
rights of any Participant hereunder or is necessary to comply with any laws,
regulations or other legal requirements.

 

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7.03    Applicable Law.

This trust shall be construed according to the laws of Oregon except as
preempted by federal law.

7.04    Agreement Binding on All Parties.

This agreement shall be binding upon the heirs, personal representatives,
successors and assigns of any and all present and future parties. The term
successors as used herein in respect of Parent or the Company shall include any
corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise, acquire all or substantially all of the
business and assets of Parent or the Company, and successors of any such
corporation or other business entity.

7.05    Notices and Directions.

Any notice or direction under this trust shall be in writing and shall be
effective when actually delivered or, if mailed, when deposited postpaid as
first-class mail. Mail to a party shall be directed to the address stated in
this trust or to such other address as either party may specify by notice to the
other party. Notices to the Committee shall be sent to the address of the
Company.

7.06    No Implied Duties.

The duties of the Trustee shall be those stated in this Trust, and no other
duties shall be implied.

 

Company:

    NORTHWEST NATURAL GAS COMPANY     By:   /s/ DAVID H. ANDERSON     Its:  
Chief Executive Officer     Executed: October 1, 2018

Trustee:

    WELLS FARGO BANK, NATIONAL ASSOCIATION     By:   /s/ Alan C. Frazier    
Its:   Senior Vice President     Executed: September 27, 2018

 

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EXHIBIT A

Assumptions and Methodology for

Calculation Required Under 2.01-3 and 2.03

 

1.

The liability will be calculated using two (2) different assumptions as to when
the director terminates service on the Board and receives a change of control
benefit:

 

  a)

As of the date of the Triggering Event.

 

  b)

Twenty-four (24) months after the date of the Triggering Event assuming future
compensation continues at current levels.

The benefit liability will be the greater of the liabilities calculated in
accordance with a) and b) above.

 

2.

Calculations will be based upon the most valuable optional form of payment
available to the participant.

 

3.

The benefit liability is equal to the present value of benefits discounted to
the trigger date at the Applicable Interest Rate determined under Code Sec.
417(e)(3) and the regulations thereunder. The Applicable Interest Rate shall be
determined on each December 31 and shall apply to all calculations in the next
calendar year.

 

4.

No mortality is assumed prior to the commencement of benefits. Future mortality
is assumed to occur in accordance with the mortality table used for purposes of
Code Sec. 417(e)(3), as set forth in Rev. Rul. 2001-62 (2001-2 C.B. 632) and
subsequent rulings.

 

5.

Where left undefined by 1. through 4. above, calculations will be performed in
accordance with generally accepted actuarial principles.

 

6.

For the purposes of projecting deferral account balances, the interest crediting
rate on all DDCP Cash Accounts is assumed to remain at the Applicable Interest
Rate determined under 3. above.