Exhibit
10.6


AGREEMENT
REGARDING


SUPPLEMENTAL RETIREMENT
BENEFITS


 


This agreement is being entered into between
Rick Davis (“Executive”) and Cascade Natural Gas Corporation (“Cascade”) to
document their agreement with respect to supplemental retirement benefits.


 


A.            Executive and Cascade entered into
an employment agreement date June 16, 2005 (the “Employment Agreement”).


 


B.            Section 4.4 of the Employment
Agreement provides that Cascade will provide Executive the opportunity to
participate in a supplemental deferred compensation plan that will be
anticipated, using reasonable assumptions concerning the rate of investment
returns, to provide Executive with replacement pay at retirement equal to 55
percent of his average base salary  at
normal retirement age 65 with 15 years of service, under the Employment
Agreement, after taking into account Social Security retirement benefits and
any retirement benefits payable to Executive under any qualified or
nonqualified retirement plan sponsored by Cascade or by Executive’s prior
employer.


 


C.            Cascade is adopting a new executive
deferred compensation plan that will credit to an account for Executive a net
contribution amount as well as a rate of investment return based on elections
made by Executive.


 


D.            The new plan will not provide a
guaranteed level of retirement income because it will provide benefits based on
the rate at which net contribution amounts and investment earnings are credited
to Executive’s account and, 
as a result, it is possible that the value of the account may
provide more or less than 55 percent of Executive’s average base salary.


 


E.             Actuaries retained by Cascade have
produced the attached schedule of net contribution amounts to be credited
to Executive’s account that will reasonably be expected, based on the
assumptions set out in the schedule, to provide the targeted rate of
replacement pay.


 


In consideration of the premises, the parties
agree as follows:


 


1.             Net contributions to the account
under the deferred compensation plan that are in accordance with the attached schedule will
satisfy Cascade’s obligations to Executive under section 4.4 of the
Employment Agreement.


 


2.             Cascade shall have no liability to
Executive under section 4.4 of the Employment Agreement other than to
credit contributions to the Executive’s account under the plan at the rates set
forth in the attached schedule during the term of Executive’s employment
with Cascade.


 


	
  CASCADE NATURAL GAS CORPORATION

  	
  EXECUTIVE

  
	
   

  	
   

  
	
  By 

  	
   /s/ Larry L. Pinnt

  	
   

  	
  /s/ Rick Davis

  	
   

  
	
  Title 

  	
  Chairman

  	
   

  	
   

  
	
   

  	
   

  
	
  Executed: January 11, 2006

  	
  Executed: January 11, 2006

  
						



 





















 


Cascade Natural Gas


Executive
Defined Contribution Plan
Benefit Projection


 


	
  Input Data for Rick Davis as of
  October 1, 2005

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hire Age:

  	
   

  	
  52

  	
   

  	
  Current Annual Base Pay (excluding bonus):

  	
   

  	
  $

  	
  240,000

  	
   

  
	
  Current Age:

  	
   

  	
  52

  	
   

  	
  Future Pay Increases:

  	
   

  	
  4.00

  	
  %

  
	
  Retirement Age:

  	
   

  	
  65

  	
   

  	
  Pre-Ret DC Investment Return:

  	
   

  	
  6.50

  	
  %(1)

  
	
  Service at Retirement:

  	
   

  	
  13

  	
   

  	
  Post-Ret DC Investment Return:

  	
   

  	
  5.50

  	
  %(2)

  
	
  Assumed Bonus %:

  	
   

  	
  24.5

  	
  %(4)

  	
  401(k) Annual Deferral (% of Qualified Pay):

  	
   

  	
  6.00

  	
  %(3)

  
	
  Corporate Tax Rate:

  	
   

  	
  36.5

  	
  %

  	
  Assumed Future Profit Sharing Contribution:

  	
   

  	
  2.00

  	
  %

  



 


Benefit Development for Rick
Davis


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Qualified

  	
   

  	
  Prior Er

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Plan

  	
   

  	
  Qual DC

  	
   

  	
  CNG

  	
   

  	
   

  	
   

  	
  CNG

  	
   

  	
  CNG

  	
   

  	
   

  	
   

  
	
  BOY

  	
   

  	
  Total

  	
   

  	
   

  	
   

  	
  Limited

  	
   

  	
  (now IRA)

  	
   

  	
  Match

  	
   

  	
  CNG
  Match

  	
   

  	
  Other DC

  	
   

  	
  Other DC

  	
   

  	
  BOY

  	
   

  
	
  Age

  	
   

  	
  Comp

  	
   

  	
  Base Pay

  	
   

  	
  Comp

  	
   

  	
  Acct EOY

  	
   

  	
  Cont.

  	
   

  	
  Acct EOY

  	
   

  	
  Cont.

  	
   

  	
  Acct EOY

  	
   

  	
  Service

  	
   

  
	
  51

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  172,909

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52

  	
   

  	
  298,800

  	
   

  	
  240,000

  	
   

  	
  210,000

  	
   

  	
  184,148

  	
   

  	
  0

  	
  (6)

  	
  0

  	
   

  	
  0

  	
  (6)

  	
  0

  	
   

  	
  0.25

  	
   

  
	
  53

  	
   

  	
  310,752

  	
   

  	
  249,600

  	
   

  	
  215,000

  	
   

  	
  196,118

  	
   

  	
  6,450

  	
   

  	
  6,656

  	
   

  	
  12,900

  	
   

  	
  13,313

  	
   

  	
  1.25

  	
   

  
	
  54

  	
   

  	
  323,182

  	
   

  	
  259,584

  	
   

  	
  220,000

  	
   

  	
  208,866

  	
   

  	
  6,600

  	
   

  	
  13,900

  	
   

  	
  13,200

  	
   

  	
  27,800

  	
   

  	
  2.25

  	
   

  
	
  55

  	
   

  	
  336,109

  	
   

  	
  269,967

  	
   

  	
  225,000

  	
   

  	
  222,442

  	
   

  	
  6,750

  	
   

  	
  21,770

  	
   

  	
  13,500

  	
   

  	
  43,539

  	
   

  	
  3.25

  	
   

  
	
  56

  	
   

  	
  349,554

  	
   

  	
  280,766

  	
   

  	
  235,000

  	
   

  	
  236,901

  	
   

  	
  7,050

  	
   

  	
  30,460

  	
   

  	
  14,100

  	
   

  	
  60,920

  	
   

  	
  4.25

  	
   

  
	
  57

  	
   

  	
  363,536

  	
   

  	
  291,997

  	
   

  	
  240,000

  	
   

  	
  252,299

  	
   

  	
  7,200

  	
   

  	
  39,870

  	
   

  	
  14,400

  	
   

  	
  79,741

  	
   

  	
  5.25

  	
   

  
	
  58

  	
   

  	
  378,077

  	
   

  	
  303,677

  	
   

  	
  245,000

  	
   

  	
  268,699

  	
   

  	
  7,350

  	
   

  	
  50,047

  	
   

  	
  14,700

  	
   

  	
  100,094

  	
   

  	
  6.25

  	
   

  
	
  59

  	
   

  	
  393,200

  	
   

  	
  315,824

  	
   

  	
  250,000

  	
   

  	
  286,164

  	
   

  	
  7,500

  	
   

  	
  61,040

  	
   

  	
  15,000

  	
   

  	
  122,080

  	
   

  	
  7.25

  	
   

  
	
  60

  	
   

  	
  408,928

  	
   

  	
  328,457

  	
   

  	
  255,000

  	
   

  	
  304,765

  	
   

  	
  7,650

  	
   

  	
  72,902

  	
   

  	
  15,300

  	
   

  	
  145,805

  	
   

  	
  8.25

  	
   

  
	
  61

  	
   

  	
  425,286

  	
   

  	
  341,595

  	
   

  	
  265,000

  	
   

  	
  324,575

  	
   

  	
  7,950

  	
   

  	
  85,845

  	
   

  	
  15,900

  	
   

  	
  171,690

  	
   

  	
  9.25

  	
   

  
	
  62

  	
   

  	
  442,297

  	
   

  	
  355,259

  	
   

  	
  270,000

  	
   

  	
  345,672

  	
   

  	
  8,100

  	
   

  	
  99,784

  	
   

  	
  16,200

  	
   

  	
  199,569

  	
   

  	
  10.25

  	
   

  
	
  63

  	
   

  	
  459,989

  	
   

  	
  369,469

  	
   

  	
  275,000

  	
   

  	
  368,141

  	
   

  	
  8,250

  	
   

  	
  114,784

  	
   

  	
  16,500

  	
   

  	
  229,568

  	
   

  	
  11.25

  	
   

  
	
  64

  	
   

  	
  478,388

  	
   

  	
  384,248

  	
   

  	
  285,000

  	
   

  	
  392,070

  	
   

  	
  8,550

  	
   

  	
  131,069

  	
   

  	
  17,100

  	
   

  	
  262,137

  	
   

  	
  12.25

  	
   

  



 


	
   

  	
   

  	
   

  	
   

  	
  Exec

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Gross

  	
   

  	
  Exec

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Corp Tax
  on

  	
   

  	
  Total
  Cost of 

  	
   

  
	
  BOY

  	
   

  	
  Total

  	
   

  	
  Cont

  	
   

  	
  Gross

  	
   

  	
  Exec Net

  	
   

  	
  Exec
  Acct

  	
   

  	
  Exec Inv

  	
   

  	
  Exec
  Plan

  	
   

  
	
  Age

  	
   

  	
  Comp

  	
   

  	
  Percent

  	
   

  	
  Cont.

  	
   

  	
  Cont.(5)

  	
   

  	
  EOY

  	
   

  	
  Earnings

  	
   

  	
  (Cont. +
  Tax)

  	
   

  
	
  51

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52

  	
   

  	
  298,800

  	
   

  	
  14,00

  	
  %

  	
  33,600

  	
   

  	
  33,600

  	
  (8)

  	
  34,675

  	
   

  	
  392

  	
   

  	
  33,992

  	
   

  
	
  53

  	
   

  	
  310,752

  	
   

  	
  14,00

  	
  %

  	
  34,944

  	
   

  	
  15,594

  	
   

  	
  53,021

  	
   

  	
  1,005

  	
   

  	
  16,599

  	
   

  
	
  54

  	
   

  	
  323,182

  	
   

  	
  14,00

  	
  %

  	
  36,342

  	
   

  	
  16,542

  	
   

  	
  73,539

  	
   

  	
  1,451

  	
   

  	
  17,993

  	
   

  
	
  55

  	
   

  	
  336,109

  	
   

  	
  14.00

  	
  %

  	
  37,795

  	
   

  	
  17,545

  	
   

  	
  96,426

  	
   

  	
  1,950

  	
   

  	
  19,495

  	
   

  
	
  56

  	
   

  	
  349,554

  	
   

  	
  14.00

  	
  %

  	
  39,307

  	
   

  	
  18,157

  	
   

  	
  121,431

  	
   

  	
  2,500

  	
   

  	
  20,657

  	
   

  
	
  57

  	
   

  	
  363,536

  	
   

  	
  15.00

  	
  %

  	
  43,800

  	
   

  	
  22,200

  	
   

  	
  152,234

  	
   

  	
  3,140

  	
   

  	
  25,340

  	
   

  
	
  58

  	
   

  	
  378,077

  	
   

  	
  15.00

  	
  %

  	
  45,551

  	
   

  	
  23,501

  	
   

  	
  186,382

  	
   

  	
  3,886

  	
   

  	
  27,388

  	
   

  
	
  59

  	
   

  	
  393,200

  	
   

  	
  15.00

  	
  %

  	
  47,374

  	
   

  	
  24,874

  	
   

  	
  224,166

  	
   

  	
  4,712

  	
   

  	
  29,586

  	
   

  
	
  60

  	
   

  	
  408,928

  	
   

  	
  15.00

  	
  %

  	
  49,268

  	
   

  	
  26,318

  	
   

  	
  265,898

  	
   

  	
  5,626

  	
   

  	
  31,944

  	
   

  
	
  61

  	
   

  	
  425,286

  	
   

  	
  15.00

  	
  %

  	
  51,239

  	
   

  	
  27,389

  	
   

  	
  311,446

  	
   

  	
  6,628

  	
   

  	
  34,017

  	
   

  
	
  62

  	
   

  	
  442,297

  	
   

  	
  16.00

  	
  %

  	
  56,841

  	
   

  	
  32,541

  	
   

  	
  365,273

  	
   

  	
  7,769

  	
   

  	
  40,310

  	
   

  
	
  63

  	
   

  	
  459,989

  	
   

  	
  16.00

  	
  %

  	
  59,115

  	
   

  	
  34,365

  	
   

  	
  424,480

  	
   

  	
  9,067

  	
   

  	
  43,432

  	
   

  
	
  64

  	
   

  	
  478,388

  	
   

  	
  16.00

  	
  %

  	
  61,480

  	
   

  	
  35,830

  	
   

  	
  489,047

  	
   

  	
  10,489

  	
   

  	
  46,319

  	
   

  



 










	
  (1) 

  	
   

  	
  a. Size of fund will limit
  investment options.

  
	
   

  	
   

  	
  b. Size of fund will result
  in higher fees than company pension plan.

  
	
   

  	
   

  	
  c.
  8% pension plan assumption is relatively
  aggressive today.

  
	
   

  	
   

  	
  d. Company has risk if
  defined benefit pension plan fails to meet the 8% assumption.

  
	
  (2) Annuity purchase
  interest assumption. Represents fixed Income return rate.

  
	
  (3) Assumes full company match. No employee contributions are
  counted toward the 47% of pay target. 

  (4) Short term bonus assumption is approximately half of target. 

  (5) Plan is graduated for larger contributions in later years. 

  (6) First year exclusion from Cascade qualified plans.

  



 





















 


Cascade Natural Gas


Executive
Defined Contribution Plan Benefit Projection


 


	
   

  	
   

  	
  Benefit

  	
   

  	
  Pct of Final 3yr Avg

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Age 65 Benefit Calculation for Rick Davis

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Target Replacement Ratio Under Non
  Qualified Plan at Age 65

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) Final 3 Year Average Base Salary

  	
   

  	
  369,658

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2) 47% x Final
  3 Year Average Base Salary

  	
   

  	
  173,739

  	
   

  	
  47.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Elements to Reach Target

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Social Security Benefit

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) Projected Social Security benefit
  beginning at age 65

  	
   

  	
  36,665

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2) One half of Projected Social Security benefit

  	
   

  	
  18,332

  	
   

  	
  5.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Qualified Plan Benefit

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) CNG Match Account

  	
   

  	
  131,069

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2) CNG Other DC Accounts

  	
   

  	
  262,137

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3) Annuity Factor
  at age 65

  	
   

  	
  11.31327

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4) CNG Qualified Plans annual annuity at
  age 65

  	
   

  	
  34,756

  	
   

  	
  9.4

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Prior Employer Qualified Benefits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) Weyerhaueser single
  life annuity at age 65

  	
   

  	
  32,488

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2) DC plan account, converted to single
  life annuity at age 65

  	
   

  	
  34,656

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3) Total annuity from prior employer
  qualified plans

  	
   

  	
  67,144

  	
   

  	
  18.2

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Prior Employer Non-Qualified Benefits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) Weyerhaueser
  non-qualified single life annuity at age 65

  	
   

  	
  9,890

  	
   

  	
  2.7

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Target Executive DC Benefit Payable in
  Order to Meet Retirement Objective at Age 65

  	
   

  	
  43,617

  	
   

  	
  11.8

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Proposed Executive DC Plan Design Results

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1) Executive DC Plan account balance at age
  65

  	
   

  	
  489,047

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2) Executive DC
  Plan annual annuity at age 65

  	
   

  	
  43,228

  	
   

  	
  11.7

  	
  %