Exhibit 10.1


 


SECOND AMENDMENT TO

CASCADE NATURAL GAS CORPORATION

1998 STOCK INCENTIVE PLAN


This
Second Amendment to the 1998 Stock Incentive Plan (“Second Amendment”) is dated
February 17, 2006, and amends that certain 1998 Stock Incentive Plan (the
“Plan”) of Cascade Natural Gas Corporation (the “Corporation”). Capitalized
terms not otherwise defined in this Second Amendment shall have the meanings
set forth in the Plan.


AMENDMENTS


Pursuant
to its authority under Article 10 of the Plan, the Board of Directors of
the Corporation hereby amends the Plan as follows:


1.      Purpose.   Section 1.2 of the Plan
is amended in its entirety to read as follows:


“1.2   Purpose.   The purpose of the Plan is to promote and advance the
interests of shareholders by enabling Corporation to attract, retain, and
reward key employees and directors of Corporation and its subsidiaries. It is
also intended to strengthen the mutuality of interests between Corporation’s
shareholders and its employees and directors. The Plan is designed to serve
these purposes by offering stock options and other equity-based incentive
awards, thereby providing a proprietary interest in pursuing the long-term
growth, profitability, and financial success of Corporation and increasing
shareholder value.”


2.      Definition of Participant.   The
definition of “Participant” in Section 2.1 of the Plan is amended in its
entirety to read as follows:


“Participant” means an employee or director of
Corporation or a Subsidiary, who is granted an Award under the Plan.”


3.      Eligibility.   Article 5 of the Plan
is amended in its entirety to read as follows:


“ARTICLE 5

ELIGIBILITY


Officers,
other key employees, and directors of Corporation and its Subsidiaries
(including employees who may also be directors of Corporation or a Subsidiary) who,
in the Committee’s judgment, are or will be contributors to the long-term
success of Corporation will be eligible to receive Awards under the Plan.”


4.      Types of Awards.   Section 6.1 of
the Plan is amended in its entirety to read as follows:


“ARTICLE 6

AWARDS


6.1   Types of Awards.   The types of Awards that may be granted under the
Plan are:


(a)    Options governed by Exhibit A of the
Plan;


(b)    Stock Appreciation Rights governed by
Exhibit B of the Plan;


(c)    Restricted Awards governed by Exhibit C
of the Plan;


(d)    Performance Awards governed by
Exhibit D of the Plan;


(e)    Other Stock-Based Awards or
combination awards governed by Exhibit E of the Plan; and


(f)     Stock awards to directors under the
Director Stock Award Plan (as amended from time to time) set forth in
Exhibit F of the Plan; provided, however, that such Awards to directors
shall not be subject to the provisions of Sections 6.2 through 6.8 of this
Plan, and such Awards to directors shall be 


 


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governed
by the provisions of the Director Stock Award Plan set forth in Exhibit F
which shall take precedence over any conflicting provisions of this Plan.


In
the discretion of the Committee, any Award may be granted alone, in addition
to, or in tandem with other Awards under the Plan.”


5.      Exhibit F.   The 2000 Directors
Stock Award Plan (as awarded) is incorporated as Exhibit F of the Plan.


6.      Approvals.   This
Second Amendment was duly approved by the Board of Directors of the Corporation
on November 14, 2005, and was approved by the Shareholders of the
Corporation on February 17, 2006.


7.      Other Provisions.   Except as expressly
amended by this Amendment, the Plan shall remain in full force and effect.


 


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