dex10k.htm


    NORTHWEST
NATURAL GAS COMPANY

    


    DEFERRED COMPENSATION PLAN FOR
DIRECTORS AND EXECUTIVES

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EFFECTIVE
JANUARY 1, 2005

    


    RESTATED
EFFECTIVE JANUARY 1, 2010



    TABLE OF CONTENTS

    


    
      	 	 	 Page
	 1	 Purpose-Effective
      Date	 1
	 2.	 Eligibility	 1
	 3.	 Deferral
      Elections	 1
	 4.	 Company
      Contributions for Executives	 3
	 5.	 FICA
      Withholding on Executives	 3
	 6.	 Accounts	 4
	 7.	 Payment of
      Benfits	 6
	 8.	 Supplemental
      Retirement Benefit	 9
	 9.	 Administration	 11
	 10.	 Claims
      Procedure	 12
	 11.	 Amendment and
      Termination of the Plan	 12
	 12.	 Miscellaneous	 13




    
    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    NORTHWEST NATURAL GAS
COMPANY

    


    DEFERRED COMPENSATION PLAN FOR
DIRECTORS AND EXECUTIVES

    


    


    1. Purpose; Effective Date;
Restatement.  The Board of Directors (the “Board”) of Northwest
Natural Gas Company (the “Company”) adopts this Deferred Compensation Plan for
Directors and Executives (the “Plan”) for the purpose of providing an unfunded
nonqualified deferred compensation plan for directors and a select group of top
management personnel.  The Plan was effective as of January 1, 2005,
although initial deferral elections under the Plan could have been submitted at
any time after November 30, 2004.  The Plan was previously restated
effective January 1, 2007 and December 20, 2007, and was again restated
effective as of February 28, 2008, except that the changes to Section 6(b) made
by that restatement do not apply to deferral allocations made in Participation
Agreements that were irrevocable on or prior to December 31,
2006.  The Plan is further amended by this restatement on December __,
2009 effective as of January 1, 2010.

     

    2. Eligibility.  Persons
eligible to defer compensation under the Plan shall consist of (a) all directors
of the Company (“Directors”), and (b) a select group of management or highly
compensated employees of the Company, which shall consist of all executive
officers of the Company and such other employees of the Company as may be
designated in writing by the Chief Executive Officer of the Company as eligible
to defer compensation under the Plan for the applicable calendar year
(“Executives”).  Any person who is both a Director and an Executive at
any time shall be considered an Executive, and not a Director, at such
time.  For all purposes of this Plan, a person who is an employee of a
subsidiary of the Company shall be considered an employee of the
Company.

     

    3. Deferral
Elections.  A Director or Executive may elect to defer
compensation under the Plan by submitting a “Participation Agreement” to the
Company on a form specified by the Company no later than the applicable deferral
deadline.  The minimum annual aggregate deferral for all forms of
compensation specified in a Participation Agreement shall be
$2,000.  Any Director or Executive who has submitted a Participation
Agreement is hereafter referred to as a “Participant.”  A
Participation Agreement submitted by a Participant shall automatically continue
from year to year and shall be irrevocable with respect to compensation once the
deferral deadline for that compensation has passed, but the Participant may
modify or terminate a Participation Agreement for compensation payable in any
year by submitting a revised Participation Agreement or otherwise giving written
notice to the Company at any time on or prior to the deferral deadline for that
compensation.

     

    (a) Elections by
Directors.

     

    (i) Fees.  A
Director may elect to defer receipt of all or any whole percentage of the annual
retainer, meeting fees and any other cash fees payable for service as a director
(“Fees”).  The deferral deadline for an election to defer Fees for
services performed in any calendar year shall be the last day of the prior
calendar year.

     

    
      
        
        

      

      
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    (ii) NEDSCP
Shares.  A Director may elect to defer receipt of all or any
whole percentage of the unvested shares (“NEDSCP Shares”) of common stock of the
Company (“Common Stock”) awarded to the Director under the Company’s
Non-Employee Directors Stock Compensation Plan (“NEDSCP”).  The
deferral deadline for an election to defer NEDSCP Shares scheduled to vest in
any calendar year shall be the last day of the prior calendar year, except that
the deferral deadline for an election to defer NEDSCP Shares scheduled to vest
on January 1 in any calendar year shall be the last day of the second preceding
calendar year.  No deferral shall be allowed of NEDSCP Shares as to
which a Director has made an election under Section 83(b) of the Internal
Revenue Code.

     

    (b) Elections by
Executives.

     

    (i) Salary.  An
Executive may elect to defer receipt of any whole percentage (up to a maximum of
50 percent) of the Executive’s base annual salary, specifically excluding other
forms of compensation referred to below as well as commissions and any non-cash
compensation (“Salary”).  The deferral deadline for an election to
defer Salary for services performed in any calendar year shall be the last day
of the prior calendar year.

     

    (ii) Bonus.  An
Executive may elect to defer receipt of all or any whole percentage of the
Executive’s annual bonus payable under the Company’s Executive Annual Incentive
Plan or other similar annual incentive plan (“Bonus”).  Payments under
the Key Goals program shall not be considered Bonus and shall not be eligible
for deferral under the Plan.  The deferral deadline for an election to
defer Bonus earned with respect to the Executive’s or the Company’s performance
in any calendar year shall be the last day of the prior calendar
year.

     

    (iii) LTIP
Compensation.  An Executive may elect to defer receipt of all
or any whole percentage of compensation payable to the Executive pursuant to an
award under the Company’s Long Term Incentive Plan (“LTIP Compensation”);
provided, however, that no election shall be permitted after December 31, 2008
to defer receipt of an award that becomes payable or vests based solely on
continued service to the Company (“Time-Based Award”).  The deferral
deadline for an election to defer any portion of a Time-Based Award shall be the
date that is 12 months prior to the date on which such portion of the Time-Based
Award is scheduled to no longer be subject to a substantial risk of
forfeiture.  The deferral deadline for an election to defer LTIP
Compensation that becomes payable or vests based on satisfaction of performance
conditions over a performance period (“Performance Award”) shall be the last day
of the calendar year prior to the commencement of the performance period;
provided, however, that for any Performance Award for which the performance
period ends on or before December 31, 2008, the deferral deadline shall be the
last day of the calendar year prior to the last year of the performance period,
and for any Performance Award for which the performance period ends on December
31, 2009 or December 31, 2010, the deferral deadline shall be December 31,
2008.

     

    (c) New Directors and
Executives.  A person who first becomes a Director or Executive
during a calendar year may elect to defer any of the types of compensation
referred to in paragraphs (a) and (b) above that is payable solely for services
performed after submission of the Participation Agreement, subject to all of the
provisions of paragraphs (a) and (b), except that the deferral deadline for any
such election shall be 30 days after the date the person becomes eligible under
the Plan.

     

    
      
        
        

      

      
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    4. Company Contributions for
Executives.

     

    (a) Matching
Contributions.  The
Company shall credit a “Matching Contribution” to a participating Executive’s
Cash Account (as defined below) each year based on the Executive’s total Salary
and Bonus and the amount of Salary and Bonus deferred under the Plan by the
Executive during that year; provided, however, that no Matching Contribution
shall be made with respect to any Salary or Bonus deferred under the Plan at a
time when the Executive is not a participant in the Company’s Retirement K
Savings Plan.  The amount of the Matching Contribution shall be equal
to the excess of (i) the lesser of (1) sixty percent (60%) of the total amount
of Executive’s Salary and Bonus deferred under the Plan and the Retirement K
Savings Plan during the calendar year, or (2) three and six-tenths percent
(3.6%) of the Executive’s total Salary and Bonus during such calendar year, over
(ii) the amount the Company would have contributed for such calendar year as a
matching contribution for the Executive under the Retirement K Savings Plan if
the Executive had deferred into the Retirement K Savings Plan the maximum amount
of compensation permitted under that plan and applicable tax law for the
year.  Matching Contributions shall be credited to the Executive’s
Account no later than January 31 of the year immediately following the calendar
year in which the Matching Contribution was earned, and shall be fully vested at
all times.

     

    (b) Supplemental
Contributions.  For any Executive who is hired after December
31, 2006 and is therefore eligible to receive non-contributory employer
contributions under Section 4.05 of the Retirement K Savings Plan, the Company
shall credit a “Supplemental Contribution” to the Executive’s Cash Account each
year in an amount equal to five percent (5%) of the greater of (i) the
Executive’s Salary and Bonus deferred under the Plan during the calendar year,
or (ii) the excess, if any, of the Executive’s total Salary and Bonus during
such calendar year over the limit provided by Section 401(a)(17) of the Internal
Revenue Code on compensation counted under the Retirement K Savings Plan for
that year.  A Supplemental Contribution shall be credited for an
Executive whose total Salary and Bonus exceeds the Section 401(a)(17) limit
whether or not the Executive defers compensation under the
Plan.  Supplemental Contributions shall be credited to the Executive’s
Account no later than January 31 of the year immediately following the calendar
year in which the Supplemental Contribution was earned.  Supplemental
Contributions for an Executive shall be vested if non-contributory employer
contributions for the Executive made for the same year would be vested under the
terms of the Retirement K Savings Plan.  Upon termination
of an Executive’s employment, any unvested Supplemental Contributions, as well
as any dividends or interest credited thereon, shall be forfeited and deducted
from the Executive’s Accounts.

     

    5. FICA Withholding on
Executives.  Under current law, all compensation, Matching
Contributions and vested Supplemental Contributions credited to an Executive’s
Accounts will be treated as wages subject to FICA tax, and the Company will be
required to withhold FICA tax from the Executive.  The amount required
to be withheld for FICA tax with respect to any amount of deferred compensation
or related Matching Contribution or Supplemental Contribution shall be withheld
from the non-deferred portion, if any, of the same compensation; provided,
however, that if the non-deferred portion of the compensation is insufficient to
cover the full required withholding, the Company shall withhold the remaining
amount from other non-deferred compensation payable to the Executive unless the
Executive otherwise pays such remaining amount to the Company.

     

    
      
        
        

      

      
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    6. Accounts.

     

    (a) Accounts.  The
Company shall establish on its books one or two separate accounts (individually,
an “Account” and collectively, the “Accounts”) for each
Participant:  a Company Stock Account, which shall be denominated in
shares of Common Stock, including fractional shares, and a Cash Account, which
shall be denominated in U.S. dollars.

     

    (b) Allocation of Deferrals
Among Accounts.  The number of NEDSCP Shares deferred by a
Director shall be credited to the Company Stock Account.  All LTIP
Compensation payable in shares of Common Stock that is deferred by an Executive
shall be credited to the Company Stock Account.  All other
compensation deferred by a Participant shall be credited to the Cash
Account.

     

    (c) Crediting of
Deferrals.  The credits for deferred Salary, Bonus and Fees
shall be entered on the Company’s books of account at the time that such
compensation would otherwise be paid.  The credit for deferred NEDSCP
Shares shall be entered on the Company’s books of account as soon as practicable
after January 1 of the first year in which such deferral is
irrevocable.  The credit for any LTIP Compensation deferred by an
Executive consisting of shares of Common Stock issued subject to forfeiture if
vesting conditions are not satisfied (“Unvested LTIP Shares”) shall be entered
on the Company’s books of account as soon as practicable after such deferral is
irrevocable.  The credit for any other deferred LTIP Compensation
shall be entered on the Company’s books of account at the time that such
compensation would otherwise be paid.

     

    (d) Transfers Among
Accounts.  Participants may elect in writing to transfer
amounts previously credited to the Cash Account to the Company Stock Account,
but shall be limited to four such transfers per calendar year.  No
transfers may be made out of a Company Stock Account unless otherwise permitted
under Section 6(i)(iv).  The Committee may require that designated
fees be deducted from amounts transferred to or from Company Stock
Accounts.

     

    (e) Valuation of Stock; Dividend
Credits.  Any dollar amount transferred or credited to a
Company Stock Account shall be deemed to increase the number of shares of Common
Stock recorded as the balance of that Account based on the closing market price
of the Common Stock reported for the day of the transfer or credit or, if such
day is not a trading day, the next trading day.  As of each date for
payment of dividends on the Common Stock, each Company Stock Account shall be
credited with the amount of dividends that would be paid on the number of shares
recorded as the balance of that Account as of the record date for such
dividend.

     

    (f) Cash Account
Interest.  Interest shall be credited to the Cash Account of
each Participant as of the last day of each calendar quarter.  The
rate of interest to be applied at the end of each calendar quarter shall be the
quarterly equivalent of an annual yield that is equal to the annual yield on
Moody’s Average Corporate Bond Yield for the preceding quarter, as published by
the Moody’s Investors Service, Inc. (or any successor thereto), or if such index
is no longer published, a substantially similar index selected by the
Board.  Interest shall be calculated for each calendar quarter based
upon the average daily balance of the Participant’s Cash Account during the
quarter.

     

    
      
        
        

      

      
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    (g) Forfeitures.  If
any NEDSCP Shares deferred by a Director under this Plan are forfeited under the
terms of the NEDSCP, the Director’s Company Stock Account shall be reduced by
the number of shares so forfeited.  If any Unvested LTIP Shares
deferred by an Executive under this Plan are forfeited under the terms of the
Executive’s applicable award agreement, the Executive’s Company Stock Account
shall be reduced by the number of shares so forfeited.

     

    (h) Statement of
Account.  At the end of each calendar quarter, a report shall
be issued by the Company to each Participant setting forth the balances of the
Participant’s Accounts under the Plan.

     

    (i) Effect of Corporate
Transaction on Company Stock Accounts.  At the time of
consummation of a Corporate Transaction (as defined below), if any, the amount
credited to a Participant’s Company Stock Account shall be converted into a
credit for cash or common stock of the acquiring company (“Acquiror Stock”)
based on the consideration received by shareholders of the Company in the
Corporate Transaction, as follows:

     

    (i) Stock
Transaction.  If holders of Common Stock receive Acquiror Stock
in the Corporate Transaction, then (1) the amount credited to each Participant’s
Company Stock Account shall be converted into a credit for the number of shares
of Acquiror Stock that the Participant would have received as a result of the
Corporate Transaction if the Participant had actually held the Common Stock
credited to his or her Company Stock Account immediately prior to the
consummation of the Corporate Transaction, and (2) Company Stock Accounts will
thereafter be denominated in shares of Acquiror Stock and ongoing deferrals into
Company Stock Accounts, if any, shall continue to be made in accordance with
outstanding deferral elections into the Company Stock Accounts as so
denominated.

     

    (ii) Cash or Other Property
Transaction.  If holders of Common Stock receive cash or other
property in the Corporate Transaction, then the amount credited to a
Participant’s Company Stock Account shall be transferred to the Participant’s
Cash Account and converted into a cash credit for the amount of cash or the
value of the property that the Participant would have received as a result of
the Corporate Transaction if the Participant had actually held the Common Stock
credited to his or her Company Stock Account immediately prior to the
consummation of the Corporate Transaction.

     

    (iii) Combination
Transaction.  If holders of Common Stock receive Acquiror Stock
and cash or other property in the Corporate Transaction, then (1) the amount
credited to each Participant’s Company Stock Account shall be converted in part
into a credit for Acquiror Stock under Section 6(i)(i) and in part into a credit
for cash under Section 6(i)(ii) in the same proportion as such consideration is
received by shareholders, and (2) ongoing deferrals into Company Stock Accounts,
if any, shall continue to be made in accordance with outstanding deferral
elections into Company Stock Accounts in accordance with Section
6(i)(i).

     

    
      
        
        

      

      
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    (iv) Election Following Stock
Transaction.  For a period of 12 months following the
consummation of any Corporate Transaction which results in Participants having
Company Stock Accounts denominated in Acquiror Stock, each Participant shall
have a one-time right to elect to transfer the entire amount in the
Participant’s Company Stock Account into the Participant’s Cash Account;
provided, however, that this election shall not be available if the Corporate
Transaction results in holders of Common Stock becoming holders of all of the
outstanding common stock of a parent corporation of the Company.  Such
election shall be made by written notice to the Company and shall be effective
on the date received by the Company.  If such an election is made, the
amount of cash to be credited to the Participant’s Cash Account shall be
determined by multiplying the number of shares of Acquiror Stock in the
Participant’s Company Stock Account by the closing market price of the Acquiror
Stock reported for the effective date of the election or, if such day is not a
trading day, the next trading day.

     

    (v) For
purposes of this Plan, a “Corporate Transaction” shall mean any of the
following:

     

    (1)           any
consolidation, merger or plan of share exchange involving the Company (a
“Merger”) pursuant to which shares of Common Stock would be converted into cash,
securities or other property;

     

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

     

    (3)           the
adoption of any plan or proposal for the liquidation or dissolution of the
Company.

     

    
       

    

    7. Payment of
Benefits.

     

    (a) Plan
Benefits.  The Company shall pay Plan benefits to each
Participant equal to the Participant’s Accounts.  Each Participation
Agreement shall include an election by the Participant as to the term of benefit
payments with respect to amounts deferred under the Participation Agreement, and
Participation Agreements from Executives shall also include an election as to
the commencement of benefit payments.  The payment elections in a
Participation Agreement shall also apply to Matching Contributions and
Supplemental Contributions credited as a result of Salary or Bonus during the
deferral period covered by the Participation Agreement, and shall also apply to
any dividends or interest credited with respect to amounts deferred under the
Participation Agreement and such Matching Contributions and Supplemental
Contributions.  If a Supplemental Contribution is credited to an
Executive’s Account for a year that is not covered by a Participation Agreement,
the Executive shall be deemed to have elected a single lump sum payment
following Separation from Service as permitted by Sections 7(b) and 7(c) below
with respect to benefits resulting from such Supplemental
Contribution.  Except as otherwise provided in this Section 7, payment
elections shall be irrevocable with respect to compensation once the deferral
deadline for that compensation has passed.  Participants may make
different payment elections with respect to subsequent deferrals of
compensation, but no Participant may at any time have compensation deferred
under the Plan payable under more than three different payment
elections.

     

    
      
        
        

      

      
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    (b) Commencement of
Payments.  Payment of benefits to Directors shall commence in
January of the year following the Director’s Separation from Service (as defined
below) with the Company.  Payment of benefits to Executives shall
commence in the later of (i) January of the year following the Executive’s
Separation from Service with the Company, or (ii) the seventh month following
the month of the Executive’s Separation from Service with the Company; provided,
however, that Executives may elect in their Participation Agreements to have
benefits from their Accounts commence in January of a year specified by the
Executive if such year is earlier than the year following the Executive’s
Separation from Service with the Company.  When used in this Plan, the
term “Separation from Service” shall have the meaning ascribed to such term in
Treasury Regulations §1.409A-1(h).

     

    (c) Term of
Payments.  Participants may elect in their Participation
Agreements to have benefits from their Accounts paid in (i) annual installments
over 5, 10 or 15 years, (ii) a single lump sum payment, or (iii) a combination
of a partial lump sum payment (expressed as a percentage) and the remainder in
installments over 5, 10 or 15 years.

     

    (d) Form of
Payments.  Benefits payable to a Participant from a Company
Stock Account shall be paid as a distribution of Common Stock plus cash for
fractional shares.  Benefits payable to a Participant from a Cash
Account shall be paid in cash.

     

    (e) Payment Timing and
Valuation.  All lump sum payments or installment payments due
under the Plan in any year shall be paid on a date in January determined by the
Company, except that if Section 7(b) requires benefits to commence in a month
other than January, the initial payment shall be paid on a date in that month
determined by the Company.  All payments shall be based on Account
balances as of the close of business on the last trading day of the immediately
preceding month.  Each partial lump sum payment and installment
payment to a Participant shall be paid in the same proportion from each of the
Accounts of the Participant subject to the applicable payment
election.  The amount of each installment payment from each Account
shall be determined by dividing the Account balance by the number of remaining
installments, including the current installment to be paid.

     

    (f) Modification of Payment
Elections.

     

    (i) An
Executive who has elected to have any benefit commence in a specified year prior
to termination of employment as permitted in Section 7(b) may elect (after such
election has otherwise become irrevocable) to specify a later year for
commencement of such benefit, provided that for any such election submitted
after December 31, 2008, (1) such election is made in writing delivered to the
Company no later than, and becoming irrevocable on, the last day of the second
year preceding the previously specified year, and (2) the later year so
specified is at least 5 years later than the previously specified
year.

     

    (ii) After a
Participant’s election under Section 7(c) regarding the term of any benefit
payments has otherwise become irrevocable, the Participant may elect to change
such term of payments, provided (1) the choice of annual installments over 15
years shall not be available for a change election under this subsection, (2)
the term of any particular payments may be changed only once under this
subsection, (3) such election must be made in writing delivered to the Company
no later than, and becoming irrevocable on, the last day of the second year
preceding the year in which the payments otherwise would have commenced (and
shall not be effective if a Separation from Service occurs on or before the date
the election becomes irrevocable), and (4) the commencement of the affected
payments shall be delayed for 5 years after the date the payments would have
commenced under the terms of the previous payment
election.  Accordingly, for a Director who elects to change the term
of any benefit payments, the commencement of those payments will be delayed
until January of the year following the fifth anniversary of the Director’s
Separation from Service.  Notwithstanding the foregoing, a Participant
may elect on or prior to December 31, 2008 to change the term of any benefit
payments that have not commenced as of that date without application of any of
the limitations or restrictions set forth in this Section 7(f)(ii).

     

    
      
        
        

      

      
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    (g) Unforeseeable
Emergency.  Notwithstanding the foregoing provisions of this
Section 7, an accelerated payment from a Participant’s Accounts may be made to
the Participant in the sole discretion of the Committee based upon a finding
that the Participant has suffered an Unforeseeable Emergency.  For
this purpose, “Unforeseeable Emergency” means a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent of the Participant, loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.  Unforeseeable Emergency shall be determined by the
Committee on the basis of information supplied by the Participant in accordance
with uniform guidelines promulgated from time to time by the
Committee.  The amount of any accelerated payment under this Section
7(g) shall be limited to the amount reasonably necessary to meet the
Participant’s needs resulting from the Unforeseeable Emergency, after taking
into account insurance and other potential sources of funds to meet such needs,
plus the amount reasonably necessary to cover income and withholding taxes on
the accelerated payment.  Any such accelerated payment shall be paid
as promptly as practicable following approval by the Committee and shall be paid
pro-rata from the Participant’s Accounts based on the account balances as of the
close of business on the day prior to the payment date.

     

    (h) Designation of
Beneficiaries; Death.

     

    (i) Each
Participant shall have the right, at any time, to designate any person or
persons as the Participant’s beneficiary or beneficiaries (both primary as well
as secondary) to whom benefits under this Plan shall be paid in the event of the
Participant’s death prior to complete distribution of the benefits due under the
Plan.  If greater than fifty percent (50%) of the benefit is
designated to a beneficiary other than the Participant’s spouse, such
beneficiary designation shall be consented to by the Participant’s
spouse.  Each beneficiary designation shall be in written form
prescribed by the Company and will be effective only if filed with the Company
during the Participant’s lifetime.  Such designation may be changed by
the Participant at any time without the consent of a beneficiary, subject to the
spousal consent requirement above.  If no designated beneficiary
survives the Participant, the balance of the Participant’s benefits shall be
paid to the Participant’s surviving spouse or, if no spouse survives, to the
Participant’s estate.

     

    (ii) Upon the
death of a Participant, notwithstanding any contrary provisions of Section 7(b)
or 7(f), benefit payments to the Participant’s beneficiary shall commence no
later than January of the year following the Participant’s death.  Any
benefits payable after the death of a Participant shall otherwise be paid in
accordance with the payment elections for such benefits that would have applied
if the Participant had not died.

     

    
      
        
        

      

      
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    (i) Payment to
Guardian.  If a benefit under the Plan is payable to a minor or
a person declared incompetent or to a person incapable of handling the
disposition of his property, the Committee may direct payment of such Plan
benefit to the guardian, legal representative or person responsible for the care
and custody of such minor, incompetent or person.  The Committee may
require proof of incompetence, minority, incapacity or guardianship as it may
deem appropriate prior to distribution of the Plan benefit.  Such
distribution shall completely discharge the Committee and the Company from all
liability with respect to such benefit.

     

    (j) Withholding; Payroll
Taxes.  The Company shall withhold from payments made hereunder
any taxes required to be withheld from such payments under federal, state or
local law.

     

    8. Supplemental Retirement
Benefit.  Any Executive who elects to defer compensation under
this Plan and who also satisfies the eligibility requirements for payment of any
benefit under the Company’s Retirement Plan for Non-Bargaining Unit Employees
(the “Retirement Plan”) shall qualify for further payment by the Company of
supplemental retirement benefits payable as a monthly annuity under this Plan,
as provided below:

     

    (a)           Commencement.

     

    (i)           If
the Executive is eligible to receive normal retirement benefits under the
Retirement Plan based on having reached age 62 at the time of Separation from
Service, the annuity shall commence with the first month following the
Executive’s Separation from Service.

     

    (ii)           If
the Executive is eligible to receive early retirement benefits under the
Retirement Plan based on having satisfied the Rule of 70 at the time of
Separation from Service, the annuity shall commence with the first month
following the later of the Executive’s 55th
birthday or the Executive’s Separation from Service.

     

    (iii)           Disability
retirement benefits have been eliminated under the Retirement Plan effective as
of January 1, 2010.  If at any time before January 1, 2011, the
Executive is eligible to receive disability retirement benefits under the terms
of the Retirement Plan as in effect prior to January 1, 2010, the annuity under
this Plan shall be calculated under Section 8(c) as if the Retirement Plan had
not been amended to eliminate disability retirement benefits, and the annuity
shall commence with the first month following the later of the Executive’s
55th
birthday or the Executive’s Separation from Service.  If the Executive
becomes disabled on or after January 1, 2011, this Section 8(a)(iii) shall not
apply.

     

    (iv)           If
the Executive is not eligible to receive normal retirement benefits, early
retirement benefits or disability retirement benefits as referred to in Section
8(a)(i), (ii) or (iii), but is eligible to receive vested benefits under the
Retirement Plan, the annuity shall commence with the first month following the
Executive’s 62nd
birthday.

     

    
      
        
        

      

      
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    (v)           If
the Executive’s surviving spouse is eligible to receive death benefits under the
Retirement Plan as a result of the Executive’s death before commencement of
benefits under this Section 8, the annuity shall commence in the month that
benefits would have commenced as provided in this Section 8(a) if the Executive
had a Separation from Service on the date of death (or on the Executive’s actual
Separation from Service, if earlier) and then survived until benefits had
commenced.

     

    
       

    

    (b)           Form of
Benefit.

     

    (i)           Annuity
Form.  If the Executive elects a form of annuity benefit under
the Retirement Plan at least 30 days prior to the first day of the month in
which the benefit under this Section 8 is required to commence, the benefit
under this Section 8 shall be paid in the same annuity form as selected under
the Retirement Plan.  If the Executive’s benefit under this Section 8
commences earlier than the Executive’s benefit under the Retirement Plan, the
Executive may, at least 30 days prior to the first day of the month in which the
benefit under this Section 8 is required to commence and otherwise in accordance
with the rules of the Retirement Plan, elect any of the standard or optional
annuity forms of benefit described in 6.01 and 6.02 of the Retirement Plan,
other than a joint and survivor annuity upon marriage or remarriage after the
annuity starting date.  If the Executive does not make a timely
election under this Section 8(b), the benefit under this Section 8 shall be paid
in the default annuity form applicable to the Executive under the Retirement
Plan.

     

    (ii)           Small Benefit Cash
Out.  If the actuarial equivalent lump sum present value of the
Executive’s benefit under this Section 8, based on the actuarial assumptions
used for determining equivalent benefits under the Retirement Plan at the time
of the Executive’s commencement of benefits, is no more than the applicable
dollar amount under Internal Revenue Code section 402(g)(1)(B) (which is $16,500
in 2010), the benefit shall be paid as a lump sum in such amount at the time
annuity payments would have otherwise commenced under Section 8(a).

     

    (c)           Amount.  The
amount payable by the Company each month to the Executive or Executive’s
beneficiaries under the Retirement Plan shall be:

     

    (i)           The
amount that would be payable at such time under the Retirement Plan assuming
that (1) benefits had commenced on the date specified in Section 8(a),
(2) benefits were payable in the annuity benefit form determined under
Section 8(b), (3) all accrued benefits under the Retirement Plan were
payable only in the annuity form as provided in Section 8(d), and (4) all
Salary and Bonus deferred by the Executive under this Plan and under the
Company’s former Executive Deferred Compensation Plan (the “Prior Plan”) had
been “paid” to or “received” by Executive in the year when the deferral was
made, provided that all such deferred amounts shall be subject to the other
applicable definitions and rules of the Retirement Plan relating to benefit
determination; plus

     

    (ii)           The
reduction, if any, in the amount of the monthly Social Security benefit payable
to the Executive, provided that such reduction results from the fact that
compensation deferred under this Plan causes the primary Social Security Benefit
payable to the Executive to be reduced, with the amount under this Section
8(c)(ii) calculated assuming commencement of Social Security benefits at the
earliest possible time, no earnings after Separation from Service and no
projected increases in the national average wage index or cost of living between
Separation from Service and commencement of benefits; minus

     

    
      
        
        

      

      
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    (iii)           The
amount that would actually be payable at such time under the Retirement Plan
assuming that (1) benefits had commenced on the date specified in Section 8(a),
(2) benefits were payable in the annuity benefit form determined under
Section 8(b), and (3) all accrued benefits under the Retirement Plan were
payable only in the annuity form as provided in Section 8(d).

     

    (d)           Retirement Plan Lump Sum
Election Ignored.  Notwithstanding any election by an Executive
to receive a portion of Executive’s Retirement Plan benefit as a lump sum, the
amount of the supplemental retirement benefit as determined under Section 8(c)
shall be calculated and determined as if Executive were to receive Executive’s
entire Retirement Plan accrued benefit in the annuity form determined under
Section 8(b).

     

    (e)           Six-Month Minimum
Delay.  Notwithstanding the foregoing, no supplemental
retirement benefit payments under this Section 8 shall be paid to any Executive
until the seventh month following the month of the Executive’s Separation from
Service with the Company.  Any payments that would have been paid if
not for this Section 8(e) shall be accumulated and paid in full in the seventh
month following the month of the Executive’s Separation from Service with the
Company together with interest from the date each payment otherwise would have
been payable until the date actually paid.  Interest for any period
will be paid at the same rate applicable for that period under Section
6(f).

     

    (f)           Waiver of Comparable
Benefits Under Prior Plan.  Because amounts deferred under the
Prior Plan are taken into account in calculating the benefits payable under this
Section 8, acceptance of the benefits under this Section 8 shall be deemed to be
a waiver of the comparable benefits set forth in Section 5.7 of the Prior
Plan.

     

    9. Administration.

     

    (a) Committee
Duties.  This Plan shall be administered by the Organization
and Executive Compensation Committee of the Board (the
“Committee”).  The Committee shall have responsibility for the general
administration of the Plan and for carrying out its intent and
provisions.  The Committee shall interpret the Plan and have such
powers and duties as may be necessary to discharge its
responsibilities.  The Committee may, from time to time, employ other
agents and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the
Company.

     

    (b) Tax Law
Compliance.  The Committee shall have the authority to cancel
any Participation Agreement in whole or in part, and immediately distribute any
compensation deferred under such Participation Agreement, but only to the extent
the Committee determines that deferral of compensation in accordance with such
Participation Agreement has or will violate Section 409A of the Internal Revenue
Code and therefore has or will require immediate inclusion of such compensation
in the income of the Participant.

     

    (c) Binding Effect of
Decisions.  The decision or action of the Committee in respect
of any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

     

    
      
        
        

      

      
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    10. Claims
Procedure.

     

    (a) Claim.  Any
person claiming a benefit, requesting an interpretation or ruling under the
Plan, or requesting information under the Plan shall present the request in
writing to the Committee, which shall respond in writing as soon as
practicable.

     

    (b) Denial of
Claim.  If the claim or request is denied, the written notice
of denial shall state:

     

    (i) The
reasons for denial, with specific reference to the Plan provisions on which the
denial is based;

     

    (ii) A
description of any additional material or information required and an
explanation of why it is necessary; and

     

    (iii) An
explanation of the Plan’s claim review procedure.

     

    (c) Review of
Claim.  Any person whose claim or request is denied or who has
not received a response within thirty (30) days may request review by notice
given in writing to the Committee.  The claim or request shall be
reviewed by the Committee who may, but shall not be required to, grant the
claimant a hearing.  On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in
writing.

     

    (d) Final
Decision.  The decision on review shall normally be made within
sixty (60) days.  If an extension of time is required for a hearing or
other special circumstances, the claimant shall be notified and the time limit
shall be one hundred twenty (120) days.  The decision shall be in
writing and shall state the reasons and the relevant Plan
provisions.  All decisions on review shall be final and bind all
parties concerned.

     

    11. Amendment and Termination of
the Plan.

     

    (a) Amendment.  The
Board may at any time amend the Plan in whole or in part; provided, however,
that no amendment shall without the consent of each affected Participant (i)
decrease or restrict the amount credited to any Account maintained under the
Plan as of the date of amendment, or (ii) accelerate or decelerate the payment
of benefits with respect to amounts credited to any Account as of the date of
the amendment.

     

    (b) Termination.  The
Board may at any time partially or completely terminate the Plan if, in its
judgment, the tax, accounting, or other effects of the continuance of the Plan,
or potential payments thereunder, would not be in the best interests of the
Company.

     

    (i) Partial
Termination.  The Board may partially terminate the Plan by
instructing the Committee not to accept any additional Participation Agreements
and terminating deferrals under all existing Participation
Agreements.  In the event of such a partial termination, the Plan
shall continue to operate and be effective with regard to all compensation
deferred prior to the effective date of such partial termination.

     

    
      
        
        

      

      
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    (ii) Complete
Termination.  The Board may completely terminate the Plan,
provided such termination is covered by an exception (set forth in regulations
or other guidance of the Internal Revenue Service) to the prohibition on
acceleration of deferred compensation.  In that event, on the
effective date of the complete termination, the Plan shall cease to operate and
the Company shall determine the balance of each Participant’s Accounts as of the
close of business on such effective date.  The Company shall pay out
such Account balances to the Participants in a single lump sum payment as soon
as practicable after such effective date.

     

    12. Miscellaneous.

     

    (a) Unsecured General
Creditor.  The Accounts shall be established solely for the
purpose of measuring the amounts owed to Participants or beneficiaries under the
Plan.  Participants and their beneficiaries, heirs, successors and
assigns shall have no legal or equitable rights, interest or claims in any
property or assets of the Company, nor shall they be beneficiaries of, or have
any rights, claims or interests in any mutual funds, other investment products
or the proceeds therefrom owned or which may be acquired by the
Company.  Except as may be provided in Section 12(b), such mutual
funds, other investment products or other assets of the Company shall not be
held under any trust for the benefit of the Participants, their beneficiaries,
heirs, successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan.  Any and
all of the Company’s assets shall be, and remain, the general, unpledged,
unrestricted assets of the Company.  The Company’s obligation under
the Plan shall be that of an unfunded and unsecured promise to pay money in the
future, and the rights of Participants and beneficiaries shall be no greater
than those of unsecured general creditors of the Company.

     

    (b) Trust
Fund.  The Company shall be responsible for the payment of all
benefits provided under the Plan.  The Company shall establish one or
more trusts, with such trustees as the Board may approve, for the purpose of
providing for the payment of such benefits, but the Company shall have no
obligation to contribute to such trusts except as specifically provided in the
applicable trust documents.  Such trust or trusts shall be
irrevocable, but the assets thereof shall be subject to the claims of the
Company’s creditors.  To the extent any benefits provided under the
Plan are actually paid from any such trust, the Company shall have no further
obligation with respect thereto, but to the extent not so paid, such benefits
shall remain the obligation of, and shall be paid by, the Company.

     

    (c) Non-assignability.  Neither
a Participant nor any other person shall have the right to commute, sell,
assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are,
expressly declared to be non-assignable and nontransferable.  No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency.

     

    
      
        
        

      

      
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    (d) Not a Contract of
Employment.  The terms and conditions of this Plan shall not be
deemed to constitute a contract of employment between the Company and any
Participant, and the Participants (and their beneficiaries) shall have no rights
against the Company except as may otherwise be specifically provided
herein.  Moreover, nothing in this Plan shall be deemed to give a
Participant the right to be retained in the service of the Company or to
interfere with the right of the Company to discipline or discharge the
Participant at any time.

     

    (e) Governing
Law.  The provisions of this Plan shall be construed and
interpreted according to the laws of the State of Oregon, except as preempted by
federal law.

     

    (f) Validity.  In
case any provision of this Plan shall be held illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but
this Plan shall be construed and enforced as if such illegal and invalid
provisions had never been inserted herein.

     

    (g) Notice.  Any
notice or filing required or permitted to be given to the Company or the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the Secretary of the
Company.  Such notice shall be deemed given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.

     

    (h) Successors.  The
provisions of this Plan shall bind and inure to the benefit of the Company and
its successors and assigns.  The term successors as used herein 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 the Company, and successors of any such corporation or
other business entity.

     

    The
foregoing restatement of the Plan was approved by the Board of Directors of
Northwest Natural Gas Company on December 17, 2009 effective as of January 1,
2010.

    


    


    NORTHWEST
NATURAL GAS COMPANY

    


    


    By:   ____________________________________                                                                      

    


    


    Attest:        __________________________________