Document:

Second Amendment to Credit Agreement

 Exhibit 10.1 
  
 SECOND AMENDMENT TO CREDIT AGREEMENT 
  

THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of March 15, 2005 (this “Amendment”), relating to the Credit Agreement referenced
below, is by and among Speedway Motorsports, Inc., a Delaware corporation (“SMI”), and Speedway Funding, LLC, a Delaware limited liability company) (“Speedway Funding” and together with SMI, the
“Borrowers”), the subsidiaries and related parties identified as Guarantors on the signature pages hereto, the Lenders identified on the signature pages hereto, Bank of America, N.A., a national banking association, as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”), Wachovia Bank, National Association, as Syndication Agent (in such capacity, the “Syndication Agent”), Calyon New York Branch
(successor in interest to Credit Lyonnais New York Branch) and SunTrust Bank, as the Documentation Agents (in such capacity, the “Documentation Agents”), and Banc of America Securities LLC, as Lead Arranger and Book Manager for the
Lenders. Terms used herein but not otherwise defined herein shall have the meanings provided to such terms in the Credit Agreement. 
  
 W I T N E S S E T H 
  
 WHEREAS, a $300 million credit facility has been extended to the Borrowers pursuant to the terms of that Credit Agreement dated as of May 16, 2003, as
amended as of November 7, 2003 (as amended and modified from time to time, the “Credit Agreement”) among the Borrowers, the subsidiaries and related parties identified as guarantors therein, the Lenders from time to time party
thereto, Bank of America, N.A., as Administrative Agent, Wachovia Bank, National Association, as Syndication Agent, Credit Lyonnais, New York Branch, Fleet National Bank, and SunTrust Bank, as the Documentation Agents, and Banc of America Securities
LLC, as Lead Arranger and Book Manager for the Lenders; 
  
 WHEREAS, the Borrowers have requested certain modifications to the Credit Agreement; 
  
 WHEREAS, the requested modifications require the approval of the Lenders; 
  
 WHEREAS, the Lenders have agreed to the requested modifications on the terms and conditions set forth herein; 

 NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Amendments. The Credit Agreement is amended in the following respects: 
  
 (a) The definition of “Applicable Percentage” is deleted in its entirety and replaced with the following: 
  
 “ “Applicable Percentage” means, for purposes of calculating the applicable interest rate for any day for any Loan,
the applicable Standby Letter of Credit Fee for any day for purposes of Section 3.5 (b) or the applicable Trade Letter of Credit Fee for any day for purposes of Section 3.5 (b) or the applicable Commitment Fee for any day for purposes of Section
3.5(a), the appropriate applicable percentage set forth below corresponding to the Consolidated Total Debt Ratio in effect as of the most recent Calculation Date: 
  

																		
	 	  	 	  	Applicable Percentages

	 
	Pricing
Level

	  	 Consolidated
 Total Debt Ratio

	  	Revolving
Commitment & Term
Loan Eurodollar
Loans

	 	 	Revolving
Commitment & Term
Loan Base Rate
Loans

	 	 	Standby Letter
of Credit Fee

	 	 	Trade
(Documentary)
Letter of Credit
Fee

	 	 	Commitment Fee

	 
	I	  	Less than 1.50 to 1.00	  	0.875	%	 	0	%	 	0.875	%	 	0.4375	%	 	0.20	%
							
	II	  	Less than 2.00 to 1.00 but greater than or equal to 1.50 to 1.00	  	1.00	%	 	0	%	 	1.00	%	 	0.50	%	 	0.25	%
							
	III	  	Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00	  	1.25	%	 	0	%	 	1.25	%	 	0.625	%	 	0.25	%
							
	IV	  	Less than 3.00 to 1.00 but greater than or equal to 2.50 to 1.00	  	1.50	%	 	0	%	 	1.50	%	 	0.75	%	 	0.30	%
							
	V	  	Greater than or equal to 3.00 to 1.00	  	1.75	%	 	0.25	%	 	1.75	%	 	0.875	%	 	0.375	%

  
 Determination of the
appropriate Applicable Percentages shall be made as of each Calculation Date. The Consolidated Total Debt Ratio in effect as of a Calculation Date shall establish the Applicable Percentages for the Loans, the Standby Letter of Credit Fee, the Trade
Letter of Credit Fee and the Commitment Fee that shall be effective as of the date designated by the Administrative Agent as the Applicable Percentage Change Date; provided, however, that if the Required Financial Information for such
Calculation Date is not delivered when due pursuant to Section 7.1(c), then Pricing Level V shall apply until the Applicable Percentage Change Date. The Administrative Agent shall determine the Applicable Percentages as of each Calculation Date and
shall promptly notify the Borrowers and the Lenders of the Applicable Percentages so determined and of the Applicable Percentage Change Date. Such determinations by the Administrative Agent of the Applicable Percentages shall be conclusive absent
demonstrable error. The initial Applicable Percentage(s) shall be based on Pricing Level III until the first Applicable Percentage Change Date occurring after March 15, 2005.” 
  
 (b) The definition of “Consolidated Capital Charges Coverage Ratio” is deleted in its entirety and replaced
with the following: 
  
 “
“Consolidated Capital Charges Coverage Ratio” means, as of any Calculation Date, the ratio of (i) Consolidated EBIT for the four-quarter period ended as of such Calculation Date, to (ii) Consolidated Interest Expense.”

  
  

 2 

 (c) The definition of “Consolidated Net Worth” is deleted in its entirety and replaced
with the following: 
  
 “
“Consolidated Net Worth” means, as of any date, total shareholders’ equity of Speedway Motorsports and its Subsidiaries plus dividends permitted by Section 8.6 less preferred stock redeemable at the holder’s discretion and
preferred stock having a first call of fifteen years or less all on a consolidated basis as of such date, as determined in accordance with GAAP.” 
  
 (d) A new definition for “OFAC” is added to Section 1.1 in correct alphabetical order to read as follows: 
  
 “ “OFAC” means the United States Treasury Department Office of Foreign
Asset Control, or any successor or replacement thereto.” 
  
 (f) A new
definition for “Patriot Act” is added to Section 1.1 in correct alphabetical order to read as follows: 
  
 “ “Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.” 
  
 (e) A new definition for “Permitted Commodity Hedging” is added to Section 1.1 in correct alphabetical order to read as follows:

  
 “ “Permitted Commodity
Hedging” means commodity hedgings by either of the Borrowers secured only by the commodity being hedged and in no event guaranteed by a Guarantor.” 
  
 (f) The definition of “Permitted Investments” is deleted in its entirety and replace with the following:

  
 “ “Permitted
Investments” means Investments which are either (i) cash and Cash Equivalents; (ii) accounts receivable created, acquired or made by any Credit Party or Subsidiary in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; (iii) Investments consisting of stock, obligations, securities or other property received by any Credit Party or Subsidiary in settlement of accounts receivable (created in the ordinary course of business) from
insolvent obligors; (iv) Investments existing as of the Closing Date and set forth in Schedule 1.1C; (v) Guaranty Obligations permitted by Section 8.1, (vi) acquisitions 

  

 3 

 
permitted by Section 8.4(c); (vii) loans to directors, officers, employees, agents, customers or suppliers that do not exceed an aggregate principal amount
of $500,000 at any one time outstanding for Speedway Motorsports and all of its Subsidiaries taken together; (viii) Investments received as consideration in connection with or arising by virtue of any merger, consolidation, sale or other transfer of
assets permitted under Section 8.4; (ix) Intercompany Indebtedness; (x) Capital Stock or other securities of any Person which is traded on the New York Stock Exchange, the American Stock Exchange, the London Stock Exchange, the Paris Bourse or
NASDAQ, provided the aggregate basis at any one time in such Investments does not exceed $2,500,000 and such investments have not been purchased on margin; (xi) loans or advances to Persons to the extent necessary to enable them to pay taxes, fees
and other expenses as and when required to maintain liquor licenses provided such loans or advances (A) are customary in Speedway Motorsports’ business and (B) the aggregate principal amount outstanding at any one time of such loans or advances
does not exceed $2,000,000; (xii) other investment grade investments (at least a BBB-and Baa3 rating (or the equivalent thereof) by S&P and Moody’s) with a maturity of less than five years provided such investments do not exceed $40,000,000
in the aggregate (including, without limitation, privately offered, unregistered funds provided the fund has a AAA rating (or the equivalent thereof) or better by S&P or Moody’s); and (xiii) non-investment grade investments with a maturity
of less than three years (and non-investment grade open end mutual funds) provided such investments do not exceed $10,000,000 in the aggregate.” 
  
 (g) The definition of “Termination Date” is deleted in its entirety and replace with the following: 
  
 “ “Termination Date” means March 31,
2010.” 
  
 (h) Section 2.2(c) is deleted in its entirety and
replaced with the following: 
  
 “(c)
Repayment of Term Loan” The principal amount of the Term Loan shall be due and payable in sixteen (16) consecutive quarterly installments, on as follows: 
  

									
	 Date

	  	 Principal
 Amortization
 Payment

	  	 Date

	  	 Principal
 Amortization
 Payment

	 June 30, 2006
	  	$	1,562,500	  	June 30, 2008	  	$	3,125,000
	 September 30, 2006
	  	$	1,562,500	  	September 30, 2008	  	$	3,125,000
	 December 31, 2006
	  	$	1,562,500	  	December 31, 2008	  	$	3,125,000
	 March 31, 2007
	  	$	1,562,500	  	March 31, 2009	  	$	3,125,000
	 June 30, 2007
	  	$	3,125,000	  	June 30, 2009	  	$	4,687,500
	 September 30, 2007
	  	$	3,125,000	  	September 30, 2009	  	$	4,687,500
	 December 31, 2007
	  	$	3,125,000	  	December 31, 2009	  	$	4,687,500
	 March 31, 2008
	  	$	3,125,000	  	March 31, 2010	  	$	4,687,500
	 	  	 	 	  	 	  	
	

	 	  	 	 	  	 Total
	  	$	50,000,000.”

  

 4 

 (i) Section 2.3(a)(iii)(A) is amended by replacing the amount “TEN MILLION DOLLARS
($10,000,000)” with the amount “SEVENTY-FIVE MILLION DOLLARS ($75,000,000)”. 
  

	 	(j)	A new Section 6.20 is added to read as follows: 

  

	 	“6.20	Patriot Act. 

  
 None of the Credit Parties, any Subsidiary, their respective directors or officers (i) is identified on the list of “Specially Designated Nationals
and Blocked Persons” maintained by OFAC, (ii) if an entity, is a prohibited “shell bank” as defined by Section 313 of the Patriot Act or provides services to any shell bank or (iii) has any of its assets invested or deposited in any
county, agency, organization or person that is subject to a sanctions program identified on a list maintained by OFAC (each a “Sanctioned Entity”) or derives any of its operating income from investments or transactions with any Sanctioned
Entity, in any manner that would violate any applicable law, rule, regulation or order of any governmental authority.” 
  

	 	(k)	Section 7.4 is amended to read as follows: 

  

	 	“7.4	Compliance with Law. 

  
 Each of the Credit Parties and their Subsidiaries will comply with all laws, rules, regulations and orders (including executive orders),
and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would have a Material Adverse Effect.” 
  

	 	(l)	The following language is added below the heading “7.11 Financial Covenants”: 

  
 “For purposes of calculating the financial covenants set forth below the amount of any Permitted
Commodity Hedging shall be excluded from the calculations.” 
  

	 	(m)	Section 7.11(a) is deleted in its entirety and replace with the following: 

  

	 	“(a)	Consolidated Net Worth. Consolidated Net Worth at each Calculation Date shall be no less than the sum of $452,710,000, increased on a cumulative basis as of the last day of
each fiscal quarter commencing with the last day of fiscal quarter December 31, 2005, by an amount equal to (i) 50% of Consolidated Net Income (provided such Consolidated Net Income is greater than zero) for the fiscal quarter then ended and (ii)
100% of Net Proceeds from an Equity Transaction for the fiscal quarter then ended.” 

  

 5 

	 	(n)	Section 7.11(b) is deleted in its entirety and replaced with the following: 

  

“(b) Consolidated Total Debt Ratio. The Consolidated Total Debt Ratio on each Calculation Date shall be no greater than 3.5
to 1.0.” 
  

	 	(o)	Section 7.11(c) is deleted in its entirety and replaced with the following: 

  

“(c) Consolidated Senior Debt Ratio. The Consolidated Senior Debt Ratio at each Calculation Date shall be no greater than
2.5 to 1.0.” 
  

	 	(p)	A new Section 7.11(e) is added to read as follows: 

  

	 	“(e)	Financial Covenant Adjustments. For any Calculation Date in which the race schedule mandated by NASCAR results in fewer scheduled races during the fiscal quarter than were
held in the same fiscal quarter for the prior year (the “Prior Period”), the Borrowers will be permitted to include in the calculation of Consolidated EBITDA for such Calculation Date the actual EBITDA from the Prior Period attributable to
any scheduled race not included in the current fiscal quarter ending on such Calculation Date solely as a result of scheduling provided the race will occur in the following fiscal quarter. In the event of the foregoing, the Borrowers shall be
required to provide to the Administrative Agent in writing not less than ten (10) days prior to the applicable Calculation Date (i) information (including reasonable estimates) demonstrating that the Borrowers would reasonably be expected to be in
compliance with all financial covenants set forth in this Section 7.11 on such Calculation Date but for the NASCAR schedule and (ii) information (including reasonable estimates) demonstrating that the Borrowers are expected to be in compliance will
all financial covenants set forth in this Section 7.11 as of the next Calculation Date not impacted by the NASCAR schedule.” 

  
 (q) Section 8.1 is amended by adding a new subparagraph (h) and (i) to the Section to read as follows: 
  
 “(h) unsecured Indebtedness not to exceed $5,000,000 in
the aggregate; and 
  
 (i) Permitted Commodity
Hedging.” 
  
 (r) Section 8.3 is amended to
read as follows: 
  
 “8.3 Nature of
Business. 
  
 None of the Credit Parties or
their Subsidiaries will substantively alter the character or conduct of the business conducted by any such Person as of the Closing Date; provided, however, Speedway Motorsports and/or Oil-Chem Research Corporation, an Illinois corporation
(“Oil-Chem”) (but no other Credit Party), may purchase and sell crude and refined bulk petroleum and related products (“Petroleum Products”) so long as no more than four (4) Cargoes (as hereinafter defined) of

  

 6 

 
Petroleum Products are shipped in any given calendar month through and including February, 2007 and no more than eight (8) Cargoes of Petroleum Products are
shipped in any given calendar month thereafter. A “Cargo” of Petroleum Products (i) shall mean the volume of Petroleum Products which may be carried in any single maritime vessel used for the conveyance of Petroleum Products (each, a
“Bulk Carrier”) and (ii) shall be deemed to have been shipped at such time as the applicable Bulk Carrier shall have departed the port in which its Cargo shall have been loaded and entered international waters. The activities of
Speedway Motorsports and Oil-Chem pursuant to this Section 8.3 shall be deemed to be within the ordinary course of business for these entities.” 
  
 (s) Section 8.6 is amended to read as follows: 
  
 “8.6 Restricted Payments. 
  
 None of the Credit Parties or their Subsidiaries will directly or indirectly declare, order, make or set apart any sum for or pay any
Restricted Payment, except (i) to make dividends payable solely in the same class of Capital Stock of such Person, (ii) to make dividends payable to any Domestic Credit Party, and (iii) provided no Default or Event of Default then exists or would be
caused thereby, Speedway Motorsports may make dividends payable on its preferred and/or common stock and/or make stock repurchases of up to (A) $150,000,000 in the aggregate annually, if the Consolidated Total Debt Ratio for the four quarter period
ending as of the most recent Calculation Date is less than 3.0 to 1.0 or (B) $75,000,000 in the aggregate annually, if the Consolidated Total Debt Ratio for the four quarter period ending as of the most recent Calculation Date is greater than or
equal to 3.0 to 1.0.” 
  
 (t) Section 11.9 is amended by (i)
replacing the “or” in front of subparagraph (c) with a comma and adding a comma, the word “or” and a new subparagraph (d) in front of the parenthetical in the sixteenth line to read as follows: 
  
 “ (d) any civil penalty or fine assessed by OFAC against, and all
reasonable costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof, by the Administrative Agent or any Lender as a result of the default hereunder by the Credit Party or any Subsidiary which default
violates a sanction enforced by OFAC”. 
  
 2. Conditions
Precedent. This Amendment shall be effective as of the date hereof upon satisfaction of each of the following conditions precedent: 
  
 (a) the execution of this Amendment by the Credit Parties and the Required Lenders; and 
  
 (b) receipt by the Administrative Agent of all other fees and expenses owing in connection with this Amendment. 

 

 7 

 3. Representations and Warranties. Each of the Credit Parties hereby represents and warrants in
connection herewith that as of the date hereof (after giving effect hereto) (i) the representations and warranties set forth in Section 6 of the Credit Agreement are true and correct in all material respects (except those which expressly relate to
an earlier date), and (ii) no Default or Event of Default has occurred and is continuing under the Credit Agreement. 
  
 4. Acknowledgments, Affirmations and Agreements. Each of the Credit Parties (i) acknowledges and consents to all of the terms and conditions of
this Amendment, (ii) affirms all of its obligations under the Credit Documents and (iii) agrees that this Amendment does not operate to reduce or discharge the Guarantors’ obligations under the Credit Agreement or the other Credit Documents.

  
 5. Credit Agreement. Except as expressly modified
hereby, all of the terms and provisions of the Credit Agreement remain in full force and effect. 
  
 6. Expenses. The Borrowers jointly and severally agree to pay all reasonable costs and expenses in connection with the preparation, execution and
delivery of this Amendment, including the reasonable fees and expenses of the Administrative Agent’s legal counsel. 
  
 7. Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an
original. It shall not be necessary in making proof of this Amendment to produce or account for more than one such counterpart. 
  
 8. Governing Law. This Amendment shall be deemed to be a contract under, and shall for all purposes be construed in accordance with, the laws of
the State of North Carolina. 
  
 [Remainder of Page Intentionally
Left Blank] 
  

 8 

 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly
executed and delivered as of the date first above written. 
  

					
	BORROWERS:	 	SPEEDWAY MOTORSPORTS, INC.,
	 	 	a Delaware corporation
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	SPEEDWAY FUNDING, LLC,
	 	 	a Delaware limited liability company
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

  
 [Signatures Continue]

					
	GUARANTORS:	 	600 RACING, INC.,
	 	 	a North Carolina corporation
		
	 	 	ATLANTA MOTOR SPEEDWAY, INC.,
	 	 	a Georgia corporation
		
	 	 	BRISTOL MOTOR SPEEDWAY, INC.,
	 	 	a Tennessee corporation
		
	 	 	CHARLOTTE MOTOR SPEEDWAY, LLC,
	 	 	a North Carolina limited liability company
		
	 	 	INEX CORP.,
	 	 	a North Carolina corporation
		
	 	 	LAS VEGAS MOTOR SPEEDWAY, INC.,
	 	 	a Delaware corporation
		
	 	 	MOTORSPORTS BY MAIL, LLC
	 	 	a North Carolina limited liability company
		
	 	 	NEVADA SPEEDWAY, LLC,
	 	 	a Delaware limited liability company
		
	 	 	SMI TRACKSIDE, LLC,
	 	 	a North Carolina limited liability company
		
	 	 	SPEEDWAY MEDIA, LLC,
	 	 	a North Carolina limited liability company
		
	 	 	SPEEDWAY PROPERTIES COMPANY, LLC,
	 	 	a Delaware limited liability company
		
	 	 	SPEEDWAY SONOMA, LLC,
	 	 	a Delaware limited liability company
		
	 	 	SPR, INC., a Delaware corporation
		
	 	 	TEXAS MOTOR SPEEDWAY, INC.,
	 	 	a Texas corporation
		
	 	 	TRACKSIDE HOLDING CORPORATION,
	 	 	a North Carolina corporation
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	SPEEDWAY SYSTEMS LLC,
	 	 	a North Carolina limited liability company
			
	 	 	By:	 	SPR, INC.,
	 	 	 	 	its manager
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

  
 [Signatures Continue]

					
	LENDERS:	 	BANK OF AMERICA, N.A.,
	 	 	in its capacity as Administrative Agent and as a Lender
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	BANK OF THE WEST
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	CAROLINA FIRST
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	COMERICA BANK
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	CALYON NEW YORK BRANCH (formerly Credit Lyonnais New York Branch), in its capacity as Documentation Agent and as a Lender
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	FIRST TENNESSEE BANK NATIONAL ASSOCIATION
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	FIRSTRUST BANK
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

  
 [Signatures
Continue] 

					
	 	 	JPMORGAN CHASE BANK, N.A.
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	RBC CENTURA BANK
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	REGIONS BANK
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	SOVEREIGN BANK
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	SUNTRUST BANK, in its capacity
	 	 	as Documentation Agent and as a Lender
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	US BANK NATIONAL ASSOCIATION
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

		
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 	 	in its capacity as Syndication Agent and as a Lender
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:	 	  

  
 [Signatures Continue]

					
	 LEAD ARRANGER
 AND BOOK
MANAGER:
	 	BANC OF AMERICA SECURITIES LLC
			
	 	 	By:	 	  

	 	 	Name:	 	  

	 	 	Title:Non-Employee Directors Stock Compensation Plan

 Exhibit 10.1 
  
 NORTHWEST NATURAL GAS COMPANY 
 NON-EMPLOYEE DIRECTORS STOCK COMPENSATION PLAN 
  
 January 1, 1989 
  
 Northwest Natural Gas Company

     an Oregon corporation 
 220 NW Second
Avenue 

			
	 Portland, OR 97209
	  	the Company

  
 The Company believes
it desirable that members of its board of directors, who represent the Company’s shareholders, be themselves shareholders. To supplement the efforts of the directors towards this end, the Company wishes to increase the ownership interest of
non-employee directors through awards of Company Common Stock. The Company, however, recognizes that a director may believe that he or she has a sufficient ownership interest in Company Common Stock, and therefore permits directors to receive awards
under the plan in the form of deferred cash rather than stock. 
  
 The following plan is therefore adopted: 
  
 1.
Administration. 
  
 Unless otherwise determined pursuant
to this section, this plan shall be administered by the corporate secretary of the Company (the Administrator), who may delegate all or part of that authority and responsibility. The Administrator shall interpret the plan, arrange for the purchase
and delivery of shares, determine forfeitures, and otherwise assume general responsibility for administration of the plan. Any decision by the Administrator shall be final and bind all parties. The Administrator may be replaced from time to time in
the discretion of the chief executive officer of the Company. 
  
 2. Awards. 
  
 2.1 Each non-employee director of
the Company, including those directors who have been employees of the Company in the past but are not employees at the time of any award under this plan, shall receive awards under this plan as of the following award dates: 
  
 (a) January 1, 1989; or 
  
 (b) In the case of (i) directors elected after January 1, 1989 and (ii)
persons who become non-employee directors after January 1, 1989 by ceasing to be employees of the Company, the date on which such director is first elected, whether by the shareholders or board of directors of the Company, or ceases to be an
employee of the Company, as the case may be; and 

 (c) On January 1 of each year thereafter, commencing with January 1, 1998; 
  
 provided, however, that this plan shall terminate as to new awards on, and no award shall be
made under this plan on or after, January 1, 2005. 
  
 2.2 As of
each award date, a participant shall receive an award calculated in the following manner. The “Number of Award Months” shall be determined by subtracting the number of full or partial calendar months remaining until all, if any, previous
awards to the participant under this plan will be vested from the number of full or partial calendar months remaining until the fifth year end after the award date; provided, however, that if, assuming the participant were reelected, a
participant’s term as a director would end because of age before the fifth year end after the award date, the “Number of Award Months” shall be determined by subtracting the number of full or partial calendar months remaining until
all, if any, previous awards to the participant under this plan will be vested from the number of full or partial calendar months remaining until the participant’s term will end because of age. The amount awarded shall then be calculated by
multiplying the Number of Award Months by an amount that, effective as of October 1, 2002, shall be $1,666.67. For purposes of this plan, “full or partial calendar months remaining” for any period includes the calendar month in which the
award date falls and the calendar month in which the last day of the period falls and all calendar months in between. 
  
 2.3 As of each award date, the dollar amount calculated under 2.2 shall be awarded to the participant as follows: 
  
 (a) With respect to award dates after February 26, 2004, each participant
may elect at any time prior to an award date to receive the entire amount to be awarded on that date in deferred cash rather than in Company Common Stock. No partial elections shall be permitted. Any such election must be in writing delivered to the
Administrator prior to the award date. If such an election is made, the dollar amount calculated under 2.2 shall be credited to the participant’s Cash Account under the Company’s Deferred Compensation Plan for Directors and Executives (the
“DCP”) effective as of the award date. The deferred cash amounts shall be subject to vesting under 3, but any interest credited with respect to these amounts under the DCP shall be fully vested and nonforfeitable at all times. The deferred
cash amounts shall otherwise be subject to all of the terms and conditions of the DCP. 
  
 (b) If a participant does not timely elect to receive an award in deferred cash, the dollar amount calculated under 2.2 shall be awarded to the participant in Common Stock as follows: 
  
 (i) As soon as practicable after the award date, the Administrator shall
deliver cash in the amount of the award and applicable commissions to one or more brokers or other persons with instructions to purchase Company Common Stock in the open market. It is understood that market conditions or regulations affecting the
purchases by a corporation of its own shares may extend the period of purchase over several days or weeks. 
  

 2 

 (ii) When several participants have the same award date, all of the stock shall be purchased and then
divided among the participants in proportion to their respective awards, regardless of any changes in price that occur while purchases are being carried out. 
  
 (iii) When all of the stock has been purchased with respect to any award date, certificates in the names of the participants for their respective shares
shall be delivered to the Administrator. Each participant shall deliver to the Administrator a blank stock power duly executed in a form satisfactory to the Administrator for each certificate for shares issued in the participant’s name.

  
 (iv) The Administrator shall hold the certificates and stock
powers until the shares are vested and released as provided in 3.4. 
  
 2.4 Upon any amendment of this plan to increase the dollar amount of awards set forth in 2.2, each participant shall receive an additional award in accordance with the procedures set forth in 2.3. The amount of the additional award for each
participant shall be determined by multiplying the amount of the increase in the award amount by the number of full or partial calendar months remaining until the participant’s most recent prior award under this plan will be fully vested. The
resulting dollar amount shall then be either used to purchase Common Stock for the participant or credited under the DCP as set forth in 2.3. 
  
 3. Vesting; Delivery of Shares; Forfeitures. 
  
 3.1 For each award under 2.2 and 2.3, the number of awarded shares or the amount of awarded cash, as applicable, that will vest per month shall be
determined by dividing the number of awarded shares or the amount of awarded cash by the Number of Award Months. This monthly amount shall vest as of the first day of each calendar month commencing with the later of the month in which the award is
made or the first month after all previous awards to the participant under this plan shall have vested. If an award is made other than on the first day of a month, the award date shall be considered the first day of that month for purposes of 3.1
and 3.2. 
  
 3.2 For each award under 2.3 and 2.4, the number of
awarded shares or the amount of awarded cash, as applicable, that will vest per month shall be determined by dividing the number of awarded shares or the amount of awarded cash by the number of full or partial calendar months remaining until the
participant’s most recent prior award under 2.2 and 2.3 will be fully vested. This monthly amount shall vest as of the first day of each calendar month commencing with the month in which the award is made. 
  
 3.3 Notwithstanding 3.1 and 3.2, all awarded shares and awarded cash of all
participants shall vest upon a change in control of the Company, and all awarded shares and awarded cash of any participant shall vest upon the death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code) of the
participant. For purposes of this plan, a “change in control” of the Company shall mean the occurrence of any of the following events: 
  

 3 

 (a) The approval by the shareholders of the Company of: 
  
 (1) any consolidation, merger or plan of share exchange
involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company 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; 
  
 (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; 
  
 (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 the Company (“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, other than the Company or any employee benefit plan sponsored by the Company) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated
purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of
the combined voting power of the then outstanding Voting Securities. 
  
 3.4 The certificate and stock power for vested shares shall be delivered to the participant or in accordance with 5.2 as soon as practicable after the participant ceases to be a director of the Company or, if earlier, as soon as practicable
after a change in control of the Company. Payment of vested deferred cash shall be governed by the terms of the DCP. 
  
 3.5 If a participant ceases to be a director (other than pursuant to death, disability or a simultaneous change in control of the Company), awarded shares
and awarded cash remaining unvested shall be forfeited. The Administrator, acting for the participant pursuant to the executed stock power, shall transfer the unvested shares to the Company, and these shares shall be cancelled. The participant or
the participant’s representative shall execute any documents reasonably requested by the Administrator to facilitate the transfer. The participant’s Cash Account under the DCP shall be reduced by the amount of unvested cash that is
forfeited. 
  

 4 

 4. Status Before Full Vesting; Transfer of Shares. 
  
 4.1 Each participant shall be a shareholder of record with respect to all
shares awarded, whether or not vested, and shall be entitled to all of the rights of such a holder, except that a participant’s share certificates shall be held by the Administrator until delivered in accordance with 3.4. 
  
 4.2 Any dividends or communications to shareholders received by the
Administrator with respect to shares held by the Administrator shall promptly be transmitted to the participant. 
  
 4.3 No participant may transfer any interest in unvested shares to any person other than the Company. 
  
 4.4 No participant may transfer any interest in any shares awarded under this
plan, whether vested or not, until he or she ceases to be a director of the Company. 
  
 4.5 Notwithstanding 2.3(b)(iv), 3.4, 4.1, 4.3 and 4.4, if a participant in the DCP elects under the DCP to defer shares of Company Common Stock awarded to the participant under this plan, promptly after the deferral
election becomes irrevocable the Administrator shall cause the Common Stock subject to such irrevocable deferral to be transferred to the trustee of the Northwest Natural Gas Company Supplemental Trust. The Common Stock so transferred shall
nevertheless remain subject to forfeiture under 3.5 if the participant ceases to be a director prior to vesting of the shares. 
  
 5. Death of a Participant. 
  
 5.1 Any shares held by the Administrator for a participant who has died shall be delivered as soon as practicable to the participant’s death
beneficiary under 5.2. 
  
 5.2 Any shares to be delivered on death
of a participant under 5.1 shall go to a participant’s beneficiary in the following order of priority: 
  
 (a) To the surviving beneficiary designated by the participant in writing to the Administrator; 
  
 (b) To the participant’s surviving spouse; or 
  
 (c) To the participant’s estate. 
  
 6. Amendment or Termination; Miscellaneous. 
  
 6.1 The board of directors of the Company may amend or terminate this plan
at any time. No amendment or termination shall adversely affect any outstanding award. 
  

 5 

 6.2 Subject to the rights of amendment and termination in 6.1, this plan shall continue indefinitely and
future awards will be made in accordance with 2.1. 
  
 6.3 Nothing
in this plan shall create any obligation on the part of the board of directors of the Company to nominate any director for reelection by the shareholders or the board of directors. 
  
 Adopted by the board of directors of Northwest Natural Gas Company on November 17, 1988, effective January 1, 1989. Amended
by the board of directors of Northwest Natural Gas Company on May 23, 1991, effective July 1, 1991. Amended by the board of directors of Northwest Natural Gas Company on July 24, 1997, effective July 1, 1997. Amended by the board of directors of
Northwest Natural Gas Company on December 18, 1997, effective January 1, 1998. Amended by the board of directors of Northwest Natural Gas Company on September 26, 2002, effective October 1, 2002. Amended by the board of directors of Northwest
Natural Gas Company on February 26, 2004, effective February 26, 2004. Amended by the board of directors of Northwest Natural Gas Company on September 23, 2004, effective January 1, 2005. Amended by the board of directors of Northwest Natural Gas
Company on November 17, 2004, effective January 1, 2005. Amended by the board of directors of Northwest Natural Gas Company on April 28, 2005, effective April 28, 2005. 
  

 6

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