Document:

dex4k.htm

    Northwest
Natural Gas Company

     

    $300,000,000

     

    Medium-Term
Notes, Series B

     

    August
24, 2009

     

    Banc of
America Securities LLC

     

    One
Bryant Park

     

    New York,
New York  10036

     

    Attn:  High
Grade Transaction Management/Legal

     

     

    UBS
Securities LLC

     

    677
Washington Blvd.

     

    Stamford,
Connecticut 06901

     

    Attn:  Fixed
Income Syndicate

     

     

    J.P.
Morgan Securities Inc.

     

    270 Park
Avenue—Floor 8

     

    New York,
New York 10017

     

    Attn:  Medium-Term
Notes Desk

     

     

    Piper
Jaffray & Co.

     

    800
Nicollet Mall

     

    Minneapolis,
MN  55402

     

    Attn:  Debt
Capital Markets

     

     

    Wells
Fargo Securities, LLC

     

    301 S.
College Street

     

    Charlotte,
NC  28288-0613

     

    Attn:  Transaction
Management Department

     

    

     

    Ladies
and Gentlemen:

     

    Reference
is hereby made to the Distribution Agreement, dated March 18, 2009 (the “Distribution Agreement”), a
copy of which has previously been delivered to you, between Northwest Natural
Gas Company, an Oregon corporation (the “Company”), and each of Banc of America
Securities LLC, UBS Securities LLC, J.P. Morgan Securities Inc. and Piper
Jaffray & Co., with respect to the issue and sale by the Company of its
First Mortgage Bonds, designated Secured Medium-Term Notes, Series B, and its
Unsecured Medium-Term Notes, Series B (collectively, the “Securities”).  Capitalized
terms used herein without definition shall have the meanings assigned to them in
the Distribution Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Subject
to the terms and conditions set forth in the Distribution Agreement, the Company
hereby appoints Wells Fargo Securities, LLC as agent of the Company for the
purpose of soliciting and receiving offers to purchase the
Securities.  In connection with such appointment, Wells Fargo
Securities, LLC is hereby entitled to the benefits and subject to the duties of
an Agent under the terms and conditions of the Distribution Agreement (including
the Administrative Procedures) and by its execution hereof is hereby made a
party to the Distribution Agreement.  In connection with such
appointment, Wells Fargo Securities, LLC shall receive as of the date
hereof:  (1) Distribution Agreement, dated March 18, 2009, among the
Company and the agents made a party thereto; (2) legal opinions, dated March 18,
2009, of Margaret D. Kirkpatrick, Morgan, Lewis & Bockius LLP, Stoel Rives
LLP, and Simpson Thacher & Bartlett LLP; (3) comfort letter, dated March 18,
2009, from PricewaterhouseCoopers LLP; (4) Base Prospectus, dated January 8,
2008 and Prospectus Supplement, dated March 18, 2009; (5) bring-down legal
opinions, dated August 6, 2009, of Margaret D. Kirkpatrick, Stoel Rives LLP, and
Morgan, Lewis & Bockius LLP; and (6) bring-down comfort letter from
PricewaterhouseCoopers LLP, dated August 6, 2009.

     

    Any
communication under the Distribution Agreement will be made in accordance with
Section 12 of the Distribution Agreement, and if to Wells Fargo Securities, LLC
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to 301 S. College Street, Charlotte,
NC  28288-0613, attention: Transaction Management Department,
facsimile transmission number (704) 383-9165.

     

    This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

     

    If the
foregoing correctly sets forth our agreement, please indicate your acceptance
hereof in the space provided for that purpose below.

     

                                Very truly
yours,

     

                                NORTHWEST NATURAL
GAS

     

                                COMPANY

     

                                By:   _________________________        

                                                      

                                Title:  Senior
Vice President and Chief

     

                                        Financial Officer

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
foregoing Agreement is hereby

     

    confirmed
and accepted as of the

     

    date
hereof.

     

    WELLS
FARGO SECURITIES, LLC

     

    
      	
              By:

            	 

    

     

      
        

      

    

    
      	
              Title:dex10b.htm

    

    NORTHWEST
NATURAL GAS COMPANY

    

    EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME PLAN

    

    (2010
Restatement)

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NORTHWEST
NATURAL GAS COMPANY

    EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME PLAN

    (2010
RESTATEMENT)

    

    

    TABLE OF
CONTENTS

    

    
       

      
        	 ARTICLE
      I.	 	 DEFINITIONS	 1
	 	 1.01	 Benefit
      Commencement Date	 1
	 	 1.02	 Board of
      Directors	 1
	 	 1.03	 Change in
      Control	 1
	 	 1.04	 Committee	 1
	 	 1.05	 Company	 1
	 	 1.06	 Effective
      Date	 1
	 	 1.07	 Final Annual
      Compensation	 1
	 	 1.08	 Normal
      Retirement Date	 1
	 	 1.09	 Participant	 1
	 	 1.10	 Plan	 1
	 	 1.11	 Retirement
      Plan	 1
	 	 1.12	 Separation
      from Service	 1
	 	 1.13	 Service	 1
	 	 1.14	 Surviving
      Beneficiary	 2
	 	 1.15	 Total and
      Permanant	 2
	 	 	 	 
	 ARTICLE
      II.	 	 AMOUNT OF
      BENEFITS; RIGHT TO RECEIVE BENEFITS	 2
	 	 2.01	 Normal
      Retirement Supplemental Income	 3
	 	 2.02	 Early
      Retirement Supplemental Income	 3
	 	 2.03	 Disability
      Retirement Supplemental Income	 3
	 	 2.04	 Death
      Benefits	 3
	 	 2.05	 Vested
      Benefits	 3
	 	 2.06	 Post-Retirement
      Change in Retirement Pklan Benefits	 4
	 	 2.07	 Forfeiture of
      Benefits	 4
	 	 2.08	 Change in
      Control Supplemental Benefits	 4
	 	 	 	 
	 ARTICLE
      III.	 	 PAYMENT OF
      BENEFITS	 4
	 	 3.01	 Form of
      Supplemental Payments	 4
	 	 3.02	 Commencement
      of Supplemental Payments	 5

      

      
        	
              	 3.03	 Six-Month
      Minimum Delay	 5
	 	 3.04 	 Source	 5
	 	 3.05	 Key Man
      Insurance	 5
	 	 	 

      

    

    
      	ARTICLE IV.	 	 ADMINISTRATION	 5
	 	 4.01	 Committee
      Discretion	 5
	 	 4.02	 Company Right
      to Amend, Modify or Terminate	 5
	 	 	 

    

    
      	ARTICLE V	 	 GENERAL
      PROVISIONS	 6
	 	 5.01	 No Effect on
      Employment	 6
	 	 5.02	 Legally
      Binding	 6

    

    
      	
            	 5.03	 Notice	 6
	 	 5.04	 No Transfer of
      Benefits	 6
	 	 5.05	 Disclosure to
      Participants	 6

    

    
      	
            	 5.06	 Adoption	 6
	 	 5.07	 Integration
      Clause	 6
	 	 	 	 

    

    
2004 ESRIP Appendix

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    NORTHWEST NATURAL GAS
COMPANY

    
      EXECUTIVE SUPPLMENTAL RETIREMENT
INCOME PLAN

    

    (2010 RESTATEMENT)

     

    PURPOSE; EFFECTIVE
DATE

    
       

    

    This Executive Supplemental Retirement
Income Plan (“Plan”) was established effective January 1, 1981, and was later
amended, to promote the best interests of the Company by enabling the Company
(a) to attract to its key management positions persons of outstanding ability,
and (b) to retain in its employ those persons of outstanding competence who
occupy key executive positions and who in the past contributed and who continue
in the future to contribute materially to the success of the business by their
ability, ingenuity and industry.  Participation in the Plan is limited
to a select group of management and highly compensated
employees.  Effective September 1, 2004, participation is limited to
Participants in the Plan as of September 1, 2004, and no new Participants will
be added to the Plan after September 1, 2004.  In order to
comply with changes in applicable law and to clarify existing provisions, the
Company adopted the 2007 Restatement on December 20, 2007 with a retroactive
effective date of January 1, 2005; provided, however, that the amendments made
in the 2007 Restatement shall not apply to any Participant whose Separation from
Service occurred prior to January 1, 2005 and the benefits for those
Participants shall be governed by the terms of the Plan in effect immediately
prior to the 2007 Restatement.  The Plan is further amended by this
2010 Restatement on December 17, 2009 effective as of January 1, 2010, and these
amendments shall not apply to any Participant whose Separation from Service
occurred prior to January 1, 2010.

    

    ARTICLE
I.                      DEFINITIONS

    
 

    The following words and phrases as used
herein shall, for the purpose of this Plan and any subsequent amendment thereof,
have the following meanings, unless a different meaning is plainly required by
the context:

    

    1.01           Benefit Commencement
Date means the first day of the month in which Plan benefits are required
to commence as provided under 3.02.

    

    1.02           Board of Directors
means the Board of Directors of the Company as constituted from time to
time.

    

    1.03           Change in Control Severance
Benefit means, for any Participant who is party to a Change in Control
Severance Agreement with the Company, the severance benefit provided for in such
agreement; provided, however, that such severance benefit is a “Change in
Control Severance Benefit” for purposes of this Plan only if, under the terms of
the Participant’s Change in Control Severance Agreement, the Participant becomes
entitled to the severance benefit (a) after a change in control of the
Company has occurred, (b) because the Participant’s employment with the Company
has been terminated by the Participant for good reason in accordance with the
terms and conditions of the Change in Control Severance Agreement or by the
Company other than for cause or disability, and (c) because the Participant has
satisfied any other conditions or requirements specified in the Change in
Control Severance Agreement and necessary for the Participant to become entitled
to receive the severance benefit.  Under no circumstances will a
Participant who is not party to a Change in Control Severance Agreement be
deemed to become entitled to a Change in Control Severance Benefit for purposes
of this Plan.  For purposes of 1.03, the terms “change in control,”
“good reason,” “cause” and “disability” shall have the meanings as may be set
forth in the Participant’s Change in Control Severance Agreement, if
any.

    
       

    

    1.04           Committee means the
Organization and Executive Compensation Committee of the Board of Directors,
previously known as the Compensation Committee.

    

    1.05           Company means
Northwest Natural Gas Company and its subsidiaries.

    

    1.06           Effective Date means
January 1, 1981, subject to any later effective date of any specific section
provided in any amendment hereto.

    

    1.07           Final Annual
Compensation means the annual average determined by taking the sum of the
Participant’s Total Compensation for the five (5) consecutive Compensation Years
out of the Participant’s final ten (10) Compensation Years with the Company
which produce the highest total amount, and dividing such sum by five
(5).  If a Participant receives a Promotion (as defined below) and
then has a Separation from Service before December 31 of the fourth Compensation
Year that commenced on or after the effective date of such Promotion, Final
Annual Compensation shall be based on a three (3) year average instead of a five
(5) year average.  If a Participant receives a Promotion and then has
a Separation from Service on or after December 31 of the fourth Compensation
Year, and before December 31 of the fifth Compensation Year, that commenced on
or after the effective date of such Promotion, Final Annual Compensation shall
instead be based on a four (4) year average.  A “Promotion” shall
include any promotion to the position of Chief Executive Officer, President or
Chief Financial Officer or any other change in title that the Committee
determines to include a significant increase in
responsibilities.  Notwithstanding the foregoing, if any Participant
has a Separation from Service on or before December 31, 2010, Final Annual
Compensation shall instead be based on a three (3) year
average.

    

    1.07-1           Total Compensation
for any Compensation Year means the sum of (a) plus (b):

    

    (a)           The
annual salary approved by the Board of Directors and in effect during the
Compensation Year; provided, however, that if a Participant’s salary is changed
during a Compensation Year, the salary amount included in Total Compensation for
that Compensation Year shall be the total amount of salary the Participant
earned for services during that Compensation Year or would have earned for
services during that Compensation Year if employment had continued at his or her
final salary level for the full Compensation Year.

    

    (b)           The
annual performance award for the prior calendar year approved by the Board of
Directors by the beginning of the Compensation Year; provided, however, that the
amount of the annual performance award included in Total Compensation for any
calendar year after 2009 shall not exceed 125% of the Participant’s target
award; provided further, however, that if a Participant has a Separation from
Service during the last 61 days of any Compensation Year, Total Compensation for
each of the Participant’s final ten (10) Compensation Years shall also be
calculated as the sum of the salary in effect for such Compensation Year as
determined under (a) plus the annual performance award for the calendar year
that ended during such Compensation Year, and these alternate Total Compensation
calculations shall be used if the resulting Final Average Compensation is
higher.

     

    1.07-2           Compensation Year
means the twelve (12) month period from March 1 to February 28/29, including any
partial portion of such period preceding a Separation from Service.

    

    1.08           Normal Retirement
Date means the first day of the month next following the Participant’s
65th birthday.

    

    1.09           Participant means an
employee specifically designated by the Committee to be covered under this Plan
and who continues to fulfill all requirements for participation.  The
initial designation of Participants shall be all executive officers of the
Company elected by the Board of Directors (not including “assistant” officer
positions).  A list of Participants as of September 1, 2004 who were
employed by the Company as of that date is included in the 2004 ESRIP
Appendix.  No new Participants shall enter the Plan after September 1,
2004.

    

    1.10           Plan means the
Executive Supplemental Retirement Income Plan herein set forth, as amended from
time to time.

    

    1.11           Retirement Plan means
the Company’s Retirement Plan for Non-Bargaining Unit Employees, as amended from
time to time.

    

    1.12           Separation from
Service shall have the meaning ascribed to such term in Treasury
Regulations §1.409A-1(h).

     

    1.13           Service depends on
the context:

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    

       

      a)           Benefit
Accrual.  Service for benefit accrual under 2.01 means years of
actual participation, including service credited under 1.13(c), after becoming a
Participant under this Plan, plus any additional years of benefit accrual credit
earned or awarded under 2.01-2(b)(2) and/or (3).

       

               (b)           Vesting
Service.  Service for vesting means all service with the
Company from commencement of employment, including service credited under
1.13(c), plus any additional grant under 2.05-5.

      

      (c)           Other
Service.  To the extent “service” is not addressed by (a) or
(b) above, Service includes all accredited years of service with the Company
credited under the Retirement Plan and includes all periods of Company paid
disability and long-term disability leave.

       
1.14           Surviving Beneficiary
means the beneficiary or beneficiaries designated by the Participant on the form
provided by the Company.  Such beneficiary designation may be changed
by the Participant at any time by written notice to the Committee.  If
no Surviving Beneficiary is designated, or if the designated Surviving
Beneficiary dies before the Benefit Commencement Date, the Surviving Beneficiary
shall be the Participant’s surviving spouse or, if none, the Participant’s
estate.

    

    1.15           Total and Permanent
Disability means that the Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months.

     

    ARTICLE
II.                      AMOUNT OF BENEFITS; RIGHT TO
RECEIVE BENEFITS

    

    Each Participant or the Participant’s
Surviving Beneficiary shall have the right to receive, and the Company shall
pay, supplemental benefits as provided in this Article II, in the form and at
the time provided in Article III:

    

    2.01           Normal Retirement
Supplemental Income.  Upon Separation from Service at or after
the Normal Retirement Date with at least ten (10) years of Service for vesting
under 1.13(b), a Participant shall be entitled to receive, subject to 2.07,
monthly supplemental retirement payments determined under 2.01-1 through
2.01-4:

    

    2.01-1           Determining ESRIP Benefit
Amount.  The amount to be paid at the Normal Retirement Date
under this Plan shall be determined by a three step process under the following
(a), (b) and (c):

    

    (a)           Determine Target
Benefit.  The sum of the Participant’s accrued target
percentage credits under 2.01-2 is multiplied by Final Annual
Compensation.

    

    (b)           Determine Offset
Amount.  The amount to be paid at Normal Retirement Date from
three other sources of retirement benefits shall be determined under
2.01-3.

    

    (c)           Determine Net
Benefit.  If the target benefit amount under (a) exceeds the
total payments from the other three sources under (b), the excess shall be paid
under 2.01-4.

    

    2.01-2     Accrued Target
Percentage.  Participant’s accrued target percentage shall be
the sum of the accruals at the rate specified below in (a) for each Year of
Participation (defined below in (b)) credited under this Plan

    

    (a)           Yearly Accrual Percentage
Schedule:

    

    (1)           Years
1-15.  The yearly target percentage accrual for all
Participants shall be:

    

    
      	
              Years
      of Participation

            	
              Accrued
      Target Percentage for Each Year of Participation

            	
              Maximum
      Total Target Percentage

            
	
              Years
      1 through 15

            	
              4.33%
      per Year

            	
              65%
      (15 Years times 4.33%)

            

    

    

    (2)           Years
16-25.  In addition, each of the Participants who had at least
six (6) Years of Participation as of September 1, 2004 as shown in the attached
2004 ESRIP Appendix shall be entitled to additional accruals for Years of
Participation 16-25 as follows:

    

    
      	
              Years
      of Participation

            	
              Accrued
      Target Percentage for Each Year of Participation

            	
              Maximum
      Total Target Percentage

            
	
              Years
      16 through 25

            	
              0.50%
      per Year

            	
              70%
      (15 Years times 4.33% plus 10 Years times
0.50%)

            

    

    

    (b)           Year of Participation
means the sum of (1), (2) and (3):

    

    (1)           Each
consecutive twelve (12) month period (including fractions calculated to the
nearest hundredth of a year) of Service measured by each anniversary of the date
of first becoming a Participant under this Plan.

    

    (2)           Any
additional Years of Participation awarded to a Participant by the Committee in
the exercise of its discretion, specifically including any additional Years of
Participation reflected in the attached 2004 ESRIP Appendix as of September 1,
2004.

    

    (3)           Three
(3) additional Years of Participation credit shall be awarded to any Participant
who becomes entitled to a Change in Control Severance Benefit.

    

    2.01-3           Payments From Other
Sources.  The total annual payments from the three sources
listed below in (a), (b) and (c) shall be determined, all calculated as a single
life annuity.

    
       

    

    (a)           the
Retirement Plan.

    

    (b)           Social
Security (as determined under 2.01-4(b)(2)).

    

    (c)           Supplemental
retirement payments under Section 5.7 of the Company’s Executive Deferred
Compensation Plan and Section 8 of the Company’s Deferred Compensation Plan for
Directors and Executives.

    

    2.01-4           Benefit Payable Under This
Plan.  The monthly payment under this Plan shall be determined
under the formula of (a) minus (b) as follows:

    

    (a)           The
target monthly benefit shall be one-twelfth (1/12) times Final Annual
Compensation times the accrued target percentage determined under 2.01-2 above;
provided, however, that if a Participant’s Separation from Service is after
December 31, 2010 and the target monthly benefit for the Participant calculated
as if the Participant’s Separation from Service had been on December 31, 2010 is
greater than the target monthly benefit calculated based on the Participant’s
actual Separation from Service, then the target monthly benefit as of December
31, 2010 shall be used;

    

    MINUS

    

    (b)           The
sum of (1) plus (2) plus (3):

    

    (1)           The
Participant’s monthly retirement benefit under the Retirement Plan assuming
commencement of benefits in the month following Separation from Service and
calculated as if the Participant had elected to have the entire benefit paid as
a single life annuity;

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      
        PLUS

        

        (2)           One-twelfth
(1/12) of the Participant’s annual primary Social Security benefit assuming
commencement of benefits in the month following Separation from Service and
determined in the same manner and based on the same earnings as are used to
compute the actual Social Security benefit;

         

        PLUS

      (3)           The
Participant’s monthly supplemental retirement benefit under Section 5.7 of the
Company’s Executive Deferred Compensation Plan and/or Section 8 of the Company’s
Deferred Compensation Plan for Directors and Executives, calculated in each case
as if the Participant had elected to have the benefit paid as a single life
annuity.

       
2.02           Early Retirement
Supplemental Income.  Upon Separation from Service at or after
age fifty-five (55) with at least ten (10) years of Service for vesting under
1.13(b), a Participant shall be entitled to receive, subject to 2.07, the
reduced monthly supplemental retirement payments determined as
follows:

    

    2.02-1           First,
the target monthly early retirement benefit shall be equal to one-twelfth (1/12)
times the Participant’s Final Annual Compensation times the accrued target
percentage determined under 2.01-2 based on the Participant’s Years of
Participation at the time of Separation from Service; provided, however, that if
a Participant’s Separation from Service is after December 31, 2010 and the
target monthly early retirement benefit for the Participant calculated as if the
Participant’s Separation from Service had been on December 31, 2010 is greater
than the target monthly early retirement benefit calculated based on the
Participant’s actual Separation from Service, then the target monthly early
retirement benefit as of December 31, 2010 shall be used.

    

    2.02-2           Second,
the unreduced monthly supplemental payment under this Plan shall be determined
under the formula in 2.01-4, using in 2.01-4(b)(1) the Participant’s monthly
retirement benefit under the Retirement Plan assuming commencement of benefits
in the month following the Participant’s Normal Retirement Date and a projected
2.5% annual increase in the Consumer Price Index between Separation from Service
and Normal Retirement Date and calculated as if the Participant had elected to
have the entire benefit paid as a single life annuity, using in 2.01-4(b)(2) the
Participant’s estimated monthly Social Security benefit payable at age 65
assuming 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 age 65, and using in 2.01-4(b)(3) the Participant’s monthly
retirement benefit under Section 5.7 of the Company’s Executive Deferred
Compensation Plan and/or Section 8 of the Company’s Deferred Compensation Plan
for Directors and Executives, calculated in each case assuming that benefits
could have been and were commenced in the month following the Participant’s
Normal Retirement Date and as if the Participant had elected to have the benefit
paid as a single life annuity.

    

    2.02-3           Third,
the unreduced monthly amount under 2.02-2 shall be reduced by one-half of one
percent (0.50%) per month for each full or partial month by which the Benefit
Commencement Date precedes the Participant’s 62nd birthday, as illustrated in
the following table:

    

    
      	
              Percentage
      of Unreduced Early Retirement Benefit for Benefit Commencement at
      Specified Age*

            
	
              Retirement
      Age

            	
              Percentage

            	
              Retirement
      Age

            	
              Percentage

            
	
              55

            	
              58%

            	
              59

            	
              82%

            
	
              56

            	
              64%

            	
              60

            	
              88%

            
	
              57

            	
              70%

            	
              61

            	
              94%

            
	
              58

            	
              76%

            	
              62-64

            	
              100%

            

    

    

    * This
table shows the percentage reduction based on years prior to age
62.  The actual percentage reduction will be further adjusted for each
additional month by which the Participant’s age at the Benefit Commencement Date
precedes the retirement age specified in the table.

    

    2.03           Disability Retirement
Supplemental Income.  Upon a Participant’s Total and Permanent
Disability while employed by the Company and with at least fifteen (15) years of
Service for vesting under 1.13(b) and 1.13(c), a Participant shall be entitled
to receive, subject to 2.07, monthly supplemental retirement payments determined
in the same manner as early retirement payments under 2.02.

    
       

    

    2.04           Death
Benefits.  If a Participant dies during employment or before
the Benefit Commencement Date for any other benefit under this Plan, a monthly
supplemental death benefit shall be paid to the Participant’s Surviving
Beneficiary as follows:

    

    2.04-1           Amount.  The
amount of the monthly supplemental death benefit shall be determined under
either 2.01, 2.02, 2.03, 2.05 or 2.08, as applicable, assuming that (a) the
Participant had a Separation from Service on the date of death (or on the
Participant’s actual Separation from Service, if earlier), (b) the Participant
had survived until the Benefit Commencement Date that would have been applicable
under 3.02 based on the assumed date of Separation from Service, (c) the
Participant had selected the form of annuity selected by the Surviving
Beneficiary pursuant to 2.04-2, and (d) the Participant had died on the day
after the Benefit Commencement Date.

    

    2.04-2           Annuity
Form.  The Surviving Beneficiary may at any time prior to the
applicable Benefit Commencement Date elect one of the available annuity forms
under 3.01 for purposes of calculating and paying the death benefit under
2.04-1.  If the Surviving Beneficiary does not make a timely election
under this 2.04-2, the Surviving Beneficiary shall be deemed to have elected a
100% joint and survivor annuity (without the “pop-up” feature) if the Surviving
Beneficiary is one individual; otherwise, the Surviving Beneficiary shall be
deemed to have elected the life annuity with 120 guaranteed payments under
3.01-1.

    

    2.04-3           Other Death
Benefits.  The supplemental death benefit under this Plan shall
be in addition to any death benefit provided by any other Company sponsored plan
or insurance program.

    

    2.05           Vested
Benefits.  Upon Separation from Service with at least five (5)
years of Service for vesting under 1.13(b), a Participant who is not eligible
for benefits under 2.01, 2.02, 2.03 or 2.08, shall be entitled to receive,
subject to 2.07, the reduced monthly supplemental retirement payments determined
as follows:

    

    2.05-1           First,
the unreduced monthly supplemental payment under this Plan shall be determined
in the same manner as such amount would be determined for early retirement
payments under 2.02-1 and 2.02-2, except that in 2.01-4(b)(2) there shall be
used the Participant’s estimated monthly Social Security benefit payable at age
65 assuming continuation of earnings after Separation from Service through age
65 at the Participant’s final salary level with the Company, but with no
projected increases in the national average wage index or cost of living between
Separation from Service and age 65.

     

    2.05-2           Second,
the vested portion of the unreduced monthly amount shall be determined by
multiplying the unreduced monthly amount by the vested percentage set forth in
the following table that corresponds to the Participant’s number of years of
Service for vesting under 1.13(b):

    

    
      	
              Completed
      Years of Vesting Service

            	
              Vested
      Percentage

            
	
              Years
      1-4

            	
              0%

            
	
              Year
      5

            	
              50%

            
	
              Year
      6

            	
              60%

            
	
              Year
      7

            	
              70%

            
	
              Year
      8

            	
              80%

            
	
              Year
      9

            	
              90%

            
	
              Year
      10 and above

            	
              100%

            

    

     

    2.05-3           Third,
if the Participant’s Separation from Service occurs before age fifty-five (55),
the vested portion of the unreduced monthly amount under 2.05-2 shall be reduced
by one-half of one percent (0.50%) per month for each full or partial month by
which the Benefit Commencement Date precedes the Participant’s 65th birthday, as
illustrated in the following table:

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	
              Percentage
      of Unreduced Vested Retirement Benefit for Benefit Commencement at
      Specified Age

            
	
              Commencement
      Age

            	
              Percentage

            	
              Commencement
      Age

            	
              Percentage

            
	
              55

            	
              40%

            	
              60

            	
              70%

            
	
              56

            	
              46%

            	
              61

            	
              76%

            
	
              57

            	
              52%

            	
              62

            	
              82%

            
	
              58

            	
              58%

            	
              63

            	
              88%

            
	
              59

            	
              64%

            	
              64

            	
              94%

            

    

    

    If the
Participant’s Separation from Service occurs at or after age 55, the vested
portion of the unreduced monthly amount under 2.05-2 shall be reduced in the
same manner as provided under 2.02-3 for early retirement benefits.

    

    2.05-4           Vesting Service
Credit.  One year of vesting service is awarded for each period
of 12 consecutive months of employment with the Company, with the first such
period beginning on the Participant’s employment commencement date and
subsequent periods beginning on each anniversary of the Participant’s employment
commencement date.

    

    2.05-5           Committee
Discretion.  For any specified Participant, the Committee may,
in its discretion, grant additional vesting service credit, waive the minimum
service requirement, reduce the early retirement reduction percentage for
payments starting before age 65, or make any appropriate adjustment of the
benefit amount under this Plan.

    

    2.06           Post-Retirement Change in
Retirement Plan Benefits.

    

    2.06-1           Change in Benefit
Formula.  If, after supplemental payments start under this
Plan, the benefit payable to a retired Participant is increased under the
Retirement Plan by a change in the Retirement Plan benefit formula or its
components, the supplemental payment under this Plan shall be reduced to reflect
such increase, effective for and after the first month when such increase is
paid.  The supplemental benefit shall be recalculated under the
benefit formula (2.01, 2.02, 2.03, 2.04, 2.05 or 2.08) applicable to the retiree
by substituting such increased Retirement Plan benefit in the formula, with all
other components of the formula to remain unchanged.

    

    2.06-2           COLA
Supplement.  Any post-retirement increase to the Retirement
Plan benefit that is not the result of a change of the Retirement Plan benefit
formula or its components (such as a cost of living adjustment for retirees)
shall not trigger a recalculation of benefits under 2.06-1 of this
Plan.

    

    2.07           Forfeiture of
Benefits.  Notwithstanding any other provision of this Plan to
the contrary, Plan benefits shall be forfeited as follows:

    

    2.07-1           Discharge for
Cause.  No Plan benefits shall be paid if the Participant is
discharged from the Company for cause involving illegal or fraudulent acts or
conduct detrimental to the interests of the Company.

    

    2.07-2           Agreement Not to
Compete.  No Plan benefits shall be paid to a Participant
unless, prior to the date Plan benefits are scheduled to commence, the Company
receives Participant’s written agreement not to compete with the Company or its
subsidiaries during the period of Plan benefit payments.  Plan
benefits shall be forfeited in whole or in part, as the Committee shall decide,
for any breach of such agreement not to compete.

    

    2.08           Change in Control
Supplemental Income.

    

    2.08-1           Benefit
Calculation.  A Participant who has a Separation from Service
before the Normal Retirement Date and is or becomes entitled to a Change in
Control Severance Benefit shall have a 100% vested right to receive, subject to
2.07, monthly supplemental retirement payments determined in the same manner as
early retirement payments under 2.02, except that (a) the Participant shall be
credited with additional Years of Participation as provided in 2.01-2(b)(3), and
(b) in lieu of applying 2.02-3, the unreduced monthly amount under 2.02-2 shall
be reduced by one-quarter of one percent (0.25%) per month for each full or
partial month by which the Benefit Commencement Date precedes the Participant’s
62nd birthday.

     

    2.08-2           Possible Benefit
Recalculation.  With respect to any Participant who is party to
a Change in Control Severance Agreement, it may be the case that (a) the
Participant’s employment with the Company is terminated prior to a “change in
control” of the Company (as defined in the Participant’s Change in Control
Severance Agreement), (b) a change in control of the Company occurs after such
termination, and (c) the Participant then becomes entitled to a Change in
Control Severance Benefit.  If, after such termination of employment
and prior to the time that the Participant becomes entitled to a Change in
Control Severance Benefit, supplemental benefit payments to the Participant have
started under the Plan, then, at such time thereafter as the Participant becomes
entitled to a Change in Control Severance Benefit, the benefits payable to the
Participant under the Plan shall be retroactively recalculated to reflect the
benefit enhancements applicable under the Plan as a result
thereof.  To the extent that the amount of the supplemental benefit
payments paid to the Participant prior to such recalculation is less than the
amount of such payments as so recalculated, the difference will be paid to the
Participant in a cash lump sum (without interest) as soon as practicable after
the change in control of the Company.

     

    ARTICLE
III.                                PAYMENT OF
BENEFITS

    
       

    

    3.01           Form of Supplemental
Payments.  Subject
to 3.01-3, supplemental monthly payments to a Participant shall be made in the
annuity form specified in 3.01-1; provided, however, that a Participant may
elect at any time at least 30 days prior to the Benefit Commencement Date to
have benefit payments made in one of the annuity forms specified in
3.01-2:

    

    3.01-1           Life Annuity With One
Hundred Twenty (120) Guaranteed Payments.  Unless the
Participant elects another annuity form under 3.01-2 , the Participant’s monthly
supplemental benefit as determined under 2.01, 2.02, 2.03, 2.05 or 2.08 shall be
paid as equal monthly payments for the Participant’s lifetime, except that if
the Participant dies before receiving one hundred twenty (120) monthly payments,
the balance of the one hundred twenty (120) payments shall be made monthly to
the Participant’s Surviving Beneficiary.

    

    3.01-2           Annuity Forms under
Retirement Plan.  The Participant may elect to receive
supplemental monthly payments in 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.  Any such alternate annuity shall be the actuarial equivalent of
the benefit under 3.01-1 as determined by the Plan’s actuary based on the
actuarial assumptions used for determining equivalent benefits under the
Retirement Plan at the Benefit Commencement Date.

    

    3.01-3           Small Benefit Cash
Out.  If the actuarial equivalent lump sum present value of a
Participant’s benefits, based on the actuarial assumptions used for determining
equivalent benefits under the Retirement Plan at the Benefit Commencement Date,
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
3.02.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    3.02           Commencement of Supplemental
Payments.

    

    3.02-1           Normal Retirement
Supplemental Income.  If a Participant is eligible for normal
retirement benefits under 2.01, supplemental monthly payments under this Plan
shall commence with the first month following the Participant’s Separation from
Service.

    

    3.02-2           Change in Control
Supplemental Income.  If a Participant is not eligible for
normal retirement benefits under 2.01, but is eligible for change in control
retirement benefits under 2.08, supplemental monthly payments under this Plan
shall commence with the first month following the later of the Participant’s
55th
birthday or the Participant’s Separation from Service.

    

    3.02-3           Disability Retirement
Supplemental Income.  If a Participant is not eligible for
normal retirement benefits under 2.01 or change in control retirement benefits
under 2.08, but is eligible for disability retirement benefits under 2.03,
supplemental monthly payments under this Plan shall commence with the first
month following the later of the Participant’s 55th
birthday or the Participant’s Total and Permanent Disability; provided, however,
that a Participant may elect no later than December 31, 2008 to have any
disability retirement benefits commence under this 3.02-3 with the first month
following the later of the Participant’s Separation from Service or another
specified birthday of the Participant that shall be no less than age 56 and no
more than age 62.

    

    3.02-4           Early Retirement
Supplemental Income.  If a Participant is not eligible for
normal retirement benefits under 2.01, change in control retirement benefits
under 2.08 or disability retirement benefits under 2.03, but is eligible for
early retirement benefits under 2.02, supplemental monthly payments under this
Plan shall commence with the first month following the later of the
Participant’s 62nd
birthday or the Participant’s Separation from Service; provided, however, that a
Participant may elect no later than December 31, 2008 to have any early
retirement benefits commence under this 3.02-4 with the first month following
the later of the Participant’s Separation from Service or another specified
birthday of the Participant that shall be no less than age 55 and no more than
age 61.

    

    3.02-5           Vested
Benefits.  If a Participant is not eligible for normal
retirement benefits under 2.01, change in control retirement benefits under
2.08, disability retirement benefits under 2.03 or early retirement benefits
under 2.02, but is eligible for vested benefits under 2.05, supplemental monthly
payments under this Plan shall commence with the first month following the later
of the Participant’s 65th
birthday or the Participant’s Separation from Service; provided, however, that a
Participant may elect no later than December 31, 2008 to have any vested
benefits commence under this 3.02-5 with the first month following the later of
the Participant’s Separation from Service or another specified birthday of the
Participant that shall be no less than age 55 and no more than age
64.

    

    3.02-6           Death
Benefits.  If a Participant’s Surviving Beneficiary is eligible
for death benefits under 2.04, supplemental monthly payments under this Plan
shall commence in the month that benefits would have commenced under 3.02-1,
3.02-2, 3.02-3, 3.02-4 or 3.02-5, as applicable, if the Participant had a
Separation from Service on the date of death (or on the Participant’s actual
Separation from Service, if earlier) and then survived until benefits had
commenced.

    

    3.02-7           Modification of
Elections.  After December 31, 2008, a Participant who has made
an election under 3.02-3, 3.02-4 or 3.02-5 may elect to change any or all of
such elections provided that (a) such change election is made in writing
submitted to the Company no later than one year before the birthday specified in
the original election, (b) such change election shall not be effective if the
Participant’s Separation from Service occurs less than one year after such
change election, (c) the birthday specified in the change election is at least
five years after the birthday specified in the original election (and therefore
may be a higher age than that permitted in the original election), and (d) the
election under any of 3.02-3, 3.02-4 or 3.02-5 may only be changed once under
this 3.02-7.

     

    3.03           Six-Month Minimum
Delay.  Notwithstanding the foregoing, no supplemental monthly
payments under this Plan shall be paid to any Participant until the seventh
month following the month of the Executive’s Separation from Service with the
Company; provided, however, that this delay in commencement of benefits shall
not apply to death benefits under 2.04.  Any payments that would have
been paid if not for this 3.03 shall be accumulated and paid in full in the
seventh month following the month of the Participant’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) of the Company’s Deferred Compensation Plan for Directors and
Executives.

    

    3.04           Source.  The
commitment of the Company to pay supplemental retirement benefits under this
Plan is an unsecured promise of the Company to make the
payments.  There is no asset or trust fund set aside for payment of
benefits hereunder, except to the extent held under the Company’s Umbrella Trust
for Executives, which is subject to the claims of the Company’s creditors under
conditions specified therein.

    

    3.05           Key Man
Insurance.  The Company shall purchase and own such key man
life insurance as it chooses on the life of any Participant.  No
Participant, nor his or her beneficiaries, heirs, assigns, personal
representative or estate, shall have any right to or interest in any such policy
or the proceeds payable thereunder on his or her death.  On death of
the Participant, the proceeds shall be paid to the Company.

     

    ARTICLE
IV.                                ADMINISTRATION

    

    4.01           Committee
Discretion.  The Committee shall have full power and authority
to interpret, construe and administer this Plan, to adopt appropriate
procedures, and to make all decisions necessary or proper to carry out the terms
of the Plan.  The Committee’s interpretation and construction hereof,
and actions hereunder, including any determination of benefit amount or
designation of the person to receive supplemental payments, shall be binding and
conclusive on all persons for all purposes.  The timetable and
procedure for notice of denial of benefit claims and for hearing on review of
such denial shall be as set forth in Article XIII of the Retirement Plan, and
the Committee shall make such final review and decision.  The
Company’s vice president responsible for human resources shall act as the
Committee’s agent in administering this Plan.  Neither the Company,
nor its officers, employees, directors or Committee, nor any member thereof,
shall be liable to any person for any action taken or omitted in connection with
the interpretation and administration of this Plan.

    

    4.02           Company Right to Amend,
Modify or Terminate.  The Company, by action of the Board of
Directors, reserves the exclusive right to amend, modify, or terminate this Plan
in whole or in part without notice to any Participant.  No such
termination, modification or amendment shall (a) terminate or diminish any
rights or benefits accrued by any Participant or Surviving Beneficiary prior
thereto, or (b) accelerate the payment of any Plan benefits unless 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 addition, with respect to any Participant who is
party to a Change in Control Severance Agreement with the Company, no such
termination, modification or amendment during the pendency of a “potential
change in control” of the Company (or, if a “change in control” of the Company
occurs, during the 24-month period immediately following such change in control)
shall, without the written consent of the Participant, terminate or diminish any
rights or benefits to which the Participant may be entitled under the
Plan.  For purposes of 4.02, the terms “potential change in control”
and “change in control” shall have the meanings as may be set forth in the
Participant’s Change in Control Severance Agreement, if any.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    ARTICLE
V.                                GENERAL
PROVISIONS

    
       

    

    5.01           No Effect on
Employment.  This Plan shall not be deemed to give any
Participant or other person in the employ of the Company any right to be
retained in the employment of the Company, or to interfere with the right of the
Company to terminate any Participant or such other person at any
time.  The Company is authorized and empowered to treat the
Participant or other person without regard to the effect which such treatment
might have under the Plan.

    

    5.02           Legally
Binding.  The rights, privileges, benefits and obligations
under this Plan are intended to be legal obligations of the Company and binding
upon the Company, its successors and assigns.  The Company agrees it
will not be a party to any merger, consolidation or reorganization, unless and
until its obligations hereunder shall be expressly assumed by its successor or
successors.

    

    5.03           Notice.  Any
election, notice or filing required or permitted to be given to the Company or
the Committee under this 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.

    

    5.04           No Transfer of
Benefits.  The interest of any Participant or beneficiary under
this Plan shall not be transferred or transferable, voluntarily or by operation
of law, by assignment, anticipation, hypothecation, pledge or other encumbrance,
or by garnishment, attachment, levy, seizure or other execution, or by
insolvency, receivership, bankruptcy or other debtor
proceeding.

    

    5.05           Disclosure to
Participants.  Each Participant shall receive a copy of this
Plan, a copy of any written procedures for administering the Plan, and any
amendments to the Plan or procedures.

    

    5.06           Adoption.  This
Plan was approved by resolution of the Board of Directors at a regular meeting
on April 16, 1981, to be effective as of January 1, 1981.  Amendments
shall take effect as specified in the implementing Board
resolution.

    

    5.07           Integration
Clause.  This written Plan document supersedes, and takes
precedence over, any prior oral or written promises to
Participants.  The Plan may be amended or modified only by a written
amendment adopted by the Company’s Board of Directors.

    

    SIGNED pursuant to proper authority
delegated by the Company’s Board of Directors:

    

    NORTHWEST
NATURAL GAS COMPANY

    

    By:  __________________________________

    Gregg S. Kantor

    Chief Executive Officer

    

    Date:
_________________________________

    

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    2004
ESRIP APPENDIX

    TO

    NORTHWEST
NATURAL GAS COMPANY

    EXECUTIVE
SUPPLEMENTAL RETIREMENT INCOME PLAN

    (Effective
September 1, 2004)

    

    

    The
following executives are Participants in the Plan as of September 1,
2004.  No new Participants will enter the Plan after September 1,
2004.  The Participants are entitled to the Years of Participation and
Years of Vesting Service shown in the following table, as of September 1,
2004:

    

    
      	
              Executive

            	
              Birth
      Date

            	
              Hire
      Date

            	
              Years
      of Participation (9/1/04)

            	
              Years
      of Vesting Service (9/1/04)

            
	
              DeBolt,
      Bruce R.

            	
              12/07/47

            	
              2/15/80

            	
              24.55

            	
              24.55

            
	
              Dodson,
      Mark S.

            	
              1/26/45

            	
              9/15/97

            	
              6.961

            	
              6.96

            
	
              Doolittle,
      Lea Anne

            	
              1/12/55

            	
              10/30/00

            	
              3.83

            	
              3.83

            
	
              Feltz,
      Stephen P.

            	
              8/26/55

            	
              10/25/82

            	
              5.50

            	
              21.83

            
	
              Kantor,
      Gregg S.

            	
              4/30/57

            	
              9/15/96

            	
              6.67

            	
              7.96

            
	
              McCoy,
      Michael S.

            	
              5/28/43

            	
              11/06/69

            	
              34.82

            	
              34.82

            
	
              Rue,
      Conrad J.

            	
              11/25/45

            	
              10/29/74

            	
              29.85

            	
              29.85

            
	
              Ugoretz,
      Beth A.

            	
              7/11/55

            	
              12/06/02

            	
              1.66

            	
              1.75

            

    

    

     

    
      1
Benefits are subject to terms of Board-approved Employment
Agreement.

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