Document:

EXHIBIT
10.29

 

CASCADE NATURAL GAS
CORPORATION

2000 DIRECTOR STOCK AWARD PLAN

 

ARTICLE 1.

ESTABLISHMENT AND PURPOSE

 

1.1.                            Establishment.  Effective April 24, 2000 (the
“Effective Date”), Cascade Natural Gas Corporation (“Cascade”) hereby
establishes the Cascade Natural Gas Corporation 2000 Director Stock Award Plan
(the “Plan”).

 

1.2.                            Purpose.  The purpose of the Plan is to advance the
interests of Cascade by encouraging members of Cascade’s board of directors
(the “Board”) who are not employees of Cascade or any of its subsidiaries
(“Directors”) to acquire a proprietary interest in Cascade through the grant of
stock awards.  It is anticipated that
the Plan will assist Cascade in attracting and retaining Directors.  Stock awards granted under the Plan will supplement
other compensation for Directors.

 

ARTICLE 2.

DEFINITIONS

 

2.1.                            Defined
Terms.  When used in the Plan, the
following terms shall have the meaning specified below.

 

“Award” or “Stock Award” shall mean an award of Shares
to a Director pursuant to the Plan.

 

“Board” shall mean the Board of
Directors of Cascade.

 

“Cascade” shall mean Cascade Natural
Gas Corporation, a Washington corporation.

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended and in effect from time to time.  Where the context so requires, any reference
to a particular Code section shall be construed to refer to the successor
provision to such Code section.

 

“Deferral Election” shall mean a
written election by a Recipient pursuant to Article 7 to defer
distribution of Stock Awards granted to the Recipient during the period covered
by the Deferral Election.

 

1

 

“Deferred Stock Account” shall mean an
unfunded bookkeeping account maintained by Cascade pursuant to Section 7.3
to account for Stock Awards that are subject to a Recipient’s Deferral
Election.

 

“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended and in effect from time to
time.  Where the context so requires,
any reference to a particular section of the Exchange Act, or to any rule
promulgated under the Exchange Act, shall be construed to refer to the
successor provisions to such section or rules.

 

“Fair Market Value.”  For all purposes of the Plan, the “Fair
Market Value” of Shares on a particular day shall be determined without regard
to any restrictions (other than a restriction which, by its terms, will never
lapse) and shall mean:

 

(a)                                  The
per-share closing sale price of Shares as reported on the New York Stock
Exchange Composite Tape or similar facility for such day;

 

(b)                                 If
Shares are not listed on the New York Stock Exchange, the per-share closing
sale price of Shares as reported for such day on the principal stock exchange
in the United States on which the Shares are listed (as determined by the
Committee); or

 

(c)                                  If
neither clause (a) nor clause (b) is applicable, the value per share determined
by the Committee in a manner consistent with Treasury Regulations under
Section 2031 of the Code.

 

If no
sale of Shares is reported for such day, but there were sales reported within a
reasonable period before and after such day, the weighted average of the means
between the highest and lowest selling prices on the nearest date before and
the nearest date after such day shall be used, with the average to be weighted
inversely by the respective number of trading days between the selling dates
and such day.

 

“Grant Date” shall mean April 24
of each year in which an Award is granted.

 

“Director” shall mean a member of the
Board who is not an employee of Cascade or any Subsidiary.

 

“Plan” shall mean this Cascade Natural
Gas Corporation 2000 Director Stock Award Plan.

 

“Plan Year” shall mean a calendar
year.

 

“Shares” shall mean the $1.00 par
value common stock of Cascade.

 

“Stock Unit” shall mean a bookkeeping
unit representing one Share credited to a Deferred Stock Account.

 

2

 

“Subsidiary” shall mean a “subsidiary
corporation” of Cascade as defined in Section 425(f) of the Code.

 

2.2.                            Gender
and Number.  Except when otherwise
indicated by the context, any masculine or feminine terminology when used in
the Plan shall also include the opposite gender; and the definition of any term
herein in the singular shall also include the plural, and vice versa.

 

ARTICLE 3.

ELIGIBILITY

 

The persons
eligible to receive Awards under the Plan are the Directors of Cascade who are
not regular employees of Cascade or a subsidiary.

 

ARTICLE 4.

ADMINISTRATION

 

4.1.                            General.  The Plan shall be administered by the Board,
which shall have full power and authority, subject to the provisions of the
Plan, to supervise administration of the Plan and interpret the provisions of
the Plan and any Awards granted hereunder. 
Any decision by the Board shall be final and binding on all
parties.  No member of the Board shall
be liable for any determination, decision, or action made in good faith with
respect to the Plan or any Awards under the Plan.  The Board may delegate any of such responsibilities to one or
more agents and may retain advisers to advise it.  No Recipient  shall
participate in the decision of any question relating exclusively to an Award
granted to that Recipient.

 

4.2.                            Rules
and Interpretation.  The Board shall
be vested with full authority to make such rules and regulations as it deems
necessary to administer the Plan and to interpret and administer the provisions
of the Plan in a uniform manner.  Any
determination, decision or action of the Board in connection with the
construction, interpretation, administration, or application of the Plan shall
be final, conclusive, and binding on all parties.

 

4.3.                            Records.  The Board shall have overall responsibility
for keeping records and providing necessary communications to Recipients.  The records of the Board with respect to the
Plan shall be conclusive and binding on all Recipients and all persons or
entities claiming through or under them.

 

4.4.                            Expenses.  The cost of settling Awards pursuant to this
Plan and the expenses of administering the Plan shall be borne by Cascade.

 

3

 

ARTICLE 5.

SHARES SUBJECT TO AWARDS

 

The stock subject
to Awards to be granted under this Plan shall be Shares, which may either be
authorized and unissued Shares or reacquired Shares.

 

ARTICLE 6.

STOCK AWARDS

 

6.1.                            Grant
of Stock Awards.  As of each
April 24 in 2000 and subsequent years, Cascade automatically shall grant
to each person who served as a Director during the period since the preceding
April 24 a Stock Award for 500 Shares. 
The number of Shares granted each year shall be subject to any
adjustment required or permitted pursuant to Article 8.  Each such grant shall occur automatically
during the term of this Plan without further action of the Board.

 

6.2.                            Issuance
of Shares.  As soon as practicable
after each Grant Date, a Share certificate shall be issued to each Recipient
who has received a Stock Award on such Grant Date and who has not elected to
defer receipt of such Shares as provided in Article 7.

 

ARTICLE 7.

DEFERRAL OF RECEIPT OF SHARES

 

7.1.                            Deferral
Election.  Each Recipient may elect
to defer receipt of Shares pursuant to a Stock Award by filing with the
Secretary of Cascade a Deferral Election substantially in the form of
APPENDIX A hereto which shall set forth the Director’s election to defer the
issuance of Shares represented by Stock Awards granted during the periods
specified in the Deferral Election. 
Each Deferral Election shall specify the Plan Year or Plan Years to be
covered by the Deferral Election.  Each
Deferral Election must be made by December 31 of the year preceding the
Plan Year covered by the Deferral Election except that the Deferral Election
for the first Plan Year must be made within 30 days after approval of the Plan
by the Board.

 

7.2.                            Duration
of Deferral Elections.  Each Deferral
Election shall be effective for all grants of Stock Awards on Grant Dates in
the Plan Years specified in the Deferral Election.  A Deferral Election may be revoked or amended by written notice
filed with the Secretary of Cascade in substantially the form of
APPENDIX B hereto.  Any such
revocation shall be effective for all grants of Stock Awards on Grant Dates in
Plan Years beginning after the date of such revocation.  Following any such revocation, a Director
may subsequently make a new Deferral Election in accordance with the provisions
of this Article 7.  Any such new
election shall be effective for all Stock Awards on Grant Dates in Plan Years
specified in the new Deferral Election beginning after the date of such new
election.

 

4

 

7.3.                            Deferred
Stock Accounts.  For each Recipient
for whom one or more Stock Awards are deferred pursuant to this Article 7,
Cascade shall maintain an unfunded Deferred Stock Account as follows:

 

7.3.1                     Each Deferred Stock Account shall
be credited with a number of Stock Units equal to the number of Shares that are
from time to time deferred.

 

7.3.2                     Whenever cash dividends are
declared on Shares, a dividend equivalent shall be computed with respect to
each Deferred Stock Account.  The amount
of the dividend equivalent shall be the product of (a) the number of Stock
Units in the Deferred Stock Account on the record date of the dividend and
(b) the per-share dividend amount. 
The dividend equivalent so computed shall be deemed reinvested in
additional shares by crediting to the Deferred Stock Account, effective on the
payment date of the cash dividend, a number of Stock Units (with fractions
computed to three decimals) obtained by dividing the amount of the dividend
equivalent by the Fair Market Value for Shares on the dividend payment
date.  Dividend equivalents shall be
credited and deemed invested under this 7.3.2 until Shares representing all
Stock Units credited to the Deferred Stock Account have been issued to the
Recipient or his or her estate.

 

7.3.3                     The Deferred Stock Account shall
be debited by a number of Stock Units equal to the number of any Shares
distributed to the Recipient pursuant to Sections 7.4 and 7.5.

 

7.3.4                     The number of Stock Units credited
to a Deferred Stock Account shall be subject to any adjustment required or
permitted pursuant to Article 8.

 

7.4.                            Issuance
of Deferred Shares.  Each
Recipient’s Deferral Election shall specify that a number of Shares equal to
the number of Stock Units credited to the Recipient’s Deferred Stock Account
shall be issued to the Recipient:

 

(a)                                  In
a single distribution as soon as practicable after the end of the calendar year
in which the Recipient ceases to be a Director of Cascade; or

 

(b)                                 In
a series of substantially equal annual distributions over a period of not to
exceed ten years beginning as soon as practicable after the end of the calendar
year in which the Recipient ceases to be a Director of Cascade, until all
Shares covered by the Deferred Stock Account have been distributed.

 

Each
election by a Recipient as to the method of issuance of Shares from a Deferred
Stock Account shall be irrevocable as to Stock Awards deferred while such
election is in effect.  A Recipient can
amend such election, but only as to Stock Awards granted during Plan Years
covered by the amended Deferral Election.

 

7.5.                            Death
of Recipient.  In the event a
Recipient dies prior to issuance of all Shares that have been credited to such
Recipient’s Deferred Stock Account, the remaining number of Shares in the
deferred Stock Account shall be issued to the estate of the Recipient as soon
as practicable following the end of the calendar year in which such death
occurs.

 

5

 

7.6.                            Fractional
Shares.  No fractional Shares shall
be issued under the Plan.  In the event
that at the time of final distribution from a Recipient’s Deferred Stock
Account there is a fractional Stock Unit credited to such account, Cascade
shall make a cash payment in lieu of such fractional Stock Unit to the
Recipient based on the Fair Market Value of Shares on the business day
immediately prior to such distribution date.

 

7.7.                            Rights
as Shareholder.  Except as otherwise
expressly provided in this Agreement, a Recipient shall have no voting or other
rights as a shareholder of Cascade on account of Stock Units credited to the
Recipient’s Deferred Stock Account until stock certificates representing Shares
have been distributed to the Recipient.

 

ARTICLE 8.

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

 

In the event of a
recapitalization, stock split, stock dividend, combination of exchange of
Shares, merger, consolidation, reorganization or liquidation, or any other
change in the corporate structure or Shares of Cascade, the Board shall make
such proportionate adjustments in the number and kind of Shares for which
Awards may be granted under the Plan and, with respect to Stock Units credited
to Deferred Stock Accounts, in the number and kind of Shares covered thereby,
as the Board in its sole discretion may deem appropriate to give effect to such
change in capitalization.

 

ARTICLE 9.

DURATION, AMENDMENT AND TERMINATION

 

9.1.                            Duration.  The Plan shall become effective on the
Effective Date and shall continue until terminated by the Board.

 

9.2.                            Termination
and Amendment of the Plan.  The
Board may terminate the Plan at any time, provided, however, that any such
termination shall not affect any Awards previously granted under the Plan
(including Shares issuable with respect to Stock Units previously credited to
Deferred Stock Accounts).  The Board may
also make such modifications of the Plan as it shall deem advisable.

 

ARTICLE 10.

MISCELLANEOUS

 

10.1.                     Board
Membership.  Nothing in the Plan or
in any Award granted pursuant to the Plan shall confer upon any Recipient any
right to continue as a Director of Cascade or to interfere in any way with the
right of the shareholders of Cascade to remove a Director at any time.

 

10.2.                     Rights
Nontransferable.  The rights of a
Director under the Plan, including the rights of a Recipient with respect to
such Recipient’s Deferred Stock Account, may not be transferred, assigned,
pledged, or hypothecated by the Director during his or her lifetime, whether by
operation of law or otherwise, or be made subject

 

6

 

to execution, attachment, or similar process, and any attempt to do so
shall be void and of no effect.

 

10.3.                     Tax
Reimbursement.  Cascade shall have
the right, in connection with the grant of any Award on the issuance of Shares
from a Deferred Stock Account, to require the Recipient to pay to Cascade an
amount sufficient to provide for any withholding tax liability imposed with
respect to such exercise.

 

10.4.                     Securities
Laws.  Cascade shall not be required
to distribute any Shares pursuant to the Plan until it shall have taken any
action required to comply with the provisions of the Securities Act of 1933 or
any other then applicable securities laws.

 

10.5.                     Applicable
Law.  To the extent that federal
laws (such as the Code and the federal securities laws) do not otherwise
control, the Plan shall be governed and construed in all respects in accordance
with Washington law.

 

7

 

APPENDIX A

DEFERRAL ELECTION

Under The

CASCADE NATURAL GAS CORPORATION

2000 DIRECTOR STOCK AWARD PLAN

 

1.                                      Agreement
to be Bound by the Plan.  I have
received a copy of the Cascade Natural Gas Corporation 2000 Stock Award Plan
(the “Plan”), and I agree to be bound by the terms and conditions of the Plan.

 

2.                                      Deferral
Election.  I elect to have
distribution of all Stock Awards granted to me under the Plan during the Plan
Years specified below deferred pursuant to Article 7 of the Plan.

 

3.                                      Plan
Years Covered.  The foregoing
election to defer distribution of Stock Awards shall be effective for:

 

[   ]                               Calendar
Year 20      only.

 

[   ]                               Calendar
Year 20      and subsequent calendar years until I
amend or terminate this election.

 

4.                                      Distribution.  I elect to have all Stock Units credited to
my Deferred Stock Account under the Plan during the years covered by the
foregoing election distributed to me:

 

[   ]                               In
a single distribution as soon as practicable following the calendar year in
which I cease to be a Director of Cascade.

 

[   ]                               In
a series of                *
substantially equal annual distributions commencing as soon as practicable
following the calendar year in which I cease to be a Director of Cascade.

 

*                                         Specify
a whole number of years from 2 to 10.

 

	
   

  	
  Dated

  	
                             ,
  20        .

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  

 

8

 

Consent
of Spouse

 

I hereby
acknowledge that I am the spouse of the Director above and that I consent
and agree to the terms and conditions of the Plan and the elections set forth
above.

 

	
  Dated

  	
                          ,
  20      .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Spouse

  
	
   

  	
   

  
	
   

  	
   

  
	
  Receipt
  Acknowledged and Approved

  	
   

  
	
   

  	
   

  
	
  CASCADE
  NATURAL GAS CORPORATION

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  
								

 

9

 

APPENDIX B

AMENDMENT OR TERMINATION OF DEFERRAL ELECTION

Under The

CASCADE NATURAL GAS CORPORATION

2000 DIRECTOR STOCK AWARD PLAN

 

[   ]                               Termination of Deferral
Election

 

I hereby terminate
my Deferral Election under the Cascade Natural Gas Corporation 2000 Director
Stock Award Plan (the “Plan”) for the calendar year beginning January 1,
20     , and for subsequent calendar years unless I
made a new Deferral Election.  I
understand that Stock Units previously deferred under the Plan remain subject
to the terms of the Plan and my Deferral Election.

 

[   ]                               Amendment
of Deferral Election

 

I hereby amend my
Deferral Election under the Plan in accordance with the new Deferral Election
attached hereto.  This amended Deferral
Election shall be effective for the periods specified thereon.

 

	
  Dated

  	
                                     ,
  20     .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Director

  

 

Consent
of Spouse

 

I hereby
acknowledge that I am the spouse of the Director above and that I consent
and agree to the action taken above.

 

	
  Dated

  	
                                     ,
  20     .

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Spouse

  

 

Receipt
Acknowledged and Approved

 

CASCADE
NATURAL GAS CORPORATION

 

	
  By 

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
					

 

10EXHIBIT
10.30

 

CONFORMED
COPY

 

THE CASCADE NATURAL GAS CORPORATION

 

EXECUTIVE SUPPLEMENTAL RETIREMENT
INCOME PLAN

 

As Amended and
Restated

as of January 1, 1996

and Further Amended through

Amendment No. 2

 

 

TABLE OF CONTENTS

 

	
  PURPOSE

  	
   

  
	
   

  	
   

  
	
  ARTICLE 1. DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  1.1

  	
  “Board”

  	
   

  
	
  1.2

  	
  “Committee”

  	
   

  
	
  1.3

  	
  “Company”

  	
   

  
	
  1.4

  	
  “Effective Date”

  	
   

  
	
  1.5

  	
  “Final Monthly Compensation”

  	
   

  
	
  1.6

  	
  “Lump Sum”

  	
   

  
	
  1.7

  	
  “Normal Retirement Date”

  	
   

  
	
  1.8

  	
  “Participant”

  	
   

  
	
  1.9

  	
  “Plan”

  	
   

  
	
  1.10

  	
  “Primary Social Security Benefit”

  	
   

  
	
  1.11

  	
  “Retirement Plan”

  	
   

  
	
  1.12

  	
  “Surviving Beneficiary”

  	
   

  
	
  1.13

  	
  “Total and Permanent Disability”

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2. PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3. RIGHT TO RECEIVE
  BENEFITS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Normal Retirement Supplemental Income

  	
   

  
	
  3.2

  	
  Early or Disability Retirement Supplemental
  Income

  	
   

  
	
  3.3

  	
  Death Benefits

  	
   

  
	
  3.4

  	
  Beneficiary of Death Benefits

  	
   

  
	
  3.5

  	
  Vested Benefits

  	
   

  
	
  3.6

  	
  Forfeiture or Suspension of Benefits

  	
   

  
	
  3.7

  	
  Retirement Benefits in the
  Event of Change in Control

  	
   

  
	
  3.8

  	
  Limitations on Certain Excess Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4. PAYMENT OF BENEFITS

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Form

  	
   

  
	
  4.2

  	
  Source

  	
   

  
	
  4.3

  	
  Key Man Insurance

  	
   

  
	
  4.4

  	
  Physical Examination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5. ADMINISTRATION,
  AMENDMENT AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Committee

  	
   

  

 

i

 

	
  5.2

  	
  Company Functions

  	
   

  
	
  5.3

  	
  Amendment and Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6. GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  No Effect on Employment

  	
   

  
	
  6.2

  	
  Legally Binding

  	
   

  
	
  6.3

  	
  No Transfer of Benefits

  	
   

  
	
  6.4

  	
  Disclosure to Participants

  	
   

  
	
  6.5

  	
  Adoption

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX A

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX B

  	
   

  

 

ii

 

CASCADE NATURAL GAS CORPORATION

 

EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME PLAN

 

PURPOSE

 

Cascade Natural Gas
Corporation established this Executive Supplemental Retirement Income Plan
effective July 1, 1983, 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.  The Plan was amended and restated effective
January 1, 1987, to clarify the provisions regarding death benefits and
again effective May 1, 1989, to reflect changes to early retirement
benefits, to clarify provisions regarding the vested benefits, spousal
benefits, and benefits in the event of change in control and to limit certain
excess payments.  The Plan is being
amended and restated to incorporate amendments to the May 1, 1989
restatement and to provide additional benefits in the event of certain changes
in control of the Company.  The
provisions of this Amended and Restated Plan supersede those of the prior
version of the Plan as of the Effective Date.

 

ARTICLE 1.

 

DEFINITIONS

 

In construing the Plan,
the following words and phrases shall have the following meanings unless a
different meaning is plainly required by the content:

 

1.1           “Board”
means the Board of Directors of the Company as constituted from time to time.

 

1.2           “Committee”
means the Pension Committee of the Board.

 

1.3           “Company”
means Cascade Natural Gas Corporation, a Washington corporation.

 

1.4           “Effective Date”
of the Amended Plan is January 1, 1996, except as follows:

 

(a)          The changes in 2.2 relating to the
date on which participation begins shall apply only to a Participant who is an
employee on or after January 1, 1996.

 

(b)         The changes in crediting of service for
vesting under 3.5(c) shall apply on May 1, 1996 only with respect to a Participant
who is an employee on or after that date.

 

1

 

(c)           The
additional severance benefits provided under 3.7(i) shall be effective
May 1, 1996.

 

1.5           “Final
Monthly Compensation” means the greater of the following:

 

(a)           One-twelfth (1/12) of the highest
annual salary paid to a Participant during any of the five calendar years
preceding the Participant’s retirement under this Plan; or

 

(b)           The rate of monthly salary payable to
the Participant in the last full month prior to the Participant’s retirement
under this Plan.

 

1.6           “Lump Sum”
means a single payment representing all unpaid installments determined under
3.3(g).

 

1.7           “Normal Retirement
Date” means the first day of the month next following the Participant’s
sixty-fifth (65th) birthday.

 

1.8           “Participant”
means an employee who has fulfilled and 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).

 

1.9           “Plan” means
the Executive Supplemental Retirement Income Plan as set out in this agreement,
as amended from time to time.

 

1.10         “Primary Social
Security Benefit” means the estimated monthly primary old age insurance
amount which a Participant could expect to receive commencing on the first day
of the month following the Participant’s 65th birthday or later termination
date under the federal Social Security Act as in effect on the Participant’s
Normal Retirement Date or Termination Date, whichever occurs first.  In making the estimate, it will be assumed
that

 

(a)          The covered earnings of a Participant
retiring on or after his Normal Retirement Date for the calendar year prior to
his retirement will be twelve (12) times his Final Monthly Compensation,
subject to the limit in (c). 
Furthermore, the Participant’s covered earnings for each prior year will
be based on the assumption that the Participant received six percent (6%)
annual increases in his compensation on the first day of January of each
year, subject to the limit in (c).

 

(b)         The covered earnings of a Participant
whose employment terminates for any reason prior to his Normal Retirement Date
will be twelve (12) times his Final Monthly Compensation, subject to the limit
in (c) and determined as of the date the Participant’s employment terminates,
for the calendar year in which the Participant’s employment terminates and for
each calendar year up to and including his Normal Retirement Date.  Furthermore, the Participant’s covered
earnings for each prior year will be subject to the limit in (c) and based on

 

2

 

the assumption that the Participant received six percent (6%) annual
increases in his compensation on the first day of January of each year.

 

(c)           Covered
earnings of a Participant for any year shall not exceed the compensation and
benefit base in effect at the beginning of the year as determined under
Section 230 of the Social Security Act.

 

1.11         “Retirement Plan”
means the Retirement Plan for Employees of Cascade Natural Gas Corporation, as
amended from time to time.

 

1.12         “Surviving Beneficiary”
means the beneficiary or beneficiaries determined pursuant to Section 3.4.

 

1.13         “Total and
Permanent Disability” means a disability that is presumably permanent and
which prevents the Participant from rendering the services required by him in
his employment by the Company.

 

1.14         “Years of Benefit Service” has
the meaning set forth in the Retirement Plan.

 

1.15         “Years of Eligibility Service”
has the meaning set forth in the Retirement Plan.

 

ARTICLE 2.

 

PARTICIPATION

 

2.1           Participation shall be limited to key
executive employees designated by the Board as eligible.  Eligible employees may be designated by name
or by class of employee.

 

2.2           Participation in the plan shall start
on the first day of the calendar month that coincides with or immediately
follows the date on which the employee becomes eligible to participate under
2.1.

 

(a)           The
date on which participation begins shall be known as the “Entry Date.”

 

(b)           Participation
shall continue until the first of the following occurs:

 

(1)           The individual ceases to be a member
of a class of employee designated as eligible to participate.

 

(2)           The Board terminates the individual’s
eligibility.

 

(3)           The individual’s employment
terminates for any reason.

 

3

 

(c)           Discontinuing
participation shall not affect a Participant’s rights to any vested accrued benefits
under the Plan, subject to 3.6.

 

2.3           No employee shall be eligible to
participate in the plan after September 30, 2003.

 

ARTICLE 3.

 

RIGHT TO RECEIVE BENEFITS

 

Each qualified
Participant or his beneficiary shall have the right to receive, and the Company
shall pay, supplemental benefits as provided in this Article 3.

 

3.1           Normal
Retirement Supplemental Income. 
Upon retirement at or after his Normal Retirement Date, a Participant
shall receive a monthly pension for life equal to the vested portion of the
Normal Retirement Benefit under (a):

 

(a)           The
Normal Retirement Benefit shall equal seventy percent (70%) of the
Participant’s Final Monthly Compensation less the sum of the following:

 

(1)           his monthly retirement income from
the Retirement Plan (computed as a single life annuity); and

 

(2)           one-twelfth (1/12) of his annual
Primary Social Security Benefit (computed on the date he actually retires
without regard to any subsequent cost of living adjustments).

 

(b)           Vesting
shall be determined under 3.5.

 

(c)           Benefits
shall cease to accrue after September 30, 2003.  The accrued benefit of any Participant shall be computed as if
the Participant terminated employment on the earlier of September 30, 2003
or the date as of which employment actually ended.

 

3.2           Early or
Disability Retirement Supplemental Income. 
Early retirement benefits and disability benefits shall be payable as
follows.

 

(a)           The
Board may approve applications for early retirement under the Plan for the
following:

 

(1)           A Participant with at least 2 Years
of Eligibility Service who has either attained age 55 or suffered a total and
permanent disability.

 

(2)           A Participant whose benefits have
fully vested under 3.5.

 

4

 

(b)           Applications
under (a) shall state whether the Participant wishes benefits to begin at
Normal Retirement Date or the date the Participant actually retires.

 

(c)           The
Participant’s monthly retirement income from the Retirement Plan shall be the
single life annuity that begins on the Participant’s Normal Retirement Date to
which the Participant would be entitled if he had attained his Normal
Retirement Date on the date his employment by the Company terminated.

 

(d)           The
Participant’s Final Monthly Compensation shall be determined as of the time the
Participant’s employment by the Company ends.

 

(e)           The
Participant’s Primary Social Security Benefit shall be computed as provided in
Section 1.10(a)(2) and shall constitute an offset in computing the
Participant’s Supplemental Retirement Income as provided in subparagraph (b)(2)
of Section 3.1 whether or not the Participant’s Social Security benefits
have commenced.  If the Participant is
not eligible to receive Social Security benefits when payment of his
supplemental retirement under this Plan begins, the Board may, in its sole
discretion, agree to pay the Participant an additional sum equal to one-twelfth
(1/12th) of the Participant’s annual Primary Social Security Benefit reduced as
provided by Section 202(q) of the Social Security Act for payment at
age 62.  Such additional payments
shall terminate with the payment due in the month of the Participant’s 62nd
birthday.

 

(f)            If
the Participant’s supplemental payments start prior to his Normal Retirement
Date, then, subject to paragraph (g) below, the amount of each monthly payment
shall be reduced using the same percentages as apply in determining a
Participant’s monthly early retirement income under the Retirement Plan as set
forth in Table C to said Retirement Plan. 
A copy of Table C is attached as Appendix A to this Agreement.

 

(g)           No
reduction under paragraph (f) will be required if either of the following
applies:

 

(1)           On the date the Participant retires,
the sum of the Participant’s age plus the number of whole Years of Benefit
Service after 1989 and Years of Past and Future Service prior to 1990 that are
credited to the Participant under the Retirement Plan equals or exceeds 90.

 

(2)           The Board has designated the
Participant as eligible to retire early without actuarial reduction of benefits.  Such designations may be made at any time
without need for an application by the Participant.

 

3.3           Death Benefits.  The Plan shall pay a death benefit to the
surviving spouse of a Qualifying Participant and to the designated beneficiary,
if the surviving spouse is not the designated beneficiary.  The death benefit payable to the surviving
spouse shall consist of the Spousal Benefit, plus, if the surviving spouse is
the designated beneficiary, the Guaranteed

 

5

 

Benefit.  The death benefit payable to a designated
beneficiary who is not the surviving spouse shall consist only of the
Guaranteed Benefit.

 

(a)           A
Qualifying Participant is any of the following:

 

(1)           A Participant who dies while still
employed by the Company.

 

(2)           A Participant who dies after the
Board has approved payment of benefits under Section 3.2 but before
payment of benefits begins.

 

(3)           A Participant who dies after payment
of benefits has begun.

 

(b)           In
determining whether payments to a Participant have begun or whether the
Guaranteed Payment Period has begun or ended, payments shall be deemed to have
been made in any month in which a payment would otherwise have been made if the
amount of the reductions under paragraph 3.1(b) did not equal or exceed the
amount determined under paragraph 3.1(a).

 

(c)           The
Guaranteed Payment Period shall be a period of 120 months that begins on the
following dates:

 

(1)           If the Participant dies while still
employed by the Company or after the Board has approved payment of benefits
under Section 3.2 but before payment of benefits begins, the Guaranteed
Payment Period shall begin on the first day of the month following the date the
Participant dies.

 

(2)           If the Participant dies after payment
of benefits under Sections 3.1 or 3.2 has begun, the Guaranteed Payment Period
shall begin with the first month in which payments are made (or deemed to have
been made) to the Participant.

 

(d)           The
Guaranteed Benefit shall be a payment for each month that remains in the Guaranteed
Payment Period when the Participant dies determined as follows:

 

(1)           Subject to subparagraph (3), if
payments to the Participant have begun when the Participant dies, the
Guaranteed Benefit shall be the monthly amount payable during the month before
the Participant’s death.

 

(2)           Subject to subparagraph (3),  if the Participant dies before payments
under Sections 3.1 or 3.2 have begun, the Guaranteed Benefit shall be the
greater of -

 

•                                          The
monthly payment that would have been made to the Participant if the Participant
had attained Normal

 

6

 

Retirement Date and
payments under Section 3.1 had begun on the day before the Participant
died.

 

•                                          The
monthly pre-retirement death benefit, if any, in Appendix B to this plan.

 

(3)           The Guaranteed Benefit shall be
reduced by the Spousal Benefit as follows:

 

•                                          The
reduction shall be determined by subtracting the monthly Spousal Benefit from
the monthly Guaranteed Benefit.

 

•                                          If
the Participant’s spouse dies after payment of the Guaranteed Benefit has
begun, the amount of the Guaranteed Benefit shall not be adjusted to reflect
the discontinuance of the Spousal Benefit.

 

•                                          If
the Guaranteed Benefit is paid in a single lump sum, the lump sum shall be
based on the reduced monthly payment.

 

(4)           The Guaranteed Benefit shall be
payable beginning with the first day of the month following the date the
Participant dies.

 

(5)           No Guaranteed Benefit shall be
payable after the Guaranteed Payment Period.

 

(e)           The Spousal Benefit shall be a
monthly payment as follows:

 

(1)           The
monthly payment shall be equal to one-half of -

 

•                                          If
payments to the Participant (other than payments under section 3.7(b)(1))
have begun when the Participant dies, the monthly amount payable during the
month before the Participant’s death;

 

•                                          If
the Participant dies before payments under Sections 3.1 or 3.2 or after
payments under section 3.7(b)(1) have begun, the monthly amount that would
have been paid to the Participant if the Participant had attained Normal Retirement
Date and payment under Section 3.1 had begun on the day before the
Participant died.

 

7

 

(2)           The benefit shall be payable to the
Participant’s spouse for life beginning with the first day of the month
following the date the Participant dies and shall be determined after
application of the rule in subparagraph (d)(3).

 

(3)           No Spousal Benefit shall be payable
if the Participant dies without a surviving spouse.  The existence and identity of the Participant’s spouse shall be
determined as of the date the Participant dies.

 

(f)            The
Committee may, in its discretion, do the following:

 

(1)           Combine the monthly payments under
the Guaranteed Benefit or the Spousal Benefits into a single annual payment for
as long as payments are due.

 

(2)           Pay the Guaranteed Benefit in a
single lump sum.

 

(g)           The
lump sum value of the Guaranteed Benefit shall be determined using an interest
rate of six percent (6%) per year, compounded annually, and the UP-1984
mortality table.

 

(h)           If
the primary beneficiary designated under Section 3.4 dies before the
Guaranteed Benefit has been completely paid, then, the balance of the
Guaranteed Benefit shall be paid to any contingent beneficiaries designated by
the Participant under Section 3.4. 
If no contingent beneficiary has been designated, a prior designation
has been revoked without substitution, or no contingent beneficiary survives
the primary beneficiary, then the unpaid balance of the Guaranteed Benefit
shall be paid as provided in paragraph 3.4(c).

 

(i)            This
supplemental death benefit shall be in addition to any death benefit provided
by any other Company-sponsored plan or insurance program.

 

3.4           Beneficiary of
Death Benefits.  Each Participant
shall designate on a form to be furnished by the Company a beneficiary or
beneficiaries of any Guaranteed Benefits that become payable on account of his
death.  The primary beneficiary of a
married Participant shall be his spouse unless the spouse consents in writing
to the designation of another primary beneficiary.  Any such beneficiary designation may be revoked or changed by
filing a new designation with the Company. 
The designation last filed with the Company shall control.  The revocation of a beneficiary designation
shall not require the consent of any beneficiary.  When a Participant dies, the Company shall distribute the
Participant’s Guaranteed Benefit in accordance with the beneficiary designation
last filed with the Company by the Participant, or, in the event no beneficiary
designation has been filed, in accordance with paragraph c. below.  Payment of a deceased Participant’s
Guaranteed Benefit as provided in this Section 3.4 shall completely
discharge the Company and the Committee.

 

8

 

(a)           Designation
of the Participant’s spouse as a beneficiary shall be deemed revoked upon the
entry of a decree of divorce or legal separation.

 

(b)           If
two or more beneficiaries are designated and one or more of them fails to
survive the deceased Participant, but one or more of the other beneficiaries do
survive the Participant, then any remaining Guaranteed Benefit shall be
distributed to the surviving beneficiaries unless otherwise expressly stated in
the designation form.

 

(c)           If
no beneficiary has been designated, a prior designation has been revoked
without substitution or no beneficiary survives the deceased Participant, then
any Guaranteed Benefit shall be paid to the following in the order named:

 

(1)           The Participant’s spouse at date of
death;

 

(2)           The Participant’s children and issue
of deceased children, per  stirpes (lawful issue and adopted);

 

(3)           Parents of the Participant;

 

(4)           Brothers and sisters of the
Participant;

 

(5)           The Participant’s estate.

 

(d)           Distribution
to beneficiaries or others who are minors or incompetent persons may be made,
at the discretion of the Committee, (1) directly to such minor, (2) to the
legal guardian or trustee of such person’s estate, or (3) to the natural
guardian or person having custody of and caring for such person.  Distributions to such persons shall be made
in accordance with such of the methods of distribution as the Committee shall
select.  The Company shall not be
required to see to the application of the sums so distributed and the receipt
by any such persons shall discharge the Company and the Committee of any
further obligation or liability with respect to such payment.

 

3.5           Vested Benefits.

 

(a)           A
Participant’s right to benefits under this Plan shall become vested and
nonforfeitable when the first of the following events occurs:

 

(1)           The 365th day immediately prior to
the Participant’s Normal Retirement Date;

 

(2)           The Participant dies;

 

(3)           The Board approves Early or
Disability Retirement Supplemental Income benefits pursuant to
Section 3.2;

 

9

 

(4)           The Participant attains age 55 and,
if the Participant’s employment ends before October 1, 2003, the
Participant completes 5 years of participation.

 

(5)           A Change in Control of The Company
(as defined in 3.7(d)) occurs.

 

(b)           Upon
termination of employment for any reason other than death, the following shall
apply:

 

(1)           The vested portion of the
Participant’s benefits shall begin at the Participant’s Normal Retirement Date,
unless the Participant qualifies for earlier payment under 3.2 or 3.7.

 

(2)           The unvested portion of a
Participant’s benefits shall be forfeited.

 

(c)           A
Participant will be credited with a year of participation on the last day of
each participation year under (d) that satisfies the following:

 

(6)           The Participant must complete 1,000
or more hours of service (as defined in the Retirement Plan) during the year.

 

(7)           The year must begin on or after the
Participant’s Entry Date under 2.2.

 

(8)           The Participant must be employed on
the last day of the year.

(d)           A
participation year is a twelve-month period that begins on the Participant’s
Entry Date or any anniversary of that date.

 

(e)           Prior to complete vesting under (a),
a Participant’s benefits shall vest based on years of age after age 39 and years
of employment in accordance with the following:

 

(1)           For each year of continuous
employment with the Company, three percent (3%) of the Participant’s benefits
shall vest, subject to the following:

 

•                                          The
Participant must have been continuously employed for three years.

 

•                                          Vesting
on account of continuous employment cannot exceed 50% of the Participant’s
benefits.

 

•                                          A
year of continuous employment is completed on each anniversary of the date the
Participant was most recently hired, if the Participant is still employed on
the anniversary

 

10

 

date.  No credit shall be given for a partial year
of continuous employment.

 

•                                          Years
of employment before a break in the Participant’s continuous employment by the
Company shall be disregarded in determining additional vesting attributable to
years of employment since the Participant’s most recent date of hire.

 

(2)           For each complete year of age after
age 39, three percent (3%) of a Participant’s benefits shall vest, subject to
the following limitations:

 

•                                          The
Participant must have been continuously employed by the Company for three
years.

 

•                                          Vesting
on account of years of age cannot exceed 50% of the Participant’s benefits.

 

(f)            If a Participant’s employment
terminates and the Participant is later rehired, all years of continuous
employment completed prior to the date of rehire shall be disregarded in
determining the vested portion of the Participant’s Normal Retirement Benefit
under 3.1(a) that accrues after rehire.

 

3.6           Forfeiture or
Suspension of Benefits. 
Notwithstanding any other provision of this Plan to the contrary,
supplemental benefits shall be forfeited or suspended as follows:

 

(a)           No supplemental benefits shall be
paid if the Participant is discharged from the Company for cause involving
illegal or fraudulent acts.

 

(b)           No supplemental benefits shall be
paid if the Participant commits suicide, while sane or insane, within one year
from the date he is enrolled under the Plan.

 

(c)           Supplemental benefit payments shall
be suspended during any period of reemployment by the Company or any other
period when payments under the Retirement Plan are suspended.  Notwithstanding the preceding sentence,
benefits payable pursuant to Section 3.7 shall be suspended only on account
of the reemployment of the Participant by the Company.

 

3.7           Retirement
Benefits in the Event of Change in Control.

 

(a)           A Participant’s benefits shall be
computed under this section 3.7 if the Participant’s employment is
involuntarily terminated within 36 months after the last event constituting a
change in control of the Company.

 

11

 

(b)           Subject to 3.8, benefits under this
section shall be the sum of the following:

 

(1)           An amount equal to seventy percent
(70%) of the Participant’s Final Monthly Compensation (without reduction for
any benefits payable from the Retirement Plan or any Primary Social Security
Benefit) commencing on the first day of the month following the later of the
Participant’s fifty-fifth (55th) birthday or the date on which the
Participant’s employment by the Company terminates and ending with the earlier
of the Participant’s death or the payment for the month in which occurs the
Participant’s sixty-fifth (65th) birthday; plus

 

(2)           An amount for the Participant’s
lifetime commencing upon the first day of the month following the later of the
Participant’s sixty-fifth birthday or the date on which the Participant’s
employment by the Company terminates and equal to seventy percent (70%) of the
Participant’s Final Monthly Compensation less the amounts described in
paragraph b. of Section 3.1, but without reduction on account of
benefits payable under 3.7(b)(1).

 

(3)           If the Participant’s employment is
terminated involuntarily before the Participant’s fifty-fifth birthday, the
severance benefit under paragraph (i).

 

(c)           Amounts payable under (b) shall be
reduced by any amounts that the Participant receives as cash compensation from
the Company for current services as an employee or independent contractor to
the extent such amounts are subject to withholding or reportable to the
Internal Revenue Service on an information return.

 

(d)           A “Change in Control” shall mean:

 

(1)           A change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the “Act”) or any successor thereto; provided that such a change in
control shall be deemed to have occurred only when (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Act) acquires, directly or
indirectly, actual economic beneficial ownership (as opposed to “beneficial
ownership” as defined in Rule 13d-3 under the Act) directly or indirectly, of
thirty percent (30%) or more of the combined voting power of the Company’s then
outstanding securities ordinarily having the right to vote at election of
directors; or

 

(2)           During any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company (the “Board”) cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Company’s stockholders, of each

 

12

 

new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; or

 

(3)           Any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which Company shares would be converted into cash, securities, or
other property; or

 

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

 

(5)           Approval by the shareholders of the
Company of any plan or proposal for the liquidation or dissolution of the
Company.

 

(e)           A
Participant’s employment shall be treated as having been involuntarily
terminated when any one or more of the following occurs:

 

(1)           The Company terminates the
Participant’s employment for any reason other than cause or the Participant’s
disability or death.

 

(2)           The Participant terminates employment
for good reason.

 

(f)            Termination
for cause shall mean termination for any of the following reasons, subject to
(g):

 

(1)           The Participant commits an act of
fraud, embezzlement, or theft constituting a felony.

 

(2)           The Participant becomes liable to the
Company for acts or omissions involving intentional misconduct or a knowing
violation of law.

 

(3)           The Participant engages in any
transaction relating to the Company from which the Participant personally
receives a benefit in money, property, or services to which the Participant is
not legally entitled.

 

(g)           Before
a Participant is terminated for cause, the following shall occur:

 

(1)           The Board shall meet to determine
whether any of the requirements for termination for cause apply to the
Participant.

 

(2)           The Company shall provide the
Participant with reasonable notice of the meeting and an opportunity for
Participant and Participant’s legal counsel to appear before the Board.

 

13

 

(3)           75% of the entire Board must
determine that the Participant’s employment shall be terminated for cause.

 

(4)           The Company shall provide to the
Participant a copy of the Board’s resolution terminating the Participant’s
employment for cause.

 

(h)           Termination
of employment for good reason shall mean termination for any of the following
reasons:

 

(1)           The Participant reasonably concludes
that a change in the Participant’s status or position with the Company does not
represent a substantially similar position or a promotion before the Change in
Control.

 

(2)           The Participant reasonably concludes
that a change in the Participant’s duties or responsibilities is inconsistent
with the Participant’s status and responsibilities before the Change in
Control.

 

(3)           The Participant is removed from or
not reappointed or reelected to any position held before the Change in Control
or to a substantially similar or superior position, except in connection with
termination of the Participant’s employment for Cause, disability or death.

 

(4)           The Company reduces the Participant’s
base salary below the level in effect immediately prior to the Change in
Control.

 

(5)           The Company fails to continue any
plan in which the Participant participates at the time of the change in control
or to provide plans providing the participant with similar benefits, except by
reason of a change in law or on account of normal expiration of a plan in
accordance with its terms as in effect at the time of the Change in Control.

 

•                                          Plan
means any compensation plan (such as an incentive or stock option plan) or any
employee benefit plan such as a thrift, pension, profit-sharing, medical,
disability, accident, life insurance plan, or a relocation plan or policy, or
any other plan, program, or policy of the Company intended to benefit
employees.

 

•                                          Failure
to continue a plan shall include the Company’s action or failure to act that
adversely affects continued participation by the Participant in any plan on at
least as favorable a basis as prior to the Change in Control, or that
materially reduces the Participant’ benefits in the future or

 

14

 

deprives the Participant
of any material benefit enjoyed at the time the Change in Control occurs.

 

(6)           The Company fails to provide and
credit the Participant with the number of paid vacation days to which
Participant was then entitled in accordance with the Company’s normal vacation
policy as in effect immediately before the Change in Control.

 

(7)           The Company requires the Participant
to be based outside the Seattle metropolitan area except for required travel on
the Company’s business to an extent consistent with the Participant’s business
travel obligations on behalf of the Company immediately before the Change in
Control.

 

(8)           The Company fails to obtain the
consent of any successor to continue this Plan.

 

(9)           The Company refuses to permit the
Participant to attend to matters or engage in activities not directly related
to the Company’s business that the Company permitted before the Change in
control.

 

(i)            Severance benefit means the sum of
the following:

 

(1)           The Participant’s full base salary
through the date on which employment terminates at the higher of the rate in
effect on the date the change in Control occurs, or the rate in effect as of
the time of such termination.

 

(2)           For the Severance Payment Period, a
monthly amount payable on the first day of the month equal to one-twelfth
(1/12) of the sum of (i) the Participant’s base annual salary at the rate in
effect when the change in control occurs, plus (ii) the average annual
incentive compensation (if any) paid to the participant with respect to the two
fiscal years prior to the fiscal year in which the change in control occurs.

 

(3)           The Severance Payment Period shall
begin with the month following the date of termination and end with the earlier
of the 36th monthly payment or the Participant’s 55th birthday.

 

3.8           Limitations on
Certain Excess Payments.

 

No payments shall be made
to a Participant under this Plan that would constitute excess parachute
payments within the meaning of Section 280G of the Internal Revenue Code.

 

(a)           The
determination of whether payments constitute excess parachute payments shall be
made by the Committee, with the advice of counsel.  The Committee shall

 

15

 

notify the Participant and any other interested parties of its
determination which shall be final and binding on all parties.

 

(1)           The Committee shall notify the
Company and the Participant in writing of its determination within 5 business
days after the Participant’s employment terminates.

 

(2)           The notice shall list all payments
that are deemed to constitute excess parachute payments and include the
Committee’s determination of the present value of each listed payment.

 

(b)           In
determining whether payments under the Plan constitute excess parachute
payments, the Committee shall take into account any other payments of
compensation that must be counted under Section 280G.

 

(c)           The
Participant may, by written notice to the Committee and the Company, elect to
receive any combination of benefits to which the Participant is otherwise
entitled, that will not exceed the maximum amount that can be paid to the
Participant without resulting in excess parachute payments.

 

(d)           If
the Participant fails to provide timely notice of an election to receive a
combination of benefits, the Committee shall determine the payments that are to
be reduced to avoid paying any excess parachute payments to the Participant.

 

ARTICLE 4.

 

PAYMENT OF BENEFITS

 

4.1           Form.  Payments to a Participant shall be made
monthly during the Participant’s lifetime. 
If the Participant dies before the end of the Guaranteed Payment Period,
the Guaranteed Payment shall be made in monthly installments, subject to
paragraph 3.3(f).

 

4.2           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.  The Company, however, does intend to honor
its obligation to pay supplemental benefits as they come due.

 

4.3           Key Man
Insurance.  The Company may purchase
and own such key man life insurance as it chooses on the life of any
Participant.  No Participant, nor his
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 death.  On the death of the
Participant, the proceeds  shall be paid
to the Company.

 

16

 

4.4           Physical Examination.  Each Participant, as requested by the
Company, shall take a physical examination by a physician approved by an
insurance carrier designated by the Company. 
The cost of the examination shall not be borne by the Participant.  The report of such examination shall be
transmitted directly from the physician to the insurance carrier designated by
the Company to establish certain costs associated with providing benefits under
this Plan.  Such examination shall
remain confidential among the Participant, the physician, the insurance carrier
and the Company.

 

ARTICLE 5.

 

ADMINISTRATION, AMENDMENT
AND TERMINATION

 

5.1           Committee.  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 of, and actions under the Plan, 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 XX of the Retirement Plan, and the Committee shall
make such final review and decision. 
The Company’s Corporate Secretary shall act as the Committee’s agent in
administering the 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.

 

5.2           Company
Functions.

 

(a)           The Company has no administrative
authority or function and is not a plan fiduciary.

 

(b)           Except as provided in (c), all
Company functions or responsibilities shall be exercised by the chief executive
officer of the Company, who may delegate all or any part of those functions.

 

(c)           The power to amend or terminate the
plan may be exercised only by the Board of Directors of the Company, except as
provided in (d).

 

(d)           The Company’s chief executive officer
or delegate may amend the Plan to make technical, administrative or editorial
changes on advice of counsel to comply with applicable law, to simplify or
clarify the Plan or to adjust the amounts of pre-retirement death benefits in
Appendix B.

 

17

 

(e)           The Board of Directors of the Company
or an Employer shall have no administrative or investment authority or
functions.  Membership on the Board
shall not, by itself, cause a person to be considered a plan fiduciary.

 

5.3           Amendment
and Termination.

 

(a)           The Company may amend this Plan at
any time by written instrument.  No
amendment shall reduce any participant’s accrued benefit or the vested
percentage of that accrued benefit, as of the date the amendment is adopted or
is effective, whichever is later.

 

(b)           The Company may wholly or partly
terminate the plan at any time. 
Termination of the plan shall not terminate nor diminish any
nonforfeitable rights or benefits accrued by any Participant or surviving
beneficiary prior to termination.

 

ARTICLE 6.

 

GENERAL PROVISIONS

 

6.1           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 and to treat him without regard to the effect which such treatment might
have upon him as a Participant in the Plan.

 

6.2           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.

 

6.3           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.

 

6.4           Disclosure to
Participants.  Each Participant
shall receive a copy of this Plan, a copy of any written procedures for
administering the Plan, any amendments to the Plan or procedures, and an annual
statement of benefits over the signature of the President.

 

6.5           Adoption.  As originally adopted, this Plan was
approved by resolution of the Board of Directors at a regular meeting on
July 27, 1983, to be effective as of July 1, 1983.  The Plan as amended and restated effective
May 1, 1989 was approved by resolution of the Board at a regular meeting
on October 24, 1989.  The Plan as
amended and restated effective January 1, 1996 was approved by resolution
of the Board at a regular meeting on April 24, 1996.

 

18

 

1996 RESTATEMENT EXECUTED
AS FOLLOWS EFFECTIVE AS STATED IN 1.4 ABOVE:

 

	
  Company:

  	
   

  	
  CASCADE NATURAL GAS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ W. Brian Matsuyama

  	
   

  
	
   

  	
  Its  

  	
  Chairman and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Executed:
  September 9, 1996

  
							

 

AMENDMENT NO. 1 EXECUTED
AS FOLLOWS EFFECTIVE IN PART JANUARY 1, 1997 AND IN PART JANUARY 1,
1996:

 

	
  Company:

  	
   

  	
  CASCADE NATURAL GAS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ W. Brian Matsuyama

  	
   

  
	
   

  	
  Its  

  	
  Chairman and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Executed: June 16,
  1997

  
							

 

AMENDMENT NO. 2 EXECUTED
AS FOLLOWS EFFECTIVE SEPTEMBER  30, 2003:

 

	
  COMPANY

  	
  Cascade
  Natural Gas Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ W. Brian Matsuyama

  	
   

  
	
   

  	
   

  	
  President and CEO

  	
   

  
						

 

19

 

APPENDIX A

(see Section 3.2(d))

 

Table C

 

To use this table, enter
column 1 with the number of years, taken to be completed twelfths, by
which the Early Retirement Date of the Participant or the date on which the
Participant is entitled to a disability benefit precedes his Normal Retirement
Date.  Determine from column 2 the
corresponding percentage.

 

	
  1

  Number of Years

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  100.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  89.95

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  81.13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  73.37

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  66.51

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  60.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  55.03

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  50.22

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  45.91

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  42.05

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10 or more

  	
   

  	
  38.57

  	
   

  

 

This table is only
applicable for a Normal Retirement Date of the first day of the month
coinciding with or next following the sixty-fifth birthday.  Any percentage which cannot be determined
directly from the above table will be determined on an actuarial basis
consistent with the above.

 

The actuarial assumptions
used in this table are -

 

	
  Mortality:  UP 84 
  20 Female

  
	
  Interest:    6.00%

  

 

20

 

APPENDIX B

(see Section 3.3(d)(2))

 

Pre-Retirement
Death Benefits

 

	
  Participant

  	
   

  	
  Monthly
  Benefit Amount

  
	
   

  	
   

  	
   

  
	
  Anderson, Larry E.

  	
   

  	
  $

  	
  5,000

  
	
   

  	
   

  	
   

  
	
  Beaudry, O. LeRoy

  	
   

  	
  $

  	
  4,500

  
	
   

  	
   

  	
   

  
	
  Boyd, Ralph E.

  	
   

  	
  $

  	
  8,000

  
	
   

  	
   

  	
   

  
	
  Haug, James E.

  	
   

  	
  $

  	
  4,500

  
	
   

  	
   

  	
   

  
	
  Matsuyama, W. Brian

  	
   

  	
  $

  	
  12,000

  
	
   

  	
   

  	
   

  
	
  Oberg, King C.

  	
   

  	
  $

  	
  6,000

  
	
   

  	
   

  	
   

  
	
  Rosok, Larry E.

  	
   

  	
  $

  	
  4,000

  
	
   

  	
   

  	
   

  
	
  Steele, Calvin R.

  	
   

  	
  $

  	
  4,000

  
	
   

  	
   

  	
   

  
	
  Stoltz, Jon T.

  	
   

  	
  $

  	
  5,500

  
	
   

  	
   

  	
   

  
	
  Wessling, J. D.

  	
   

  	
  $

  	
  6,000

  

 

21

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