NORTHWEST NATURAL GAS CO (Form: 8-K, Received: 12/19/2006 13:58:17)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

December 14, 2006

Date of Report (Date of earliest event reported)

LOGO

NORTHWEST NATURAL GAS COMPANY

(Exact name of registrant as specified in its charter)

Commission File No. 1-15973

Oregon

93-0256722

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

220 N.W. Second Avenue, Portland, Oregon 97209

(Address of principal executive offices) (Zip Code)

Registrant’s Telephone Number, including area code: (503) 226-4211

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

As described in more detail below, on December 14, 2006, the Board of Directors of Northwest Natural Gas Company (the “Company”) took actions having the following effects:

•

the tax “gross-up” in change in control severance agreements for all executive officers was eliminated;

•

the change in control severance benefits payable to Mark S. Dodson, President and Chief Executive Officer of the Company, were reduced to a single $750,000 payment;

•

the “change in control” definition and triggering events in the Company’s two supplemental retirement plans were conformed to the definitions and triggering events approved in December 2005 for the change in control severance agreements;

•

a special provision of the Company’s Executive Supplemental Retirement Income Plan that used final salary in lieu of three-year average salary for calculating retirement benefits following a change in control and related termination of employment was eliminated;

•

a lower second tier benefit level applicable to new executive officers of the Company was added to the Company’s Supplemental Executive Retirement Plan; and

•

the 2% reduction in the interest crediting rate under the Company’s two older deferred compensation plans that was approved in September 2006 was delayed for ten years.

In consideration of the executive officers’ consent to certain of these actions, the Company agreed to pay to each executive officer $10,000 in cash, except to Mr. Dodson who will receive $1.00. The form of consent is filed as Exhibit 10.1.

Amended and Restated Severance Agreements with Certain Executive Officers

On December 14, 2006, the Board of Directors approved the Company’s entry into amended and restated severance agreements with certain executive officers of the Company. These agreements, which will be entered into effective December 14, 2006, generally provide for the payment, upon the termination of the employee’s employment by the Company without cause or by the employee for “good reason” (as defined in the severance agreements) within two years following a “change in control” of the Company (as defined in the severance agreements), of an amount equal to two times the sum of the employee’s annual salary and average bonus for the last three years, and also provide up to two-years’ continuation of life, accident and health insurance benefits. The form of amended and restated severance agreement with all executive officers other than Mark S. Dodson is filed as Exhibit 10.2.

The Board of Directors approved the revised form of severance agreement to change the provisions regarding the excise tax on “parachute payments.” Under the prior form of severance agreement, if any benefits to the employee were subject to the excise tax, the Company was required to make an additional payment to the employee such that the employee would receive net benefits as if no excise tax were payable. Such provision was eliminated in the revised form of severance agreement. Under the revised form, if any benefits otherwise payable to the employee would be subject to the excise tax, then, if it would result in greater net benefits for the employee to have the benefits that would otherwise be payable reduced by the amount necessary to prevent them from being “parachute payments,” then the employee will be paid such reduced benefits. If it would result in greater net benefits for the employee to pay the excise tax and receive the full amount of the benefits otherwise payable to him or her, then the employee will be paid the full amount of such benefits without reduction. In such event, the Company will not be able to deduct the “parachute payments” for federal income tax purposes.

Amended and Restated Severance Agreement with Mark S. Dodson

On December 14, 2006, the Board of Directors approved the Company’s entry into an amended and restated severance agreement with Mark S. Dodson, the Company’s President and Chief Executive Officer. This agreement, which will be entered into effective December 14, 2006, generally provides for the payment of severance benefits upon the termination of Mr. Dodson’s employment by the Company without cause or by Mr. Dodson for “good reason” (as defined in the severance agreement) within two years following a “change in control” of the Company (as defined in the severance agreement). The amended and restated severance agreement with Mr. Dodson is filed as Exhibit 10.3.

The Board of Directors approved the revised form of severance agreement with Mr. Dodson to change the amount of the severance benefits. Under the prior form of severance agreement with Mr. Dodson, the severance benefits generally consisted of an amount equal to three times the sum of his annual salary and average bonus for the last three years, plus up to three-years’ continuation of life, accident and health insurance benefits. Under the revised form of severance agreement with Mr. Dodson, the severance benefits generally consist of an amount equal to $750,000. Another change from the prior agreement is inclusion of a provision pursuant to which Mr. Dodson agrees that, upon a “change in control” of the Company within the meaning of any Long Term Incentive Award Agreement with the Company to which he is party, any outstanding award under such an agreement for which the performance period has not expired will be cancelled and no payout under the agreement will be made. The revised form of severance agreement with Mr. Dodson also includes the same change to the provisions regarding the excise tax on “parachute payments” that is described above.

Amendments to Executive Supplemental Retirement Income Plan

On December 14, 2006, the Board of Directors approved amendments to the Company’s Executive Supplemental Retirement Income Plan (the “ESRIP”) to conform the definition of

“change in control” and the related triggering events for enhanced benefits under the ESRIP to the definition of change in control and the related triggering events for severance benefits that were approved in December 2005 when the Company amended and restated its severance agreements with executive officers. Specifically, under the ESRIP as amended, the enhanced benefits payable to ESRIP participants under the ESRIP in connection with a “change in control” of the Company and related termination of employment shall only be payable to a participant if the participant becomes entitled to severance benefits under the participant’s severance agreement (if any) with the Company. A copy of the ESRIP is filed as Exhibit 10.4.

In addition, under the ESRIP prior to the amendments, the enhanced benefits payable to a participant in connection with a change in control and related termination of employment were generally calculated using the participant’s salary at the time of termination plus the average of the participant’s bonus over a three-year period, which would generally result in greater enhanced benefits than if the average of the participant’s salary and bonus over a three-year period had been used, as is the case for all other benefit calculations under the ESRIP. Under the ESRIP as amended, the average of the participant’s salary and bonus over a three-year period (rather than salary at the time of termination plus the average of the participant’s bonus over a three-year period) is also used in connection with a change in control and related termination of employment. Under the ESRIP both before and after the amendments, the enhanced benefits payable to a participant in connection with a change in control and related termination of employment include full vesting in ESRIP benefits and the receipt of three additional years of service credit.

The amendments also included certain other changes made to clarify the operation of certain provisions and other technical changes.

Amendments to Supplemental Executive Retirement Plan

On December 14, 2006, the Board of Directors approved amendments to the Company’s Supplemental Executive Retirement Plan (the “SERP”), effective December 1, 2006, to add a second tier of benefits under the SERP for individuals who become executive officers of the Company on or after December 1, 2006 (“Tier 2 Participants”). Under the SERP as amended, participants who were already participants in the SERP prior to December 1, 2006 are referred to as “Tier 1 Participants.” Under the SERP as amended, Tier 2 Participants are generally entitled to a make-up benefit upon termination of employment equal to the amount, if any, by which the Tier 2 Participant’s benefit under the Company’s Retirement Plan for Non-Bargaining Unit Employees (the “Qualified Plan”) would be greater than the actual benefit payable under the Qualified Plan upon termination in the absence of certain Internal Revenue Code limits that have the effect of reducing benefits payable under the Qualified Plan. Generally, for purposes of calculating the make-up benefit, salary and bonus deferred by the Tier 2 Participant under the Company’s Deferred Compensation for Directors and Executives shall be considered to have been paid to the Tier 2 Participant in the year in which the deferral occurred. The make-up benefit is generally vested after the Tier 2 Participant has completed five years of service with the Company. The make-up benefit is payable in the form of an annuity. A copy of the SERP is filed as Exhibit 10.5.

The amendments to the SERP also conformed the definition of “change in control” and the triggering event for enhanced benefits under the SERP to the definition of change in control and the triggering events for severance benefits that were approved in December 2005 when the Company amended and restated its severance agreements with executive officers. Specifically, under the SERP as amended, the enhanced benefits payable to SERP participants under the

SERP in connection with a “change in control” of the Company and related termination of employment shall only be payable to a participant if the participant becomes entitled to severance benefits under the participant’s severance agreement (if any) with the Company. Under the terms of the SERP prior to the amendments, participants generally became entitled to enhanced benefits under the SERP upon a “change in control” of the Company, regardless of whether or not the participant’s employment was terminated in connection with the change in control.

Under the SERP as amended, the enhanced benefits payable to both Tier 1 Participants and Tier 2 Participants in connection with a “change in control” of the Company and related termination of employment generally consist of full vesting in SERP benefits and the receipt of three additional years of service credit.

Amendments to Executive Deferred Compensation Plan

On December 14, 2006, the Board of Directors approved amendments to the Company’s Executive Deferred Compensation Plan (the “EDCP”) to change the interest crediting rate on cash accounts under the EDCP. Under the EDCP both before and after the amendments, until January 1, 2007, interest on cash accounts is credited at a rate equal to two percentage points over a Moody’s corporate bond index, and the interest rate credited on cash accounts under the plan shall always be at least six percent (6%). However, the EDCP prior to the amendments also provided that, beginning January 1, 2007, the EDCP would (i) credit interest at the same Moody’s corporate bond rate, but without the additional two percentage points, and (ii) no longer include a 6% interest rate floor.

The EDCP as amended provides that, beginning January 1, 2007, the EDCP will (i) credit interest at the same Moody’s corporate bond rate, plus two percentage points, and (ii) include a 6% interest rate floor. The EDCP as amended also generally provides that, beginning January 1, 2017, the EDCP will (i) credit interest at the interest rate that applies to cash accounts under the Company’s Deferred Compensation for Directors and Executives (the “Deferred Compensation Plan”), as such plan may be amended from time to time, and (ii) no longer include a 6% interest rate floor. A copy of the EDCP is filed as Exhibit 10.6. Similar amendments were made at the same time to the Company’s Directors Deferred Compensation Plan (the “DDCP”), a copy of which (as amended) is filed as Exhibit 10.7.

The EDCP and the DDCP were terminated for purposes of new deferrals of compensation effective January 1, 2005. Current deferrals of compensation by directors and officers are made pursuant to the Deferred Compensation Plan, which continues to provide that, beginning January 1, 2007, such plan will (i) credit interest at the same Moody’s corporate bond rate described above, but without the additional two percentage points, and (ii) no longer include a 6% interest rate floor.

Amendment to Employment Agreement with Mark S. Dodson

On December 14, 2006, the Board of Directors approved an amendment to the Employment Agreement between the Company and Mark S. Dodson.

Under the employment agreement with Mr. Dodson prior to the amendment, Mr. Dodson generally would be vested and eligible under the ESRIP for supplemental retirement benefits based on 65% of his “final annual compensation” (as defined in the ESRIP), notwithstanding that he is not otherwise eligible under the ESRIP for such target percentage accrual, and with no reduction in benefits based on early retirement, if (a) his employment is terminated for any reason after December 31, 2007, (b) he becomes disabled during employment, (c) he dies during employment, (d) his employment is terminated by the Company other than for cause, or (e) he becomes entitled to severance benefits under his severance agreement with the Company in connection with a change in control-related termination. Under Mr. Dodson’s employment agreement as amended, if Mr. Dodson becomes entitled to severance benefits under his severance agreement with the Company in connection with a change in control-related termination occurring before December 31, 2007, he will not become entitled to the 65% ESRIP benefit referenced above or to any other enhanced ESRIP benefits. A copy of the amendment to Mr. Dodson’s employment agreement is filed as Exhibit 10.8.

Item 8.01.

Other Events.

On December 14, 2006, the Board of Directors elected Richard G. Reiten as Chairman of the Board. In addition, the Board appointed the following officers:


Gregg S. Kantor		Executive Vice President, effective December 18, 2006
J. Keith White		Vice President, effective January 1, 2007
David R. Williams		Vice President, effective January 1, 2007
Grant M. Yoshihara		Vice President, effective January 1, 2007

A press release announcing the selection of the Chairman and the appointment of officers was issued on December 18, 2006 and is filed as Exhibit 99.1 hereto.

Item 9.01.

Financial Statements and Exhibits



(d)		Exhibits

10.1		Form of Consent dated December 14, 2006 entered into by each executive officer.

10.2		Form of amended and restated executive change in control severance agreement between the Company and each executive officer other than Mark S. Dodson.

10.3		Amended and restated executive change in control severance agreement dated December 14, 2006 between the Company and Mark S. Dodson.

10.4		Amended and Restated 1998 ESRIP Change in Control Appendix to the Executive Supplemental Retirement Income Plan, as amended effective December 14, 2006.

10.5		Supplemental Executive Retirement Plan, restated as of December 1, 2006.

10.6		Executive Deferred Compensation Plan, restated as of January 1, 2007.

10.7		Directors Deferred Compensation Plan, restated as of January 1, 2007.

10.8		Amendment dated December 14, 2006 to employment agreement dated December 20, 2002 between the Company and Mark S. Dodson.

99.1		Press Release of Northwest Natural Gas Company issued December 18, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				NORTHWEST NATURAL GAS COMPANY (Registrant)

Dated: December 19, 2006				/s/ David H. Anderson
				David H. Anderson
				Senior Vice President and Chief Financial Officer

Exhibit 10.1

CONSENT

This Consent is entered into effective December 14, 2006 by the undersigned participants in the Executive Supplemental Retirement Income Plan (the “ESRIP”) of Northwest Natural Gas Company (the “Company”) and the undersigned participants in the Company’s Supplemental Executive Retirement Plan (the “SERP”). All of the undersigned other than David H. Anderson and Margaret D. Kirkpatrick are ESRIP participants. None of the undersigned other than David H. Anderson and Margaret D. Kirkpatrick are SERP participants. Each of the undersigned is party to a change in control severance agreement with the Company.

On December 14, 2006, the Board of Directors of the Company approved the amendments to the 1998 ESRIP Change in Control Appendix to the ESRIP (the “ESRIP Amendments”) reflected on the attached marked copy of the appendix. Section 4.02 of the ESRIP provides that no amendment to the ESRIP shall “terminate nor diminish any rights or benefits accrued by any Participant or surviving beneficiary prior thereto.” Because the ESRIP Amendments may be viewed as terminating or diminishing certain rights of those ESRIP participants who are current employees of the Company, the Company has requested that the undersigned ESRIP participants consent to the ESRIP Amendments.

On December 14, 2006, the Board of Directors of the Company also approved amendments to the SERP. The amendments to the SERP conformed the definition of “change in control” and the triggering event for enhanced benefits under the SERP to the definition of change in control and the triggering events for severance benefits that were approved in December 2005 when the Company amended and restated its severance agreements with executive officers. Specifically, under the SERP as amended, the enhanced benefits payable to SERP participants under the SERP in connection with a “change in control” of the Company and related termination of employment shall only be payable to a participant if the participant becomes entitled to severance benefits under the participant’s severance agreement (if any) with the Company. Under the terms of the SERP prior to the amendments, SERP participants generally became entitled to enhanced benefits under the SERP upon a “change in control” of the Company, regardless of whether or not the participant’s employment was terminated in connection with the change in control. Although the Company is not required to obtain the consent of any SERP participants in connection with the amendments, the Company has requested that the undersigned SERP participants consent to the amendments.

On December 14, 2006, the Board of Directors of the Company also approved the Company’s entry into amended and restated change in control severance agreements with the executive officers of the Company to eliminate the tax “gross-up” in those agreements (and, in the case of the amended and restated change in control severance agreement with Mark S. Dodson, to reduce the amount of his change in control severance benefits to a single $750,000 payment). The Company has requested that each of the undersigned enter into an amended and restated change in control severance agreement with the Company in the form provided to the undersigned by the Company.

To induce the undersigned (other than David H. Anderson and Margaret D. Kirkpatrick) to consent to the ESRIP Amendments, to induce David H. Anderson and Margaret D. Kirkpatrick to consent to the above-described amendments to the SERP and to induce each of the undersigned to enter into an amended and restated change in control severance agreement with the Company in the form provided by the Company, the Company agrees to pay Mark S. Dodson $1 in cash and each of the other undersigned officers $10,000 in cash, payable on or before December 31, 2006, subject to applicable tax withholding. In consideration of such payment, (a) each of the undersigned ESRIP participants hereby consents to the ESRIP Amendments, (b) each of the undersigned SERP participants hereby consents to the above-described amendments to the SERP, and (c) each of the undersigned hereby agrees to enter into an amended and restated change in control severance agreement with the Company in the form provided by the Company.

Mark S. Dodson

Lea Anne Doolittle

Stephen P. Feltz

Gregg S. Kantor

Conrad J. Rue

David H. Anderson

Margaret D. Kirkpatrick


AGREED:

NORTHWEST NATURAL GAS COMPANY

By:

Title:

Exhibit 10.2

December ___, 2006

Re:

Change in Control Severance Agreement

Dear :

Northwest Natural Gas Company, an Oregon corporation (the “Company”), considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of the Company. In this connection, the Company recognizes that, as is the case with many publicly held corporations, the possibility of a change in control may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company, its customers and its shareholders. Accordingly, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management to their assigned duties without distraction in circumstances arising from the possibility of a change in control of the Company.

In order to induce you to remain in the employ of the Company, this letter agreement, which has been approved by the Board, sets forth severance benefits which the Company agrees will be provided to you in the event your employment with the Company is terminated in connection with a Change in Control (as defined in Section 3 hereof) under the circumstances described below. The Company and you have entered into a prior letter agreement regarding change in control severance benefits dated December 15, 2005. Upon your signature of this letter agreement, the prior agreement shall be amended and restated in its entirety in the form of this agreement.

1. Agreement to Provide Services; Right to Terminate .

(i) Except as otherwise provided in paragraph (ii) below, the Company or you may terminate your employment at any time, subject to the Company’s providing the benefits hereinafter specified in accordance with the terms hereof.

(ii) In the event of a Potential Change in Control (as defined in Section 3 hereof), you agree that you will not leave the employ of the Company (other than as a result of Disability, as such term is hereinafter defined) and will render the services contemplated in the

recitals to this Agreement until the earliest of (a) a date which is 270 days from the occurrence of such Potential Change in Control, or (b) a termination of your employment pursuant to which you become entitled under this Agreement to receive the benefits provided in Section 5(iii) below.

2. Term of Agreement . This Agreement shall commence on the date hereof and shall continue in effect until December 31, 2007; provided, however, that commencing on January 1, 2008 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless at least 90 days prior to such January 1 date, the Company or you shall have given notice that this Agreement shall not be extended (provided that no such notice may be given by the Company during the pendency of a Potential Change in Control); and provided, further, that this Agreement shall continue in effect for a period of twenty-four (24) months beyond the term provided herein if a Change in Control shall have occurred during such term. Notwithstanding anything in this Section 2 to the contrary, this Agreement shall terminate automatically if you or the Company terminate your employment prior to the earlier of Shareholder Approval (as defined in Section 3 hereof), if applicable, or the Change in Control. In addition, the Company may terminate this Agreement during your employment if, prior to the earlier of Shareholder Approval, if applicable, or the Change in Control, you cease to hold your current position with the Company, except by reason of a promotion.

3. Change in Control; Potential Change in Control; Shareholder Approval; Person.

(i) For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:

(A) The consummation of:

(1) any consolidation, merger or plan of share exchange involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or

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

(B) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board (“Incumbent Directors”) shall cease

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for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(C) Any Person (as hereinafter defined) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of the combined voting power of the then outstanding Voting Securities.

Notwithstanding anything in the foregoing to the contrary, unless otherwise determined by the Board, no Change in Control shall be deemed to have occurred for purposes of this Agreement if (1) you acquire (other than on the same basis as all other holders of shares of Common Stock of the Company) an equity interest in an entity that acquires the Company in a Change in Control otherwise described under subparagraph (A) above, or (2) you are part of a group that constitutes a Person which becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted in a Change in Control under subparagraph (C) above.

(ii) For purposes of this Agreement, a “Potential Change in Control” shall be deemed to have occurred if:

(A) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(B) any Person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

(C) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

(iii) For purposes of this Agreement, “Shareholder Approval” shall be deemed to have occurred if the shareholders of the Company approve an agreement entered into by the Company, the consummation of which would result in the occurrence of a Change in Control.

(iv) For purposes of this Agreement, the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), other than the Company or any employee benefit plan sponsored by the Company.

4. Termination Following Shareholder Approval or Change in Control . If a Change in Control occurs, you shall be entitled to the benefits provided in Section 5(iii) hereof in the event that (x) a Date of Termination (as defined in Section 4(v) below) of your employment with

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the Company occurred or occurs after the earlier of Shareholder Approval, if applicable, or the Change in Control and no later than twenty-four (24) months after the Change in Control, or (y) your employment with the Company is terminated by you for Good Reason (as defined below) based on an event occurring concurrent with or subsequent to the earlier of Shareholder Approval, if applicable, or the Change in Control and your Notice of Termination (as defined in Section 4(iv) below) in connection therewith shall have been given no later than twenty-four (24) months after the Change in Control; provided, however, that if any such termination is (a) because of your death, (b) by the Company for Cause (as defined below) or Disability, or (c) by you other than for Good Reason based on an event occurring concurrent with or subsequent to the earlier of Shareholder Approval, if applicable, or the Change in Control, then you shall not be entitled to the benefits provided in Section 5(iii) hereof.

(i) Disability . Termination by the Company of your employment based on “Disability” shall mean termination because of your absence from your duties with the Company on a full-time basis for one hundred eighty (180) consecutive days as a result of your incapacity due to physical or mental illness, unless within thirty (30) days after Notice of Termination is given to you following such absence you shall have returned to the full-time performance of your duties.

(ii) Cause . Termination by the Company of your employment for “Cause” shall mean termination upon (a) the willful and continued failure by you to perform substantially your assigned duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness) after a demand for substantial performance is delivered to you by the Chairman of the Board or President of the Company which specifically identifies the manner in which such executive believes that you have not substantially performed your duties or (b) the willful engaging by you in illegal conduct which is materially and demonstrably injurious to the Company. For purposes of this paragraph (ii), no act, or failure to act, on your part shall be considered “willful” unless done, or omitted to be done, by you in knowing bad faith and without reasonable belief that your action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for the purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of the conduct set forth above in (a) or (b) of this paragraph (ii) and specifying the particulars thereof in detail.

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(iii) Good Reason . Termination by you of your employment with the Company for “Good Reason” shall mean termination by you of your employment with the Company based on any of the following events provided you give Notice of Termination after the occurrence of any of the following events and no later than 30 days after the later of (1) notice to you of such event, or (2) the Change in Control:

(A) a change in your status, title, position(s) or responsibilities as an officer of the Company which does not represent a promotion from your status, title, position(s) and responsibilities as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control, or the assignment to you of any duties or responsibilities which are inconsistent with such status, title or position(s), or any removal of you from or any failure to reappoint or reelect you to such position(s), except in connection with the termination of your employment for Cause or Disability or as a result of your death or by you other than for Good Reason;

(B) a reduction by the Company in your base salary as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control;

(C) the failure by the Company to continue in effect any Plan (as hereinafter defined) in which you are participating immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control (or Plans providing you with at least substantially similar benefits) other than as a result of the normal expiration of any such Plan in accordance with its terms as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control, or the taking of any action, or the failure to act, by the Company which would adversely affect your continued participation in any of such Plans on at least as favorable a basis to you as is the case immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control or which would materially reduce your benefits in the future under any of such Plans or deprive you of any material benefit enjoyed by you immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control;

(D) the failure by the Company to provide and credit you with the number of paid vacation days to which you are then entitled in accordance with the Company’s normal vacation policy as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control;

(E) the Company’s requiring you to be based more than 30 miles from where your office is located immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control except for required travel on the Company’s business to an extent substantially consistent with the business travel obligations which you undertook on behalf of the Company prior to the earlier of Shareholder Approval, if applicable, or the Change in Control;

(F) the failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 7 hereof;

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(G) any purported termination by the Company of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of paragraph (iv) below (and, if applicable, paragraph (ii) above); and for purposes of this Agreement, no such purported termination shall be effective; or

(H) the failure by the Company to pay you any portion of your current compensation, to credit your Deferred Compensation Plan account in accordance with your previous election, or to pay you any portion of an installment of deferred compensation under any Plan in which you participated, within seven (7) days of the date such compensation is due.

For purposes of this Agreement, “Plan” shall mean any compensation plan such as an incentive, stock option or restricted stock plan or any employee benefit plan such as a thrift, pension, profit sharing, deferred compensation, medical, disability, accident, life insurance, or relocation plan or policy or any other plan, program or policy of the Company intended to benefit employees.

(iv) Notice of Termination . Any purported termination by the Company or by you (other than termination due to your death, which shall terminate your employment automatically) following the earlier of Shareholder Approval, if applicable, or a Change in Control shall be communicated by Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

(A) With respect to any Notice of Termination given by you for Good Reason, such Notice of Termination may indicate that such termination for Good Reason shall be conditioned upon, and postponed until, the date on which it is finally determined, either by mutual written agreement of the parties or by the arbitrators in a proceeding as provided in Section 13 hereof, that Good Reason exists for such termination. If a Notice of Termination given by you for Good Reason indicates that such termination shall be so conditioned and postponed, then, if the Company disputes the existence of Good Reason, the Company shall, within thirty (30) days after the Notice of Termination is given, notify you that a dispute exists concerning the termination, whereupon Section 13 hereof shall apply to such dispute. If no such notice is given by the Company within such 30-day period, then a final determination that Good Reason exists shall be deemed to have occurred on the date thirty (30) days after the Notice of Termination for Good Reason is given.

(B) Notwithstanding anything to the contrary in this Agreement:

(1) if, at any time before the Date of Termination determined pursuant to this Agreement with respect to any purported termination by you of your employment with the Company, there exists a basis for the Company to terminate

Page 6

your employment for Cause, then the Company may, regardless of whether or not you have given Notice of Termination for Good Reason and regardless of whether or not Good Reason exists, terminate your employment for Cause, in which event you shall not be entitled to the benefits provided in Section 5(iii) hereof, and

(2) if you die or your employment is terminated based on Disability after you have given Notice of Termination for Good Reason and before the Date of Termination determined under this Agreement with respect to that Notice of Termination, and it is subsequently finally determined that Good Reason existed at the time your employment terminated, then termination of your employment shall be deemed to have occurred for Good Reason (and not due to your death or Disability) and you shall be entitled to the benefits provided in Section 5(iii) hereof.

(v) Date of Termination . “Date of Termination” shall mean the date your employment with the Company is terminated following the earlier of Shareholder Approval, if applicable, or a Change in Control, which date shall be determined as follows:

(A) if your employment is to be terminated for Disability, thirty (30) days after Notice of Termination is given (provided that, if you shall have returned to the performance of your duties on a full-time basis during such thirty (30) day period, then the termination for Disability contemplated by the Notice of Termination shall not occur),

(B) if your employment is terminated due to your death, the date of your death,

(C) if your employment is to be terminated by the Company other than for Disability, or if your employment is to be terminated by you without a claim of Good Reason, the date specified in the Notice of Termination, and

(D) if your employment is to be terminated by you for Good Reason, the date ninety (90) days after the date on which a Notice of Termination is given, unless either:

(1) an earlier date has been agreed to by the Company either in advance of, or after, receiving such Notice of Termination (in which case such earlier date shall be the Date of Termination),

(2) pursuant to and in accordance with Section 4(iv) you have indicated in your Notice of Termination that you are conditioning your termination upon (and postponing such termination until) the date on which it is finally determined that Good Reason exists for such termination (in which case the later of such date as determined in accordance with Section 4(iv) above, or the date otherwise determined under this Section 4(v)(D), shall be the Date of Termination),

Page 7

(3) the Company shall not have notified you within fifteen (15) days after a Notice of Termination for Good Reason is given that it intends to fully correct the circumstances giving rise to Good Reason (in which case the date fifteen (15) days after the Notice of Termination shall be the Date of Termination), or

(4) if the Company gives notice as provided in Section 4(v)(D)(3) and if the circumstances giving rise to Good Reason are fully corrected on or prior to the date that is ninety (90) days after such Notice of Termination was given, then the termination for Good Reason contemplated by such Notice of Termination shall not occur.

5. Compensation Upon Termination or During Disability .

(i) During any period following the earlier of Shareholder Approval, if applicable, or a Change in Control that you fail to perform your duties as a result of incapacity due to physical or mental illness, you shall continue to receive your full base salary at the rate then in effect and any benefits or awards under any Plans shall continue to accrue during such period, to the extent not inconsistent with such Plans, until your employment is terminated pursuant to and in accordance with Sections 4(i) and 4(v) hereof. Thereafter, your benefits shall be determined in accordance with the Plans then in effect.

(ii) If your employment shall be terminated for Cause or as a result of death following the earlier of Shareholder Approval, if applicable, or a Change in Control, the Company shall pay you your full base salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given plus any benefits or awards which pursuant to the terms of any Plans have been earned or become payable, but which have not yet been paid to you. Thereupon the Company shall have no further obligations to you under this Agreement.

(iii) If a Change in Control occurs and either (a) after the earlier of Shareholder Approval, if applicable, or the Change in Control and no later than twenty-four (24) months after the Change in Control, a Date of Termination of your employment with the Company occurred or occurs as a result of a termination by the Company other than for Cause or Disability, or (b) your employment with the Company is terminated by you for Good Reason based on an event occurring concurrent with or subsequent to the earlier of Shareholder Approval, if applicable, or the Change in Control and your Notice of Termination in connection therewith shall have been given no later than twenty-four (24) months after the Change in Control, then, by no later than the fifth day following the later of the Date of Termination or the Change in Control (except as may otherwise be provided), you shall be entitled, without regard to any contrary provisions of any Plan, to a severance benefit as follows:

(A) the Company shall pay your full base salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given

Page 8

plus any benefits or awards which pursuant to the terms of any Plans have been earned or become payable, but which have not yet been paid to you; provided, however, that with respect to a termination of your employment for Good Reason based on a reduction by the Company in your base salary as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control, the Company shall pay your full base salary through the Date of Termination at the rate in effect just prior to such reduction plus any benefits or awards which pursuant to the terms of any Plans have been earned or become payable, but which have not yet been paid to you;

(B) as severance pay and in lieu of any further salary for periods subsequent to the Date of Termination, the Company shall pay to you in a single payment an amount in cash equal to _____ times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control and (2) the greater of (i) the average of the last three annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) the average of the last three annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the earlier of Shareholder Approval, if applicable, or the Change in Control; and

(C) for a ____________ (__) month period after the Date of Termination, the Company shall arrange to provide you, your spouse and your dependents with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this subparagraph (C) to the extent that a similar benefit is actually received by you from a subsequent employer during such ____________ ( ) month period, and any such benefit actually received by you shall be reported to the Company.

(iv) The amount of any payment provided for in this Section 5 shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise. Your entitlements under Section 5(iii) are in addition to, and not in lieu of, any rights, benefits or entitlements you may have under the terms or provisions of any Plan.

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The “Capped Benefit” shall equal the Specified Benefits, reduced by the amount necessary to prevent any portion of the Specified Benefits from being a “parachute payment” as defined in Section 280G(b)(2) of the Code. The Capped Benefit would therefore equal 2.99 multiplied by your applicable “base amount” as defined in Section 280G(b)(3) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Benefit than from the Specified Benefits, there shall be taken into account any excise tax that would be imposed under Section 4999 of the Code and all federal, state and local taxes required to be paid by you in respect of the receipt of such payments. The parties acknowledge that the application of Section 280G is uncertain in many respects and agree that the Company shall make all calculations and determinations under this section (including application and interpretation of the Code and related regulatory, administrative and judicial authorities) in good faith, which calculations and determinations shall be conclusive absent manifest error. The Company shall provide you with a reasonable opportunity to review and comment on the Company’s calculations of the Capped Benefit and to request which of the Specified Benefits shall be reduced. If, after payment of any amount under this Agreement or any Other Arrangement, it is determined that the calculation of the Capped Benefit was calculated incorrectly, the amount of the Capped Benefit will be adjusted, the Company shall pay to you any additional amount that should have been paid to you, and you shall repay to the Company any amount that should not have been paid to you, in each case with interest at the discount rate applicable under Section 280G(d)(4) of the Code.

7. Successors; Binding Agreement .

(i) Upon your written request, the Company will seek to have any Successor (as hereinafter defined), by agreement in form and substance satisfactory to you, assent to the fulfillment by the Company of its obligations under this Agreement. For purposes of this Agreement, “Successor” shall mean any Person that succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Company’s business directly, by merger, consolidation or purchase of assets, or indirectly, by purchase of the Company’s Voting Securities or otherwise.

(ii) This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there be no such designee, to your estate.

8. Fees and Expenses . The Company shall pay to you all legal fees and related expenses incurred by you in good faith as a result of (i) your termination following the earlier of Shareholder Approval, if applicable, or a Change in Control (including all such fees and expenses, if any, incurred in contesting or disputing in good faith any such termination) or (ii) your seeking to obtain or enforce in good faith any right or benefit provided by this Agreement.

Page 10

9. Survival . The respective obligations of, and benefits afforded to, the Company and you as provided in Sections 5, 6, 7(ii), 8 and 13 of this Agreement shall survive termination of this Agreement, but only with respect to a Change in Control occurring during the term of this Agreement.

10. Notice . For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid and addressed to the address of the respective party set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Chairman of the Board or President of the Company, with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

11. Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by you and the Chairman of the Board or President of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Oregon.

12. Validity . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

13. Arbitration . Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Portland, Oregon by three arbitrators in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators’ award, which award shall be a final and binding determination of the dispute or controversy, in any court having jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall bear all costs and expenses of the arbitrators arising in connection with any arbitration proceeding pursuant to this Section 13.

14. Related Agreements. To the extent that any provision of any other agreement between the Company or any of its subsidiaries and you shall limit, qualify or be inconsistent with any provision of this Agreement, then for purposes of this Agreement, while the same shall remain in force, the provision of this Agreement shall control and such provision of such other agreement shall be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose.

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15. Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument.

If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject.


Sincerely,

NORTHWEST NATURAL GAS COMPANY

By
		Mark S. Dodson
		President and CEO

Agreed to this ____ day

of ____________, 2006.

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Exhibit 10.3

December 14, 2006

Mr. Mark S. Dodson

5232 SW Bancroft

Portland, OR 97221

Re:

Change in Control Severance Agreement

Dear Mark:

1. Agreement to Provide Services; Right to Terminate .

3. Change in Control; Potential Change in Control; Shareholder Approval; Person.

(i) For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:

(A) The consummation of:

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

(B) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board (“Incumbent Directors”) shall cease

Page 2

(ii) For purposes of this Agreement, a “Potential Change in Control” shall be deemed to have occurred if:

(A) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

(B) any Person (including the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

(C) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

Page 3

Page 4

(B) a reduction by the Company in your base salary as in effect immediately prior to the earlier of Shareholder Approval, if applicable, or the Change in Control;

(F) the failure by the Company to obtain from any Successor (as hereinafter defined) the assent to this Agreement contemplated by Section 7 hereof;

Page 5

(B) Notwithstanding anything to the contrary in this Agreement:

Page 6

(B) if your employment is terminated due to your death, the date of your death,

(D) if your employment is to be terminated by you for Good Reason, the date ninety (90) days after the date on which a Notice of Termination is given, unless either:

(1) an earlier date has been agreed to by the Company either in advance of, or after, receiving such Notice of Termination (in which case such earlier date shall be the Date of Termination),

Page 7

5. Compensation Upon Termination or During Disability .

(A) the Company shall pay your full base salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given

Page 8

(B) as severance pay and in lieu of any further salary for periods subsequent to the Date of Termination, the Company shall pay to you in a single payment an amount in cash equal to $750,000.

(iv) Notwithstanding any provision to the contrary in any Long Term Incentive Award Agreement (“LTIP Agreement”) between you and the Company evidencing a performance-based award to you under the Company’s Long Term Incentive Plan, you agree that upon the occurrence of a Change in Control any outstanding award under an LTIP Agreement for which the performance period has not expired shall be cancelled, and you shall receive no payout under any such outstanding LTIP Agreement. Solely for purposes of this Section 5(iv), “Change in Control” shall have the meaning set forth in the applicable LTIP Agreement. Unless and until this Section 5(iv) is expressly amended in writing, it is intended to override any contrary provision of any current or future LTIP Agreement.

(v) The amount of any payment provided for in this Section 5 shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by you as the result of employment by another employer after the Date of Termination, or otherwise. Except as expressly provided in this Agreement, your entitlements under Section 5(iii) are in addition to, and not in lieu of, any rights, benefits or entitlements you may have under the terms or provisions of any Plan.

6. Parachute Payments . Notwithstanding any other provision in this Agreement or any other agreement or arrangement between the Company and you with respect to compensation or benefits (each an “Other Arrangement”), in the event that the provisions of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, or any successor provisions (the “Code”), would cause you to receive a greater after-tax benefit from the Capped Benefit (as defined below) than from the amounts (including the monetary value of any non-cash benefits) otherwise payable pursuant to this Agreement or any Other Arrangement (the “Specified Benefits”), the Capped Benefit shall be paid to you in lieu of the Specified Benefits. The “Capped Benefit” shall equal the Specified Benefits, reduced by the amount necessary to prevent any portion of the Specified Benefits from being a “parachute payment” as defined in Section 280G(b)(2) of the Code. The Capped Benefit would therefore equal 2.99 multiplied by your applicable “base amount” as defined in Section 280G(b)(3) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Benefit than from the Specified Benefits, there shall be taken into account any excise tax that would be

Page 9

imposed under Section 4999 of the Code and all federal, state and local taxes required to be paid by you in respect of the receipt of such payments. The parties acknowledge that the application of Section 280G is uncertain in many respects and agree that the Company shall make all calculations and determinations under this section (including application and interpretation of the Code and related regulatory, administrative and judicial authorities) in good faith, which calculations and determinations shall be conclusive absent manifest error. The Company shall provide you with a reasonable opportunity to review and comment on the Company’s calculations of the Capped Benefit and to request which of the Specified Benefits shall be reduced. If, after payment of any amount under this Agreement or any Other Arrangement, it is determined that the calculation of the Capped Benefit was calculated incorrectly, the amount of the Capped Benefit will be adjusted, the Company shall pay to you any additional amount that should have been paid to you, and you shall repay to the Company any amount that should not have been paid to you, in each case with interest at the discount rate applicable under Section 280G(d)(4) of the Code.

7. Successors; Binding Agreement .

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15. Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument.

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Sincerely,

NORTHWEST NATURAL GAS COMPANY

By		/s/ Lea Anne Doolittle
		Lea Anne Doolittle
		Vice President

Agreed to this 15th day

of December, 2006.

/s/ Mark S. Dodson

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Exhibit 10.4

AMENDED AND RESTATED

1998 ESRIP CHANGE IN CONTROL APPENDIX

NORTHWEST NATURAL GAS COMPANY

EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME PLAN

(Effective December 14, 2006)

The benefits of any actively employed Participant covered under the Company’s Executive Supplemental Retirement Income Plan (ESRIP) who becomes entitled to a Change in Control Severance Benefit shall be vested, determined and paid under the Plan as modified by the provisions set forth below in 1.11(a), 1.14, 2.01-2(b)(4), 2.02A, 2.05A, 2.09 and 4.02A:

1.	Section 1.11(a) is amended to cross reference new 2.01-2(b)(4):

(a) Benefit Accrual . Service for benefit accrual under 2.01 means years of actual participation, including service credited under 1.11(c), after becoming a Participant under this Plan, plus any additional years of benefit accrual credit earned or awarded pursuant to 2.01-2(b)(2), (3) or (4).

2.	Section 1.14 is added to define “Change in Control Severance Benefit”:

1.14 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 1.14, 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.

3. Section 2.01-2(b)(4) is added to increase the years of participation benefit accrual by three (3) years for any Participant who becomes entitled to a Change in Control Severance Benefit. 2.01-2(b), as amended and restated to reflect the addition of 2.01-2(b)(4), is as follows:

(b) Year of Participation means the sum of (1), (2), (3) and (4):

(1) Each consecutive twelve (12) month period of Company service measured by each anniversary of the date of first becoming a Participant under this Plan.

(2) All additional years of participation credit awarded to a Participant by the Committee in the exercise of its discretion.

(3) All years of service credit earned for Company service and awarded by the Committee for each of the ten (10) Participants in the Plan on September 1, 1998, as set forth in the attached 1998 ESRIP Appendix.

(4) Three (3) additional years of participation credit shall be awarded to any Participant who becomes entitled to a Change in Control Severance Benefit (defined in 1.14) pursuant to the Amended and Restated 1998 ESRIP Change in Control Appendix.

4. Section 2.02A shall replace 2.02 regarding eligibility to receive and the award of the early retirement benefits for any Participant who becomes entitled to a Change in Control Severance Benefit:

2.02A Early Retirement Supplemental Income . Any Participant who becomes entitled to a Change in Control Severance Benefit (defined in 1.14) shall be entitled at or after age fifty-five (55) to receive during the Participant’s lifetime, subject to 2.07, the reduced monthly supplemental retirement payments determined as follows:

2.02A-1 First, the gross annual retirement benefit at the Participant’s Normal Retirement Date shall be determined under 2.01-2 using the Participant’s Final Annual Compensation and Service under 1.11(a) at the time employment by the Company ends.

2.02A-2 Second, the monthly supplemental payment under this Plan starting at the Normal Retirement Date shall be determined under the formula in 2.01-4 using the Participant’s early annual retirement allowance (under Retirement Plan 7.02) payable at his or her Normal Retirement Date, projected annual primary Social Security benefit under the Retirement Plan, and annual retirement benefits payable under the Executive Deferred Compensation Plan determined as a supplement to such payment under the Retirement Plan.

2.02A-3 Third, if supplemental payments start before the Participant’s Normal Retirement Date, to achieve the necessary reduction of the target benefit under 2.01 and 2.02A-1, the monthly amount under 2.02A-2 shall be reduced by one-quarter of one percent (0.25%) per month for each month that the benefits begin before the Participant’s 62 ^nd birthday.

5. Section 2.05A shall replace 2.05 regarding the vested benefits of any Participant who becomes entitled to a Change in Control Severance Benefit:

2.05A Vested Benefits . Any Participant who becomes entitled to a Change in Control Severance Benefit (defined in 1.14) thereupon shall have a 100% vested and nonforfeitable right to receive supplemental payments under this Plan starting as early as age 55 under 2.02A.

6. Section 2.09 is added to address a circumstance under which an appropriate recalculation of benefits may occur:

2.09 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 terms and conditions of payment set forth in the Amended and Restated 1998 ESRIP Change in Control Appendix. 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.

7. Section 4.02A replaces Section 4.02 to affirm the provisions in this Amended and Restated 1998 ESRIP Change in Control Appendix:

4.02A 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; provided, however , that no such termination, modification or amendment shall terminate or diminish any rights or benefits accrued by any Participant or Surviving Beneficiary prior thereto and provided further that, 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 Amended and Restated 1998 ESRIP Change in Control Appendix. For purposes of 4.02A, 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.

Exhibit 10.5

NORTHWEST NATURAL GAS COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

2006 RESTATEMENT

Table of Contents


		Page
1.	Purpose; Effective Date	1

2.	Eligibility	1

3.	Years of Participation	1

4.	Normal Retirement Benefit	1

5.	Early Retirement Benefit	3

6.	Termination Benefit	3

7.	Time and Form of Payment to Participant	4

8.	Death Benefit	5

9.	Change in Control	6

10.	Administration	7

11.	Claims Procedure	7

12.	Amendment and Termination of the Plan	8

13.	Miscellaneous	8

INDEX OF TERMS


Term	Section	Page
Board	1	1

Change in Control Severance Benefit	9(b)	6
Committee	10(a)	7
Company	1	1

Deferred Comp Plan	4(e)(ii)	2
Disability - SERP	6(e)	4

Early Retirement Date	5(a)	3
Effective Date	1	1
Eligibility Date	2	1
ESRIP	1	1

Final Average Pay	4(c)	2

Normal Retirement Date	4(a)	1

Participant	2	1
Pension Offset	4(e)	2
Plan - SERP	1	1

Qualified Plan	1	1

Short Service Factor	4(d)	2

Tier 1 Participant	2	1
Tier 2 Participant	2	1

Year of Participation	3	1

NORTHWEST NATURAL GAS COMPANY

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

2006 RESTATEMENT

1. Purpose; Effective Date . The Board of Directors (the “Board”) of Northwest Natural Gas Company (the “Company”) adopts this Supplemental Executive Retirement Plan (the “Plan”) in order to attract and retain highly effective executives by providing retirement benefits in excess of those provided by the Northwest Natural Gas Company Retirement Plan for Non-Bargaining Unit Employees (the “Qualified Plan”). The Plan shall not apply to executives already covered by the Company’s Executive Supplemental Retirement Income Plan (the “ESRIP”). The Plan is intended to constitute an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees. The Plan was adopted effective as of September 1, 2004 (the “Effective Date”). In order to provide for a second tier of benefits for new executive officers, the Company adopts this 2006 Restatement effective December 1, 2006.

2. Eligibility . Each executive officer of the Company hired into such office after the Effective Date and each other executive employee of the Company designated by the Organization and Executive Compensation Committee of the Board shall be eligible to participate in the Plan (a “Participant”). “Eligibility Date” means the date as of which the Participant became an executive officer of the Company or the effective date of designation to participate in the Plan, whichever applies. A Participant with an Eligibility Date before December 1, 2006 (a “Tier 1 Participant”) shall be provided full benefits under the Plan and a Participant with an Eligibility Date on or after that date (a “Tier 2 Participant”) shall be provided with Make-Up Benefits as described in 4(f), 5(d), 6(d), 7(c), and 8(d). Participants in the ESRIP shall not be eligible to participate in the Plan.

3. Years of Participation . Vesting of benefits, accrual of benefits, and eligibility for retirement shall be based on the Participant’s Years of Participation. “Year of Participation” means a 12-month period elapsed between the Participant’s Eligibility Date and date of separation from service with the Company. If participation is not continuous, whole and fractional months shall be aggregated and any remaining fractional month shall be disregarded.

4. Normal Retirement Benefit .

(a) Normal Retirement Date . A Participant’s “Normal Retirement Date” is the first of the month following separation from service with the Company at or after attainment of age 65 and completion of five Years of Participation.

(b) Amount of Benefit . A Tier 1 Participant’s benefit upon Normal Retirement Date shall be a lump sum equal to six times Final Average Pay (FAP) times the Short Service Factor (SSF) minus the Pension Offset (PO) as follows:

Lump sum = (6 x FAP x SSF) - PO

(c) Final Average Pay . “Final Average Pay” means the Tier 1 Participant’s average annual salary plus annual performance award in the 60 consecutive calendar months of employment with the Company producing the highest average out of the 120 months ending with the calendar month preceding the Tier 1 Participant’s separation from service with the Company. If the Tier 1 Participant’s employment was not continuous, months of non-employment shall be disregarded and the adjoining months treated as continuous. If the Tier 1 Participant does not have 60 consecutive months of employment, the average shall be based on all months of employment. The Tier 1 Participant’s annual performance award shall be attributed 1/12 ^th to each of the months in which it was earned.

(d) Short Service Factor . “Short Service Factor” means a percentage calculated by dividing the Tier 1 Participant’s Years of Participation at separation from service with the Company by 15, not to exceed 100 percent.

(e) Pension Offset . “Pension Offset” means a lump sum amount equal to the combined actuarial equivalent value of the following:

(i) The Tier 1 Participant’s benefit payable at age 65 under the Qualified Plan in the normal form provided by that plan;

(ii) The make-up benefit payable at age 65 provided by any elective nonqualified deferred compensation plan of the Company (a “Deferred Comp Plan”) on account of the reduction in benefits under the Qualified Plan and under Social Security resulting from deferral of compensation under the Deferred Comp Plan; and

(iii) The Tier 1 Participant’s Social Security benefit payable at age 65, as estimated by the Committee based on the Tier 1 Participant’s total compensation in the most recent full calendar year and an assumed rate of increase over a full working career.

(f) Make-Up Benefit . A Tier 2 Participant’s benefit upon Normal Retirement Date shall be equal to the amount, if any, by which the Tier 2 Participant’s benefit under the Qualified Plan would be greater than the actual benefit payable under the Qualified Plan upon Normal Retirement Date in the absence of both the following limits:

(i) The limit provided by Section 401(a)(17) of the Internal Revenue Code on compensation counted under the Qualified Plan.

(ii) The limit provided by Section 415(b) of the Internal Revenue Code on benefits payable under the Qualified Plan.

(g) Deferred Compensation . The Tier 2 Participant’s Qualified Plan benefit calculated without the limits in (f)(i) and (ii) shall treat salary and bonus deferred by the Tier 2 Participant under the Northwest Natural Gas Company Deferred Compensation Plan for Directors and Executives or the predecessor to such plan as though it had been paid to or received by the Tier 2 Participant in the year when the deferral occurred, but only to the extent such salary and bonus is not counted in the calculation of a supplemental retirement benefit payable to the Tier 2 Participant under Section 8 of such plan.

5. Early Retirement Benefit .

(a) Early Retirement Date . A Participant’s “Early Retirement Date” is the first of the month following separation from service with the Company at or after attainment of age 55 and completion of 15 Years of Participation and before attainment of age 65.

(b) Amount of Benefit . A Tier 1 Participant’s benefit upon Early Retirement Date shall be a lump sum determined under the same formula in 4(b) as the benefit at Normal Retirement Date, with the same defined terms, subject to the following additional detail in the definition of Pension Offset. The value of the Qualified Plan benefit and the make-up benefit provided by the Deferred Comp Plan shall be based on the benefit payable at age 65, even if those benefits start before age 65. The value of the Social Security Benefit shall be based on the assumption of no earnings after Early Retirement Date and payment starting at the later of the Tier 1 Participant’s Early Retirement Date or the date the Tier 1 Participant attains age 62.

(c) Reduction for Commencement Before Age 60 . The Tier 1 Participant’s benefit upon Early Retirement Date shall be reduced by five percent for each year by which Early Retirement Date precedes the first of the month following the Tier 1 Participant’s 60 ^th birthday, with interpolation for a partial year based on one-twelfth of the full five percent for each month.

(d) Make-Up Benefit . A Tier 2 Participant’s benefit upon Early Retirement Date shall be the same as the Tier 2 Participant’s benefit upon Normal Retirement Date, except the calculation shall be based on the Qualified Plan benefit as of the Early Retirement Date without the limits described in 4(f)(i) and (ii) and based on deferred salary and bonus as provided in 4(g).

6. Termination Benefit .

(a) Vesting. A Participant shall become vested in benefits under the Plan upon completing five Years of Participation, upon suffering a Disability, or when entitled to a Change in Control Severance Benefit as provided in 9(a). A Participant whose employment with the Company terminates prior to vesting shall forfeit any right to benefits under the Plan, subject to reinstatement of such right upon rehire into a position with the Company eligible to participate in the Plan. A Participant whose employment with the Company terminates after becoming vested and before qualifying for Early or Normal Retirement Date shall be paid a termination benefit.

(b) Amount of Benefit . A Tier 1 Participant’s termination benefit shall be determined under the same formula in 4(b) as the benefit at Normal Retirement Date, with the same defined terms, subject to the following additional detail in the definition of Pension Offset. The Pension Offset shall be calculated the same as on Early Retirement Date, except the value of Social Security benefits shall be based on the assumption of future earnings continuing at the Participant’s last pay rate with the Company and on payment starting at age 65.

(c) Reduction for Commencement Before Age 60 . The Tier 1 Participant’s termination benefit shall be reduced by five percent for each year by which the first of the month following separation from service with the Company precedes the first of the month following the Participant’s 60 ^th birthday, with interpolation for a partial year based on one-twelfth of the full five percent for each month. This paragraph (c) shall not reduce the Tier 1 Participant’s benefit below 40 percent of the amount payable at age 60.

(d) Make-Up Benefit . A Tier 2 Participant’s termination benefit shall be the same as the Tier 2 Participant’s benefit upon Normal Retirement Date, except the calculation shall be based on the Qualified Plan benefit, without the limits described in 4(f)(i) and (ii) and based on deferred salary and bonus as provided in 4(g), as of the date the Tier 2 Participant first receives a benefit payable from the Qualified Plan.

(e) Disability . “Disability” means a termination of employment because of absence from duties with the Company for 180 consecutive days as a result of the Participant’s incapacity due to physical or mental illness or injury, unless within 30 days after a written notice of termination is given following such absence the Participant returns to full-time performance of Company duties.

7. Time and Form of Payment to Participant .

(a) Lump Sum . Except as provided in (b), (e), and (f), benefits shall be paid to a Tier 1 Participant in a lump sum of cash within 30 days following the Tier 1 Participant’s separation from service with the Company.

(b) Optional Annuity Forms . Upon an Early Retirement Date or Normal Retirement Date, the Tier 1 Participant can elect to receive payment in any of the following forms in lieu of a lump sum:

(i) A monthly annuity for the life of the Tier 1 Participant and continuing at 50 percent for the life of a contingent annuitant designated by the Tier 1 Participant.

(ii) A monthly annuity for the life of the Tier 1 Participant and continuing at 100 percent for the life of a contingent annuitant designated by the Tier 1 Participant.

(iii) A monthly annuity for the life of the Tier 1 Participant and continuing for the remainder of 120 months to a beneficiary designated by the Tier 1 Participant if the Tier 1 Participant dies before receiving 120 monthly payments.

(c) Make-Up Benefit . Except as provided in (e), benefits shall be paid to a Tier 2 Participant within 30 days following the Tier 2 Participant’s separation from service with the Company upon a Normal Retirement Date, an Early Retirement Date, or a termination benefit commencement date, in the form of a single life annuity for the life of the Tier 2 Participant as described in the Qualified Plan or, at the election of the Tier 2 Participant, in either of the annuity forms described in (b)(i) or (ii). An election by the Tier 2 Participant to receive one of such annuity forms shall be made in accordance with the rules for selection of the form of payment of benefits under the Qualified Plan.

(d) Actuarial Equivalency . The amount payable in any of the annuity forms provided in (b) shall be the actuarial equivalent of the lump sum in (a), or of the single life annuity described in (c), based on the actuarial assumptions used for determining equivalent benefits under the Qualified Plan at the time of the Participant’s retirement date. Annuity benefits shall start on the first of the calendar month following Early or Normal Retirement Date, except as provided in (e).

(e) 6-Month Delay for Specified Employees . For a Participant who is a key employee as defined in Section 416(i) of the Internal Revenue Code for the plan year of separation from service with the Company, payment of a lump sum or commencement of monthly annuity benefits shall be postponed until the first day of the seventh calendar month following the Participant’s separation from service. A lump sum payable to such a Participant shall be increased to the actuarial equivalent of the amount determined under the benefit formula, using the actuarial assumptions described in (d). An annuity benefit payable to such a Participant shall be converted to the actuarial equivalent of a benefit starting on Early or Normal Retirement Date.

(f) Election of Payment Form . A Tier 1 Participant may elect to receive payment in an optional annuity form on a written form prescribed by the Committee. Such an election shall be effective for an Early or Normal Retirement Date occurring on or after the January 1 following the date the written form is received by the Committee and shall continue to apply until changed by a later election by the Tier 1 Participant. If such an election is in effect for the year of the Participant’s Early or Normal Retirement Date, the Tier 1 Participant shall elect at the time of retirement to receive payment in one of the forms provided in 7(b).

8. Death Benefit .

(a) Beneficiary . If a Tier 1 Participant dies before separation from service with the Company, a death benefit shall be paid to the Beneficiary designated by the Tier 1 Participant on a written form prescribed by the Committee. A designation made by the Tier 1 Participant shall remain in effect until changed by a subsequent designation. If no Beneficiary has been designated or no person designated by the Tier 1 Participant survives, the Beneficiary shall be the following in order of priority:

(i) The Participant’s surviving spouse.

(ii) The Participant’s surviving children in equal shares.

(iii) The Participant’s estate.

(b) Amount of Benefit . The death benefit shall have a lump sum value equal to 50 percent of the amount determined under the formula in 4(b) for the benefit at Normal Retirement Date, calculated on the basis of the Tier 1 Participant’s Final Average Pay, Years of Participation, and Pension Offset determined as of the day before death.

(c) Form of Payment . The amount calculated under (b) shall be converted to an actuarial equivalent single life annuity for the life of the Beneficiary commencing on the first of the month following the date of death, except as follows. If the lump sum value is under $50,000, the lump sum shall be paid to the Beneficiary within 30 days after the date of death in lieu of a life annuity. Actuarial equivalency shall be based on the actuarial assumptions used for determining equivalent benefits under the Qualified Plan at the time of the Tier 1 Participant’s death.

(d) Make-Up Benefit . If a Tier 2 Participant dies with a surviving spouse entitled to a death benefit under the Qualified Plan, a death benefit shall be payable to the surviving spouse equal to the amount, if any, by which the Qualified Plan death benefit would be greater than the actual death benefit payable under the Qualified Plan in the absence of the limits in 4(f)(i) and (ii) and based on deferred salary and bonus as provided in 4(g).

9. Change in Control .

(a) Enhancements . Each Participant who becomes entitled to a Change in Control Severance Benefit shall be provided enhanced benefits as follows:

(i) All Participants shall be fully vested in benefits under the Plan, regardless of Years of Participation.

(ii) Tier 1 Participants shall be credited with three additional Years of Participation beyond those the Participant has actually completed.

(iii) The make-up benefit provided for Tier 2 Participants under 4(f), 5(d), 6(d), 7(c), and 8(d) shall be calculated by subtracting the Tier 2 Participant’s actual Qualified Plan benefit from a Qualified Plan benefit that is calculated without the limits described in 4(f)(i) and (ii), that counts deferred salary and bonus as provided in 4(g), and that is based on the Tier 2 Participant’s actual years of service credited for benefits under the Qualified Plan plus three additional years.

(b) Change in Control Severance Benefit . “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 the Plan only if, under the terms of the Participant’s Change in Control Severance Agreement, the Participant becomes entitled to the severance benefit (i) after a change in control of the Company has occurred, (ii) 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 (iii) 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 the Plan. For purposes of this Section 9(b), 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.

(c) Possible Benefit Recalculation . With respect to any Participant who is party to a Change in Control Severance Agreement, it may be the case that (i) 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), (ii) a change in control of the Company occurs after such termination, and (iii) 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, 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 enhancements described in Section 9(a). To the extent that the amount of the 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.

10. Administration .

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

(b) Tax Law Compliance . The Committee shall have the authority to cancel an executive’s participation in the Plan if the Committee determines that providing nonqualified deferred compensation under the Plan will or may cause the Plan to be operated in violation of Section 409A of the Internal Revenue Code.

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

11. Claims Procedure .

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

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

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

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

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

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

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

12. Amendment and Termination of the Plan .

(a) Amendment . The Board may at any time amend the Plan in whole or in part; provided, however, that no amendment shall without the consent of each affected Participant (i) decrease the Participant’s benefit accrued under the formula in 4(b) of the Plan as of the date of amendment, or (ii) accelerate the payment of benefits under the Plan. The Board shall have the right to apply an amendment retroactively, including any amendment necessary to comply with restrictions on nonqualified deferred compensation provided by Section 409A of the Internal Revenue Code.

(b) Termination . The Board may at any time terminate the Plan if, in its judgment, the tax, accounting, or other effects of the continuance of the Plan, or potential payments thereunder, would not be in the best interests of the Company. Upon termination, no further benefits shall accrue under the Plan, which shall continue for the purpose of paying benefits accrued under the Plan as of the termination date as they become payable.

13. Miscellaneous .

(a) Unsecured General Creditor . Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims or interests in any mutual funds, other investment products or the proceeds therefrom owned or which may be acquired by the Company. Except as provided in (b), any and all of the Company’s assets shall be, and remain, the general, unpledged, unrestricted assets of the Company. The Company’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future, and the rights of Participants and beneficiaries shall be no greater than those of unsecured general creditors of the Company.

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

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

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

(e) Withholding; Payroll Taxes . The Company shall withhold from payments made hereunder any taxes required to be withheld from such payments under federal, state or local law. When the value of a Participant’s benefits under the Plan becomes subject to FICA tax, as determined by applicable law, the Participant’s share of FICA shall be withheld from other non-deferred compensation payable to the Participant. Any amount not covered by such withholding shall be paid by the Participant to the Company out of other funds.

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

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

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

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

(j) Successors . The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.

The foregoing 2006 Restatement was approved by the Board of Directors of Northwest Natural Gas Company on December 14, 2006.


NORTHWEST NATURAL GAS COMPANY

By:		/s/ Mark S. Dodson



Attest:		/s/ C.J. Rue

Exhibit 10.6

NORTHWEST NATURAL GAS COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED 2007 RESTATEMENT

Effective January 1, 1987

Restated as of January 1, 2007

TABLE OF CONTENTS


		PAGE
ARTICLE I	PURPOSE	1

1.1	Restatement	1
1.2	Purpose	1

ARTICLE II	DEFINITIONS	1

2.1	Account	1
2.2	Acquiror Stock	1
2.3	Base Annual Salary	1
2.4	Beneficiary	1
2.5	Board	1
2.6	Bonus	2
2.7	Cash Compensation	2
2.8	Change in Control	2
2.9	Committee	2
2.10	Common Stock	2
2.11	Compensation	2
2.12	Corporate Transaction	2
2.13	Corporation	3
2.14	Deferral Commitment	3
2.15	Deferral Deadline	3
2.16	Deferred Cash Compensation	3
2.17	Deferred Compensation Account Benefit	3
2.18	Determination Date	3
2.19	Disability	4
2.20	Executive	4
2.21	Financial Hardship	4
2.22	Interest	4
2.23	LTIP Compensation	4
2.24	Matching Contribution	5
2.25	Participation Agreement	5
2.26	Plan Benefits	5
2.27	Retirement	5
2.28	Retirement Plan	5
2.29	Supplemental Retirement Benefit	5
2.30	Trust	5

ARTICLE III	DEFERRAL COMMITMENTS	5

3.1	Participation	5
3.2	Deferral Election	5

TABLE OF CONTENTS

(Continued)


		PAGE
ARTICLE IV	DEFERRED COMPENSATION ACCOUNTS	6

4.1	Accounts	6
4.2	Matching Contribution	6
4.3	Stock Account	6
4.4	Cash Account	7
4.5	Effect of Corporate Transaction on Stock Accounts	7
4.6	Statement of Account	8

ARTICLE V	PLAN BENEFITS	8

5.1	Plan Benefit	8
5.2	Commencement of Payments	8
5.3	Lump Sum or Installment Payments	9
5.4	Form of Benefit Payment	9
5.5	Hardship Distributions	9
5.6	Death Benefit	9
5.7	Supplemental Retirement Benefit	9
5.8	Withholding; Payroll Taxes	10
5.9	Payment to Guardian	11
5.10	Accelerated Distribution	11

ARTICLE VI	BENEFICIARY DESIGNATION	11

6.1	Beneficiary Designation	11
6.2	Amendments	11
6.3	No Beneficiary Designation	11
6.4	Effect of Payment	11

ARTICLE VII	ADMINISTRATION	12

7.1	Committee; Duties	12
7.2	Agents	12
7.3	Binding Effect of Decisions	12
7.4	Indemnity of Committee	12

ARTICLE VIII	CLAIMS PROCEDURE	12

8.1	Claim	12
8.2	Denial of Claim	12
8.3	Review of Claim	12
8.4	Final Decision	13

TABLE OF CONTENTS

(Continued)


		PAGE
ARTICLE IX	AMENDMENT AND TERMINATION OF THE PLAN	13

9.1	Amendment	13
9.2	Corporation’s Right to Terminate	13

ARTICLE X	MISCELLANEOUS	14

10.1	Unfunded Plan	14
10.2	Unsecured General Creditor	14
10.3	Trust Fund	14
10.4	Nonassignability	15
10.5	Not a Contract of Employment	15
10.6	Protective Provision	15
10.7	Governing Law	15
10.8	Validity	15
10.9	Notice	15
10.10	Successors	15

iii

NORTHWEST NATURAL GAS COMPANY

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of January 1, 1987

Restated as of January 1, 2007

ARTICLE I

PURPOSE

1.1 Restatement . Northwest Natural Gas Company adopted an Executive Deferred Compensation Plan (the “Plan”) effective January 1, 1987, which was previously restated effective as of January 1, 2001, January 1, 2003, and December 15, 2005. Effective as of January 1, 2007, the Plan was amended and restated by a 2007 Restatement. The Plan is now amended and restated again by this Amended and Restated 2007 Restatement, effective as of January 1, 2007.

1.2 Purpose . The purpose of this Executive Deferred Compensation Plan is to provide an unfunded deferred compensation plan for a select group of top management personnel.

ARTICLE II

DEFINITIONS

For purposes of this Plan, the following words and phrases shall have the meanings indicated, unless the context clearly indicates otherwise:

2.1 Account . “Account” means the record or records maintained by the Corporation for each Executive in accordance with Article IV with respect to any deferral of Compensation pursuant to this Plan. An Account shall be either a “Stock Account” as described in Section 4.3 or a “Cash Account” as described in Section 4.4.

2.2 Acquiror Stock . “Acquiror Stock” is defined in Section 4.5.

2.3 Base Annual Salary . “Base Annual Salary” means the annual compensation payable to an Executive, excluding bonuses, commissions, LTIP Compensation and other noncash compensation.

2.4 Beneficiary . “Beneficiary” means the person, persons or entity designated under Article VI to receive any Plan Benefits payable after an Executive’s death.

2.5 Board . “Board” means the Board of Directors of Northwest Natural Gas Company or any successor thereto.

Page 1

2.6 Bonus . “Bonus” means the compensation derived under the Corporation’s Executive Annual Incentive Plan or other similar incentive plan and payable in any year in a lump sum to an Executive.

2.7 Cash Compensation . “Cash Compensation” means the total Base Annual Salary and Bonus remuneration payable by the Corporation to the Executive for services.

2.8 Change in Control . “Change in Control” means the occurrence of any of the following events:

(a) The consummation of:

(i) any consolidation, merger or plan of share exchange involving the Corporation (a “Merger”) as a result of which the holders of outstanding securities of the Corporation ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or

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

(b) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Corporation (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(c) Any person (as such term is used in Section 14(d) of the Securities Exchange Act of 1934, other than the Corporation or any employee benefit plan sponsored by the Corporation) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Corporation, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of the combined voting power of the then outstanding Voting Securities.

2.9 Committee . “Committee” means the Organization and Executive Compensation Committee, or such other Committee as may be designated by the Board.

2.10 Common Stock . “Common Stock” means common stock of the Corporation.

2.11 Compensation . “Compensation” means Cash Compensation and LTIP Compensation.

Page 2

2.12 Corporate Transaction . “Corporate Transaction” means any of the following:

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

(b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Corporation.

2.13 Corporation . “Corporation” means Northwest Natural Gas Company, an Oregon corporation, or any successor thereto, and any corporations or other entities affiliated with or subsidiary to it that may be selected by the Board from time to time and which take action to adopt and implement this Plan.

2.14 Deferral Commitment . “Deferral Commitment” means a Deferral Commitment made by an Executive pursuant to Article III and for which a Participation Agreement has been submitted by the Executive to the Committee.

2.15 Deferral Deadline . “Deferral Deadline” means, for any Compensation payable to an Executive, the last day on which the Executive can submit a Participation Agreement to make a Deferral Commitment with respect to such Compensation. The Deferral Deadlines for various forms of Compensation shall be as follows:

(a) For Base Annual Salary payable in any calendar year, the Deferral Deadline shall be the last day of the previous calendar year; provided, however, that for a person who becomes an eligible Executive during a year, the Deferral Deadline for Base Annual Salary payable for the remainder of the year shall be 30 days after the person becomes an Executive and the Deferral Commitment shall only apply to Base Annual Salary payable after the Participation Agreement is submitted.

(b) For Bonus payable in any calendar year, including Bonus payable with respect to the Executive’s or the Corporation’s performance in the previous calendar year, the Deferral Deadline shall be the last day of the previous calendar year.

(c) For LTIP Compensation payable at any time, the Deferral Deadline shall be the date one year prior to the vesting date for time-based awards and the date one year prior to the last day of the award period for performance-based awards; provided, however, that the Deferral Deadline for any LTIP Compensation that becomes payable in any calendar year on an accelerated basis as a result of a Change in Control shall be the last day of the previous calendar year.

2.16 Deferred Cash Compensation . “Deferred Cash Compensation” means the amount of Cash Compensation that the Executive elects to defer pursuant to a Deferral Commitment.

2.17 Deferred Compensation Account Benefit . “Deferred Compensation Account Benefit” means the benefit payable to an Executive as calculated pursuant to Article IV and payable under Sections 5.1 through 5.6.

2.18 Determination Date . “Determination Date” means the last day of each calendar quarter.

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2.19 Disability . “Disability” means a physical or mental condition that, in the opinion of the Committee, prevents the Executive from satisfactorily performing the Executive’s usual duties for the Corporation. The Committee’s decision as to Disability will be based upon medical reports and/or other evidence satisfactory to the Committee.

2.20 Executive . “Executive” means one of a select group of management or highly compensated employees of the Corporation, which shall consist of all executive officers of the Corporation and any other employee of the Corporation designated in writing by the Chief Executive Officer of the Corporation for participation in the benefits of the Plan.

2.21 Financial Hardship . “Financial Hardship” means a severe financial hardship to the Executive resulting from a sudden and unexpected illness or accident of the Executive or of a dependent of the Executive, loss of the Executive’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Executive. Financial Hardship shall be determined by the Committee on the basis of information supplied by the Executive in accordance with uniform guidelines promulgated from time to time by the Committee.

2.22 Interest . “Interest” is credited to Cash Accounts under the Plan and means the quarterly equivalent of an annual yield that is two percentage points (2%) higher than the annual yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such index is no longer published, a substantially similar index selected by the Board. At no time shall such Interest rate be less than six percent (6%) annually.

Notwithstanding the foregoing provisions of this Section 2.22, effective as of January 1, 2017, the Interest rate shall equal the rate of interest for interest credited to cash accounts under the Corporation’s Deferred Compensation Plan for Directors and Executives, as such plan may be amended from time to time (the “DCPDE”), regardless of whether or not such rate of interest shall be more or less than six percent (6%) annually; provided, however, that if at any time on or after January 1, 2017 there is no interest credited to cash accounts under the DCPDE because the DCPDE shall have ceased to operate or for any other reason, then, at such time on or after January 1, 2017, the Interest rate shall equal the quarterly equivalent of an annual yield that is equal to the annual yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such index is no longer published, a substantially similar index selected by the Board, regardless of whether or not such Interest rate shall be more or less than six percent (6%) annually. Any change in the Interest rate that occurs on January 1, 2017 or thereafter pursuant to the provisions of this paragraph shall not constitute a “change in the definition of Interest” within the meaning of Section 9.1(b) below.

2.23 LTIP Compensation . “LTIP Compensation” means compensation paid to an Executive pursuant to an award under the Corporation’s Long Term Incentive Plan. LTIP Compensation may be payable to the Executive either in Common Stock (“Stock LTIP Compensation”) or in cash (“Cash LTIP Compensation”).

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2.24 Matching Contribution . “Matching Contribution” means the contribution made by the Corporation and credited to the Executive’s Account under Section 4.2.

2.25 Participation Agreement . “Participation Agreement” means the agreement submitted by an Executive to the Committee no later than the applicable Deferral Deadline with respect to one or more Deferral Commitments.

2.26 Plan Benefits . “Plan Benefits” mean the Deferred Compensation Account Benefit and the Supplemental Retirement Benefit.

2.27 Retirement . “Retirement” means either early retirement, normal retirement, or disability retirement under the Retirement Plan.

2.28 Retirement Plan . “Retirement Plan” means the Corporation’s Retirement Plan for Non-Bargaining Unit Employees.

2.29 Supplemental Retirement Benefit . “Supplemental Retirement Benefit” means the benefit payable to an Executive under Section 5.7.

2.30 Trust . “Trust” means the Northwest Natural Gas Company Umbrella Trust™ For Executives established by the Corporation in connection with this Plan.

ARTICLE III

DEFERRAL COMMITMENTS

3.1 Participation . An eligible Executive may elect to participate in the Plan by submitting a Participation Agreement to the Committee no later than the applicable Deferral Deadline. An election to defer Compensation by the Executive shall continue from year to year and shall be irrevocable with respect to Compensation once the Deferral Deadline for that Compensation has passed, but may be modified or terminated by written notice from the Executive at any time on or prior to the Deferral Deadline for that Compensation.

3.2 Deferral Election .

(a) Election to Defer Cash Compensation . An Executive may, no later than the applicable Deferral Deadline, elect to defer receipt of a certain whole percentage, up to fifty percent (50%), of the Base Annual Salary and a certain whole percentage, up to one hundred percent (100%), of any Bonus payable to the Executive as an employee of the Corporation.

(b) Election to Defer LTIP Compensation . An Executive may, no later than the applicable Deferral Deadline, elect to defer receipt of a certain whole percentage, up to one hundred percent (100%), of any Stock LTIP Compensation and a certain whole percentage, up to one hundred percent (100%), of any Cash LTIP Compensation that becomes payable to the Executive.

(c) FICA Withholding . Under current law, all Compensation and Matching Contributions credited to an Executive’s Accounts will be treated as wages subject to FICA tax,

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and the Corporation will be required to withhold FICA tax from the Executive. The amount required to be withheld for FICA tax with respect to any amount of deferred Compensation or related Matching Contribution shall be withheld from the non-deferred portion, if any, of the same Compensation; provided, however, that if the non-deferred portion of the Compensation is insufficient to cover the full required withholding, the Corporation shall withhold the remaining amount from other non-deferred Compensation payable to the Executive unless the Executive otherwise pays such remaining amount to the Corporation.

(d) Financial Hardship . Termination of the Executive’s election to defer may, solely in the Committee’s discretion, become applicable as soon as practicable after the Committee’s determination that the Executive has incurred Financial Hardship, as evidenced by the Executive to the Committee.

ARTICLE IV

DEFERRED COMPENSATION ACCOUNTS

4.1 Accounts . The Corporation shall establish on its books one or two separate Accounts for each Executive who elects to defer Compensation under the Plan: a Cash Account and/or a Stock Account. Compensation deferred by an Executive shall be credited to the Stock Account or the Cash Account as elected by the Executive at the time the Executive elects to defer Compensation. Such election may be divided between the two Accounts in increments of twenty-five percent (25%) of the deferred Compensation covered by the election. An Executive may change the allocation of new deferrals of Compensation between the Stock Account and the Cash Account, but such change shall apply to new deferrals only if it is submitted on or prior to the Deferral Deadline for such new deferrals. Once Compensation has been credited to the Stock Account or the Cash Account, no transfers between the Stock Account and the Cash Account shall be permitted except as otherwise provided in Section 4.5(d). The credit for deferred Compensation shall be entered on the Corporation’s books of account at the time that Compensation not deferred is paid or payable to the Executive.

4.2 Matching Contribution . The Corporation shall credit a Matching Contribution to an Executive’s Account based on the amount of Deferred Cash Compensation elected by the Executive; provided, however, that no Matching Contributions shall be made to the Account of any Executive who is not eligible to participate in the Corporation’s Retirement K Savings Plan until such time of eligibility. The amount of the Matching Contribution shall be equal to the excess of (a) the lesser of (i) sixty percent (60%) of the Executive’s Deferred Cash Compensation during the calendar year, or (ii) three and six-tenths percent (3.6%) of the Executive’s Cash Compensation during such calendar year, over (b) the amount, if any, the Corporation has contributed for such calendar year as a matching contribution for the Executive to the Retirement K Savings Plan. Matching Contributions shall be credited to the Executive’s Account on the last day of the calendar year in which the Matching Contribution was earned, and shall be allocated between the Executive’s Cash Account and Stock Account in the same ratio as Deferred Cash Compensation is allocated for the year.

4.3 Stock Account . An Executive’s Stock Account shall be denominated in shares of Common Stock, including fractional shares. With respect to Stock LTIP Compensation deferred

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to an Executive’s Stock Account, the number of deferred shares shall be credited to the Stock Account. With respect to each amount of Cash Compensation, Cash LTIP Compensation or Matching Contribution deferred to an Executive’s Stock Account, the amount of cash deferred shall be divided by the closing market price of the Common Stock reported for the last trading day preceding the date on which the Stock Account is to be credited, and the resulting number of shares (including fractional shares) shall be credited to the Executive’s Stock Account. As of each date for payment of dividends on the Common Stock, the Stock Accounts shall be credited with an additional number of shares (including fractional shares) equal to the amount of dividends that would be paid on the number of shares recorded as the balance of the Stock Account as of the record date for such dividend divided by closing market price of the Common Stock reported for such payment date or, if such day is not a trading day, the next trading day.

4.4 Cash Account . An Executive’s Cash Account shall be denominated in dollars. With respect to each amount of Cash Compensation, Cash LTIP Compensation or Matching Contribution deferred to an Executive’s Cash Account, an equal amount of dollars shall be credited to the Executive’s Cash Account. With respect to Stock LTIP Compensation deferred to an Executive’s Cash Account, the number of deferred shares shall be multiplied by the closing market price of the Common Stock reported for the last trading day preceding the date on which the Cash Account is to be credited, and the resulting number of dollars shall be credited to the Executive’s Cash Account. Interest on each Cash Account shall be calculated as of each Determination Date based upon the average daily balance of the Cash Account since the preceding Determination Date and shall be credited to the Cash Account at that time.

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

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

(b) Cash or Other Property Transaction . If holders of Common Stock receive cash or other property in the Corporate Transaction, then (i) the amount credited to an Executive’s Stock Account shall be transferred to the Executive’s Cash Account and converted into a cash credit for the amount of cash or the value of the property that the Executive would have received as a result of the Corporate Transaction if the Executive had actually held the Common Stock credited to his or her Stock Account immediately prior to the consummation of the Corporate Transaction, and (ii) Stock Accounts shall no longer exist under the Plan and all ongoing deferrals shall thereafter be made into Cash Accounts.

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(c) Combination Transaction . If holders of Common Stock receive Acquiror Stock and cash or other property in the Corporate Transaction, then (i) the amount credited to each Executive’s Stock Account shall be converted in part into a credit for Acquiror Stock under Section 4.5(a) and in part into a credit for cash under Section 4.5(b) in the same proportion as such consideration is received by shareholders, and (ii) ongoing deferrals into Stock Accounts pursuant to outstanding Deferral Commitments shall continue to be made into Stock Accounts in accordance with Section 4.5(a).

(d) Election Following Stock Transaction . For a period of 12 months following the consummation of any Corporate Transaction which results in Executives having Stock Accounts denominated in Acquiror Stock, each Executive shall have a one-time right to elect to transfer the entire amount in the Executive’s Stock Account into the Executive’s Cash Account. Such election shall be made by written notice to the Corporation and shall be effective on the date received by the Corporation. If such an election is made, the amount of cash to be credited to the Executive’s Cash Account shall be determined by multiplying the number of shares of Acquiror Stock in the Executive’s Stock Account by the closing market price of the Acquiror Stock reported for the last trading day preceding the effective date of the election.

4.6 Statement of Account . As soon as practicable after each Determination Date, a report shall be issued by the Corporation to each participating Executive setting forth the balances of the Executive’s Accounts under the Plan as of the immediately preceding Determination Date.

ARTICLE V

PLAN BENEFITS

5.1 Plan Benefit . The Corporation shall pay Plan Benefits to each Executive pursuant to this Article V equal to the Executive’s Accounts.

5.2 Commencement of Payments .

(a) Payment of any Deferred Compensation Account Benefits under the Plan shall commence as of the earlier of:

(i) A date elected by the Executive as specified in the applicable Participation Agreement between the Corporation and the Executive; or

(ii) The first business day of January following the year of the Executive’s Retirement, total Disability or other termination of employment.

(b) Supplemental Retirement Benefits under Section 5.7 shall be made as of, or commence as of, the earliest date for which a monthly payment is payable to or for the Executive under the Retirement Plan.

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5.3 Lump Sum or Installment Payments .

(a) At the time the Executive elects to defer Compensation, the Executive may also elect to receive Deferred Compensation Account Benefits either:

(i) In equal or approximately equal annual installments (the number of such installments not to exceed fifteen (15)) as designated by the Executive, with the amount of the installments being adjusted over the installment period to reflect changes in Interest or dividends credited to the Executive’s Accounts;

(ii) In a single sum payment; or

(iii) In a combination of partial lump sum payment, and remainder in installments.

(b) An Executive may elect to modify such election by filing a change of payment designation which shall supersede the prior form of payment designation in the Participation Agreement for Compensation deferred in any one (1) or more calendar years. If the Executive’s most recent change of payment designation has not been filed one (1) full calendar year prior to the year of Executive’s Retirement, Disability, other termination of employment or earlier date selected for commencement of payments, the prior election shall be used to determine the form of payment. For example, an Executive retiring in 2003 must file a written request with the Committee by December 31, 2001 to change the Executive’s form of payment designation.

5.4 Form of Benefit Payment . Benefits payable to an Executive from a Stock Account shall only be paid to such Executive as a distribution of Common Stock (or Acquiror Stock, if applicable) plus cash for fractional shares. Benefits payable to an Executive from a Cash Account shall only be paid to such Executive in cash.

5.5 Hardship Distributions . Notwithstanding the foregoing provisions of this Article V, payment from the Executive’s Accounts may be made to the Executive in the sole discretion of the Committee based upon a finding that an Executive has suffered a Financial Hardship. The amount of such a withdrawal shall be limited to the amount reasonably necessary to meet the Executive’s needs resulting from the Financial Hardship. If payment is made due to Financial Hardship under this Plan, the Executive’s deferrals shall cease for a twelve (12) month period. Any resumption of the Executive’s deferrals under the Plan after such twelve (12) month period shall be made only at the election of the Executive in accordance with Article III herein.

5.6 Death Benefit . Upon the death of the Executive or a former Executive prior to the receipt of the full amount of Deferred Compensation Account Benefits, the balance of such benefits shall be paid by the Corporation to the applicable surviving designated Beneficiary or Beneficiaries as soon as practicable in the manner elected in writing by the Executive, or, if no such election is made, by single sum payment.

5.7 Supplemental Retirement Benefit . Any Executive who elects to defer Compensation under this Plan and who also satisfies the eligibility requirements for payment of

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any benefit under the Retirement Plan shall qualify for further payment by the Corporation of Supplemental Retirement Benefits payable as an annuity under this Plan, as provided below:

(a) Amount . The amount payable by the Corporation each month during the time an annuity benefit is payable to the Executive or Executive’s Beneficiary(ies) under the Retirement Plan shall be:

(i) The amount that would be payable at such time under the Retirement Plan determined under Section 5.7(c) by treating all accrued benefits under the Retirement Plan as being payable only in the annuity form and by treating all Cash Compensation deferred by the Executive under this Plan as though it had been “paid” to or “received” by Executive in the year when the deferral was made, provided that all such deferred amounts shall be subject to the other applicable definitions and rules of the Retirement Plan relating to benefit determination; plus

(ii) The reduction, if any, in the amount of the “primary Social Security Benefit” which will actually be payable to the Executive, provided that such reduction results from the fact that Compensation deferred under this Plan causes the primary Social Security Benefit payable to the Executive to be reduced and that such reduction is not otherwise payable under Section 5.7(a)(i) above; minus

(iii) The amount actually payable at such time under the Retirement Plan as determined under Section 5.7(c) by treating all accrued benefits under the Retirement Plan as being payable only in the annuity form.

(b) Form and Duration . The form of Supplemental Retirement Benefit payable by the Corporation shall be the same annuity form, and shall be paid by the Corporation for the same duration, as the annuity benefit actually payable under the Retirement Plan. Such annuity benefit forms include (subject to any change in the Retirement Plan at the time payment begins) a standard life annuity (no survivorship benefit); a half (50%) or full (100%) joint and survivor annuity to the Executive and surviving spouse with or without a “pop-up” if the spouse dies before the Executive; a ten (10) year certain annuity which can provide death benefits to any surviving designated beneficiary; and a full (100%) joint and survivor benefit for the spouse of a vested married Executive who dies before retirement; and payees include the Executive and, if the operative form provides for payment after the Executive’s death, the Executive’s surviving spouse or other surviving designated Beneficiary(ies) or estate.

(c) Retirement Plan Lump Sum Election Ignored . Notwithstanding any election by an Executive to receive a portion of Executive’s Retirement Plan benefit as a lump sum, the amount of the Supplemental Retirement Benefit as determined under Section 5.7(a) and the form and duration of the Supplemental Retirement Benefit as determined under Section 5.7(b) shall be calculated and determined as if Executive were to receive Executive’s entire Retirement Plan accrued benefit in the same annuity form that applies to the annuity portion of Executive’s Retirement Plan benefit.

5.8 Withholding; Payroll Taxes . The Corporation shall withhold from payments made hereunder any taxes required to be withheld from such payments under federal, state or

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local law. However, a Beneficiary may elect in writing not to have withholding for federal income tax purposes pursuant to Section 3405(a)(2) of the Internal Revenue Code, or any successor provision thereto.

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

5.10 Accelerated Distribution . Notwithstanding any other provision of the Plan, an Executive shall be entitled to receive, upon written request to the Committee, a lump sum distribution equal to ninety percent (90%) of the balance in the Executive’s Accounts as of the Determination Date immediately preceding the date on which the Committee receives the written request. The remaining balance shall be forfeited by the Executive. An Executive who receives a distribution under this section shall be suspended from participation in the Plan for twelve (12) months. The amount payable under this section shall be paid in a lump sum within sixty-five (65) days following the receipt of the notice by the Committee from the Executive.

ARTICLE VI

BENEFICIARY DESIGNATION

6.1 Beneficiary Designation . Each Executive shall have the right, at any time, to designate any person or persons as the Executive’s Beneficiary or Beneficiaries (both primary as well as secondary) to whom benefits under this Plan shall be paid in the event of the Executive’s death prior to complete distribution of the benefits due under the Plan. If greater than fifty percent (50%) of the benefit is designated to a Beneficiary other than the Executive’s spouse, such Beneficiary designation shall be consented to by the Executive’s spouse. Each Beneficiary designation shall be in written form prescribed by the Committee and will be effective only when filed with the Committee during the Executive’s lifetime.

6.2 Amendments . Any Beneficiary designation may be changed by the Executive without the consent of any designated Beneficiary by the filing of a new Beneficiary designation with the Committee, subject to the spousal consent required in Section 6.1 above. The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed.

6.3 No Beneficiary Designation . In the absence of an effective Beneficiary designation, or if all designated Beneficiaries predecease the Executive or die prior to complete distribution of the Executive’s benefits, then the Executive’s designated Beneficiary shall be deemed to be the Executive’s estate.

6.4 Effect of Payment . The payment to the deemed Beneficiary shall completely discharge the Corporation’s obligations under this Plan.

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ARTICLE VII

ADMINISTRATION

7.1 Committee; Duties . This Plan shall be administered by the Committee. The Committee shall have such powers as may be necessary to discharge its responsibilities. These powers shall include, but not be limited to, interpretation of the Plan provisions, determination of amounts due to any Executive, the rights of any Executive or Beneficiary under this Plan, the right to require any necessary information from any Executive, determine the amounts credited to Executive’s Accounts and Interest earned, and any other activities deemed necessary or helpful.

7.2 Agents . The Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Corporation.

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

7.4 Indemnity of Committee . To the extent permitted by applicable law, the Corporation shall indemnify, hold harmless and defend the members of the Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan, provided that the members of the Committee were acting in accordance with the applicable standard of care.

ARTICLE VIII

CLAIMS PROCEDURE

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

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

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

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

8.3 Review of Claim . Any person whose claim or request is denied or who has not received a response within thirty (30) days may request review by notice given in writing to the

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Committee. The claim or request shall be reviewed by the Committee who may, but shall not be required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing.

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

ARTICLE IX

AMENDMENT AND TERMINATION OF THE PLAN

9.1 Amendment . The Board may at any time amend the Plan in whole or in part, subject to the following:

(a) Upon a Change in Control, no amendment shall be effective to change the payout schedule in Section 9.2(b).

(b) No amendment shall be effective to decrease or restrict the amount credited to any Account maintained under the Plan as of the date of the amendment. Changes in the definition of Interest shall be subject to the following restrictions:

(i) Notice . A change shall not become effective before the first day of the calendar year which follows the adoption of the amendment and at least thirty (30) days written notice of the amendment to the Executive.

(ii) Change in Control . Any change in the definition of Interest after a Change in Control shall apply only to those amounts credited to the Executive’s Account after the Change in Control.

9.2 Corporation’s Right to Terminate . The Board may at any time partially or completely terminate the Plan, if, in its judgment, the tax, accounting, or other effects of the continuance of the Plan, or potential payments thereunder, would not be in the best interests of the Corporation.

(a) Partial Termination . The Board may partially terminate the Plan by instructing the Committee not to accept any additional Deferral Commitments. In the event of such a partial termination, the Plan shall continue to operate and be effective with regard to Deferral Commitments entered into prior to the effective date of such partial termination.

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(b) Complete Termination . The Board may completely terminate the Plan by instructing the Committee not to accept any additional Deferral Commitments, and terminating all ongoing Deferral Commitments. The Plan shall cease to operate and the Committee shall pay out to each Executive the balance in the Executive’s Accounts in a lump sum or in equal annual installments amortized over the period listed in the payout schedule below based on the total balance in the Executive’s Accounts at the time of such complete termination:

PAYOUT SCHEDULE


Total Balance of Accounts		Payout Period
Less than $10,000		Lump sum

$10,000 but less than $50,000		Lesser of 5 years or period elected in Participation Agreement

More than $50,000		Period elected in Participation Agreement

Interest earned on the unpaid balance in the Executive’s Cash Account shall be the applicable Interest rate on the Determination Date immediately preceding the effective date of such complete termination.

ARTICLE X

MISCELLANEOUS

10.1 Unfunded Plan . This Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the Plan shall terminate and no further benefits shall accrue hereunder in the event it is determined by a court of competent jurisdiction or by an opinion of counsel that the Plan constitutes an employee pension benefit plan within the meaning of Section 3(2) of ERISA which is not so exempt. In the event of a termination under this Section 10.1, all ongoing Deferral Commitments shall terminate, no additional Deferral Commitments will be accepted by the Committee, and the amount of each Executive’s Account balance shall be distributed to such Executive at such time and in such manner as the Committee, in its sole discretion, determines.

10.2 Unsecured General Creditor . The Accounts shall be established solely for the purpose of measuring the amounts owed to Executives or their Beneficiaries under this Plan. Executives and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Corporation, nor shall they be Beneficiaries of, or have any rights, claims or interests in any life insurance policies, annuity contracts or the proceeds therefrom owned or which may be acquired by the Corporation. Except as may be provided in Section 10.3, such policies, annuity contracts or other assets of the Corporation shall not be held under any trust for the benefit of the Executives, their Beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Corporation under this Plan. Any and all of the Corporation’s assets and policies shall be, and remain, the general, unpledged, unrestricted assets of the Corporation. The Corporation’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future.

10.3 Trust Fund . The Corporation shall be responsible for the payment of all benefits provided under the Plan. The Corporation shall establish the Trust, with such trustee or trustees

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as the Board may approve, for the purpose of providing for the payment of such benefits. The Trust shall be irrevocable, but the assets thereof shall be subject to the claims of the Corporation’s creditors. To the extent any benefits provided under the Plan are actually paid from the Trust, the Corporation shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Corporation.

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

10.5 Not a Contract of Employment . The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Corporation and the Executive, and the Executive (or the Executive’s Beneficiary) shall have no rights against the Corporation except as may otherwise be specifically provided herein. Moreover, nothing in this Plan shall be deemed to give an Executive the right to be retained in the service of the Corporation or to interfere with the right of the Corporation to discipline or discharge the Executive at any time.

10.6 Protective Provision . An Executive will cooperate with the Corporation by furnishing any and all information requested by the Corporation, in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as the Corporation may deem necessary and taking such other actions as may be requested by the Corporation.

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

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

10.9 Notice . Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to any member of the Committee or the Secretary of the Corporation. 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.

10.10 Successors . The provisions of this Plan shall bind and inure to the benefit of the Corporation and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Corporation, and successors of any such corporation or other business entity.

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NORTHWEST NATURAL GAS COMPANY

By:		/s/ Mark S. Dodson



Attest:		/s/ C.J. Rue

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Exhibit 10.7

NORTHWEST NATURAL GAS COMPANY

DIRECTORS DEFERRED COMPENSATION PLAN

EFFECTIVE JUNE 1, 1981

AMENDED AND RESTATED AS OF JANUARY 1, 2007

Table of Contents


		Page
1.	Restatement	1

2.	Election by Directors	1

3.	Accounts	2

4.	Interest	4

5.	Terms of Payment	5

6.	Death of Director	6

7.	Administration	6

8.	Definitions; Change in Control; Corporate Transaction	7

9.	Amendment and Termination of the Plan	8

10.	Miscellaneous	9

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NORTHWEST NATURAL GAS COMPANY

DIRECTORS DEFERRED COMPENSATION PLAN

1. Restatement . The Board of Directors (the “Board”) of Northwest Natural Gas Company (hereinafter, the “Company”) adopted a Director’s Deferred Compensation Plan (hereinafter, the “Plan”) effective June 1, 1981, which was previously restated effective as of January 1, 1988, December 1, 1997, December 1, 2001, February 26, 2004 and December 15, 2005. Effective as of January 1, 2007, the Plan was restated. The Plan is now amended and restated by this Restatement, again effective as of January 1, 2007.

2. Election by Directors .

(a) Eligibility . Any director of the Company or any corporation or other entity affiliated with or subsidiary to it (a “Director”) is eligible to elect to defer receipt of all or part of (i) the fees paid to him or her as a Director or as a member of a committee of the Board (“Fees”), or (ii) the shares (“NEDSCP Shares”) of restricted common stock of the Company (“Common Stock”) awarded to the Director under the Company’s Non-Employee Directors Stock Compensation Plan (“NEDSCP”). In addition, a Director may elect under the NEDSCP to receive awards under that plan as deferred cash credits (“NEDSCP Cash Credits”) rather than as NEDSCP Shares.

(b) Deferral of Fees . Any Director may elect, prior to the beginning of any calendar year, to defer receipt of fees for that calendar year, whether or not the fees are actually payable in that calendar year; and any newly elected Director prior to assuming office may elect to defer receipt of fees commencing after the date on which the Director assumes office. Any election under the preceding sentence shall apply only to fees earned subsequent to the date the election is filed. Total deferrals of Fees by a Director in a calendar year must be at least $1,500.

(c) Deferral of NEDSCP Shares . Any Director may elect, prior to the beginning of any calendar year, to defer receipt of unvested NEDSCP Shares that are scheduled to vest in that calendar year; and any newly elected Director prior to assuming office may elect to defer receipt of NEDSCP Shares that will vest in the remainder of the calendar year after the date on which the Director assumes office. Total deferrals of NEDSCP Shares by a Director in a calendar year must be at least 100% of the NEDSCP Shares scheduled to vest in that year. No deferral shall be allowed of NEDSCP Shares as to which a Director has made an election under Section 83(b) of the Internal Revenue Code.

(d) Continuation and Modification . An election to defer Fees or NEDSCP Shares by a Director shall automatically continue from year to year unless the Director terminates or modifies the election by written request. Any such termination or modification shall not become applicable until the calendar year following the year in which such written termination or modification is filed. In the event of a termination of a deferral election, any amounts already deferred by a Director shall not be paid until he or she ceases to serve as a Director, and then only pursuant to the terms, conditions, limitations and restrictions of the Plan.

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3. Accounts .

(a) Accounts . The Company shall establish on its books one, two or three separate accounts (individually, an “Account” and collectively, the “Accounts”) for each Director who participates in the Plan: a Stock Account, a Cash Account, and/or for each person who is a Director as of January 1, 1998, a Retirement Benefit Account. The number of NEDSCP Shares deferred by a Director shall be credited to the Stock Account. Any NEDSCP Cash Credits shall be credited to the Cash Account. Fees deferred by a Director shall be credited to the Stock Account or the Cash Account as elected by the Director at the time the Director elects to defer Fees. Such election may be divided between the two Accounts in increments of 25 percent of the deferred Fees covered by the election. An election between the Stock Account and the Cash Account shall be irrevocable as to the deferred Fees covered by the election and no transfers between the Stock Account and the Cash Account shall be permitted except as otherwise provided in Paragraph 3(f)(iv). The credit for deferred Fees shall be entered on the Company’s books of account each month at the time that Fees are paid to other Directors who do not elect to defer the payment of such Fees. The credit for deferred NEDSCP Shares shall be entered on the Company’s books of account as soon as practicable after January 1 of the year subject to the deferral. The credit for an NEDSCP Cash Credit shall be entered on the Company’s books of account effective as of the award date for such credit under the NEDSCP. No special fund shall be established nor shall any notes or securities be issued by the Company with respect to a Director’s Accounts.

(b) Stock Account . A Director’s Stock Account shall be denominated in shares of Common Stock, including fractional shares. With respect to each amount of Fees deferred to a Director’s Stock Account, the Stock Account shall be credited with a number of shares equal to the deferred Fees divided by the purchase price for shares of Common Stock under the Company’s Dividend Reinvestment and Direct Stock Purchase Plan (the “DRSPP”) on the Investment Date (as defined in the DRSPP) next succeeding the day the deferred Fees would have been paid if not for the deferral. As of each date for payment of dividends on the Common Stock, the Stock Accounts shall be credited with an additional number of shares (including fractional shares) equal to the amount of dividends that would be paid on the number of shares recorded as the balance of the Stock Account as of the record date for such dividend divided by closing market price of the Common Stock reported for such payment date or, if such day is not a trading day, the next trading day.

(c) Forfeiture of NEDSCP Shares or NEDSCP Cash Credits . If any NEDSCP Shares deferred by a Director under this Plan are forfeited under the terms of the NEDSCP, the Director’s Stock Account shall be reduced by the number of shares so forfeited. If any NEDSCP Cash Credits of a Director are forfeited under the terms of the NEDSCP, the Director’s Cash Account shall be reduced by the amount of NEDSCP Cash Credits so forfeited.

(d) Retirement Benefit Account . A Director’s Retirement Benefit Account shall be denominated in shares of Common Stock, including fractional shares. Effective as of January 1, 1998, Section 5 of Article III of the Company’s Bylaws has been amended to eliminate with respect to all persons who are Directors as of January 1, 1998 a provision for a retirement benefit payable to Directors who retire from the Board at age 72 with at least 10 years of service. Effective as of January 1, 1998, the Retirement Benefit Account of each person who

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is a Director on that date shall be credited with a number a shares of Common Stock determined by the Company as a replacement for the prior retirement benefit. As of each date for payment of dividends on the Common Stock, the Retirement Benefit Accounts shall be credited with an additional number of shares (including fractional shares) equal to the amount of dividends that would be paid on the number of shares recorded as the balance of the Retirement Benefit Account as of the record date for such dividend divided by the purchase price for shares of Common Stock under the DRSPP for dividends reinvested on such payment date. The Retirement Benefit Account of a Director shall be canceled, and all amounts credited to such account shall be forfeited, if the Director ceases to be a Director before reaching age 70 or before serving as a Director for 10 years; provided, however, that each Director’s Retirement Benefit Account will be fully vested and noncancellable upon the death of the Director, the disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code) of the Director, or a Change in Control as defined in Paragraph 8.

(e) Statement of Account . At the end of each calendar quarter, a report shall be issued by the Company to each participating Director setting forth the balances of the Director’s Accounts under the Plan. The credit entries made to a Director’s Accounts constitute merely a general obligation of the Company to pay such Accounts to the Director, or to his or her beneficiary or estate when due under the Plan.

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

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

(ii) Cash or Other Property Transaction . If holders of Common Stock receive cash or other property in the Corporate Transaction, then (1) the amount credited to a Director’s Stock Account and/or Retirement Benefit Account shall be transferred to the Director’s Cash Account and converted into a cash credit for the amount of cash or the value of the property that the Director would have received as a result of the Corporate Transaction if the Director had actually held the Common Stock credited to his or her Stock Account and/or Retirement Benefit Account immediately prior to the consummation of the Corporate Transaction, and (2) Stock Accounts shall no longer exist under the Plan and all ongoing deferrals, if any, shall thereafter be made into Cash Accounts.

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(iii) Combination Transaction . If holders of Common Stock receive Acquiror Stock and cash or other property in the Corporate Transaction, then (1) the amount credited to each Director’s Stock Account and/or Retirement Benefit Account shall be converted in part into a credit for Acquiror Stock under Paragraph 3(f)(i) and in part into a credit for cash under Paragraph 3(f)(ii) in the same proportion as such consideration is received by shareholders, and (2) ongoing deferrals of Fees and NEDSCP Shares, if any, shall continue to be made in accordance with outstanding deferral elections into Stock Accounts in accordance with Paragraph 3(f)(i).

(iv) Election Following Stock Transaction . For a period of 12 months following the consummation of any Corporate Transaction which results in Directors having Stock Accounts and/or Retirement Benefit Accounts denominated in Acquiror Stock, each Director shall have a one-time right to elect to transfer the entire amount in the Director’s Stock Account and Retirement Benefit Account into the Director’s Cash Account. Such election shall be made by written notice to the Company and shall be effective on the date received by the Company. If such an election is made, the amount of cash to be credited to the Director’s Cash Account shall be determined by multiplying the number of shares of Acquiror Stock in the Director’s Stock Account and Retirement Benefit Account by the closing market price of the Acquiror Stock reported for the last trading day preceding the effective date of the election.

4. Interest . Interest shall be credited to the Cash Account balance (including both principal and interest) of each participating Director based on the balance at the end of each calendar quarter. The rate of interest to be applied at the end of each calendar quarter is set forth below in this Paragraph 4. The interest credit shall continue to be applied to the Cash Account of a Director, even if ceasing to serve as a Director, until all amounts credited to his or her Cash Account have been paid. Said interest shall be calculated quarterly, based upon the average daily balance of the Director’s Cash Account since the preceding calendar quarter, after giving effect to any reduction in the Cash Account as a result of any payments. The remaining annual payments will be recomputed to reflect the additional interest credits.

The rate of interest to be applied at the end of each calendar quarter shall be the quarterly equivalent of an annual yield that is two percentage points (2%) higher than the annual yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as published by the Moody’s Investors Service, Inc. (or any successor thereto), or if such index is no longer published, a substantially similar index selected by the Board. At no time shall the rate of interest be less than six percent (6%) annually. Notwithstanding the foregoing, effective as of January 1, 2017, the rate of interest to be applied at the end of each calendar quarter shall be the rate of interest for interest credited to cash accounts under the Company’s Deferred Compensation Plan for Directors and Executives, as such plan may be amended from time to time (the “DCPDE”), regardless of whether or not such rate of interest shall be more or less than six percent (6%) annually; provided, however, that if at any time on or after January 1, 2017 there is no interest credited to cash accounts under the DCPDE because the DCPDE shall have ceased to operate or for any other reason, then, at such time on or after January 1, 2017, the rate of interest to be applied at the end of each calendar quarter shall be the quarterly equivalent of an annual yield that is equal to the annual yield on Moody’s Average Corporate Bond Yield for the preceding quarter, as published by Moody’s Investors Service, Inc. (or any successor thereto), or, if such index is no longer published, a substantially similar index selected by the Board, regardless of

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whether or not such rate of interest shall be more or less than six percent (6%) annually. Any change in the rate of interest that occurs on January 1, 2017 or thereafter pursuant to the provisions of this paragraph shall not constitute an “amendment affecting the interest rate” within the meaning of Paragraph 9(a) below.

5. Terms of Payment .

(a) Plan Benefits . The amounts contained in a Director’s Accounts are subject to the terms of payment as set forth in this paragraph. When a Director ceases to serve as a Director of the Company, either by retirement or otherwise, the individual shall be entitled to payment of the amounts in his or her Accounts.

(b) Timing of Benefit Payment . At the time the Director elects to defer Fees or NEDSCP Shares or to receive NEDSCP Cash Credits in lieu of NEDSCP Shares, and with respect to Retirement Benefit Accounts before January 1, 1998, the Director may designate the number of annual installments, not to exceed ten, in which the applicable Account balance shall be paid, or the Director may elect to receive such Account balance in a lump sum payment, or in a combination of a partial lump sum and the remainder in installment payments. A Director may elect to modify such election by filing a change of payment designation which shall supersede the prior form of payment designation for any one (1) or more deferral periods. If the Director’s most recent change of payment designation has not been filed one (1) full calendar year prior to the year in which the Director ceases to serve as a Director of the Company, the prior election shall be used to determine the form of payment. For example, a Director leaving the Board in 2003 must file a written request with the Committee by December 31, 2001 to change his form of payment designation.

(c) Form of Benefit Payment . Benefits payable to a Director from a Stock Account or a Retirement Benefit Account shall only be paid to such Director as a distribution of Common Stock plus cash for fractional shares. Benefits payable to a Director from a Cash Account shall only be paid to such Director in cash.

(d) Commencement of Payment . Any lump sum payment or the first annual installment payment owed to a Director shall not be due earlier than the first business day of January in the year following the year in which he or she ceases to serve as a Director of the Company. In the event a Director terminates the election to defer Fees or NEDSCP Shares, any Fees or NEDSCP Shares already deferred shall not be payable to the Director until such time as he or she ceases to serve as a Director, and then only subject to the terms and conditions contained herein. The provisions of this paragraph are subject to the terms of Paragraph 6 covering the death of a Director and to the terms of Paragraph 8 covering a Change in Control.

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

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

(g) Accelerated Distribution . Notwithstanding any other provision of the Plan, a Director shall be entitled to receive, upon written request to the Committee, a lump sum distribution equal to ninety percent (90%) of the vested Account balance as of the last day of the calendar quarter immediately preceding the day on which the Committee receives the written request. The remaining balance shall be forfeited by the Director. A Director who receives a distribution under this section shall be suspended from participation in the Plan for 12 months, but such suspension shall not apply to crediting of NEDSCP Cash Credits. The amount payable under this section shall be paid in a lump sum within 65 days following the receipt of the notice by the Committee from the Director.

6. Death of Director .

(a) Plan Death Benefit . Upon the death of a Director or a former Director prior to the receipt of the full amount credited to his or her Accounts, the balance of the Director’s Accounts shall be paid to the designated beneficiary or beneficiaries in the manner elected in writing by the Director at the time of the deferral election, or if no such election is made, by lump sum payment.

(b) Beneficiary . At the time a Director elects to defer payment of Fees or NEDSCP Shares or to receive NEDSCP Cash Credits in lieu of NEDSCP Shares, and with respect to Retirement Benefit Accounts before January 1, 1998, the Director may designate a beneficiary or beneficiaries. If greater than 50% of the benefit is designated to a beneficiary other than the Director’s spouse, such beneficiary designation shall be consented to by the Director’s spouse. Such designation may be changed by the Director at any time without the consent of a beneficiary, subject to the spousal consent requirement above. If no designated beneficiary survives the Director or former Director, the balance of the Director’s Accounts shall be paid to the Director’s estate.

7. Administration .

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

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(c) Indemnity of Committee . To the extent permitted by applicable law, the Company shall indemnify, hold harmless and defend the members of the Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan, provided that the members of the Committee were acting in accordance with the applicable standard of care.

8. Definitions; Change in Control; Corporate Transaction .

(a) For purposes of this Plan, a “Change in Control” of the Company shall mean the occurrence of any of the following events:

(i) The consummation of:

(A) any consolidation, merger or plan of share exchange involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger; or

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

(ii) At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(iii) Any person (as such term is used in Section 14(d) of the Securities Exchange Act of 1934, other than the Company or any employee benefit plan sponsored by the Company) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of the combined voting power of the then outstanding Voting Securities.

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

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

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

9. Amendment and Termination of the Plan .

(a) Amendment . The Board may at any time amend the Plan in whole or in part; provided, however, that upon a Change in Control, no amendment shall be effective to change the payout schedule in Paragraph 9(b)(ii), and further provided that no amendment shall decrease or restrict the amount credited to any Account maintained under the Plan as of the date of amendment. An amendment affecting the interest rate credited under Paragraph 4 shall not become effective before the first day of the calendar year which follows the adoption of the amendment and at least 30 days written notice of the amendment to the Director. An amendment affecting the interest rate credited under Paragraph 4 that is adopted after a Change in Control shall apply only to those amounts credited to Directors’ Accounts after the Change in Control.

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

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

(ii) Complete Termination . The Board may completely terminate the Plan by instructing the Committee not to accept any additional deferrals, and terminate all ongoing deferrals. The Plan shall cease to operate and the Committee shall pay out to each Director the balance in each of his or her Accounts in a lump sum or in equal annual installments amortized over the period listed in the payout schedule below based on the balance in the particular Account at the time of such complete termination:

Payout Schedule


Appropriate Account Balance		Payout Period
Less than $10,000		Lump sum

$10,000 but less than $50,000		Lesser of 5 years or period elected in Participation Agreement

More than $50,000		Period elected in Participation Agreement

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Interest earned on the unpaid balance in the Director’s Cash Account shall be the applicable interest rate at the end of the calendar quarter immediately preceding the effective date of such complete termination.

10. Miscellaneous .

(a) Unsecured General Creditor . The Accounts shall be established solely for the purpose of measuring the amounts owed to a Director or beneficiary under the Plan. Directors and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims or interests in any life insurance policies, annuity contracts or the proceeds therefrom owned or which may be acquired by the Company. Except as may be provided in Paragraph 10(b), such policies, annuity contracts or other assets of the Company shall not be held under any trust for the benefit of the Directors, their beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of the Company’s assets and policies shall be, and remain, the general, unpledged, unrestricted assets of the Company. The Company’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future.

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

(c) Nonassignability . No assignment or alienation may be made of any deferred fees or interest thereon, except in accordance with Paragraph 6.

(d) Governing Law . The provisions of this Plan shall be construed and interpreted according to the laws of the State of Oregon.

(e) Successors . The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.

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(f) The foregoing restatement of the Plan was approved by the Board of Directors of Northwest Natural Gas Company effective as of January 1, 2007.


NORTHWEST NATURAL GAS COMPANY

By:		/s/ Mark S. Dodson
		Mark S. Dodson
		President and CEO



Attest:		/s/ C.J. Rue

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Exhibit 10.8

AMENDMENT TO EMPLOYMENT AGREEMENT

The Employment Agreement between Northwest Natural Gas Company, an Oregon corporation (“NNG”), and Mark S. Dodson (“Dodson”) dated December 20, 2002 (the “Agreement”) is hereby amended as follows:

1.	Section 4 of the Agreement is amended to read in its entirety as follows:

“4. ESRIP Benefits for Retirement, Termination, Disability or Death

“4.1 In General . Executive supplemental retirement income benefits under the ESRIP normally are available upon vesting that begins after 5 years of service, and the amount of benefits then increases with additional years of service. This Agreement provides for payment of ESRIP benefits even though Dodson is not otherwise vested in such benefits and provides for benefits at higher levels than Dodson would otherwise be entitled based on his years of service. For determination of any ESRIP payment starting before Dodson’s age 65 normal retirement date, Dodson shall be treated as though he qualifies for and will receive an “early annual retirement allowance” under NNG’s Retirement Plan, and Dodson’s ESRIP benefits shall not be subject to reduction under Section 2.02-3 of the ESRIP based on age at retirement. If entitled to receive ESRIP benefits under this Agreement, Dodson may select any of the benefit payment options under Section 3.01 of the ESRIP for which he is eligible.

“4.2 Full ESRIP . NNG shall be liable under the ESRIP to pay Dodson the full ESRIP benefit using the 65 percent normal retirement income target provided under Section 2.01-2 of the ESRIP once any of the following conditions has been satisfied:

“(a) Dodson’s employment is terminated for any reason after he completes the Second Term;

“(b) Dodson becomes totally and permanently disabled at any time during employment by NNG; or

“(c) NNG terminates Dodson without cause, where “cause” has the meaning set forth in paragraph 4(ii) of Dodson’s separate amended and restated change in control severance agreement dated December 14, 2006, as such agreement may be amended from time to time (the “Change in Control Severance Agreement”); provided, however, that this subsection (c) shall not apply if as a result of such termination Dodson becomes entitled to receive severance benefits under the Change in Control Severance Agreement.

“4.3 One-half ESRIP . If, after December 31, 2002 but prior to the end of the Second Term, Dodson terminates employment with NNG under circumstances where he is not entitled to full ESRIP benefits under Section 4.2 above, NNG shall be liable under the ESRIP to pay Dodson the greater of (a) the benefit he would otherwise be entitled to under the ESRIP, or (b) a one-half ESRIP benefit using a 32.5 percent normal retirement income target under ESRIP Section 2.01-2 in place of the 65 percent target.

“4.4 Death During Employment . If Dodson should die in service, NNG shall pay his surviving spouse 100 percent of the 100 percent joint and survivor annuity amount under ESRIP Section 2.04-1(a) using the full ESRIP benefit under 4.2 above.

“4.5 No ESRIP Change in Control Benefits . Dodson shall not be entitled to any of the benefit enhancements otherwise provided under the terms of the ESRIP to participants who become entitled to Change in Control Severance Benefits (as defined therein).

2.	Except as otherwise provided herein, all other provisions of the Agreement shall remain in full force and effect.


IT IS SO AGREED:

NORTHWEST NATURAL GAS COMPANY		MARK S. DODSON

By:	/s/ Richard G. Reiten
Name:	Richard G. Reiten	Dated:	December 14, 2006
Title:	Chairman of the Board
Dated:	December 14, 2006

Exhibit 99.1


FOR IMMEDIATE RELEASE		December 18, 2006

NW Natural’s directors elect board chairman, approve senior management promotions

PORTLAND - Northwest Natural Gas Company’s (NYSE: NWN, dba NW Natural) board of directors announced today it has elected a new chairman of the board and approved several senior management promotions. The actions were taken at the board’s Dec. 14 meeting.

Board member Richard Reiten, retired CEO of NW Natural, was elected chairman of the board, succeeding Richard Woolworth, who passed away in August. Reiten, 67, has been on the board since 1996, previously serving as chairman from 2000-2005. He joined NW Natural as president and chief operating officer in 1995 and was appointed CEO in 1997 and chairman of the board in 2000. Reiten retired as CEO of NW Natural in 2002.

The board also appointed Gregg Kantor executive vice president, effective today. Kantor, 49, has served as NW Natural’s senior vice president of public and regulatory affairs since 2003. He joined the company in 1996 and was appointed vice president of public affairs and communications in 1998.

“With the retirement of Mike McCoy, our executive vice president over the last 6 years, it was important to designate a new executive to help coordinate the senior management team,” said Mark Dodson, president and CEO of NW Natural.

The board made three other senior management appointments effective January 1, 2007. Grant Yoshihara, 51, was promoted to vice president of utility operations; Dave Williams, 53, was promoted to vice president of utility services; and Keith White, 53, was promoted to vice president of business development and energy supply.

“We are pleased to fill these critical positions from within the organization,” Dodson said. These appointments reflect the depth and breadth of our management team. Combined, these four individuals have more than 60 years of experience at NW Natural. They are a seasoned team who have proven they can guide this company to success. ”

Yoshihara first joined the company in 1991, supporting gas supply contracting and operations. He has held successive management positions in industrial and commercial services, district and field operations, marketing and consumer services, and most recently served in the role of managing director of utility services. His new responsibilities will include engineering and technical services, gas delivery operations and maintenance, resource management and operations business analysis.

Williams joined the company in 1978 and worked in residential market services for more than a decade. He has served as district manager of the company’s Astoria and Salem districts and in 1998 was named general manager of district and support services. In 2000, he became general manager of utility operations and co-chair of the labor-relations team. In addition to continuing to manage the company’s labor issues, his responsibilities will include management of all customer acquisition and customer service functions for NW Natural.

White joined NW Natural in 1996 as director of energy marketing. In 1998, he assumed the position of director of business development and then became the company’s chief strategic officer in 2003. His new responsibilities will include strategic planning, business development, gas supply and the company’s interstate gas storage business segment.

NW Natural is headquartered in Portland, Ore., and serves more than 630,000 residential and business customers in Oregon and southwest Washington. It is the largest independent natural gas utility in the Pacific Northwest. With annual customer growth on pace for a 20th consecutive year of more than 3 percent, it is also one of the fastest-growing local distribution companies in the nation. The company has increased its dividends paid on common stock for 51 consecutive years.

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