EXHIBIT (10n.)
EMPLOYMENT AGREEMENT
This agreement is between Northwest Natural Gas Company, an
Oregon corporation hereinafter referred to as "NNG", and Xxxxxxx
X. Xxxxxx, hereafter referred to as "Xxxxxx."
WHEREAS, Xxxxxx has chosen to take early retirement from his
position as President of Portland General Electric ("PGE")
effective January 1, 1996; and
WHEREAS, NNG, through the Organization and Executive
Compensation Committee of the Board of Directors, has undertaken
a nationwide search for a successor to its chief executive
officer, Xxxxxx X. Xxxxxxx ("Xxxxxxx"), who has announced his
intention to retire effective February 28, 1997; and
WHEREAS, the parties have reached an agreement for the
employment of Xxxxxx, subject to ratification by the NNG Board of
Directors at a special meeting to be called on November 2, 1995;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties agree as follows:
1. POSITIONS AND RESPONSIBILITIES
------------------------------
1.1 Xxxxxx shall be employed by NNG as its President
and Chief Operating Officer on February 28, 1996
with direct operating responsibilities for all
utility business activities.
1.2 Effective on February 28, 0000 Xxxxxxx shall be
elected Chairman and Chief Executive Officer of
NNG. Xxxxxx shall report to Xxxxxxx on utility
operational matters while Xxxxxxx shall continue
to direct all subsidiary nonutility business
activities.
1.3 Effective on January 1, 1997 Xxxxxx shall be
elected President and Chief Executive Officer of
NNG. Xxxxxxx will continue to serve as Chairman
of the Board of Directors following Xxxxxx'x
election, but he will cease to be an employee at
his retirement on February 28, 1997.
1.4 As President and Chief Executive Officer, Xxxxxx
shall have complete executive responsibility for
all business activities of NNG and its
subsidiaries, subject only to the authority of the
Board of Directors of NNG. Xxxxxx shall be
directly responsible and report to the full Board
of Directors and shall regularly confer with the
Chairman, Lead Director and Committee Chairs of
the Board on matters subject to Board policy
approval and oversight.
1.5 Subject to the provisions of Sections 6 and 7 of
this Agreement, the Board shall retain at all
times its inherent authority to elect and remove
all officers, including the President and Chief
Executive Officer.
2. TERMS
-----
2.1 The term of Xxxxxx'x employment as President and
Chief Operating Officer shall be February 28, 1996
to December 31, 1996.
2.2 The term of Xxxxxx'x employment as President and
Chief Executive Officer shall be January 1, 1997
to February 28, 2003.
3. SALARY
------
3.1 Xxxxxx'x salary commencing on February 28, 1996
shall be $330,000 per year.
3.2 The salaries of all officers are adjusted by the
Board of Directors annually. The next scheduled
date for salary adjustments under this Agreement
is March 1, 1997.
4. OTHER BENEFITS
--------------
4.1 The benefits granted to Xxxxxx include those made
available to all employees, as determined from
time to time. Those in effect as of the date of
this agreement are described in summary form in
sections 2, 3, 7 and 8 of Exhibit A, attached
hereto and made a part hereof.
4.2 In addition to regular benefits, Xxxxxx shall be
eligible for special executive benefits made
available by the Board of Directors to the
officers of NNG. These include the Executive
Supplemental Retirement Income Plan (ESRIP), the
Executive Deferred Compensation Plan, the 1985
Stock Option Plan, the Executive Annual Incentive
Plan, as adjusted by the Board to address
strategic priorities, and the Executive vehicle
and parking benefit. These benefits are described
in sections 1, 4, 5, 6, and 9 of Exhibit A.
4.3 Xxxxxx is eligible for immediate participation in
all of the benefits described above with the
exception of the Retirement K Savings Plan which
has a 90-day period of service before
participation begins and the Employee Stock
Purchase Plan which has a six-month waiting
period.
5. RETIREMENT
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5.1 Executive supplemental retirement income benefits
under the ESRIP are available upon vesting at age
55 with 15 years of prior service credit.
5.2 So that Xxxxxx will be fully vested and eligible
for the retirement supplement otherwise available
on February 28, 2003, NNG shall grant him credit
under ESRIP for eight years of prior service
effective February 27, 1996.
6. DEATH, DISABILITY, OR SEVERANCE
-------------------------------
6.1 If Xxxxxx should die before vesting in the ESRIP,
and while he is employed pursuant to this
Agreement, NNG shall grant to his surviving spouse
the full 100% joint and survivor annuity which
would have been available had he been vested on
the date of death.
6.2 If Xxxxxx becomes physically or mentally disabled
so that, in the sole judgment of the Organization
and Executive Compensation Committee of the Board
of Directors, he is unable to fulfill the
responsibilities of his office, then vesting shall
be accelerated to the date of the Committee's
finding of disability, and Xxxxxx shall
automatically be vested in ESRIP and granted early
retirement with all benefits under ESRIP as if he
were vested and elected to take early retirement
on the date of the finding of disability.
6.3 If, despite the employment covenants included
herein, the Board of Directors elects to terminate
Xxxxxx'x employment for other than disability or
cause, then Xxxxxx shall be immediately vested
under the ESRIP and shall be granted early
retirement with all benefits under ESRIP as if he
were vested and elected to take early retirement
on the date of termination.
6.4 The accelerated vesting and the benefits which
immediately follow shall constitute the sole
severance payment available to Xxxxxx for
termination and shall be deemed to constitute
liquidated damages and not a penalty under this
agreement.
6.5 For the purpose of this section the following
definitions apply:
6.5.1 "Cause" means gross misconduct or
willful and material breach of the
Agreement by Xxxxxx, or Xxxxxx'x
unilateral and voluntary decision to
resign from his executive position;
6.5.2 "Termination" means the involuntary
retirement or removal of Xxxxxx by NNG
from either of the officer positions
during the terms specified in Section 2;
6.5.3 "Vested" means Xxxxxx shall be deemed to
have satisfied the minimum service
requirement of ESRIP. The ESRIP
requirement that he be eligible for
early retirement under the Retirement
Plan for Non-Bargaining Unit Employees
hereby is expressly waived.
7. CHANGE IN CONTROL
-----------------
7.1 "Change in Control" has the meaning defined in
Exhibit B, attached hereto and made a part hereof.
7.2 If there is a change in control which is followed
by the voluntary resignation by Xxxxxx from
employment due to a significant detrimental change
in the nature or scope of his authority or duties,
or a reduction in total compensation, or an
omission of customary increases in compensation,
then Xxxxxx shall be entitled to the following
benefits from NNG:
7.2.1 NNG shall pay the full base salary and all
other compensation under benefit plans
through the date of resignation;
7.2.2 NNG shall pay Xxxxxx a lump sum severance
payment equal to 2.99 multiplied by his
"base amount" as defined in Section 280G of
the Internal Revenue Code of 1986, as
amended ('the Code");
7.2.3 The severance payment shall be reduced by
the value of any other benefit paid or
payable to Xxxxxx in connection with the
change in control to the extent such
benefits constitute "parachute payments"
within the meaning of Section 280G(b)(2) of
the Code unless Xxxxxx waives those
benefits.
7.3 Xxxxxx shall not be under any duty to mitigate
damages by reason of resignation due to change in
control. He shall receive the benefits described
in paragraph 7.2 without offset regardless of any
other income he may receive from any other sources
following his resignation.
7.4 Xxxxxx and NNG agree that because there can be no
exact measure of the damages which would occur if
he resigned for the reasons set forth in paragraph
7.2, the payment and benefits provided herein
shall be deemed to constitute liquidated damages
and not a penalty under this Agreement.
8. SPECIAL CONDITIONS
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8.1 It is a condition precedent of this Agreement that
Xxxxxx will provide evidence of good health
through a physical exam to be completed prior to
November 1, 1995.
8.2 This Agreement will not be effective until
approved by the NNG Board of Directors.
8.3 On January 2, 1996 NNG will pay a pre-employment
bonus of $100,000 to Xxxxxx. The bonus is
intended to compensate Xxxxxx in full for costs,
expenses and lost opportunity incurred in the
transition to NNG employment from retirement.
8.4 In lieu of any program of life insurance beyond
that provided to all NNG employees under the
Freedom Flex Benefits (Exhibit A), NNG will assist
Xxxxxx during the time he remains an employee of
NNG in keeping in place an existing $750,000 split
dollar life insurance program. The assistance is
limited to the following:
8.4.1 NNG will reimburse Xxxxxx annually for
interest costs as incurred to carry a loan
not to exceed $200,000 in principal; and
8.4.2 NNG will pay annual bonuses to Xxxxxx
sufficient, after taxes are paid, to pay
the annual premiums which come due under
the existing schedule, attached hereto as
Exhibit C.
8.5 During his employment Xxxxxx shall be entitled to
2.083 days per month of vacation.
9. GENERAL PROVISIONS
------------------
9.1 This agreement is not assignable without the
express approval of both parties.
9.2 This agreement may not be amended or cancelled
except by mutual agreement in writing.
9.3 Notices shall be sufficient if sent by registered
or certified mail to the addresses last specified
by the parties.
9.4 If litigation is commenced by either party to
enforce the provisions of this Agreement, the
prevailing party shall be entitled to an award of
costs and reasonable attorneys' fees.
9.5 This Agreement shall be construed in accordance
with the laws of the State of Oregon.
9.6 NNG will require any successor (whether direct or
indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the
business and/or assets of NNG to assume and agree
to perform this Agreement as if no such succession
took place. Failure of NNG to obtain such
assumption and agreement shall be a breach of this
Agreement, providing Xxxxxx with a right to
compensation from NNG as provided in Section 7 for
change in control.
9.7 If Xxxxxx should die while employed hereunder, any
payments then due shall be payable as if he
continued to live. Such payments should be made
to his designee, or if none, to his estate.
IT IS SO AGREED:
NORTHWEST NATURAL XXXXXXX X. XXXXXX
GAS COMPANY
By /s/ Xxxxxx X. Xxxxxxx By /s/ X. X. Xxxxxx
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Its President & CEO Dated: October 30, 1995
Dated: October 30, 1995
APPROVED BY THE BOARD OF DIRECTORS OF NORTHWEST NATURAL GAS
COMPANY:
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------
Its Lead Director
Dated: November 2, 1995
EXHIBIT A
NORTHWEST NATURAL GAS COMPANY
SUMMARY
OF
PRINCIPAL PLAN PROVISIONS
EXECUTIVE/EXEMPT EMPLOYEE BENEFIT PLANS
October 1995
TABLE OF CONTENTS
Plan Page
---- ----
1.0 Executive Supplemental Retirement Income Plan 1
2.0 Retirement Plan for Non-Bargaining Unit Employees 3
3.0 Retirement K Savings Plan 6
4.0 Executive Deferred Compensation Plan 9
5.0 Executive Annual Incentive Plan 11
6.0 1985 Stock Option Plan 12
7.0 Employee Stock Purchase Plan 14
8.0 Freedom Flex Benefit Plan 15
9.0 Automobile and Parking Policy for Executives 16
1.0 EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
1.1 ELIGIBILITY
To Participate in the Plan
Selection by the Organization and Executive
Compensation Committee.
For Normal Retirement Benefits
The first of the month next following the
attainment of age 65 and the completion of 15
years of Service.
For Early Retirement Benefits
Age 55 and the completion of 15 years of Service.
1.2 NORMAL FORM OF BENEFITS
Life annuity with 10 years certain.
1.3 OPTIONAL FORMS OF BENEFITS
Half (50%) joint and survivor annuity
Full (100%) joint and survivor annuity
1.4 FINAL ANNUAL COMPENSATION
Annual salary of the Participant last approved by the
Organization and Executive Compensation Committee, PLUS
The average compensation award determined by averaging
the last three awards. Final Annual Compensation is
calculated prior to any reduction for amounts deferred
under the Company's Executive Deferred Compensation
Plan or Retirement K Savings Plan.
1.5 VESTING
100% upon death or after age 55 and the completion of
15 years of Service; zero otherwise.
For disability, 100% after the completion of 15 years
of Service.
1.6 BENEFITS
Normal Retirement Benefit
70% of Final Annual Compensation if the
Participant has completed at least 25 years of
Service, otherwise 65% of Final Annual
Compensation, MINUS
The Participant's Normal Retirement allowance
under the Retirement Plan payable as a single life
annuity at age 65, MINUS
The Participant's Primary Social Security Benefit
payable at age 65, MINUS
The Participant's Supplemental Retirement Benefit
(if any) under the Executive Deferred Compensation
Plan payable as a single life annuity at age 65.
Early Retirement Benefit
The Normal Retirement Benefit multiplied by the
applicable early retirement reduction percentage
shown below.
Preretirement Death Benefit
If before age 55 and 15 years of Service, 25% of
Final Annual Compensation payable to beneficiary
for 10 years. After age 55 and 15 years of
Service, Participant may elect full (100%) joint
and survivor annuity for spouse.
Postretirement Death Benefit
The remainder of any benefit due the Participant
under the benefit option selected at the time of
retirement.
Early Retirement Reduction Percentage
Percentage of
Age When Early Normal Retirement
Payments Start Supplement Payable
-------------- ------------------
55 67%
56 72
57 77
58 82
59 87
60 92
61 96
62-64 100
2.0 RETIREMENT PLAN FOR NON-BARGAINING UNIT EMPLOYEES
SUMMARY OF PRINCIPAL PLAN PROVISIONS
2.1 Eligibility
Regular, full-time employees not in bargaining unit.
Entry Date
First day of month after one year of service during
which 1,000 hours of service have been completed.
2.2 Normal Retirement Age
Age 65.
2.3 Pension Payable Upon Normal Retirement
1. Benefit at Age 65
a. Basic Benefit
45% of Final Average Earnings (reduced if service
at 65 is less than 15 years).
b. Over 15 years service
0.55% of Final Average Earnings for each
accredited year of service in excess of 15.
c. Over 40 years service
0.45% of Final Average Earnings for each
accredited year of service in excess of 40.
d. Offset Formula
0.50% times the lesser of Final Average Earnings
or Covered Compensation, times accredited years of
service, limited to 35 years.
e. Net Benefit
(a) + (b) + (c) - (d)
2. Accrued Benefit Payable at Age 65
Net benefit at age 65, assuming service to age 65,
multiplied by actual service ratio (actual service
divided by service to age 65).
3. Final Average Earnings
Average annual compensation during five highest
consecutive years of the last ten compensation years.
4. Covered Compensation
Average of Taxable Wage Base for the 35 years prior
to and including the year of retirement, death or
termination.
5. Service Recognized in Formula
Complete months of service as a Non-Bargaining Unit
employee, starting with the month after hire.
2.4 Early Retirement
1. Eligibility
After age 55, if age plus accredited years of service
total 70 or more.
2. Reduction for early commencement
Age at Retirement Factor
----------------- ------
62 and older 100%
61 96
60 92
59 87
58 82
57 77
56 72
55 67
2.5 Retirement After Normal Retirement
1. Adjustment in Normal Retirement pension
Greater of (a) benefit determined at age 65 with
actuarial increase for delayed commencement, or
(b) benefit determined at actual retirement age.
2.6 Pension Upon Vested Termination
1. Eligibility
Five years of service, effective January 1, 1989.
2. Commencement of Benefits
After age 55 if age plus accredited years of
service total 70 or more. Actuarially equivalent
reduction prior to age 65.
2.7 Benefit Upon Disability
1. Eligibility
Ten accredited years of service, permanent and
total disability.
2. Benefit
Same as benefit for early retirement with
actuarial reduction if disability occurs before
age 55.
2.8 Death Benefit Before Retirement
1. Eligibility
After becoming vested and survived by a spouse
legally married for one year or more.
2. Amount of Benefit
Amount that would be paid if member retired just
before death, or on the day after the day he would
have attained his earliest commencement age (if he
died before that earliest retirement age), and
selected half joint and survivor option.
2.9 Death Benefit After Retirement
1. Provisions for surviving beneficiary
Joint and Survivor Options (actuarial equivalent).
2. Other options
Ten-Year-Certain Annuity Option.
Social Security Adjustment Option.
2.10 Changes in Plan Provisions
The section 401(a)(17) pay limit was reduced to $150,000 from $235,840.
3.0 RETIREMENT K SAVINGS PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
3.1 Eligibility to Participate
Employees may enter the Plan on the next entry date
following completion of 90 days of employment which
included at least 250 hours of service or completion of
one year of service.
3.2 Entry Date
The first day of January, April, July or October after
completing eligibility requirements.
3.3 Compensation for Elective and Matching Contributions
All pay reportable on IRS Form W2 plus pretax
contributions to the Plan or a Section 125 plan, but
excluding reimbursements, fringe benefits, severance or
disability pay, certain awards and other deferred
compensation. Compensation is limited to $150,000 (as
indexed) for plan years beginning after December 31,
1993.
3.4 Matching Contributions
The Company matches 50% of the employees' deferrals up
to 4% of compensation.
3.5 Deferral Contributions
Each participant may elect to defer and contribute up
to 15% of his or her compensation to the plan.
Deferral election amounts are limited to the maximum
established for the year under IRS regulations ($9,240
in 1995 and $9,500 in 1996).
3.6 Rollover Contributions
The plan will accept rollover of funds from other
qualified plans or conduit IRAs.
3.7 Normal Retirement
Normal retirement age is 65.
3.8 Distributions
Vested amounts will be paid as a lump sum in cash or in
employer securities and will be made within 60 days
after the latest of: (1) the date the distribution
application is received, (2) the date the amount of the
distribution is known, and (3) the end of the plan year
of retirement.
3.9 Loans
Availability
Participant may borrow from their accounts in the
RKSP if they are current employees or a "party-in-interest" and
meet the following conditions:
(1) The loan is for an approved purpose and does
not exceed the amount needed for that purpose; and
(2) the participant can demonstrate the intention
and the ability to repay the loan.
Terms
(1) Minimum loan amount is $1,000;
(2) maximum loan amount cannot exceed the lesser
of 50% of your account balance or $50,000;
(3) payments must be made monthly by payroll
deduction; prepayment in full is allowed; no
partial prepayments are accepted;
(4) only one loan may be applied for in any year
and only one loan may be outstanding at a time;
(5) interest rates will be determined by the
Committee, based on locally prevailing commercial
lending rates for a comparable loan at the time
the loan is made;
(6) duration of loans is from 6 months to 57
months; and
(7) applications must be in writing on forms
provided and an application fee of $50 will be
charged.
Security
All loans are secured by the borrower's account
balances. Also, there must be an assignment of
current pay or other automatic payment arrangement
to service the loan.
3.10 In-Service Distributions
The Plan allows the following in-service withdrawals:
A rollover account withdrawal.
A hardship withdrawal. Following a withdrawal of
rollover account funds, a participant may withdraw
elective contributions to satisfy a financial hardship
related to medical expenses, tuition, preventing
eviction or foreclosure or other reason permitted by
Treasury regulations.
3.11 Vesting
Participants' accounts are fully vested at all times.
3.12 Plan Investment Options
All of a participant's accounts may be invested in any
or all of the following funds at the election of the
participant, but must be in 10% increments. Investment
elections and transfers of account balances are
effective on January 1, April 1 , July 1, or October 1:
Bank and Government Fund
Fixed Income Fund
Balanced Fund
Common Stock Fund
Columbia Special Fund
Northwest Natural Gas Company Stock Fund
4.0 EXECUTIVE DEFERRED COMPENSATION PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
4.1 Eligibility
Key employees designated annually by the Board.
4.2 Deferrals
Up to 25% of salary and up to 100% of bonus, subject to
$1,500 annual minimum. One year minimum deferral
period.
4.3 Company Matching Contributions
The Company matches 25% of participants' deferrals, up
to 8% of compensation.
4.4 Interest Crediting Rate
30-year Treasury Securities rate plus 3% (minimum of
6%). The 4th quarter 1995 crediting rate is 9.71%.
4.5 Distributions
Amounts Distributed
100% of deferrals and Company match plus interest.
Distributed Upon:
(1) Separation of Service
(2) Death
(3) Disability
(4) Earlier date specified in Participation Agreement
(5) Hardship approved by the Administrative Committee
Form of Distribution:
Executive May Elect:
(1) Equal annual installments (up to 15) with interest
on unpaid balance (beneficiary will receive
remaining payments if death occurs before complete
payout).
(2) Lump Sum
(3) Combination: Partial Lump Sum, with Installment
Payments on the remainder
4.6 Supplemental Pension Benefit
Participation in the Executive Deferred Compensation
Plan may reduce Company pension benefit. Any lost
pension benefit will be made up by the Company with an
additional benefit from this plan during retirement.
4.7 Hardship Provisions
(1) Distributions based on Financial Hardship may be
granted by the Administrative Committee if
participant suffers an extraordinary and
unforeseen financial emergency.
(2) If a distribution is made under this provision,
contributions to this plan cease for 12 months.
4.8 Disability Feature
If participant becomes disabled prior to retirement, he
will receive his account balance upon proof of
disability. Balance will be distributed in the form
elected in Participation Agreement.
4.9 Death Benefits
Beneficiary will receive the remaining account balance
in the form determined by participant's election.
4.10 Cost Recovery Insurance
(1) Purchased on each participant and owned by an
Umbrella Trust (trademark) established by
Northwest Natural Gas.
(2) Proceeds are payable to the Trust and the
participant has no right to either the policy or
policy proceeds.
(3) Provides Northwest Natural Gas with present value
recovery of the cost of the Plan.
4.11 Other Provisions
(1) Participants are unsecured general creditors of
the Company.
(2) The percent of salary or bonus elected remains in
effect from year to year unless changed by
participant. Changes, effective January 1, must
be made by the last business day of December of
the preceding year.
(3) The Plan is Administered by the Retirement K
Savings Plan Administrative Committee.
5.0 EXECUTIVE ANNUAL INCENTIVE PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
5.1 Eligibility
Participants designated annually by Board of Directors.
5.2 Benefit
Annual cash incentive award up to 20% to 40% of salary
(dependent upon each executive's ability to influence
corporate performance) if established individual and
corporate performance goals are met (up to 30% to 60%
if goals are exceeded). Awards conditioned upon net
income exceeding specified percentage of target and
being sufficient to cover payment of all dividends.
5.3 Performance Goals
Established annually by Board of Directors upon
recommendation of Organization and Executive
Compensation Committee. Generally, goals measure the
Company's performance in terms of overall
profitability, financial performance, cost reduction
and the achievement of greater efficiency.
6.0 1985 STOCK OPTION PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
6.1 Eligibility
Only officers and other key employees whom the
Organization and Executive Compensation Committee
(Committee) determines will perform services of special
importance to the Company in the management, operation
and development of its business are eligible for
receipt of options granted under the Plan.
6.2 Incentive Stock Options
The Committee may grant Incentive Stock Options, on
terms and conditions it deems appropriate, subject to
the following: (1) the option price per share may not
be less than 100% of the fair market value of the
Common Stock when the option is granted; (2) the term
of the option may not exceed ten years; (3) the
purchase price of Common Stock on exercise of an option
may be paid either in cash or by the surrender of
shares of previously acquired Common Stock held for one
year or more valued at fair market value on the date of
the option exercise; (4) unless otherwise determined by
the Committee, an option will expire on the earlier of
(i) the expiration of the term for which it was
granted, (ii) 12 months after termination of an
optionee's employment due to death or physical
disability, or (iii) three months after termination of
an optionee's employment for any reason other than
death or physical disability; (5) no optionee may be
granted options for more than 50,000 shares of Common
Stock in any fiscal year; and (6) the aggregate fair
market value (determined on the date of grant) of
shares for which Incentive Stock Options become
exercisable for the first time by an optionee in any
calendar year shall not exceed $100,000.
6.3 Non-Statutory Stock Options
The Committee may also grant Non-Statutory Stock
Options. The option price may not be less than 100% of
the fair market value of the Common Stock when the
option is granted. The term of the option may not
exceed ten years plus seven days, the purchase price
will be paid as described in clause (3) above, the
option will expire as described in clause (4) above,
and the number of shares covered by options granted to
any one employee in any fiscal year will be limited as
described in clause (5) above.
6.4 Exercise of Options
Generally, no option may be exercisable during the
first year following the date it is granted.
7.0 EMPLOYEE STOCK PURCHASE PLAN
SUMMARY OF PRINCIPAL PLAN PROVISIONS
7.1 Eligibility to Participate
Regular full-time employees of the Company (one who has
been employed at least six months and is actively
employed on the offering date) are eligible to
participate in the Plan, including officers but
excluding directors not otherwise employed by the
Company.
7.2 Method of Participation
Annual offerings are made on the date determined by the
Board of Directors. An eligible employee may subscribe
within 30 days for not less than five shares nor more
than 600 shares in any calendar year. Payment may be
made only by payroll deduction over a period of not
less than six months nor more than 12 months from the
offering date. Shares are issued upon completing
payment in full.
7.3 Purchase Price
The purchase price of shares is 92% of the fair market
value (mean between bid and asked prices) on the date
the offering is made.
8.0 FREEDOM FLEX BENEFIT PLAN
See: "Freedom Flex Benefits Update - Annual Enrollment
Issue to All Non-Bargaining Employees - December 1994"
Subject Page
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Annual Enrollment Decisions 2
1995 Benefit Costs 2
Company Contributions 2
Core Benefits 2
Your Benefit Costs 2
What's New in 1995 3
New Vision Care Benefit 3
ODS Expands Vantage PPO Service Area
in Oregon and Washington 3
Good Health Plan Offers New Wellness Benefits 3
Your 1995 Benefit Options 3
Your Medical Plan Options 3
Comparing Your Medical Plans 4-5
Selecting a Medical Plan 6
Your Dental Options 6
Eye Care Plan of America 6
Long-Term Disability 7
Life Insurance / AD&D 7
Optional Dependent Life Insurance 7
Flexible Spending Accounts 7
Other Benefit News 7
Survivor's Health Coverage 7
Enroll Now for Retirement K Savings Plan 8
FREEDOM FLEX
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Benefits Update
December 1994
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Annual Enrollment Issue
To All Non-bargaining Employees:
The 1995 enrollment period for Freedom Flex, Northwest Natural
Gas Company's flexible benefits plan, is November 30 through
December 12. That means it's time for you to make your health
coverage decisions for the next plan year. Any enrollment
changes you make will be effective January 1, 1995 through
December 31, 1995.
Due to our good claims experience and the conditions in the
health care market in 1994, we have been successful in holding
our overall Freedom Flex benefits costs to less than a 1%
increase over last year -- good news in a time when health care
costs often rise dramatically. Of course, as a plan participant,
you play an important role by working as a partner with Northwest
Natural Gas and using your health care benefits wisely.
In 1995 Northwest Natural Gas will continue to offer the same
medical, dental, life insurance and long term disability options
as it does now, along with some improvements in vision care. To
help you make your enrollment decisions, this Benefits Update
provides information about your enrollment options and highlights
changes that may affect your 1995 benefits. Your personalized
enrollment form provides more details about your individual
benefit options and costs.
If you want to make changes in your enrollment for 1995, or if
you want to participate in a Dependent Care Spending Account or
the Health Care Spending Account, you must return your completed
forms to Human Resources no later than December 12.
If you have any questions about annual enrollment, contact Xxxxxx
XxXxxxxx or me in Human Resources.
Sincerely,
Xxxxxxx X. Xxxxx
Benefits Administrator
Human Resources
This Benefits Update provides a brief look at the Freedom Flex
Benefit Plan options you have during annual enrollment. Please
refer to the individual plan booklets and summary plan
descriptions for information on plan benefits, limitations and
exclusions. If there's a conflict between these highlights and
official plan documents, benefits will be based on the official
plan document. This Plan is subject to change. The Company
reserves the right to amend any component of the Plan at any
time.
------------------------------------------------------------------------
Inside....
Annual Enrollment Decisions 2
1995 Benefit Costs 2
What's New in 1995? 3
New Vision Care Benefit
ODS Expands Vantage PPO Service Area
Good Health Plan offers new wellness benefits
Your 1995 Benefit Options 3
Comparing your Medical Plans 4
Other Benefit News 7
How to Enroll 8
-------------------------------------------------------------------------
ANNUAL ENROLLMENT DECISIONS
During annual enrollment, you may
- Make changes to your medical and dental coverage.
- Change who you are covering for Freedom Flex benefits. For
example, you may add or cancel coverage for eligible
dependents.
- Change the amount of Life Insurance and Long Term Disability
coverage you currently have.
- Enroll in a Dependent Care and/or Health Care Spending
Account.
Changes you make in your coverage will be effective January 1,
1995 through December 31, 1995. It's important to review the
different benefit options before you make your elections, because
you may not change your benefit elections during the year unless
you have a qualified status change.
----------------------------------------------------------------
WHAT IS A QUALIFIED STATUS CHANGE?
You may change your benefits choices during the year only if you
have a qualified status change. A qualified status change
includes:
- Marriage, divorce or legal separation
- Birth or adoption of a child
- Death of your spouse or child
- Change in your or spouse's employment status - from full-time to
part-time or vice versa
- Loss of spouse's job
- Loss of spouse's health coverage
You must notify Human Resources within 31 days of a status
change.
-----------------------------------------------------------------
1995 BENEFIT COSTS
Most employees will have only minimal increases in Freedom Flex
benefits costs this year. In fact, Northwest Natural Gas has only
two premium rate increases in Freedom Flex benefits -- a 1.5 %
increase in Xxxxxx Medical Plan rates and a 20% increase in the
Life Insurance/Accidental Death & Disability rates. It has been
a number of years since the Life Insurance/AD&D program has been
reviewed. The increase was necessary to bring our rates more in
line with our experience and the make up of the employee group.
Even with these two increases, Northwest Natural Gas has been
able to hold the overall costs increase for Freedom Flex Benefits
to less than 1% over 1994 costs.
COMPANY CONTRIBUTION
Northwest Natural Gas Company's 1995 contribution toward the cost
of Freedom Flex benefits consists of:
- an $80 Discretionary Cash Allowance
Plus
- a Flex Credit Contribution equal to:
83.25% of the cost of Core Medical and Dental Plans plus
100% of the average cost of Core Life/AD&D and Long Term
Disability Insurance
The amount of the Discretionary Cash Allowance is the same for
each eligible employee. You receive Flex Credits based on the
number of dependents you have enrolled in the plan. Your
personalized Benefit Enrollment Form lists the amount of Flex
Credits allowed for each benefit option.
----------------------------------------------------------------
CORE BENEFITS
The Core Plan is the package of benefits on which Northwest
National Gas Company bases its annual contribution toward the
cost of benefits. Core Benefits are the ODS $200 Medical Plan,
Oregon Dental Service $50 Dental Plan, Life Insurance/AD&D
coverage equal to your salary, and Long Term Disability coverage
equal to 50% of your salary after 6 months of disability.
----------------------------------------------------------------
YOUR BENEFIT COSTS
Your costs are determined by your benefit elections. Your
personalized enrollment form lists the costs of your benefit
options and the amount of the Company Contribution --
Discretionary Cash Allowance and Flex Credits -- for which you
are eligible.
You may use the Company Contribution to help pay the cost of your
benefit selections, buy higher levels of benefits coverage, and
make deposits into your Health Care and Dependent Care Spending
Accounts. After you have made your benefit choices,
- If the cost of your benefit elections is less than the
amount of the Company Contribution, you will receive the
excess Company Contribution amount as taxable income in your
paycheck.
- If the cost of your benefits is more than the amount of the
Company Contribution you receive, the cost of your benefit
choices, except Optional Dependent Life Insurance, will be
deducted from your paycheck on a before-tax basis.
WHAT'S NEW IN 1995?
As you make your enrollment decisions, you should be aware of the
following changes in your Freedom Flex benefits.
NEW VISION CARE BENEFIT
Northwest Natural Gas Company is introducing a new vision benefit
-- Eye Care Plan of America (ECPA) -- which offers you and your
dependents a way to save money on your eyewear and accessories.
Effective January 1, 1995, the company will automatically provide
this coverage for all employees and dependents enrolled under
Freedom Flex.
The Optional Vision Care Plan which provided coverage for eye
exams, lenses, frames and contact lenses through ODS, will be
discontinued as of December 31, 1994. If you are currently
enrolled in this plan, coverage for these services will be
provided as follows:
- Benefits for vision exams are provided by your ODS $200 or
ODS $500 Medical Plan. All medical plans now cover vision
exams.
- Benefits for vision materials are provided through the Eye
Care Plan of America.
Eye Care Plan of America offers you and your dependents
significant savings on eyewear and accessories when purchased
from ECPA providers. Providers include both chain store eye care
centers and independent practitioners. Unlike the current Vision
Care Plan, under the ECPA you can buy eyewear whenever you need
it and as often as you like at costs 20% to 60% below retail
price.
In late December, you will receive more information about the
plan from ECPA, including an identification card and instructions
on how to use the plan.
ODS EXPANDS VANTAGE PPO SERVICE AREA IN OREGON AND WASHINGTON
ODS has expanded the Vantage Preferred Provider Organization
(PPO) service area within Oregon and parts of Washington,
including many coastal areas and the Xxxxxx area. As a result,
you may now live within a Vantage PPO service area, which will
affect the way benefits are paid under the ODS $500 and ODS $200
Plans. As with all ODS plan members living in a Vantage PPO
service area, YOU MUST NOW USE A VANTAGE PREFERRED PROVIDER TO
RECEIVE THE MAXIMUM BENEFIT LEVEL.
Effective January 1, 1995, if you are enrolled in the ODS $200 or
the ODS $500 Plan and live within the Vantage service area, the
plan pays benefits as follows:
- 90% after deductible if you receive care from a Vantage
preferred provider.
- 70% after deductible if you don't use a Vantage preferred
provider.
For employees who live outside the Vantage service area or when
services are not available from a Vantage provider, the ODS $200
and ODS $500 Plans will continue to pay 80% after deductible of
covered services received from any licensed provider.
If you are affected by these changes, you will receive more
information, including a directory of Vantage providers in your
area. Updated provider directories are also available from Human
Resources.
GOOD HEALTH PLAN OFFERS NEW WELLNESS BENEFITS
The Providence Good Health Plan is offering expanded wellness
benefits to enrolled employees and family members. Beginning
January 1, 1995, plan members will be eligible for several new
programs:
- HEALTH EDUCATION CLASSES, including smoking cessation,
weight management and stress management programs, are
available at Portland-area Providence Good Health Plan
facilities for a $5 copayment per course.
- FREE HEALTH ADVICE LINE, which allows you to call a
registered nurse, day or night, for medical information and
guidance, class registration, physician referral and
information.
- FITNESS CLUB DISCOUNTS at more than 90 Northwest Athletic
Club Association fitness clubs.
If you are enrolled in the Good Health Plan for 1995, look for
more information about this program from The Good Health Plan in
February.
YOUR 1995 BENEFIT OPTIONS
The following is a brief summary of the highlights of your
Freedom Flex benefit options. For more information, including
eligibility, benefits, limitations and exclusions, refer to the
individual plan booklets and summary plan descriptions available
from Human Resources.
-YOUR MEDICAL PLAN OPTIONS
During annual enrollment you may enroll in or switch to another
Freedom Flex medical plan. You may choose from the following
plans (where available):
- ODS $200 Plan (Core)
- ODS $500 Plan
- Kaiser Health Plan
- Sisters of Providence Good Health Plan
- SelectCare
- Opt out
You may "opt out," or decline, coverage IF YOU ARE COVERED BY A
GROUP HEALTH PLAN THROUGH YOUR SPOUSE'S EMPLOYER. You will need
to provide information regarding your other group coverage.
----------------------------------------------------------------------------
COMPARING YOUR MEDICAL PLANS
----------------------------------------------------------------------------
ODS $200 Plan
---------------------------------------------------
Choice of Provider Any licensed provider. Higher benefits paid for
Vantage providers. See Vantage Preferred Provider
directory for Vantage service areas.
Annual Deductible Individual: $200
Family: $600
Annual Out-of-Pocket
Maximum $1,000 per person plus deductible.
----------------------------------------------------
Vantage Non-Vantage
----------------------------------------------------
How the Plan Pays
Benefits 90% after deductible 70% after deductible up to
up to the $1,000 out- the $1,000 out-of-pocket
of-pocket maximum; maximum; 100% thereafter.
100% thereafter.
IF SERVICES ARE UNAVAILABLE
FROM A VANTAGE PROVIDER,
80% AFTER DEDUCTIBLE.
COVERED SERVICES
Hospital Inpatient 90% after deductible. 70% after deductible.
Outpatient Surgery 90% after deductible. 70% after deductible.
Emergency Room 90% after deductible. 70% after deductible.
Ambulance 80% after deductible. 80% after deductible.
Physician Services
- Office Visits 90% after deductible. 70% after deductible.
- Hospital Visits 90% after deductible. 70% after deductible.
- Home Visits 90% after deductible. 70% after deductible.
Outpatient Surgery 90% after deductible. 70% after deductible.
Preventive Care
- Well Baby Care Not covered. Not covered.
- Routine Physical
Exam Not covered. Not covered.
- Routine Eye Exam Maximum $30 allowance Maximum $30 allowance
for one eye exam each for one eye exam each
12 months. 12 months.
Maternity Care
(employee and 90% after deductible. 70% after deductible.
covered spouse)
Diagnostic X-ray and 90% after deductible. 70% after deductible.
Laboratory
Prescription Drugs 80% after deductible. 80% after deductible.
CERTIFAX MAIL ORDER CERTIFAX MAIL ORDER
PHARMACY: You pay $5 PHARMACY: You pay $5
for each generic drug; for each generic drug;
$10 for each brand $10 for each brand
name drug. name drug.
Mental Health/ 90% after deductible. 70% after deductible.
Substance Abuse Oregon state mandated Oregon state mandated
benefit limits. benefit limits.
This Medical Plan Comparison is a brief summary of plan benefits. For more
information, including limitations and exclusions, refer to the individual
Medical Plan summary plan descriptions.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMPARING YOUR MEDICAL PLANS
-------------------------------------------------------------------------------
ODS $500 Plan
---------------------------------------------------
Choice of Provider Any licensed provider. Higher benefits paid for
Vantage providers. See Vantage Preferred Provider
directory for Vantage service areas.
Annual Deductible Individual: $500
Family: $1,500
Annual Out-of-Pocket
Maximum $1,000 per person plus deductible.
----------------------------------------------------
Vantage Non-Vantage
----------------------------------------------------
How the Plan Pays
Benefits 90% after deductible 70% after deductible up to
up to the $1,000 out- the $1,000 out-of-pocket
of-pocket maximum; maximum; 100% thereafter.
100% thereafter.
IF SERVICES ARE UNAVAILABLE
FROM A VANTAGE PROVIDER,
80% AFTER DEDUCTIBLE.
COVERED SERVICES
Hospital Inpatient 90% after deductible. 70% after deductible.
Outpatient Surgery 90% after deductible. 70% after deductible.
Emergency Room 90% after deductible. 70% after deductible.
Ambulance 80% after deductible. 80% after deductible.
Physician Services
- Office Visits 90% after deductible. 70% after deductible.
- Hospital Visits 90% after deductible. 70% after deductible.
- Home Visits 90% after deductible. 70% after deductible.
Outpatient Surgery 90% after deductible. 70% after deductible.
Preventive Care
- Well Baby Care Not covered. Not covered.
- Routine Physical
Exam Not covered. Not covered.
- Routine Eye Exam Maximum $30 allowance Maximum $30 allowance
for one eye exam each for one eye exam each
12 months. 12 months.
Maternity Care
(employee and 90% after deductible. 70% after deductible.
covered spouse)
Diagnostic X-ray and 90% after deductible. 70% after deductible.
Laboratory
Prescription Drugs 80% after deductible. 80% after deductible.
CERTIFAX MAIL ORDER CERTIFAX MAIL ORDER
PHARMACY: You pay $5 PHARMACY: You pay $5
for each generic drug; for each generic drug;
$10 for each brand $10 for each brand
name drug. name drug.
Mental Health/ 90% after deductible. 70% after deductible.
Substance Abuse Oregon state mandated Oregon state mandated
benefit limits. benefit limits.
This Medical Plan Comparison is a brief summary of plan benefits. For more
information, including limitations and exclusions, refer to the individual
Medical Plan summary plan descriptions.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
COMPARING YOUR MEDICAL PLANS
----------------------------------------------------------------------------
Kaiser Health Plan
------------------------------------------------
Choice of Provider Xxxxxx Permanente facilities. See Provider
directory for service areas.
Annual Deductible N/A
Annual Out-of-Pocket
Maximum Individual: $600.
Family: $1,200.
How the Plan Pays
Benefits Most services covered in full after you pay
required copayment.
COVERED SERVICES
Hospital Inpatient Covered in full. Therapies limited to short-term.
Outpatient Surgery Covered in full after $5 copayment per visit.
Emergency Room KAISER FACILITY: Covered in full after $5
copayment.
NON-KAISER FACILITY: Covered at 50% of first $100
per incident, plus any required copayments for
qualifying emergency care.
Ambulance Covered in full after $25 copayment per visit.
Physician Services
- Office Visits Covered in full after $5 copayment per visit.
- Hospital Visits Covered in full.
- Home Visits Covered in full within service area after $5
copayment per visit.
Outpatient Surgery Covered in full after $5 copayment per visit.
Preventive Care
- Well Baby Care Covered in full after $5 copayment per visit.
- Routine Physical Exam Covered in full after $5 copayment per visit.
- Routine Eye Exam Covered in full after $5 copayment per visit for
exams for eyeglasses and medically necessary
contact lenses. No charge for regular lenses and
select frames every two years.
Maternity Care (employee
and covered spouse) $5 copayment for each visit (includes enrolled
dependent children.)
Diagnostic X-ray and Covered in full.
Laboratory
Prescription Drugs You pay 50% of charges up to $25 per prescription.
Mental Health/
Substance Abuse INPATIENT AND RESIDENTIAL: Covered after 20%
copayment up to specified maximums.
OUTPATIENT: $5 copayment per visit for substance
abuse; $15 copayment per one-hour individual
session and $7.50 copayment per two-hour group
session.
This Medical Plan Comparison is a brief summary of plan benefits. For more
information, including limitations and exclusions, refer to the individual
Medical Plan summary plan descriptions.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMPARING YOUR MEDICAL PLANS
-------------------------------------------------------------------------------
Good Health Plan
---------------------------------------------------
Choice of Provider Must use participating physicians and hospitals.
See Provider directory for service areas.
Annual Deductible N/A
Annual Out-of-Pocket
Maximum Individual: $700.
Family: $2,000.
How the Plan Pays
Benefits Most services covered in full after you pay
required copayment.
COVERED SERVICES
Hospital Inpatient Covered in full.
Outpatient Surgery Covered in full.
Emergency Room PLAN PROVIDERS: Covered in full after $50
copayment.
NON-PLAN PROVIDERS: 50% copayment of first $200.
Emergency or authorized after-hours care at plan
physician's office. Covered in full after $25
copayment.
Ambulance Covered in full after $50 copayment.
Physician Services
- Office Visits Covered in full after $5 copayment per visit.
- Hospital Visits Covered in full.
- Home Visits Covered in full after $15 copayment per visit.
Outpatient Surgery Covered in full.
Preventive Care
- Well Baby Care Covered in full after $5 copayment per visit.
- Routine Physical Exam Covered in full after $5 copayment per visit.
- Routine Eye Exam Covered in full after $5 copayment per visit for
vision screening. Limited to children under age
18.
Maternity Care (employee
and covered spouse) Covered in full after $5 copayment.
Diagnostic X-ray and Covered in full.
Laboratory
Prescription Drugs GENERIC DRUGS: You pay $10 for each 30-day supply.
BRAND NAME DRUGS: You pay $10 plus the difference
between the cost of the generic and brand name
prescription drug.
Mental Health/
Substance Abuse INPATIENT AND RESIDENTIAL: Covered up to specified
benefit maximums.
OUTPATIENT: Covered in full after $15 copayment or
20% copayment, whichever is less, up to specified
benefit maximums.
This Medical Plan Comparison is a brief summary of plan benefits. For more
information, including limitations and exclusions, refer to the individual
Medical Plan summary plan descriptions.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COMPARING YOUR MEDICAL PLANS
-------------------------------------------------------------------------------
SelectCare
---------------------------------------------------
Choice of Provider Must use participating physicians and hospitals.
See Provider directory for service areas.
Annual Deductible N/A
Annual Out-of-Pocket
Maximum Individual: $700.
Family: $2,000.
How the Plan Pays
Benefits Most services covered in full after you pay
required copayment.
COVERED SERVICES
Hospital Inpatient Covered in full.
Outpatient Surgery Covered in full.
Emergency Room Covered in or out of service area after $50
copayment.
Ambulance Covered in full after $50 copayment.
Physician Services
- Office Visits Covered in full after $5 copayment per visit.
- Hospital Visits Covered in full.
- Home Visits Covered in full after $15 copayment per visit.
Outpatient Surgery Covered in full.
Preventive Care
- Well Baby Care Covered in full after $5 copayment per visit.
- Routine Physical Exam Covered in full after $5 copayment per visit.
- Routine Eye Exam Covered in full after $5 copayment per visit for
vision screening. Limited to children under
age 18.
Maternity Care (employee
and covered spouse) Covered in full.
Diagnostic X-ray and Covered in full.
Laboratory
Prescription Drugs You pay $10 for each 30-day supply.
Mental Health/
Substance Abuse INPATIENT AND RESIDENTIAL: Covered up to specified
benefit maximums.
OUTPATIENT: Covered in full after $15 copayment
or 20% copayment, whichever is less, up to
specified benefit maximums.
This Medical Plan Comparison is a brief summary of plan benefits. For more
information, including limitations and exclusions, refer to the individual
Medical Plan summary plan descriptions.
-----------------------------------------------------------------------------
The comparison on pages 4 and 5 provides a brief summary of key
features of the Freedom Flex Medical Plans.
All Freedom Flex medical plans cover most of the same types of
services. They differ in how benefits are paid, the amount of
deductible, copayments, and out-of-pocket maximums you'll pay for
each plan, and the service areas where coverage is available.
Your monthly Freedom Flex costs will also vary, depending on your
medical plan choice.
-SELECTING A MEDICAL PLAN
When selecting a medical plan, it's important to carefully
consider the different Freedom Flex plans and to select the plan
that best meets your medical needs. You should also consider
which plan is most cost effective for your particular
circumstances.
For example, the ODS $200 and ODS $500 Plans both pay the same
benefits for the same covered services. However, depending on
which plan you choose, you'll pay different costs for family
coverage under the Freedom Flex Program and different annual
deductibles during the year before the plan pays benefits. If
you are willing to pay a higher deductible in exchange for a
lower monthly employee cost, the ODS $500 Plan may be a more cost
effective plan. The following example illustrates how much you
pay each year in employee costs and deductible for each of the
plans:
ODS $200 ODS $500
----------------------------------------------------------------------------
Employee premium
costs per year
for family coverage $4,980 ($415/month) $3,636 ($303/month)
Deductible (Family) $600 $1,500
------ ------
Total $5,580 $5,136
YOU WILL PAY $444 MORE EACH YEAR IN DEDUCTIBLE AND PREMIUM COSTS
FOR FAMILY COVERAGE UNDER ODS $200 PLAN.
If you have questions or want to discuss which plan is
appropriate for your circumstance, contact Xxxx Xxxxx in Human
Resources.
-YOUR DENTAL PLAN OPTIONS
Under the Freedom Flex Benefits Plan, you have three dental plan
options plus an "opt out" option. All three plans pay benefits
for preventive, diagnostic care and routine treatment, major
restorative, and prosthetic services.
- The Oregon Dental Service Dental Plans -- the $50 Dental
(Core) Plan and the $25 Dental Plan-- have different annual
deductibles, but work in the same way and cover the same
services. After you pay the deductible, the plan pays a
portion of eligible expenses. You may receive services from
any qualified provider.
- The Kaiser Dental Plan provides services only through Kaiser
providers and facilities. Generally, most services are paid
in full after you pay any required copayments. You do not
have to be enrolled in the Kaiser Health Plan to enroll in
the Kaiser Dental Plan.
- If you have dental coverage through your spouse's employer,
you may decide to decline coverage under Freedom Flex.
The following is a comparison of key features of the Freedom Flex
Dental Plans.
------------------------------------------------------------------------------
COMPARING YOUR DENTAL PLAN
Oregon Dental Service Oregon Dental Service Kaiser Dental
$50 Plan (Core Plan) $25 Plan Plan
-------------------------------------------------------------------------------
Deductible $50 $25 None. Copayments
required for
services.
Maximum yearly
benefit $1,500 $1,500 None
Preventive and
Diagnostic
Services 80% after deductible 80% after deductible Covered in
full after a
$5 copayment
per visit.
Routine
Services 80% after deductible 80% after deductible Covered in full
after a $5
copayment per
visit.
Major Restorative
Services 50% after deductible 50% after deductible 50%
Prosthetics 50% after deductible 50% after deductible 50%
-----------------------------------------------------------------------------
-EYE CARE PLAN OF AMERICA
Eye Care Plan of America (ECPA) is a vision plan that offers you
and your dependents discounts on lenses, frames, contact lenses
and supplies purchased from ECPA providers. You are automatically
enrolled in the EyeCare Plan of America, if you are enrolled in a
Freedom Flex plan. Here's how the plan works:
- ECPA has over 5,000 participating eye care centers
nationwide, including national and regional retail chains as
well as independent practitioners.
- There are no claim forms to file. All charges are handled
directly between you and the ECPA provider.
- To receive your discount, you must show your ECPA
identification card at the time of service. You and your
dependents may purchase as much eyewear as you want and as
often as you want. The amount of your discount will vary
from 20% to 60% depending on the type of eyewear you
purchase.
- Contact lenses and supplies are discounted at 20% off the
retail price. Discounts on disposable contacts are limited
to 20% for the first 90-day supply only.
- When you purchase lenses and frames, you will pay the
published wholesale price of eyewear, plus a dispensing fee
depending on the type of eyewear you purchase:
-----------------------------------------------------------------
TYPE OF EYEWEAR PURCHASED: DISPENSING FEE:
-----------------------------------------------------------------
Single Vision $30
Bifocal Lenses $35
Trifocal Lenses $40
Cataract Lenses $50
Progressive Lenses $70
Frames only $15
Lenses only 1/2 the appropriate dispensing fee
-----------------------------------------------------------------
Note: Effective January 1, 1995, vision exams will be covered
under your Freedom Flex medical plan.
-LONG TERM DISABILITY
Long Term Disability (LTD) provides financial protection if you
are disabled and cannot work for an extended period of time. When
you enroll in the Freedom Flex Benefit Plan, you are
automatically enrolled in the LTD Core benefit. The Core Plan
pays a monthly benefit after six months of disability equal to
50% of your salary. The amount of LTD benefit you receive may be
offset by disability income you receive from other sources, such
as Social Security, Workers' Compensation, retirement and sick
pay.
If you want additional coverage you can choose:
- LTD Option 1, which pays benefits after six months of
disability equal to 65% of your salary from all sources.
- LTD Option 2, which pays a monthly benefit after three
months of disability equal to 65% of your salary from all
sources.
You have the option to make your contributions for LTD on a
before-tax or after-tax basis. Under current tax law, if you make
contributions for LTD coverage on a before-tax basis, your
disability benefit payments will be considered taxable income.
Consult your tax advisor if you have questions.
-LIFE INSURANCE/AD&D
When you enroll in Freedom Flex, you are automatically enrolled
in the Life Insurance/Accidental Death and Dismemberment (AD&D)
Core Plan. If you die, the Life Insurance Core Plan pays your
beneficiary a benefit equal to your basic annual salary. In
addition, AD&D benefits are paid if you die in an accident or
lose sight, speech, hearing or limbs.
Instead of Core Plan coverage, you may elect either higher or
lower levels of life insurance benefits:
- 1/2 your basic annual salary.
- 2 times your basic annual salary
- 3 times your basic annual salary to a maximum benefit of
$300,000.
You may be required to provide evidence of insurability if you
increase your coverage or if you are enrolling for the first time
and did not purchase life insurance when you were first eligible.
-OPTIONAL DEPENDENT LIFE INSURANCE
You may also purchase Optional Dependent Life Insurance in
amounts of $5,000 or $10,000 for your spouse and $1,000 and
$2,000 for your children. Your cost for Dependent Life Insurance
is deducted from your pay on an after-tax basis.
-FLEXIBLE SPENDING ACCOUNTS
During annual enrollment, you must decide whether you want to
participate in either or both Flexible Spending Accounts (FSA).
PARTICIPATION IN AN FSA IS NOT AUTOMATIC, EVEN IF YOU
PARTICIPATED IN 1994. YOU MUST ENROLL EACH YEAR TO PARTICIPATE.
Flexible Spending Accounts let you set aside before-tax money to
reimburse yourself for eligible expenses throughout the year. By
using before-tax money for these bills, you lower your taxable
income for the year -- so you pay less in taxes.
- THE HEALTH CARE SPENDING ACCOUNT helps you pay eligible out-of-
pocket medical, dental and vision costs for you and your
family. You may contribute from $120 per year to $4,800 per
year.
- THE DEPENDENT CARE SPENDING ACCOUNT helps you pay for care
of your dependents, including children under age 13 and
disabled parents, while you work. The minimum amount you
may contribute is $120 per year. The annual maximum
contribution is the smallest of the following amounts:
- $5,000 ($2,500 if you're married and filing federal
income taxes separately)
- Your annual earned income
- Your spouse's annual earned income.
Remember, it's important to estimate your expenses carefully.
You can only change your contribution amount during the year if
you experience a qualified status change. Also, the IRS says you
must forfeit any money in your account which you don't use by the
end of the year.
The Freedom Flex Summary Plan Description (SPD) provides more
information about the Dependent Care and Health Care Spending
Accounts. You can obtain a copy of the SPD from Human Resources.
OTHER BENEFIT NEWS
SURVIVOR'S HEALTH COVERAGE
If you have coverage through a Freedom Flex HMO medical plan, you
may be eligible for Survivor's Health Coverage. With this
coverage, Northwest Natural Gas Company will continue to pay the
cost of medical premiums for your spouse, if you die.
You are eligible for this benefit if you are retired or you are
an active employee eligible for retirement AND you are enrolled
in or transfer to a Freedom Flex HMO Medical Plan - the Kaiser
Health Plan, The Providence Good Health Plan and SelectCare.
ENROLL NOW FOR RETIREMENT K SAVINGS PLAN
It's never too early or too late to begin saving for your
retirement. The Retirement K Savings Plan (RKSP) can be an
important part of your total retirement saving program. Here's
how:
- You can contribute from 1% to 15% of your pay through
automatic payroll deductions.
- For each dollar you save in the plan, up to the first 4% of
your pay, the company will contribute 50 cents. That's like
getting an immediate 50% return on your money.
- Your contributions to the plan come out of your paycheck on
a before-tax basis. This reduces your current taxes and
you'll have more take-home pay than if you saved on an
after-tax basis.
- The plan offers six investment options that allow you to
tailor an investment portfolio to meet your specific
retirement needs. You decide how to invest your
contributions and can even make separate investment
elections for any Key Goal Award dollars you contribute.
- You own 100% of the money in your account as soon as you
enroll in the plan -- including your contributions, the
company matching contributions, and any earnings.
If you haven't yet enrolled in the Retirement K Savings Plan or
want to change the amount of your current contribution, you can
do it now during the December enrollment period. Just return your
completed enrollment form to Human Resources by December 15,
1994.
If you currently participate in the plan and want to change your
current investment mix, complete the transfer form and return it
to Human Resources by December 15, 1994.
KEY GOAL AND PERFORMANCE BONUS ELECTION
Starting in 1995, you may elect to contribute a portion of your
annual Key Goal and Performance Bonus to the RKSP. You can make a
special Bonus election to direct Northwest Natural Gas to
contribute from 0% to 85% of your Bonus to the RKSP. You do not
have to make Bonus contributions at the same rate as
contributions to the plan from your regular paycheck. However,
your total annual contribution (your bonus contributions plus
contributions from your regular paycheck) to RKSP may not exceed
15% of your annual income up to an annual maximum. In 1994, the
annual maximum is $9,240.
Your bonus election does not change the contribution rate you
elected for contributions to the RKSP from your regular paycheck.
Your bonus election will remain in effect until you change it.
If you do not designate a separate election for your Bonus
contribution, your Bonus contribution will be the same percentage
rate as your regular paycheck contribution.
Included in this enrollment packet is the Bonus election form and
the regular change form.
INFOEXPRESS COMING IN 1995
Northwest Natural Gas is implementing a new recordkeeping and
administration system which will give you greater flexibility in
managing your Retirement K Savings Plan Account. As part of this
system, we are providing an interactive telephone system ---
called InfoExpress -- that lets you obtain information about your
Retirement K Savings Plan account any time you need it -- day and
night, weekdays and weekends.
When you call InfoExpress, you can:
- Check your Retirement K Savings Plan account balance
- Make changes in the amount you contribute
- Change how your contributions are invested
- Obtain general plan information
Look for more information about InfoExpress in December. You will
receive a personalized information packet containing your
personal identification number and instructions for using the
InfoExpress system.
HOW TO ENROLL
If you are currently enrolled in the Freedom Flex Benefits Plan,
you will receive a personalized enrollment form. It lists your
current benefit selections, your 1995 benefit options, costs and
amounts of the Company's Discretionary Allowance and Flex
Credits.
IF YOU DON'T WANT TO MAKE CHANGES IN YOUR 1994 BENEFITS or
participate in a Spending Account, you do not need to return
your enrollment form. Except for the Spending Accounts and the
Optional Vision Care Plan, your current benefits will continue in
1995. If you are currently enrolled in a Freedom Flex medical
plan, you and any enrolled dependents will automatically be
enrolled in the Eye Care Plan of America at no cost to you,
effective January 1, 1995.
TO MAKE CHANGES IN YOUR BENEFIT ELECTIONS FOR 1995, return your
completed personalized enrollment form to Human Resources by
December 12.
To help us ensure that claims are processed properly, it's
important to provide us with accurate dependent data in the
Family Information section of your enrollment form. Be sure to
provide Social Security numbers for all dependents age one or
older.
TO ENROLL OR RE-ENROLL IN A SPENDING ACCOUNT, return your
completed Flexible Spending Account Enrollment/Status Change
Form. Indicate which account or accounts you are participating
in and the amount you want to contribute.
Contact Xxxxxx XxXxxxxx or Xxxx Xxxxx in Human Resources if you
have questions.
9.0 AUTOMOBILE AND PARKING POLICY FOR EXECUTIVES
9.1 Classification and Types of Vehicles
The Company provides executive officers with
automobiles, with selection based on price level, make
and model within three classifications: president,
senior officers and other officers. Acceptable types
of vehicles are American automobiles, two-or four-door
sedans or station wagons, but does not include
recreational vehicles, convertibles or sports cars.
9.2 Mileage Records
Executives are required to maintain mileage records for
their assigned vehicles.
Mileage information must be provided annually to the
Tax Department. The Tax Department calculates the
taxable amount based on the annual lease value of the
vehicle and personal miles driven for inclusion on the
executive's Form W-2.
9.3 Designated Drivers
Executive cars may be used as personal cars; however,
their use is limited to the assigned driver or, with
the executive's consent, immediate family members.
9.4 Executive Automobile Purchase
The Company purchases new executive cars after four
years of service. Exceptions to this policy must be
approved by the Treasurer and Controller. At the end
of the four-year period the executive may purchase the
car. The purchase price will be the low Xxxxxx Blue
Book value.
9.5 Executive Automobile Purchase at Retirement
Upon retirement, executives may purchase their assigned
automobiles. If selected, the purchase price will be
for the depreciated remaining value (prorated monthly)
but not lower than 20% of the original capitalized
value, or the low Xxxxxx Blue Book value, whichever is
lower. However, if the automobile is in assigned use
longer than the three year depreciation period, the 20%
residual value will be reduced at the rate of 25% per
year calculated monthly. The reduction in residual
value will cease at 50% of the original residual value.
9.6 Parking
The Company provides parking space in One Pacific
Square to executives without charge.
EXHIBIT B
CHANGE IN CONTROL DEFINITION
For purposes of this Agreement, a "Change in Control"
shall occur if during the Terms of this Agreement:
(a) Any "person", as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than
NNG, any trustee or other fiduciary holding
securities under an employee benefit plan of NNG,
or any corporation owned, directly or indirectly,
by the stockholders of NNG in substantially the
same proportions as their ownership of stock of
NNG), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, other than as a result of
a purchase from NNG, of securities ordinarily
having the right to vote for the election of
directors ("Voting Securities") of NNG
representing thirty percent (30%) or more of the
combined voting power of NNG's then outstanding
Voting Securities;
(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 NNG
("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;
(c) The stockholders of NNG approve any consolidation,
merger or plan of share exchange involving NNG (a
"Merger") in which NNG is not the continuing or
surviving corporation or pursuant to which the
Voting Securities of NNG would be converted into
cash, securities or other property, other than a
Merger involving NNG in which the holders of the
Voting Securities of NNG immediately prior to the
Merger have the same proportionate ownership of
the Voting Securities of the surviving corporation
immediately after the Merger; or
(d) The stockholders of NNG approve a plan of complete
liquidation of NNG or an agreement for the sale or
disposition by NNG of all or substantially all of
NNG's assets.
EXHIBIT C
SENIOR OFFICERS' LIFE INSURANCE BENEFIT PLAN PGE
XXXXXXX X. XXXXXX, INSURED
ISSUE DATE 12/1/86
POLICY #1A2177948
Execu-
Corporate tive EOY
Execu- With- with- Cash BOY
tive drawal drawal Sur- Executive
Policy Policy Corporate Contribu- of for render Cash
Year Age Premium Bonus tion Basis Taxes Value Benefit
------ --- ------- --------- --------- ------- ------ ------- -------
(1) (2) (3) (4) (5) (6) (7)
1986 47 32,000 803 (803) 0 0 0 550,000
1987 48 32,000 855 (855) 0 0 0 550,000
1988 49 18,983 704 (704) 0 0 14,989 550,000
1989 50 18,983 704 (704) 0 0 5,122 550,000
1990 51 18,983 748 (748) 0 0 14,940 550,000
1991 52 18,983 803 (803) 0 0 26,822 550,000
1992 53 18,983 869 (869) 0 0 40,554 550,000
1993 54 4,200 946 (946) 0 0 55,844 550,000
1994 55 0 1,018 (1,018) 0 0 71,528 550,000
1995 56 0 1,089 (1,089) 0 0 88,197 550,000
------- ------ ------- ------- -------
163,116 8,538 (8,538) 0 0
1996 57 0 1,166 (1,166) 0 0 105,303 550,000
1997 58 0 1,188 (1,188) 0 0 123,418 550,000
1998 59 0 1,238 (1,238) 0 0 142,603 550,000
1999 60 0 1,287 (1,287) 0 0 163,658 550,000
2000 61 0 1,375 (1,375) 0 0 186,091 550,000
2001 62 0 1,463 (1,463) 0 0 209,772 550,000
2002 63 0 1,606 (1,606) 0 0 235,172 550,000
2003 64 0 1,749 (1,749) 0 0 262,448 550,000
2004 65 0 1,947 (1,947) 0 0 291,832 550,000
2005 66 0 2,162 (2,162) 0 0 323,565 550,000
------- ------ ------ ------- -------
163,116 23,718 (23,718) 0 0
2006 67 0 0 0 139,398 0 344,913 550,000
2007 68 0 0 0 0 140,045 214,275 550,000
2008 69 0 0 0 0 0 223,862 550,000
2009 70 0 0 0 0 0 233,579 550,000
2010 71 0 0 0 0 0 243,411 550,000
2011 72 0 0 0 0 0 253,338 550,000
2012 73 0 0 0 0 0 263,436 550,000
2013 74 0 0 0 0 0 273,683 550,000
2014 75 0 0 0 0 0 284,051 550,000
2015 76 0 0 0 0 0 294,534 550,000
------- ------ ------ ------- -------
163,116 23,718 (23,718) 139,398 140,045
--------------------------------------------
Assumed Maximum Executive Tax rate for incomes of $250,000
or greater (Combined State and Federal) = 46.50%
The above values are for illustrative purposes only; values are not guaranteed.
The projected premium schedule and cash values are based on the current rate of
6.70% for five years, and 6.95% thereafter.
EXHIBIT C
SENIOR OFFICERS' LIFE INSURANCE BENEFIT PLAN PGE
XXXXXXX X. XXXXXX, INSURED
ISSUE DATE 12/1/86
POLICY #1A2177934
Cor- Execu-
porate tive EOY
Execu- With- With- Cash BOY
tive drawal drawal Sur- Executive
Policy Policy Corporate Contri- of for render Cash
Year Age Premium Bonus bution Basis Taxes Value Benefit
----- --- ------- --------- ------- ------ ----- ----- -------
(1) (2) (3) (4) (5) (6) (7)
1986 47 8,000 214 (214) 0 0 0 200,000
1987 48 8,000 228 (228) 0 0 0 200,000
1988 49 8,000 238 (238) 0 0 0 200,000
1989 50 8,000 256 (256) 0 0 1,211 200,000
1990 51 8,000 272 (272) 0 0 4,175 200,000
1991 52 8,000 292 (292) 0 0 7,837 200,000
1992 53 8,000 316 (316) 0 0 12,206 200,000
1993 54 8,000 344 (344) 0 0 17,232 200,000
1994 55 1,100 370 (370) 0 0 22,937 200,000
1995 56 0 396 (396) 0 0 29,095 200,000
------ ----- ------- ------- -------
65,100 2,926 (2,926) 0 0
1996 57 0 424 (424) 0 0 35,495 200,000
1997 58 0 432 (432) 0 0 42,275 200,000
1998 59 0 450 (450) 0 0 49,458 200,000
1999 60 0 468 (468) 0 0 57,345 200,000
2000 61 0 500 (500) 0 0 65,750 200,000
2001 62 0 532 (532) 0 0 74,628 200,000
2002 63 0 584 (584) 0 0 84,154 200,000
2003 64 0 636 (636) 0 0 94,386 200,000
2004 65 0 708 (708) 0 0 105,412 200,000
2005 66 0 786 (786) 0 0 117,324 200,000
------ ----- ------ ------- -------
65,100 8,446 (8,446) 0 0
2006 67 0 0 0 56,654 0 124,917 200,000
2007 68 0 0 0 0 50,560 77,615 200,000
2008 69 0 0 0 0 0 80,927 200,000
2009 70 0 0 0 0 0 84,379 200,000
2010 71 0 0 0 0 0 87,863 200,000
2011 72 0 0 0 0 0 91,371 200,000
2012 73 0 0 0 0 0 94,926 200,000
2013 74 0 0 0 0 0 98,520 200,000
2014 75 0 0 0 0 0 102,138 200,000
2015 76 0 0 0 0 0 105,775 200,000
------ ----- ------ ------- ------
65,100 8,446 (8,446) 56,654 50,560
--------------------------------------------
Assumed Maximum Executive Tax rate for incomes of $250,000
or greater (Combined State and Federal) = 46.50%
The above values are for illustrative purposes only; values are not guaranteed.
The projected premium schedule and cash values are based on the current rate of
6.70% for five years, and 6.95% thereafter.
AMENDMENT
TO
EMPLOYMENT AGREEMENT
BETWEEN
NORTHWEST NATURAL GAS COMPANY
AND
XXXXXXX X. XXXXXX
The Employment Agreement between Northwest Natural Gas
Company, an Oregon Corporation hereinafter referred to as "NNG",
and Xxxxxxx X. Xxxxxx, hereinafter referred to as "Xxxxxx", dated
as of October 30, 1995 (the "Agreement"), hereby is amended,
subject to the approval of the Board of Directors of NNG at its
regular meeting to be held on February 22, 1996, as follows:
1. Sections 8.4, 8.4.1 and 8.4.2 of the Agreement
hereby are replaced with the following new section
8.4:
"8.4 In lieu of any program of life insurance
beyond that provided to all NNG employees under
the Freedom Flex Benefits (Exhibit A), NNG will
assist Xxxxxx during the time he remains an
employee of NNG in keeping in place an existing
$750,000 split dollar life insurance program. The
assistance is limited to the payment by NNG of
annual bonuses to Xxxxxx sufficient, after taxes
are paid, to pay the annual premiums which come
due under the existing schedule, attached hereto
as Exhibit C."
2. The following new Section 8.6 hereby is added to
the Agreement:
"8.6 NNG will reimburse Xxxxxx for the full
amount of Xxxxxx'x 1995 income tax liability,
consisting of federal and state income tax and
Medicare tax, on the amount to be reported on an
Internal Revenue Service Form W-2 for the year
1995 by Xxxxxx'x former employer, Portland General
Electric Company ("PGE"), as the value to Xxxxxx
of Xxxxxx'x Waverley Country Club membership and
home security system, both of which previously
were purchased by PGE for Xxxxxx."
3. Section (a) of Exhibit B to the Agreement hereby
is amended to read as follows:
"(a) Any 'person,' as such term is used in
Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the
'Exchange Act') (other than NNG, any trustee
or other fiduciary holding securities under
an employee benefit plan of NNG, or any
corporation owned, directly or indirectly, by
the stockholders of NNG in substantially the
same proportions as their ownership of stock
of NNG), is or becomes the 'beneficial owner'
(as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, other than as a
result of a purchase from NNG, of securities
ordinarily having the right to vote for the
election of directors ('Voting Securities')
of NNG representing twenty percent (20%) or
more of the combined voting power of NNG's
then outstanding Voting Securities;"
4. Except as provided herein, all other provisions of
the Agreement shall remain in full force and
effect.
IT IS SO AGREED:
NORTHWEST NATURAL GAS COMPANY
By /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxxx
------------------------ ----------------------
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
President & CEO Dated: February 27, 1996
Dated: February 22, 1996
APPROVED BY THE BOARD OF DIRECTORS OF NORTHWEST NATURAL GAS
COMPANY:
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------
Its Lead Director
Dated: February 22, 1996
sak|ID#960740003
