Exhibit 10.3
FORM OF
NON-STATUTORY STOCK OPTION
AGREEMENT
RESTATED STOCK OPTION
PLAN
THIS AGREEMENT is made as of the
«date», between Northwest Natural Gas Company, an Oregon
corporation (the “Company”), and «FirstName»
«LastName» (the “Optionee”).
Pursuant to the Company’s
Restated Stock Option Plan (the “Plan”), the
Organization and Executive Compensation Committee of the Board of
Directors (the “Committee”) has voted to grant the
Optionee an option to purchase common stock of the Company
(“Common Stock”) in the amount indicated below. In
consideration of the promises and mutual covenants herein
contained, the Company and the Optionee agree as
follows:
1. Option Grant . The Company
grants to the Optionee on the terms and conditions stated below the
right and option (the “Option”) to purchase an
aggregate of «Shares» shares of the Company’s
authorized but unissued or reacquired Common Stock at a price of
«price» per share. The Option is a Non-Statutory Stock
Option as defined in the Plan.
2. Terms . The Option is
granted on the following terms:
2.1 Duration of Option .
Subject to reductions in the Option period as provided in section
2.5, the Option shall continue in effect for 10 years and seven
days from the date hereof.
2.2 Vesting . Except as
provided in section 2.5, the Option shall not be exercisable for
any shares in the first year after the date hereof and thereafter
may be exercised from time to time in the amounts as set forth on
attached Schedule A.
2.3 Limitations on Rights to
Exercise . Except as provided in section 2.5, the Option may
not be exercised unless when exercised the Optionee is employed by
the Company and shall have been so employed continuously since the
Option was granted. For purposes of this Agreement, the Optionee is
considered to be employed by the Company if the Optionee is
employed by any parent or subsidiary of the Company. Absence on
leave or on account of illness or disability under rules
established by the Committee shall not be deemed an interruption of
employment for this purpose. Vesting of the Option as set forth on
Schedule A shall continue during a medical, family or military
leave of absence, whether paid or unpaid, and vesting of the Option
shall be suspended during any other unpaid leave of
absence.
2.4 Nonassignability . The
Option is nonassignable and nontransferable by the Optionee except
by will or by the laws of descent and distribution of the state or
country of the Optionee’s domicile at the time of death, and
it is exercisable during the Optionee’s lifetime only by the
Optionee.
2.5 Termination of Employment
.
(a) General Rule . If
employment of the Optionee by the Company is terminated for any
reason other than in the circumstances specified in subsection
(b) below, the Option may be exercised at any time prior to
its expiration date or the expiration of three months after the
date of termination of employment, whichever is the shorter period,
but only if and to the extent the Optionee was entitled to exercise
the Option on the date of termination.
(b) Termination because of
Retirement, Death or Total Disability . If the Optionee’s
employment by the Company is terminated because of retirement (as
defined in the Company’s Retirement Plan for Non-Bargaining
Unit Employees), the Option may be exercised for all remaining
shares subject thereto, free of any limitation on the number of
shares for which the Option may be exercised in any period, at any
time prior to its expiration date or the expiration of 36 months
after the date of termination, whichever is the shorter period. If
the Optionee’s employment by the Company is terminated
because of death or total disability (as defined below), the Option
may be exercised for all remaining shares subject thereto, free of
any limitation on the number of shares for which the Option may be
exercised in any period, at any time prior to its expiration date
or the expiration of 12 months after the date of termination,
whichever is the shorter period. If the Optionee’s employment
is terminated by death, the Option shall be exercisable only by the
person or persons to whom the Optionee’s rights under the
Option shall pass by the Optionee’s will or by the laws of
descent and distribution of the state or country of the
Optionee’s domicile at the time of death. The term
“total disability” means a medically determinable
mental or physical impairment that is expected to result in death
or has lasted or is expected to last for a continuous period of 12
months or more and that, in the opinion of the Company and two
independent physicians, causes the Optionee to be unable to perform
duties as an employee, director, or officer of the Company and
unable to be engaged in any substantial gainful activity. Total
disability shall be deemed to have occurred on the first day after
the two independent physicians have furnished their written opinion
of total disability to the Company and the Company has reached an
opinion of total disability.
(c) Failure to Exercise
Option . In the event of the termination of employment of the
Optionee, to the extent the Option is not exercised within the
limited periods provided above, all further rights to purchase
shares pursuant to the Option shall terminate at the expiration of
such periods.
2.6 Purchase of Shares .
Shares may be purchased or acquired pursuant to the Option only by
notice
