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Item 9A. Controls and Procedures

2023-02-24 compared with 2022-02-25 · 57 added, 26 removed, 299 unchanged (22% of the section changed)

5 unchanged sentences

NW Holdings and NW Natural management are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rule 13a-15(f).

There have been no changes in internal control over financial reporting that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting for NW Holdings and NW Natural.

In September 2022, we implemented a new enterprise resource planning system to replace our legacy system.

The implementation was designed to increase the automation of internal controls in areas of purchasing and payables, asset management, financial reporting and consolidation and to improve access security.

In connection with this implementation, we performed pre-implementation planning, design and testing of internal controls that became effective in the third quarter of 2022.

Management has and will continue to evaluate and monitor NW Holdings’ and NW Natural’s internal controls over financial reporting to verify such controls remain effective as processes and procedures in each of the affected areas continue to evolve.

There were no other changes in NW Holdings' or NW Natural's internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting for NW Holdings and NW Natural.

The statements contained in Exhibit 31.1, Exhibit 31.2, Exhibit 31.3, and Exhibit 31.4 should be considered in light of, and read together with, the information set forth in this Item 9(a).

OTHER INFORMATION

This disclosure is intended to satisfy any obligation to provide disclosures pursuant to Item 5.03 of Form 8-K.

On February 24, 2022, the Board of NW Holdings approved the amendment and restatement of NW Holdings’ Amended and Restated Bylaws (Bylaws).

The amendments were made to Article II, Section 1 of the Bylaws to provide more flexibility in setting the date of an annual meeting of shareholders.

The Bylaws that were adopted by the Board of NW Holdings on February 24, 2022 are attached to this Annual Report on Form 10-K as Exhibit 3c.

On February 23, 2023, the Board of Directors of NW Natural approved Amended and Restated Change in Control Severance Agreements (Amended Agreements) with each of David H.

Anderson, NW Natural’s Chief Executive Office, Frank H.

Burkhartsmeyer, NW Natural’s Chief Financial Officer, and each of NW Natural’s other named executive officers, which amend and restate the existing Change of Control Agreements (Existing Agreements) with each of those officers.

The Amended Agreements, like the Existing Agreements are “double-trigger” and become payable only upon the occurrence of a Change of Control and either (i) the officer’s employment is terminated without Cause or for Disability after the earlier of Shareholder Approval, if applicable, or the Change of Control and no later than twenty-four (24) months after the Change of Control;

or (ii) the officer delivers a notice of termination for Good Reason after the earlier of Shareholder Approval, if applicable, or the Change of Control and no later than twenty-four (24) months after the Change of Control.

The Amended Agreements amend the Existing Agreements in the following ways:

• utilizes the target payment under the Executive Annual Incentive Compensation Plan, rather than the average of the last three years’ bonus in calculating the severance payment;

• adjusted health and welfare benefits from 24 months to 30 months for Mr.

Anderson to align with the time period of his severance payment;

• adjusts vacation provision language to reflect that NW Natural no longer cashes out vacation;

• clarifies that a Change in Control will not be triggered with the aggregation of above 20% of Voting Securities, provided the acquirer of such Voting Securities has filed a Schedule 13G indicating that the Voting Securities are not acquired and are not held for the purpose of or with the effect of changing management or policies;

• contains other clarifying provisions.

The foregoing description is qualified in its entirety by the full forms of agreement, which are filed as Exhibits 10o and 10p to this Form 10-K.

Capitalized terms not defined herein shall have the meanings set forth in the Amended Agreements.

On February 22, 2023, the Organization and Executive Compensation Committees of the Boards of Directors of NW Holding and NW Natural (OECC) approved amendments to the February 2021 and February 2022 Performance Share Long Term Incentive

Agreements (LTIP Agreements) with the same officers such that, if the officers become entitled to receive severance benefits as described above in connection with the Amended Agreements, the shares of Common Stock subject to the LTIP Agreements will fully vest based on target performance.

The foregoing description is qualified in its entirety by the full form of amendment, which is filed as Exhibit 10w to this Form 10-K.

On February 23, 2023, the Board of Directors of NW Holdings and NW Natural approved amendments to the Executive Annual Incentive Plan (EAIP) to provide that if an officer becomes entitled to receive change of control severance benefits as described above in connection with the Amended Agreements, he or she will receive a pro-rated award under the EAIP based on days worked during the year relative to target performance.

The amendment also provides that if there is a change of control and the participant remains employed through the end of the performance period, he or she will receive payment at target.

The foregoing description is qualified in its entirety by the full form of the amended EAIP, which is filed as Exhibit 10m to this Form 10-K.

On February 22, 2023, the OECCs granted performance share awards to the each of the same officers.

The form of Performance Share Long Term Incentive Agreement pursuant to which the awards were made is substantially the same as the form used for the February 2022 awards, except that they provide for “double-trigger” vesting at target as described above with respect to the amendments to the LTIP Agreements.

The foregoing description is qualified in its entirety by the full form of award agreement, which is filed as Exhibit 10x to this Form 10-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

19 unchanged sentences

Assistant Corporate Secretary (2010-2014).

Heiting 52 Senior Vice President, Operations and Chief Marketing Officer (2018- );

Kimberly Heiting Rush 53 Senior Vice President, Operations and Chief Marketing Officer (2018- );

Senior Vice President, Communications and Chief Marketing Officer (2018);

6 unchanged sentences

Process Director (2007-2013).

Kravitz 39 Vice President, Rates and Regulatory (2022- );

Senior Director, Rates and Regulatory (2021-2022);

Director, Rates and Regulatory (2018-2021);

Regulatory Attorney (2014-2018).

Palfreyman 44 President, NW Natural RNG Holding Company, LLC (2021- );

15 unchanged sentences

President and Chief Executive Officer, NW Natural Gas Storage, LLC (2011- );

President, KB Pipeline Company (2018- );

President and Chief Executive Officer, Gill Ranch Storage, LLC (2011-2020).

32 unchanged sentences

Each executive officer serves successive annual terms;

present terms end at the 2022 annual meeting.

present terms end at the first meeting of the Board of Directors after the 2023 Annual Meeting of Shareholders.

There are no family relationships among our executive officers, directors or any person chosen to become one of our officers or directors.

74 unchanged sentences

Amended and Restated Articles of Incorporation of Northwest Natural Gas Company (incorporated by reference to Exhibit 3b to Form 10-K for the year ended December 31, 2020).

Amended and Restated Bylaws of Northwest Natural Holding Company.

Amended and Restated Bylaws of Northwest Natural Gas Company.

Amended and Restated Bylaws of Northwest Natural Holding Company (incorporated by reference to Exhibit 3.1 to the Form 10-Q for the quarter ended June 30, 2022, File No.

Amended and Restated Bylaws of Northwest Natural Gas Company (incorporated by reference to Exhibit 3.2 to the Form 10-Q for the quarter ended June 30, 2022, File No.

Copy of Mortgage and Deed of Trust of Northwest Natural Gas Company, dated as of July 1, 1946 (Mortgage and Deed of Trust), to Bankers Trust (to whom Deutsche Bank Trust Company Americas is the successor), Trustee (incorporated by reference to Exhibit 7(j) in File No.

15 unchanged sentences

23 to the Mortgage and Deed of Trust, dated as of September 1, 2018 (incorporated by reference to Exhibit 4(a) to Form 8-K dated September 10, 2018, File No.

Twenty-fourth Supplemental Indenture, providing for, among other things, First Mortgage Bonds, 4.78% Series due 2052, dated as of September 1, 2022, by and between Northwest Natural Gas Company and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to the Form 8-K filed September 30, 2022, file No.

Twenty-fifth Supplemental Indenture, providing for, among other things, First Mortgage Bonds, 5.43% Series due 2053, dated as of December 1, 2022, by and between Northwest Natural Gas Company and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to Form 8-K dated December 1, 2022, File No.

Copy of Indenture, dated as of June 1, 1991, between Northwest Natural Gas Company and Bankers Trust Company (to whom Deutsche Bank Trust Company Americas is successor), Trustee, relating to Northwest Natural Gas Company's Unsecured Debt Securities (incorporated by reference to Exhibit 4(e) in File No.

1 unchanged sentence

as administrative agent and Bank of America, N.A., U.S.

Bank National Association, and Wells Fargo Bank, National Association, as co-syndication agents (incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2021, File No.

Bank National Association, and Wells Fargo Bank, National Association, as co-syndication agents, as amended by Amendment No.1, dated as of January 20, 2023.

Amended and Restated Credit Agreement, dated as of November 3, 2021, among Northwest Natural Gas Company and the lenders party thereto, with JPMorgan Chase Bank, N.A.

as administrative agent and Bank of America, N.A., U.S.

Bank National Association, and Wells Fargo Bank, National Association, as co-syndication agents (incorporated by reference to Exhibit 4.2 to Form 10-Q for the quarter ended September 30, 2021, File No.

Bank National Association, and Wells Fargo Bank, National Association, as co-syndication agents, as amended by Amendment No.

1, dated as of January 20, 2023.

Credit Agreement, dated as of June 10, 2021, among NW Natural Water Company, LLC, Northwest Natural Holding Company, the lenders party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 4.2 to the Form 8-K filed June 14, 2021, File No.

1 unchanged sentence

Bank National Association, as administrative agent (incorporated by reference to Exhibit 4.1 to the Form 8-K filed June 14, 2021, File No.

Credit Agreement, dated as of September 15, 2022, among Northwest Natural Holding Company and the lenders party thereto, with U.S.

Bank National Association as administrative agent (incorporated by reference to Exhibit 4.1 to the Form 8-K filed September 21, 2022, file No.

Credit Agreement, dated as of September 15, 2022, among NW Natural Water Company, LLC, Northwest Natural Holding Company and the lenders party thereto, with U.S.

Bank National Association as administrative agent (incorporated by reference to Exhibit 4.2 to the Form 8-K filed September 21, 2022, file No.

Description of securities registered under Section 12 of the Exchange Act of 1934 (incorporated by reference to Exhibit 4j to Form 10-K for the year ended December 31, 2019, File No.

23 unchanged sentences

Northwest Natural Gas Company Umbrella Trust for Executives, effective January 1, 1988, restated as of October 1, 2018 (incorporated by reference to Exhibit 10.10 to the Form 8-K dated October 1, 2018, File No.

Restated Stock Option Plan, as amended effective December 14, 2006 (incorporated by reference to Exhibit 10c to Form 10-K for 2006, File No.

Form of Restated Stock Option Plan Agreement (incorporated by reference to Exhibit 10h to Form 10-K for 2009, File No.

Executive Deferred Compensation Plan, effective as of January 1, 1987, restated as of October 1, 2018 (incorporated by reference to Exhibit 10.4 to the Form 8-K dated October 1, 2018, File No.

4 unchanged sentences

Non-Employee Directors Stock Compensation Plan, as amended effective December 15, 2005 (incorporated by reference to Exhibit 10.2 to Form 8-K dated December 16, 2005, File No.

Executive Annual Incentive Plan, effective January 1, 2021 (incorporated by reference to Exhibit 10o to Form 10-K for 2020, File No.

Executive Annual Incentive Plan, effective January 1, 2022.

Form of Change in Control Severance Agreement between Northwest Natural Gas Company and each executive officer, as amended and restated as of March 1, 2020 (incorporated by reference to Exhibit 10q to Form 10-K for 2019, File No.

Northwest Natural Gas Company Long Term Incentive Plan, as amended and restated effective May 24, 2012 (incorporated by reference to Exhibit 10r to Form 10-K for 2012, File No.

Executive Annual Incentive Plan, effective January 1, 2022 (incor porated by reference to Exh ibit 10o to Form 10-K for 2021, File No.

Executive Annual Incentive Plan, effective February 23 , 2023.

Form of Change in Control Severance Agreement between Northwest Natural Gas Company and each executive officer, as amended and restated as of March 1, 2020 (inco rporated by reference to Exh ibit 10q to Form 10-K for 2019, File No.

Form of Change in Control Severance Agreement between Northwest Natural Gas Company and David Anderson , as amended and restated as of February 2 3 , 2023.

Form of Change in Control Severance Agreement between Northwest Natural Gas Company and each executive officer (other than David Anderson) , as amended and restated as of February 2 3 , 2023.

Northwest Natural Gas Company Long Term Incentive Plan, as amended and restated effective May 25, 2017 (incorporated by reference to Exhibit 10s to Form 10-K for 2017, File No.

Northwest Natural Holding Company Long Term Incentive Plan, as amended and restated as of October 1, 2018 (incorporated by reference to Exhibit 10.1 to the Form 8-K dated October 1, 2018, File No.

Form of Performance Share Long Term Incentive Award Agreement under Long Term Incentive Plan (2019-2021) (incorporated by reference to Exhibit 10z to Form 10-K for 2018, File No.

Northwest Natural Gas Company Long Term Incentive Plan, as amended and resta ted as of October 1, 2 018 (incorporated by reference to Exhibit 10 .1 to Form 8 -K dated October 1, 2018 , File No.

Northwest Natural Holding Company Long Term Incentive Plan, as amended and restated as of February 2 3 , 2023.

Form of Performance Share Long Term Incentive Agreement under Long Term Incentive Plan (2020-2022) (incorporated by reference to Exhibit 10x to Form 10-K for 2019, File No.

Form of Performance Share Long Term Incentive Agreement under Long Term Incentive Plan (2021-2023)(incorporated by reference to Exhibit 10w to Form 10-K for 2020, File No.

Form of Performance Share Long Term Incentive Agreement under Long Term Incentive Plan (2022-2024) (incorporated by reference to Exhibit 1 0w to Form 10-K for 2021, File No.

Form of Amendment to Performance Share Long Term Incentive Agreement under Long Term Incentive Plan (2021-2023) and Long Term Incentive Plan (2022-2024)

Form of Performance Share Long Term Incentive Agreement under Long Term Incentive Plan (2023-2025).

1 unchanged sentence

Consent to Amendment of Deferred Compensation Plan for Directors and Executives, dated February 28, 2008 entered into by each executive officer (incorporated by reference to Exhibit 10bb to Form 10-K for 2007, File No.

Form of Restricted Stock Unit Award Agreement under Long Term Incentive Plan (2022) (inc orporated by reference to Exhibit 10 z to Form 1 0-K for 2021, File No.

Form of Restricted Stock Unit Award Agreement under Long Term Incentive Plan (2023).

2 unchanged sentences

Form of Restricted Stock Unit Award Agreement under Long Term Incentive Plan (2019) (incorporated by reference to Exhibit 10cc to Form 10-K for 2018, File No.

Form of Restricted Stock Unit Award Agreement under Long Term Incentive Plan (2018) (incorporated by reference to Exhibit 10bb to Form 10-K for 2017, File No.

Severance Agreement between Northwest Natural Gas Company and an executive officer, dated August 1, 2016 (incorporated by reference to Exhibit 10.1 to Form 8-K dated July 29, 2016, File No.

Form of Restricted Stock Unit Award Agreement between Northwest Natural Gas Company and an executive officer dated as of July 27, 2016 (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2016, File No.

Form of Severance Agreement between Northwest Natural Gas Company and an executive officer, dated May 17, 2017 (incorporated by reference to Exhibit 10.1 to Form 8-K dated April 24, 2017, File No.

Form of Special Restricted Stock Unit Agreement between Northwest Natural Gas Company and an executive officer, dated May 17, 2017 (incorporated by reference to Exhibit 10.2 to Form 8-K dated April 24, 2017, File No.

Form of Special Retention Restricted Stock Unit Agreement between Northwest Natural Gas Company and an executive officer, dated September 30, 2016 (incorporated by reference to Exhibit 10qq to Form 10-K for 2017, File No.

Cash Retention Agreement between Northwest Natural Gas Company and an executive officer, dated as of March 1, 2018 (incorporated by reference to Exhibit 10ss to Form 10-K for 2017, File No.

Annual Incentive Plan for NW Natural Gas Storage, LLC, as amended effective January 1, 2021 (incorporated by reference to Exhibit 10ll to Form 10-K for 2020, File No.

Annual Incentive Plan for NW Natural Gas Storage, LLC, as amended effective January 1, 2022.

Long Term Incentive Plan for NW Natural Gas Storage, LLC, as amended effective January 1, 2016 (incorporated by reference to Exhibit 10pp to Form 10-K for 2016, File No.

Annual Incentive Plan for NW Natural Gas Storage, LLC, as amended effective January 1, 2022 (inc orporated b y reference to Exhibit 10ll to F orm 10-K for 2021, File No.

*Incorporated by reference as indicated

65 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures