MDU RESOURCES GROUP, INC.
NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN
I. Purpose
The purpose of the MDU Resources Group, Inc. Non-Employee
Director Stock Compensation Plan is to provide ownership of the
Company's stock to non-employee members of the Board of Directors
in order to improve the Company's ability to attract and retain
highly qualified individuals to serve as directors of the Company
and to strengthen the commonality of interest between directors
and stockholders.
II. Definitions
When used herein, the following terms shall have the
respective meanings set forth below:
"Agent" means a securities broker-dealer selected by the
Company and registered under the Exchange Act.
"Annual Retainer" means the annual retainer payable by the
Company to Non-Employee Directors and shall include, for
purposes of this Plan, meeting fees, cash retainers and any
other cash compensation payable to Non-Employee Directors by
the Company for services as a Director.
"Annual Meeting of Stockholders" means the annual meeting of
stockholders of the Company at which directors of the
Company are elected.
"Board" or "Board of Directors" means the Board of Directors
of the Company.
"Committee" means a committee whose members meet the
requirements of Section IV(A) hereof, and who are appointed
from time to time by the Board to administer the Plan.
"Common Stock" means the common stock, $1.00 par value, of
the Company.
"Company" means MDU Resources Group, Inc., a Delaware
corporation, and any successor corporation.
"Effective Date" means the date as of which the Plan is
approved by the stockholders of the Company.
"Employee" means any officer or other common law employee of
the Company or of any of its business units or divisions or
of any Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Non-Employee Director" or "Participant" means any person
who is elected or appointed to the Board of Directors of the
Company and who is not an Employee.
"Plan" means the Company's Non-Employee Director Stock
Compensation Plan, adopted by the Board on February 9, 1995,
and approved by the stockholders on April 25, 1995, as it
may be amended from time to time.
"Plan Year" means the period commencing on the Effective
Date of the Plan and ending the next following December 31
and, thereafter, the calendar year.
"Stock Payment" means that portion of the Annual Retainer to
be paid to Non-Employee Directors in shares of Common Stock
rather than cash for services rendered as a director of the
Company, as provided in Section V hereof, including that
portion of the Stock Payment resulting from any election
specified in Section VI hereof.
"Subsidiary" means any corporation that is a "subsidiary
corporation" of the Company, as that term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as
amended.
III. Shares of Common Stock Subject to the Plan
Subject to Section VII below, the maximum aggregate number
of shares of Common Stock that may be delivered under the Plan is
112,500 shares. The Common Stock to be delivered under the Plan
will be made available from authorized but unissued shares of
Common Stock, treasury stock or shares of Common Stock purchased
on the open market. Shares of Common Stock purchased on the open
market shall be purchased by the Agent in compliance with Rule
10b-6 and Rule 10b-18 under the Exchange Act to the extent
compliance shall be required. Shares of Common Stock purchased
on the open market by the Agent shall be purchased and held in
such manner that such shares are not returned to the status of
treasury stock or authorized but unissued shares of Common Stock.
IV. Administration
A. The Plan will be administered by a committee appointed
by the Board, consisting of two or more persons who are not
eligible to participate in the Plan. Members of the Committee
need not be members of the Board. The Company shall pay all
costs of administration of the Plan.
B. Subject to and not inconsistent with the express
provisions of the Plan, the Committee has and may exercise such
powers and authority of the Board as may be necessary or
appropriate for the Committee to carry out its functions under
the Plan. Without limiting the generality of the foregoing, the
Committee shall have full power and authority (i) to determine
all questions of fact that may arise under the Plan, (ii) to
interpret the Plan and to make all other determinations necessary
or advisable for the administration of the Plan and (iii) to
prescribe, amend and rescind rules and regulations relating to
the Plan, including, without limitation, any rules which the
Committee determines are necessary or appropriate to ensure that
the Company and the Plan will be able to comply with all
applicable provisions of any federal, state or local law. All
interpretations, determinations and actions by the Committee will
be final and binding upon all persons, including the Company and
the Participants.
V. Determination of Annual Retainer and Stock Payments
A. The Board shall determine the Annual Retainer payable
to all Non-Employee Directors of the Company.
B. Each director who is a Non-Employee Director
immediately following the date of the Company's Annual Meeting of
Stockholders shall receive on the fifteenth business day
following the Annual Meeting a Stock Payment of 1,000 shares of
Common Stock as a portion of the Annual Retainer payable to such
director for the Plan Year in which such date occurs.
Certificates evidencing the shares of Common Stock constituting
Stock Payments shall be registered in the respective names of the
Participants and shall be issued to each Participant. The cash
portion of the Annual Retainer shall be paid to Non-Employee
Directors at such times and in such manner as may be determined
by the Board of Directors.
C. Any director may decline a Stock Payment for any Plan
Year; provided, however, that no cash compensation shall be paid
in lieu thereof. Any director who declines a Stock Payment must
do so in writing prior to the performance of any services as a
Non-Employee Director for the Plan Year to which such Stock
Payment relates.
D. No Non-Employee Director shall be required to forfeit
or otherwise return any shares of Common Stock issued as a Stock
Payment pursuant to the Plan (including any shares of Common
Stock received as a result of an election under Section VI)
notwithstanding any change in status of such Non-Employee
Director which renders him ineligible to continue as a
Participant in the Plan. Any person who is a Non-Employee
Director immediately following the Company's Annual Meeting of
Stockholders shall be entitled to receive a Stock Payment as a
portion of the applicable Annual Retainer.
VI. Election to Increase Amount of Stock Payment
In lieu of receiving the cash portion of the Annual Retainer
for any Plan Year, a Participant may make a written election to
reduce the cash portion of such Annual Retainer by a specified
dollar amount and have such amount applied to purchase additional
shares of Common Stock of the Company. The election shall be
made on a form provided by the Committee and must be returned to
the Committee on or before the last business day of the year
prior to the year in which the election is to be effective. The
election form shall state the amount by which the Participant
desires to reduce the cash portion of the Annual Retainer, which
shall be applied toward the purchase of Common Stock; provided,
however, that no fractional shares may be purchased. Stock to be
delivered to Participants pursuant to this election shall be
delivered in December of each year. Cash in lieu of any
fractional share shall be paid to the Participant. An election
shall continue in effect until changed or revoked by the
Participant. No Participant shall be allowed to change or revoke
any election for the then current year, but may change an
election for any subsequent Plan Year. All shares of Common
Stock received pursuant to an election under this Article VI must
be held by a Participant for six months after receipt thereof.
VII. Adjustment For Changes in Capitalization
If the outstanding shares of Common Stock of the Company are
increased, decreased or exchanged for a different number or kind
of shares or other securities, or if additional shares or new or
different shares or other securities are distributed with respect
to such shares of Common Stock or other securities, through
merger, consolidation, sale of all or substantially all of the
property of the Company, reorganization or recapitalization,
reclassification, stock dividend, stock split, reverse stock
split, combinations of shares, rights offering, distribution of
assets or other distribution with respect to such shares of
Common Stock or other securities or other change in the corporate
structure or shares of Common Stock, the number of shares to be
granted annually, the maximum number of shares and/or the kind of
shares that may be issued under the Plan shall be appropriately
adjusted by the Committee. Any determination by the Committee as
to any such adjustment will be final, binding and conclusive.
The maximum number of shares issuable under the Plan as a result
of any such adjustment shall be rounded down to the nearest whole
share.
VIII. Amendment and Termination of Plan
A. The Board will have the power, in its discretion, to
amend, suspend or terminate the Plan at any time; provided,
however, that no amendment which requires stockholder approval in
order for the Plan to continue to comply with Rule 16b-3 under
the Exchange Act, including any successor to such Rule, shall be
effective unless such amendment shall be approved by the
requisite vote of the stockholders of the Company entitled to
vote thereon.
B. Notwithstanding the foregoing, any provision of the
Plan that either states the amount and price of securities to be
issued under the Plan and specifies the price and timing of such
issuances, or sets forth a formula that determines the amount,
price and timing of such issuances, shall not be amended more
than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income
Security Act, or the rules thereunder.
IX. Effective Date and Duration of the Plan
The Plan will become effective upon the Effective Date, and
shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Section
VIII, until all shares subject to the Plan have been purchased or
acquired according to the Plan's provisions.
X. Miscellaneous Provisions
A. Continuation of Directors in Same Status
Nothing in the Plan or any action taken pursuant to the Plan
shall be construed as creating or constituting evidence of any
agreement or understanding, express or implied, that the Company
will retain a Non-Employee Director as a director or in any other
capacity for any period of time or at a particular retainer or
other rate of compensation, as conferring upon any Participant
any legal or other right to continue as a director or in any
other capacity, or as limiting, interfering with or otherwise
affecting the right of the Company to terminate a Participant in
his capacity as a director or otherwise at any time for any
reason, with or without cause, and without regard to the effect
that such termination might have upon him as a Participant under
the Plan.
B. Compliance with Government Regulations
Neither the Plan nor the Company shall be obligated to issue
any shares of Common Stock pursuant to the Plan at any time
unless and until all applicable requirements imposed by any
federal and state securities and other laws, rules and
regulations, by any regulatory agencies or by any stock exchanges
upon which the Common Stock may be listed have been fully met.
As a condition precedent to any issuance of shares of Common
Stock and delivery of certificates evidencing such shares
pursuant to the Plan, the Board or the Committee may require a
Participant to take any such action and to make any such
covenants, agreements and representations as the Board or the
Committee, as the case may be, in its discretion deems necessary
or advisable to ensure compliance with such requirements. The
Company shall in no event be obligated to register the shares of
Common Stock deliverable under the Plan pursuant to the
Securities Act of 1933, as amended, or to qualify or register
such shares under any securities laws of any state upon their
issuance under the Plan or at any time thereafter, or to take any
other action in order to cause the issuance and delivery of such
shares under the Plan or any subsequent offer, sale or other
transfer of such shares to comply with any such law, regulation
or requirement. Participants are responsible for complying with
all applicable federal and state securities and other laws, rules
and regulations in connection with any offer, sale or other
transfer of the shares of Common Stock issued under the Plan or
any interest therein including, without limitation, compliance
with the registration requirements of the Securities Act of 1933,
as amended (unless an exemption therefrom is available), or with
the provisions of Rule 144 promulgated thereunder, if applicable,
or any successor provisions. Certificates for shares of Common
Stock may be legended as the Committee shall deem appropriate.
C. Nontransferability of Rights
No Participant shall have the right to assign the right to
receive any Stock Payment or any other right or interest under
the Plan, contingent or otherwise, or to cause or permit any
encumbrance, pledge or charge of any nature to be imposed on any
such Stock Payment (prior to the issuance of stock certificates
evidencing such Stock Payment) or any such right or interest.
D. Severability
In the event that any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provision of the Plan.
E. Governing Law
To the extent not preempted by Federal law, the Plan shall
be governed by the laws of the State of North Dakota.