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 (exclusive of any per
meeting fees or expense reimbursements.)
"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, $3.33 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
75,000 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 300 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 no later than six months prior to the applicable Annual
Meeting of Stockholders of the Company. 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 to be delivered on the same date that
the Stock Payment is made; provided, however, that no fractional
shares may be purchased. 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.
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.
Approved by the Board of Directors February 9, 1995
Approved by the Stockholders April 25, 1995
Amended August 17, 1995 and effective October 13, 1995, as to the
three-for-two stock split