MDU RESOURCES GROUP, INC.
SUPPLEMENTAL INCOME SECURITY PLAN
(As Amended and Restated Effective January 1, 1997)
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I -- DEFINITIONS
ARTICLE II -- ELIGIBILITY
ARTICLE III -- SUPPLEMENTAL DEATH AND RETIREMENT BENEFITS
ARTICLE IV -- EXCESS RETIREMENT BENEFITS
ARTICLE V -- DISABILITY BENEFITS
ARTICLE VI -- MISCELLANEOUS
ARTICLE VII -- ADDITIONAL AFFILIATED COMPANIES
INTRODUCTION
The objective of the MDU Resources Group, Inc. Supplemental
Income Security Plan (the "Plan") is to provide certain levels of survivor
benefits and retirement income for a select group of management or highly
compensated employees and their families. Eligibility for participation in
this Plan shall be limited to management or highly compensated employees
who are selected by the Chief Executive Officer of MDU Resources, Inc. (the
"Company"). This Plan became effective January 1, 1982, has been amended
from time to time thereafter, and has been amended and restated effective
January 1, 1997.
The Plan is intended to constitute an unfunded "excess benefit
plan" as defined in Section 3(36) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to the extent it provides
benefits that would be paid under one or more of the tax-qualified pension
plans of the Company or certain of its subsidiaries but for certain
limitations set forth under the Internal Revenue Code of 1986, as amended
(the "Code"), and constitutes an unfunded plan of deferred compensation
maintained by the Company primarily for the purpose of providing non-
elective deferred compensation for a select group of management or highly
compensated employees.
ARTICLE I -- DEFINITIONS
Unless a different meaning is plainly implied by the context, the
following terms as used in this Plan shall have the following meanings:
1.1 "Administrator" means the Chief Executive Officer of the
Company or any other person to whom the Chief Executive Officer of the
Company has delegated the authority to administer the Plan. The Manager of
the Corporate Human Resources Department of the Company is initially
delegated the authority to perform the administrative responsibilities
required under the Plan.
1.2 "Affiliated Company" means any current or future corporation
which (i) is in a controlled group of corporations (within the meaning of
Section 414(b) of the Code) of which the Company is a member and (ii) has
been approved by the Chief Executive Officer of the Company to adopt the
Plan for the benefit of its Employees.
1.3 "Beneficiary" means an individual or individuals, any entity
or entities (including corporations, partnerships, estates or trusts) that
shall be entitled to receive benefits payable pursuant to the provisions of
this Plan by virtue of a Participant's death; provided, however, that if
more than one such person is designated as a Beneficiary hereunder, each
such person's proportionate share of the death benefit hereunder must
clearly be set forth in a written statement of the Participant received by
and filed with the Administrator prior to the Participant's death. If such
proportionate share for each Beneficiary is not set forth in the
designation, each Beneficiary shall receive an equal share of the death
benefits provided hereunder.
1.4 "Company" means MDU Resources Group, Inc., and its
successors, if any.
1.5 "Effective Date" of the Plan means January 1, 1982. The
Effective Date of this amendment and restatement of the Plan is January 1,
1997.
1.6 "Eligible Retirement Date" means the First Eligible
Retirement Date and the last day of each subsequent calendar month.
1.7 "Employee" means each person actively employed by an
Employer, as determined by such Employer in accordance with its practices
and procedures.
1.8 "Employer" means the Company and any Affiliated Company which
shall adopt this Plan with respect to its Employees with the prior approval
of the Company as set forth in Article 7 of the Plan.
1.9 "First Eligible Retirement Date" for a Participant means the
last day of the month during which such Participant is both no longer
actively employed by any Employer and has attained at least age 65.
1.10 "Limitation on Benefits" shall mean the statutory limitation
on the maximum benefit that may be payable to participants under a Pension
Plan due to the application of certain provisions contained in the Code.
1.11 "Participant" means a present or former management or highly
compensated Employee selected by the Chief Executive Officer of the Company
to receive benefits under this Plan. An Employee will become a Participant
at the time such Employee commences participation hereunder pursuant to the
provisions of Section 2.1 hereof.
1.12 "Pension Plan" means the MDU Resource Group, Inc. Pension
Plan for Non-Bargaining Unit Employees, the Williston Basin Interstate
Pipeline Company Pension Plan for Non-Bargaining Unit Employees, or the
Knife River Coal Mining Company Salaried Employees' Pension Plan, as in
effect on the Effective Date and as amended from time to time.
1.13 "Plan" means the Plan designated as the MDU Resources Group,
Inc. Supplemental Income Security Plan, as embodied herein, and any
amendments thereto.
1.14 "Plan Year" means the calendar year. The first Plan Year
for this Plan shall be the 1982 calendar year.
1.15 "Salary" means annual base earnings payable by an Employer
to a Participant excluding (i) bonuses, (ii) incentive compensation, and
(iii) any other form of supplemental income.
1.16 "Standard Actuarial Factors" means, with respect to a
Participant, the actuarial factors and assumptions used for the calculation
of actuarial equivalents under the Pension Plan under which the Participant
actively participates from time to time.
1.17 "Standard Life Insurance" means life insurance that could be
purchased from a commercial life insurance company at standard rates
without a surcharge assessed, based on an individual's general good health.
1.18 "Standard Underwriting Factors" means life insurance rating
factors utilized by a commercial life insurance company selected by the
Chief Executive Officer of the Company which are based on the risk
assessment classifications utilized by such insurer to determine if an
applicant qualifies for insurance at standard rates or if health or other
factors might require a surcharge.
1.19 "Year of Participation" means each Plan Year of
participation in the Plan by a Participant while actively employed by one
or more of the Employers (including years while such Participant is
qualified as totally disabled under the Employer's disability plan), as
determined in the sole discretion of the Administrator.
ARTICLE II -- ELIGIBILITY
2.1 Eligibility for Participation. The Chief Executive Officer
of the Company shall determine which management and/or highly compensated
Employees may be eligible to participate in the Plan. General criteria for
initial consideration of an Employee includes, but is not limited to, the
following: (A) either an officer (excluding assistant secretary or
assistant treasurer), or a senior management employee of an employer
earning a base salary exceeding a threshold amount as determined by the
Chief Executive Officer of the Company; (B) an executive who makes a
significant contribution to the Company's success and profitability; (C) an
executive in a business unit where benefits of this nature are a common
practice, or there is a specific need to recruit and retain key executives;
and (D) the expectation that participation in the Plan will not exceed four
percent of the total employment of the Company and affiliated companies.
Each Employee who is selected as eligible to participate hereunder and who
meets the requirements for participation set forth under Section 2.2 hereof
shall commence participation on the first day of the Plan Year coincident
with or next following the date of such Employee's selection.
2.2 Requirements for Participation. In order to be eligible to
participate in the Plan, an Employee selected by the Chief Executive
Officer of the Company must (i) be actively at work for one or more of the
Employers; (ii) have a current state of health and physical condition that
would satisfy customary requirements for insurability under Standard Life
Insurance; provided, however, that no provision of this Plan shall be
construed or interpreted to limit participation in the Plan in
contravention of the Americans With Disabilities Act and related federal
and state laws; and (iii) consent to supply information or to otherwise
cooperate as necessary to allow the Company to obtain life insurance on
behalf of such Employee (as set forth under Section 6.3 of the Plan).
2.3 Eligibility for Benefits. Subject to the provisions of
Articles III and IV hereof, Participants who terminate their employment
with an Employer subsequent to becoming vested in a retirement benefit
under a Pension Plan shall be eligible to receive a benefit under this
Plan. Plan benefits may commence (i) as of the earlier to occur of (A) the
first day of the month following the date of the Participant's death or (B)
if the Participant who elects to receive retirement benefits under Article
3 hereof, the Participant's First Eligible Retirement Date, for purposes of
the benefits payable under Article III of the Plan, and (ii) at the time
benefit payments commence to the Participant under a Pension Plan, for
purposes of the benefits payable under Article IV of the Plan.
2.4 Relationship to Other Plans. Participation in the Plan
shall not preclude or limit the participation of the Participant in any
other benefit plan sponsored by one or more of the Employers for which such
Participant otherwise would be eligible. However, any benefits payable
under this Plan shall not be deemed salary or compensation to the
Participant for purposes of determining benefits under any other employee
benefit plan maintained by one or more of the Employers.
2.5 Forfeiture of Benefits. Notwithstanding any provision of
this Plan to the contrary, if any Participant is discharged from employment
by one or more of the Employers for cause due to willful misconduct,
dishonesty, or conviction of a crime or felony, all as determined at the
sole discretion of the Chief Executive Officer of the Company the rights of
such Participant (or any Beneficiary of such Participant) to any present or
future benefit under this Plan shall be forfeited to the extent not
prohibited by applicable law.
ARTICLE III -- SUPPLEMENTAL DEATH AND RETIREMENT BENEFITS
3.1 Amount of Benefit.
(a) Subject to the provisions of Section 3.3 of the Plan,
the monthly supplemental death and/or retirement benefits payable on behalf
of (or to) a Participant as of such Participant's date of death (or First
Eligible Retirement Date) will be an amount determined at the sole
discretion of the Chief Executive Officer of Company at the time of the
Participant's commencement of participation in the Plan, as may be adjusted
from time to time thereafter by the Chief Executive Officer of the Company.
However, in no event will a Participant be entitled to have a monthly
supplemental death benefit paid on such Participant's behalf (or be
entitled to receive a monthly supplemental retirement benefit) that exceeds
the Monthly Death Benefit or Monthly Retirement Benefit (as applicable)
corresponding to the Participant's Salary in effect at the date such
initial or revised benefit determination is to be effective, all as set
forth in the applicable Appendix hereto. Benefits for Participants
retiring or dying after December 31, 1989, and prior to January 1, 1997,
shall be determined in accordance with Appendix A. Benefits for
Participants retiring or dying after December 31, 1996, shall be determined
in accordance with Appendix B; provided, however, that benefits for each
such individual who also was a Participant on December 31, 1996, shall be
determined in accordance with Appendix A or Appendix B, whichever such
Appendix provides for the greatest amount of benefits. Changes in Salary
do not automatically result in changes to a Participant's level of
benefits.
(b) Participants who died, terminated employment with, or
retired from, the Employers prior to January 1, 1990, will receive benefits
hereunder in accordance with the terms of the Plan as in effect at the time
of the Participant's death, termination of employment or retirement from
the Employers.
(c) The benefit amounts determined by the Chief Executive
Officer of the Company pursuant to Section (a) above are based on the
assumption that each Participant's health and physical condition at the
time of such Participant's commencement of participation in the Plan meets
customary requirements for Standard Life Insurance. Benefits under the
Plan may be reduced by the Chief Executive Officer of the Company within a
reasonable period following the establishment of such benefit level in
accordance with Standard Underwriting Factors, but only with respect to
that portion of the monthly death or retirement benefit for which the
criteria for health and physical condition are not met. Participants will
be notified of any such reduction within a reasonable period following
participation in the Plan. Once retirement benefits have been reduced
under this Section 3.1, such benefits shall not be further reduced for the
remainder of the Participant's participation in the Plan.
3.2 Amount of Monthly Benefit for Retirement or Death Prior to
Completing at Least 10 Years of Participation. If a Participant retires or
terminates employment with an Employer (for reasons other than the
Participant's death) before the Participant completes at least 10 Years of
Participation, the monthly death and/or retirement benefits to which such
Participant otherwise would be entitled under the terms of Section 3.1
hereof shall be reduced as follows:
Years of Participation Percent of Section 3.1
Completed by the Participant Benefits Payable
Less than 3 years 0%
3 years but less than 5 years 10%
5 years but less than 7 years 25%
7 years but less than 9 years 50%
9 years but less than 10 years 75%
10 years or more 100%
3.3 Payment of Monthly Benefit. Upon attainment of age 65 or,
as of such Participant's First Eligible Retirement Date (if later), a
Participant wil be entitled to determine the form of benefit payable to
such Participant under subsection (a) hereof, and the date of commencement
of such benefits, subject to the approval of the Chief Executive Officer of
the Company, in accordance with the terms of the Plan.
(a) The Participant may elect to receive:
(i) a monthly death benefit in amounts determined
pursuant to Section 3.1 hereof, multiplied by the appropriate percentage
amount set forth in Section 3.2, or
(ii) in lieu of any death benefits under this Plan
a monthly retirement benefit determined in accordance with Section 3.1,
multiplied by the appropriate percentage amount set forth in Section 3.2,
with no death benefit, or
(iii) a percentage of each benefit described in
subsections(a)(i) and (a)(ii) above. The percentage of each benefit must
be in even increments of ten percent (10%).
(b) A Participant must select one of the options under
subsection (a) above. If, in accordance with Sections 3.3(a)(ii) or (iii),
a Participant has elected to receive less than one hundred percent (100%)
of such Participant's monthly retirement benefit, the Participant may
subsequently elect to begin receiving an increased retirement benefit
except that there may be no more than two(2) such increases during the
Participant's lifetime, and no more than one (1) such increase during any
calendar year. Any such increase in retirement benefit payments will
result in a reduction in death benefits equal, when expressed as a
percentage amount, to the percentage increase in retirement benefit.
Participants shall not be entitled to decrease retirement benefit payments.
(c) Elections under this Section 3.3 must be communicated
in writing to the Administrator and will be effective as of the first day
of the first month following the Administrator's receipt and the approval
of such request by the Chief Executive Officer of the Company.
3.4 Payment of Monthly Death and Retirement Benefits.
(a) Death Benefits. Any death benefits payable with
respect to a Participant pursuant to Sections 3.3(a)(i) or 3.3(a)(iii)
shall commence on the first day of the calendar month next following the
date of the Participant's death and shall be payable in monthly
installments for a period of 180 months.
(b) Retirement Benefits. The monthly retirement benefits
under this Plan shall commence on the Eligible Retirement Date selected by
the Participant (upon 30 day's written notice to the Administrator) and
will be payable to such Participant in monthly installments for a period of
180 months. In the event the Participant dies prior to the completion of
such 180-month payment period, the balance of such retirement benefits
shall be paid to the Participant's Beneficiary at such times and in such
amounts as if the Participant had not died, such payment being made in
addition to any death benefits payable under Sections 3.3(a)(i) or (iii)
hereof. To the extent a Participant elects to commence receiving increased
retirement benefits pursuant to Section 3.3(b), the amount of increase of
retirement benefits shall be in the form of a monthly benefit payable for a
separate 180-month period.
(c) Method of Payment. Notwithstanding the provisions of
subsections (a) and (b) of this Section 3.4, the Chief Executive Officer of
the Company reserves the right to pay benefits in the form of an
actuarially equivalent single sum (as determined by the Administrator) when
retirement or death benefits are payable due to termination of employment,
excluding disability, or death prior to the Participant's attainment of age
55.
3.5 Exclusions and Limitations.
(a) No death benefits will be payable with respect to a
Participant in the event of such Participant's death by suicide within two
(2) years after commencement of participation in the Plan, and no benefit
increase will apply in the event of any such Participant's death by suicide
within two (2) years after such Participant becomes eligible for an
increase in death benefits.
(b) In the event that a Participant misrepresents any
health or physical condition at the time of commencement of participation
in the Plan or at the time of a retirement or death benefit increase, no
retirement or death benefit or retirement or death benefit increase will be
payable under the Plan within two (2) years of such misrepresentation.
3.6 Death of a Beneficiary.
(a) In the event any Beneficiary predeceases the
Participant, is not in existence, is not ascertainable, or is not locatable
as of the date benefits under the Plan become payable to such Beneficiary,
Plan benefits shall be paid to such contingent Beneficiary or Beneficiaries
as shall have been named by the Participant on the Participant's most
recent Beneficiary election form that has been received and filed with the
Administrator prior to the Participant's death. If no contingent
Beneficiary has been named, the contingent Beneficiary shall be the
Participant's estate.
(b) In the event any Beneficiary dies after commencing to
receive monthly benefits under the Plan but prior to the payment of all
monthly benefits to which such Beneficiary is entitled, remaining benefits
shall be paid to a beneficiary designated by the deceased Beneficiary (the
"Secondary Beneficiary"), provided such designation has been received and
filed with the Administrator prior to the death of the Beneficiary. If no
such person has been designated by the deceased Beneficiary, the Secondary
Beneficiary shall be the estate of the Beneficiary. In the event the
Secondary Beneficiary shall die prior to the payment of all benefits to
which such Secondary Beneficiary is entitled, the remainder of such
payments shall be made to such Secondary Beneficiary's estate. If the
Administrator is in doubt as to the right of any person to receive benefits
under the Plan, the Administrator may retain such amount, without liability
for any interest thereon, until the rights thereto are determined, or the
Administrator may pay such amount into any court of competent jurisdiction
and such payment shall be a complete discharge of the liability of the Plan
and the Employer therefor.
3.7 Discretion As To Benefit Amount. Notwithstanding the
foregoing, the Chief Executive Officer of the Company may, with full and
complete discretion, disregard Standard Underwriting Factors and customary
requirements for Standard Life Insurance in establishing and/or increasing
the amount of any Participant's retirement or death benefit under the Plan.
3.8 Suspension of Benefits Upon Reemployment. Employment with
any Employer subsequent to the commencement of retirement benefits under
this Article III may, at the sole discretion of the Chief Executive Officer
of the Company, result in the suspension of such benefits for the period of
such employment or reemployment.
ARTICLE IV -- EXCESS RETIREMENT BENEFITS
4.1 Participation. Benefits under this Article IV shall be
payable only to those Participants whose benefits under the Pension Plan
under which they otherwise participate commence prior such Participant's
attainment of age 65 and are reduced or limited by reason of the Limitation
on Benefits. Benefits under this Article IV (i) shall be payable only for
such period that the benefits under the Pension Plan are actually reduced
or limited and (ii) shall terminate as of the last day of the month
immediately preceding the month during which occurs the Participant's
sixty-fifth (65th) birthday. Furthermore, benefits under this Article IV
also shall be payable only to those Participants who are active Employees
on or after January 1, 1997.
4.2 Amount and Method of Payment.
(a) Amount of Benefit. The amount, if any, of the monthly
benefit payable to or on account of a Participant pursuant to this Article
IV shall equal the excess of (i) over (ii) where:
(i) equals the amount of monthly retirement
benefits which would be provided to the Participant under the Pension Plan
without regard to the Limitation on Benefits; and
(ii) equals the amount of monthly retirement
benefits payable to such Participant under the Pension Plan due to the
application of the Limitation on Benefits; provided, however, that no
benefit shall be payable to a Participant under this Article IV unless
the amount of such monthly benefit is at least fifty dollars ($50).
The benefit amount provided under this Section 4.2(a) shall be
determined with reference to the form of benefit determined under
Section 4.2(c) hereof and shall be calculated in accordance with the
Standard Actuarial Factors utilized under the Pension Plan.
(b) Vesting. The amount of benefits payable to a
Participant under this Article IV shall be subject to the vesting schedule
set forth in the Pension Plan. A Participant shall be vested in benefits
under this Article IV to the same extent as such Participant is vested in
benefits under the Pension Plan.
(c) Payment of Benefit. The benefits provided under this
Article IV shall be paid to each such Participant, surviving spouse (as
defined under the Pension Plan) or joint annuitant (as defined under the
Pension Plan) at the same time and in the same form and manner as benefits
are payable under the Pension Plan. Payments shall be made in accordance
with, and subject to, the terms and conditions of the Pension Plan;
provided, however, that no spousal consent shall be required to commence
any form of payment under this Article IV.
(d) Duration of Payments. Subject to Section 4.2(c),
benefits provided under this Article IV shall commence at the same time as
payments commence under the Pension Plan, and shall continue to age 65 or
the death of the Participant, if prior to age 65, and, if applicable, in a
reduced amount until the death of the Participant's lawful spouse or joint
annuitant, whichever is applicable for those Participants receiving
benefits under Appendix B.
(e) Treatment During Subsequent Employment. Employment
with any Employer subsequent to the commencement of benefits under this
Article IV will result in the suspension of such benefits for the period of
such employment or reemployment to the extent forth under the Pension Plan.
(f) Necessity of Actual Reduction. Notwithstanding any
other provision of this Plan, no amount shall be payable under this Article
IV unless the Participant's monthly benefit paid under the Pension Plan is
actually reduced because of application of the Limitation on Benefits.
Benefits payable to a Participant under this Article IV shall not duplicate
benefits payable to such Participant from any other plan or arrangement of
the Company. In the event the Secretary of the Treasury or a change in law
liberalizes the limitations applicable to determining the Limitation on
Benefits such that a Participant may receive additional benefits under the
Pension Plan, and the Pension Plan provides for the payment of such
additional benefits to the Participant, the amount payable under this
Article IV shall be reduced by a corresponding amount.
ARTICLE V -- DISABILITY BENEFITS
5.1 Monthly Disability Benefit.
(a) If a Participant becomes totally disabled following
commencement of participation in the Plan, the Participant shall continue
to receive credit for Years of Participation under the Plan for so long as
the Participant is totally disabled and such Participant's employment with
the Employer has not terminated. Following termination of the Participant's
employment with the Employer, the Participant's monthly retirement benefits
under Article III of the Plan shall commence beginning on or after the
Participant's First Eligible Retirement Date.
(b) A Participant is "totally disabled" if such Participant
is disabled within the meaning of the applicable long-term disability plan
sponsored by such Participant's Employer.
(c) If a Participant who terminates employment with the
Company due to total disability dies while totally disabled and before
attaining age 65, any death benefit payable to the Participant's
Beneficiary will be determined and paid in accordance with the terms of
Article III.
ARTICLE VI -- MISCELLANEOUS
6.1 Amendment and Termination. Any action to amend, modify,
suspend or terminate the Plan may be taken at any time, and from time to
time, by resolution of the Board of Directors of the Company (or any person
or persons duly authorized by resolution of the Board of Directors of the
Company to take such action) in its sole discretion and without the consent
of any Participant or Beneficiary, but no such action shall retroactively
reduce any benefits accrued by any Participant under this Plan prior to the
time of such action.
6.2 No Guarantee of Employment. Nothing contained herein shall
be construed as a contract of employment between a Participant and any
Employer or shall be deemed to give any Participant the right to be
retained in the employ of any Employer.
6.3 Funding of Plan and Benefit Payments. This Plan is unfunded
within the meaning of ERISA. Each Employer will make Plan benefit payments
from its general assets. Each Employer may purchase policies of life
insurance on the lives of Plan Participants and to refuse participation in
the Plan to any Employee who, if requested to do so, declines to supply
information or to otherwise cooperate so that the Employer may obtain life
insurance on behalf of such Participant. The Employer will be the owner
and the beneficiary of any such policy, and Plan benefits will be neither
limited to nor secured by any such policy or its proceeds. Participants
and their Beneficiaries shall have no right, title or interest in any such
life insurance policies, in any other assets of any Employer or in any
investments any Employer may make to assist it in meeting its obligations
under the Plan. All such assets shall be solely the property of such
Employer and shall be subject to the claims of such Employer's general
creditors. There are no assets of any Employer that are identified or
segregated for purposes of the payment of any benefits under this Plan. To
the extent a Participant or any other person acquires a right to receive
payments from an Employer under the Plan, such right shall be no greater
than the right of any unsecured general creditor of such Employer and such
person shall have only the unsecured promise of the Employer that such
payments shall be made.
6.4 Payment Not Assignable. Except in the case of a Qualified
Domestic Relations Order described under Code Section 414(p), Participants
and their Beneficiaries shall not have the right to alienate, anticipate,
commute, sell, assign, transfer, pledge, encumber or otherwise convey the
right to receive any payments under the Plan, and any payments under the
Plan or rights thereto shall not be subject to the debts, liabilities,
contracts, engagements or torts of Participants or their Beneficiaries nor
to attachment, garnishment or execution, nor shall they be transferable by
operation of law in the event of bankruptcy or insolvency. Any attempt,
whether voluntary or involuntary, to effect any such action shall be null,
void and of no effect.
6.5 Applicable Law. The Plan and all rights hereunder shall be
governed by and construed according to the laws of the State of North
Dakota, except to the extent such laws are preempted by the laws of the
United States of America.
6.6 Claims Procedure.
(a) Participants and Beneficiaries eligible for benefits
under this Plan, or any person duly authorized by them, have the right
under ERISA and the Plan to file a written claim to the Administrator for
payment of such benefits.
(b) If the claim is denied in whole or in part, the
claimant will receive written notice of the Administrator's decision,
including the specific reason for the decision, within 90 days after the
Administrator received the claim. If the Administrator needs more than 90
days to make a decision, the Administrator will notify the individual in
writing within the initial 90-day period. An additional 90 days may be
taken if the Administrator sends this notice. The extension notice will
show the date by when the Administrator's decision will be sent.
6.7 Plan Administration.
(a) The Plan shall be administered by the Administrator.
The Administrator shall serve as the final review under the Plan and shall
have sole and complete discretionary authority to determine conclusively
for all persons, and in accordance with the terms of the documents or
instruments governing the Plan, any and all questions arising from the
administration of the Plan and interpretation of all Plan provisions. The
Administrator shall make the final determination of all questions relating
to participation of employees and eligibility for benefits, and the amount
and type of benefits payable to any Participant or Beneficiary. In no way
limiting the foregoing, the Administrator shall have the following specific
duties and obligations in connection with the administration of the Plan:
(i) To promulgate and enforce such rules,
regulations and procedures as may be proper for the efficient
administration of the Plan;
(ii) To determine all questions arising in the
administration, interpretation and application of the Plan, including
questions of eligibility and of the status and rights of Participants
and any other persons hereunder;
(iii) To decide any dispute arising hereunder;
provided, however, that the Administrator shall not participate in any
matter involving any questions relating solely to the Administrator's own
participation or benefit under this Plan;
(iv) To advise the Boards of Directors of the
Employers regarding the known future need for funds to be available for
distribution;
(v) To correct defects, supply omissions and
reconcile inconsistencies to the extent necessary to effectuate the Plan;
(vi) To compute the amount of benefits and other
payments which shall be payable to any Participant or Beneficiary in
accordance with the provisions of the Plan and to determine the person or
persons to whom such benefits shall be paid;
(vii) To make recommendations to the Board of
Directors of the Company with respect to proposed amendments to the Plan;
(viii) To file all reports with government agencies,
Participants and other parties as may be required by law, whether such
reports are initially the obligation of the Employers, or the Plan;
(ix) To engage an actuary to the Plan, if
necessary, and to cause the liabilities of the Plan to be evaluated by such
actuary; and
(x) To have all such other powers as may be
necessary to discharge its duties hereunder.
(b) Decisions by the Administrator shall be final,
conclusive and binding on all parties and not subject to further review.
(c) The Administrator may employ attorneys, consultants,
accountants or other persons (who may be attorneys, consultants, actuaries,
accountants or persons performing other services for, or are employed by,
any Employer or any affiliate of any Employer), and the Administrator, the
Employers and their other officers and directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. No member of
the Board of Directors of any Employer, the Chief Executive Officer of the
Company, the Administrator, nor any other officer, director or employee of
the Company or of any Employer acting on behalf of the Board of Directors
of any Employer or the Chief Executive Officer of the Company or the
Administrator, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and
all members of the Boards of Directors of the Employers, the Chief
Executive Officer of the Company and the Administrator and each officer or
employee of the Company or of an Employer acting on their behalf shall be
fully indemnified and protected by the Company for all costs, liabilities
and expenses (including, but not limited to, reasonable attorneys' fees and
court costs) relating to any such action, determination or interpretation.
6.8 Binding Nature. This Plan shall be binding upon and inure
to the benefit of the Employers and their successors and assigns and to the
Participants, their Beneficiaries and their estates. Nothing in this Plan
shall preclude any Employer from consolidating or merging into or with, or
transferring all or substantially all of its assets to another company or
corporation, whether or not such other company or corporation assumes this
Plan and any obligation of the Employer hereunder.
6.9 Withholding Taxes. The Employers may withhold from any
benefits payable under this Plan all Federal, State, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
6.10 Action Affecting Chief Executive Officer. To the extent any
action required to be taken by the Chief Executive Officer of the Company
would decrease, increase, accelerate, delay or otherwise materially impact
such individual's benefits under the Plan, such action shall be taken
instead by the Compensation Committee of the Board of Directors of the
Company.
6.11 Payments Due Missing Persons. The Administrator shall make
a reasonable effort to locate all persons entitled to benefits (including
retirement benefits and death benefits for Beneficiaries) under the Plan;
however, notwithstanding any provisions of this Plan to the contrary, if,
after a period of five years from the date such benefits first become due,
any such persons entitled to benefits have not been located, their rights
under the Plan shall stand suspended. Before this provision becomes
operative, the Administrator shall send a certified letter to all such
persons at their last known address advising them that their benefits under
the Plan shall be suspended. Any such suspended amounts shall be held by
the Employer for a period of three additional years (or a total of eight
years from the time the benefits first became payable) and thereafter such
amounts shall be forfeited and non-payable.
6.12 Liability Limited. Neither the Employers, the
Administrator, nor any agents, employees, officers, directors or
shareholders of any of them, nor any other person shall have any liability
or responsibility with respect to this Plan, except as expressly provided
herein.
6.13 Incapacity. If the Administrator shall receive evidence
satisfactory to it that a Participant or Beneficiary entitled to receive
any benefit under the Plan is, at the time when such benefit becomes
payable, a minor or is physically or mentally incompetent to receive such
benefit and to give a valid release therefor, and that another person or an
institution is then maintaining or has custody of such Participant or
Beneficiary and that no guardian, committee or other representative of the
estate of such Participant or Beneficiary shall have been duly appointed,
the Administrator may make payment of such benefit otherwise payable to
such Participant or Beneficiary (or to such guardian, committee or other
representative of person's estate) to such other person or institution, and
the release of such other person or institution shall be a valid and
complete discharge for the payment of such benefit.
6.14 Plurals. Where appearing in the Plan, the singular shall
include the plural, and vice versa, unless the context clearly indicates a
different meaning.
6.15 Headings. The headings and sub-headings in this Plan are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
6.16 Severability. In case any provision of this Plan shall be
held illegal or void, such illegality or invalidity shall not affect the
remaining provisions of this Plan, but shall be fully severable, and the
Plan shall be construed and enforced as if said illegal or invalid
provisions had never been inserted herein.
6.17 Payment of Benefits. All amounts payable hereunder may be
paid directly by the Employer or pursuant to the terms of the grantor
trust, if any, established as a funding vehicle for benefits provided
hereunder.
ARTICLE VII -- ADDITIONAL AFFILIATED COMPANIES
7.1 Participation in the Plan.
(a) Any Employer may become an Affiliated Company with
respect to this Plan with the consent of the Chief Executive Officer of the
Company, upon the following conditions:
(i) such Employer shall make, execute and deliver
such instruments as the Company requires; and
(ii) such Employer shall designate the Company, the
Chief Executive Officer of the Company and the Administrator, as its agents
for purposes of this Plan.
(b) Any such Affiliated Company may by action of its Board
of Directors withdraw from participation, subject to approval by the Chief
Executive Officer of the Company.
7.2 Effect of Participation. Each Affiliated Company which with
the consent of the Chief Executive Officer of the Company complies with
Section 7.1(a) shall be deemed to have adopted this Plan for the benefit of
its Employees who participate in this Plan.
IN WITNESS WHEREOF, the Company, as the sponsoring employer of
the Plan, has caused this Plan document to be duly executed by its
President and Chief Executive Officer on this 14 day of November, 1996.
MDU RESOURCES GROUP, INC.
By: /s/ H. J. Mellen, Jr.
H. J. Mellen, Jr.
President and Chief Executive Officer
APPENDIX A
Monthly
Monthly Retirement
Level Salary Death Benefit Benefit*
D $ 50,000 - $ 59,999 $ 3,456 $ 1,728
E $ 60,000 - $ 74,999 $ 4,320 $ 2,160
F $ 75,000 - $ 99,999 $ 5,760 $ 2,880
G $100,000 - $124,999 $ 7,200 $ 3,600
H $125,000 - $149,999 $ 8,640 $ 4,320
I $150,000 - $174,999 $10,080 $ 5,040
J $175,000 - $199,999 $11,520 $ 5,760
K $200,000 - $224,999 $12,960 $ 6,480
L $225,000 - $249,999 $14,400 $ 7,200
M $250,000 - $274,999 $15,840 $ 7,920
N $275,000 - $299,999 $17,280 $ 8,640
O $300,000 - $324,999 $18,720 $ 9,360
P $325,000 - $349,999 $20,160 $10,080
All benefits are paid for a maximum of 180 months.
* This amount shall be lesser than the net present value of the death
benefit, as determined at the sole discretion of the Administrator.
APPENDIX B
Monthly Monthly
Death Retirement
Level Salary Benefit Benefit*
D $ 50,000 - $ 59,999 $ 2,660 $ 1,330
E $ 60,000 - $ 69,999 $ 3,600 $ 1,800
F $ 75,000 - $ 99,999 $ 5,160 $ 2,580
G $100,000 - $124,999 $ 7,200 $ 3,600
H $125,000 - $149,999 $ 8,940 $ 4,470
I $150,000 - $174,999 $10,720 $ 5,360
J $175,000 - $199,999 $12,500 $ 6,250
K $200,000 - $224,999 $14,600 $ 7,300
L $225,000 - $249,999 $16,430 $ 8,215
M $250,000 - $274,999 $18,250 $ 9,125
N $275,000 - $299,999 $20,950 $10,475
O $300,000 - $324,999 $24,290 $12,145
P $325,000 - $349,999 $27,340 $13,670
Q $350,000 - $399,999 $32,220 $16,110
R $400,000 - $449,999 $39,050 $19,525
S $450,000 - $499,999 $45,700 $22,850
T $500,000+ $52,400 $26,200
All benefits are paid for a maximum of 180 months.
* This amount shall be lesser than the net present value of the death
benefit, as determined at the sole discretion of the Administrator.