MDU RESOURCES GROUP, INC.
Amended and Restated
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Effective January 1, 1992
I. PURPOSE
The Board of Directors of MDU Resources Group, Inc. (the
"Company") established the Deferred Compensation Plan for Directors
(the "Plan") effective as of September l, 1988. The Plan is hereby
amended and restated effective January 1, 1992, and is substituted
for the Restated Plan established by the Company on August 1, 1991.
The Plan shall continue until terminated by the Board of Directors
of the Company, subject to the provisions of Article XII, below.
The purpose of this Plan is to aid the Company in attracting
and retaining as Directors persons whose abilities, experience and
judgment can contribute to the continued progress of the Company.
The Plan will provide a method of deferring compensation to the
Directors.
II. DEFINITIONS
A. Beneficiary. "Beneficiary" means the person or persons
designated as such in accordance with Article XI.
B. Compensation and Deferral Amount. "Compensation" means
any cash retainer, meeting fees and any other cash
compensation payable to Eligible Directors by the Company
for services as a Director. This Deferred Compensation
Plan for Directors governs any or all of that
Compensation which the Participant elects to credit to
his Deferred Compensation Account, which is hereafter
referred to as the "Deferral Amount."
C. Deferred Compensation Account. "Deferred Compensation
Account" means the account maintained on the books of
account of the Company for each Participant pursuant to
Article VI.
D. Effective Date. "Effective Date" means January 1, 1992,
the date on which the restated and amended Plan became
effective.
E. Eligible Director. "Eligible Director" means those
Directors of the Company who are not employees of the
Company.
F. Investment Units. This term shall have the meaning
defined in Article VI.B.
G. Market Price. "Market Price" means the average of the
highest and lowest transaction prices for the Company's
common stock on the New York Stock Exchange for a given
day.
H. Participant. "Participant" means an Eligible Director
participating in the Plan in accordance with the
provisions of Article IV.
I. Plan Year. "Plan Year" means the calendar year.
III. ADMINISTRATION OF THE PLAN
The Board of Directors shall be the sole administrator of the
Plan.
The Board of Directors may from time to time establish rules
and regulations for the administration of the Plan.
All determinations of the Board of Directors, irrespective of
their character or nature, including, but not limited to, all
questions of construction and interpretation, shall be final,
binding and conclusive upon all parties. Without limiting the
generality of the foregoing, the determination of the Board of
Directors as to whether a Participant has terminated his services
and the date thereof shall be final, binding and conclusive upon
all persons.
The Company and/or the Board of Directors may consult with
legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations and duties hereunder or with
respect to any claim, action or proceeding or any other matter, and
shall not be liable for any action taken or not taken by it in good
faith pursuant to the advice of such counsel.
The Chairman, at the direction of the Board of Directors
shall be responsible for maintaining books and records for the Plan
and adopting standard forms for such matters as beneficiary
designations and applications for benefits, provided such rules and
forms are not inconsistent with the provisions of the Plan. Such
books and records shall only be open for examination by a
Participant or his duly designated beneficiary to the extent that
they specifically involve the Deferred Compensation Account created
for his benefit or any payments which are to be made to him or his
beneficiary hereunder. Each Participant or his duly designated
beneficiary shall be notified no less frequently than annually of
the balance in his account.
Neither the Board of Directors nor any member of the Board
of Directors nor the Company nor any other person who is acting on
behalf of the Board of Directors or the Company shall be liable
for any act or failure to act hereunder except for gross negligence
or fraud.
IV. PARTICIPATION
All Eligible Directors, including any person who becomes a
Director after the effective date hereof, shall be Participants in
the Plan.
Each Participant in the Plan shall have the right to elect to
defer the payment of all or any part of his Compensation, with such
Deferral Amount to be payable at the time or times and in the
manner hereinafter stated. A Participant must defer at least
$1,000 per year.
Each Participant who elects to defer the payment of all or any
part of his Compensation shall execute and deliver to the Board of
Directors a "Notice of Election." Such Notice will provide the
percentage of his Compensation to be deferred, the date such
deferral is to commence and the beneficiary designations of the
Director. Such deferral election shall be applicable only to
Compensation earned by reason of services rendered after the date
of such Notice.
An election to defer Compensation shall continue in effect
until revoked or modified by a subsequent "Notice of Election,"
provided however, (1) that every election to defer shall be
irrevocable as to Compensation earned prior to the date of
revocation and (2) that such election may be changed no more often
than annually. Revocation or modification shall be made in writing
to the Board of Directors and shall be effective upon the date
stated therein.
V. VESTING OF DEFERRED COMPENSATION ACCOUNT
A Participant's interest in his Deferred Compensation Account
shall vest immediately with regard to Deferral Amounts and earnings
thereon.
VI. ACCOUNTS AND VALUATIONS
A. Deferred Compensation Accounts. The Board of Directors
shall establish and maintain a separate Deferred
Compensation Account for each Participant. The
Participant's Deferral Amount shall be credited to the
Participant's Deferred Compensation Account quarterly on
the first day of March, June, September and December in
amounts as nearly equal as possible.
B. Conversion to Investment Units. At the time a Deferral
Amount is credited to the Deferred Compensation Account,
it shall be converted to Investment Units, by dividing
the amount deferred by the Market Price of the Company's
stock on the first trading day immediately preceding the
deferral. Fractional share Investment Units will be
maintained in the Account.
VII. DIVIDEND EQUIVALENTS
If a dividend is declared on the common stock of the Company,
an equivalent amount shall be credited to the Participant's
Deferred Compensation Account for each Investment Unit. Such
amounts shall be converted to additional Investment Units, pursuant
to Article VI.B.
VIII. DISTRIBUTION
A. Conversion of Investment Units to Dollars. When a
Participant leaves the Board of Directors, dies, or
becomes disabled, the number of Investment Units in his
Deferred Compensation Account shall be multiplied by the
Market Price of the Company's common stock on the day
that is six full calendar months after the date of his
leaving, death, or disability. If the New York Stock
Exchange is not open that day then it shall be the Market
Price on the next day the New York Stock Exchange is
open. During this six month period, if a dividend is
declared on common stock of the Company, an equivalent
amount shall be credited to the Participant's Deferred
Compensation Account for each Investment Unit. Such
amounts shall be credited in cash and shall not be
converted to additional Investment Units.
B. Payment. The dollar value of the Investment Units
contained in the Participant's Deferred Compensation
Account shall be paid to him in substantially equal
monthly payments over five years, with interest at a
fixed rate over the five-year period. The fixed rate
shall be the prime rate plus 1 percentage point on the
day the value of the Investment Units is determined
according to this Article VIII. The "prime rate," for
purposes of this paragraph, shall be the base rate on
corporate loans posted by at least 75 percent of the
nation's 30 largest banks as reported daily in The Wall
Street Journal.
IX. TAX WITHHOLDING UPON DISTRIBUTION
To the extent required by law, the Company shall withhold from
payments made hereunder any taxes required to be withheld by the
federal or any state or local government.
X. COMMENCEMENT OF PAYMENTS
Except as otherwise provided in this Plan, commencement of
payments under this Plan shall begin as soon as administratively
feasible after the value of the Investment Units is determined
according to Article VIII.
XI. BENEFICIARY DESIGNATION
Each Participant shall have the right at any time to designate
any person or persons as Beneficiary or Beneficiaries (both
principal and contingent) to whom payment under this Plan shall be
paid in the event of death prior to complete distribution of the
deferred amounts under the Plan. Each beneficiary designation
shall become effective only when filed in writing with the Board of
Directors during the Participant's lifetime on a form provided by
the Board of Directors.
The filing of a new beneficiary designation form will cancel
all beneficiary designations previously filed. Any finalized
divorce of a Participant subsequent to the date of filing of a
beneficiary designation form shall revoke such designation. The
spouse of a married Participant domiciled in a community property
jurisdiction shall join in any designation of Beneficiary or
Beneficiaries other than the spouse.
If a Participant fails to designate a Beneficiary as provided
above or if the beneficiary designation is revoked by divorce, or
otherwise, without execution of a new designation, or if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
distribution of such benefits shall be made to the Participant's
estate.
If any distribution to a Beneficiary is to be made in
installments, and the primary Beneficiary dies before receiving all
installments, the remaining installments, if any, shall be paid to
the estate of the primary Beneficiary in a lump sum.
XII. AMENDMENT AND TERMINATION OF PLAN
A. Amendment. The Company may at any time amend the Plan in
whole or in part, provided, however, that except as
provided in Article XII.B., no amendment shall act to
reduce the benefits under the Plan payable to any
Participant with respect to any Deferral Amount credited
to the Participant's Deferred Compensation Account prior
to the date of the amendment. Written notice of any
amendments shall be given to each Participant.
B. Termination of Plan
1. Company's Right to Terminate. The Board of
Directors may at any time terminate the Plan.
2. Payments Upon Termination. Upon any termination of
the Plan under this section no additional Deferral
Amounts will be credited to the Participant's
Deferred Compensation Account. The Investment
Units recorded in such Account shall be converted
into dollars pursuant to Article VIII.A. and paid
in a lump sum to the Participant or the
Participant's Beneficiary.
XIII. MISCELLANEOUS
A. Unsecured General Creditor. Participants and their
beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, interests, or other claims
in any property or assets of the Company, nor shall they
be beneficiaries of, or have any rights, claims, or
interests in any specified assets of the Company. Any
and all of the Company's assets shall be and remain
general, unpledged, unrestricted assets of the Company.
The Company's obligation under the Plan shall be that of
an unfunded and unsecured promise of Company to pay money
in the future.
B. Obligations to the Company. If a Participant becomes
entitled to a distribution of benefits under the Plan,
and if at such time the Participant has outstanding any
debt, obligation, or other liability representing an
amount owed to the Company, then the Company may offset
such amounts owing it or an affiliate against the amount
of benefits otherwise distributable. Such determination
shall be made by the Board of Directors.
Establishment of this Plan and the participation by any
person shall not be construed to confer any right on the
part of such person to be nominated for reelection, or to
be reelected, to the Board of Directors of the Company.
C. Nonassignability. Neither a Participant nor any other
person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage, or otherwise
encumber, transfer, hypothecate, or convey in advance of
actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are,
expressly declared to be unassignable and nontransfer-
able. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration
for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the
event of a Participant's or any other person's bankruptcy
or insolvency.
D. Protective Provisions. A Participant will cooperate with
the Company by furnishing any and all information
requested by the Company in order to facilitate the
payment of any amounts hereunder. If a Participant
refuses to cooperate, the Company shall have no further
obligation to the Participant under the Plan.
E. Gender, Singular and Plural. Wherever the context so
requires, words in the masculine include the feminine and
words in the feminine include the masculine and the
definition of any term in the singular may include the
plural.
F. Captions. The captions to the articles, sections, and
paragraphs of this Plan are for convenience only and
shall not control or affect the meaning or construction
of any of its provisions.
G. Applicable Law. This Plan shall be construed,
administered and governed in accordance with the laws of
the State of North Dakota.
H. Validity. In the event any provision of this Plan is
held invalid, void, or unenforceable, the same shall not
affect, in any respect whatsoever, the validity of any
other provision of this Plan.
I. Notice. Any notice or filing required or permitted to be
given to the Board of Directors shall be sufficient if
in writing and hand delivered, or sent by registered or
certified mail, to the principal office of the Company,
directed to the attention of the Secretary of the
Company. Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of
the date shown on the postmark on the receipt for
registration or certification.