THE BAUERLY BROTHERS, INC.
DEFERRED COMPENSATION PLAN
Effective April 19, 2001
BAUERLY BROTHERS, INC.
DEFERRED COMPENSATION PLAN
This is the
Bauerly Brothers, Inc. Deferred Compensation
Plan (the "Plan"), and is adopted by
BAUERLY BROTHERS, INC., a
Minnesota corporation (the "Company"), for
the purpose of
providing an inducement for continued
service by designated key
employees of the Company following the
merger of the Company with
MDU RESOURCES GROUP, INC., a Delaware
corporation ("MDU").
Benefits due under the Plan constitute a
mere promise by the
Company to pay benefits as the Plan
provides.
Accordingly,
Participants are general unsecured
creditors of the Company with
respect to their benefit, and the Plan is
unfunded for tax
purposes. This document contemplates the
establishment of a
trust after the Acquisition for the purpose
of holding MDU Shares
under this Plan, subject to the claims of
the general creditors
of MDU and the Company.
ARTICLE I
ADOPTION OF PLAN; PARTICIPATION
The Plan is
adopted effective this 19th day of April, 2001;
provided, however, that the Plan shall
automatically terminate
(and any Account balances shall be
forfeited entirely) on the
30th day thereafter if the Acquisition has
not then occurred.
Each individual listed on Schedule A shall
be a Participant,
provided that such individual is an
employee of the Company in
good standing on the Effective Date.
ARTICLE II
VESTING
2.1 Vesting. A Participant who has not
incurred a Termination before a
Distribution Date will become vested in
that percentage of his or
her Account remaining on that Distribution
Date as specified
below:
First Distribution Date
25.00%
Second Distribution Date
33.33%
Third Distribution Date
50.00%
Fourth Distribution Date
100.00%
A Participant
who incurs a Termination shall forfeit any
remaining unvested portion of his or her
Account on the date of
such Termination; provided, however, that a
Participant who dies
or becomes totally disabled before having
incurred a Termination
shall fully vest in his or her Account.
2.2 Forfeitures. The MDU Shares
forfeited under Section 2.1 shall be
reallocated among the Accounts of
Participants immediately before
the next following Distribution Date in
proportion to the Account
balances that have not been forfeited as of
that Distribution
Date. A Participant's allocation under
this section shall
include any fractional MDU Share that
results from the pro rata
computation.
ARTICLE III
CREDITS AND CHARGES TO ACCOUNTS
3.1 Account. An Account shall be established
and maintained for each
Participant, which Account shall be
credited initially with the
number of MDU Shares set forth opposite the
Participant's name on
Schedule A. Subject to all of the terms and
conditions of this
Plan, each Participant shall be entitled to
receive the MDU
Shares credited to his or her Account.
Each Account shall
be
charged with distributions, income taxes
and any other amounts
required to be withheld under Section 4.6,
and credited with
forfeitures as described in Section
2.2.
3.2 Earnings. Dividends paid on MDU Shares held
by the Trust shall be
accumulated in the Trust and allocated to
Accounts as of the next
following Distribution Date in proportion
to the Account balances
that have not been forfeited as of that
Distribution Date.
ARTICLE IV
DISTRIBUTIONS
4.1 No Withdrawals. Except as
otherwise provided in this article,
withdrawals are not available from an
Account.
4.2 Timing of Distribution.
On each Distribution
Date (or as soon
as is practicable thereafter), and subject
to the fractional share rule
in Section 4.7, the Participant shall
receive a distribution of the portion
of his or her Account that became vested on
that date under
Section 2.1, plus cash in the amount of any
dividends credited to
the Account under Section 3.2 (regardless
of whether the
dividends were paid on vested or unvested
MDU Shares), all
appropriately adjusted for withholding
taxes under Section 4.6.
4.3 Death or Disability.
Should a Participant
die or become
totally disabled before incurring a
Termination, the Participant's Account
shall vest in full and be paid to his or
her Beneficiary under Article
V, or to the Participant, on the next
Distribution Date (or as
soon as is practicable thereafter).
4.4 Limitation on Distributions to
Covered Employee.
Notwithstanding
any other provision of this article, if a
Participant is a "covered
employee" as defined in Code
Section162(m)(3) at the time of any
distribution, the maximum amount which may
be distributed from such a
Participant's Account in any Plan Year
shall not exceed $1,000,000, less
the amount of compensation paid to the
Participant by the Company in such Plan
Year which is not "performance-based" (as
defined in Code Section
162(m)(4)(C)). Such amount shall be reasonably
determined by the
Administrator at the time of the proposed
distribution. Any
amount not distributed to a Participant in
a Plan Year as a
result of the limitation set forth in this
section shall be
distributed in the next Plan Year, which
may again be subject to
the limitation of this section.
4.5 Payments to Minors and
Incompetents. If any
person entitled to
any payment under this Plan is, in the
judgment of the Administrator,
incapable of giving receipt for such
payment because of minority, illness,
infirmity or other incapacity, the
Administrator may pay the amount due such
person to a duly appointed legal
representative, if there is one, or, if
none, to the spouse, children, dependents,
or such other persons
with whom the person entitled to payment
resides. Any such
payment shall be a complete discharge of
the liability of the
Company, its Affiliates, and the Plan with
respect to such
payment.
4.6 Tax Withholding. The Company (or Trustee, as the
case may be)
shall deduct from any payment or share
delivery made under this Plan an amount
equal to, or shares having a value equal
to, all or part of any
taxes required by law to be withheld by the
Company (including
withholding and employment taxes), and any
other amounts required
to be withheld by applicable law or court
order. The Company
or
Trustee may sell, on the Participant's
behalf, shares that would
otherwise be distributed if the proceeds
are used to satisfy the
Participant's tax withholding and other
obligations described in
this section.
4.7 Fractional Shares. In general, fractional MDU Shares
shall not be
distributed under the Plan, and the
fractional MDU Share that
would otherwise be distributed shall
instead remain in the
Participant's Account. Immediately before the fourth and
final
Distribution Date, any fractional MDU Share
in an Account, that
is at least one-half of one share, shall be
rounded up to a whole
share, and all other fractional MDU Shares
in an Account shall be
forfeited without compensation; provided,
however, that the
Administrator may make an appropriate
adjustment to this
calculation to eliminate any rounding
errors and ensure that all
MDU Shares in the Trust are allocated to
Accounts.
ARTICLE V
BENEFICIARY DESIGNATIONS
5.1 Designation of Beneficiary.
Each Participant may
designate
in the form and the manner specified by the
Administrator a Beneficiary to
receive the payment (if any) due under
Article IV at the Participant's death.
The Beneficiary of a married Participant
shall be the
Participant's spouse, unless the
Participant designates a
Beneficiary other than the spouse and the
spouse consents in
writing to the designation in the form and
the manner prescribed
by the Administrator. A Participant may revoke such
designation
at any time and substitute therefor another
Beneficiary. A
married Participant may revoke a prior
Beneficiary designation
only with the consent of his or her spouse
in the form and the
manner prescribed by the Administrator.
A designated
spousal
Beneficiary who becomes divorced from the
Participant shall be
deemed to have p
