MDU RESOURCES GROUP, INC.
DEFERRED COMPENSATION PLAN FOR
DIRECTORS
(as amended and restated effective May 15,
2008)
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 May 15, 2008. The Plan shall continue
until terminated by the Board of Directors of the Company, subject
to the provisions of Article XI, 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.
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Beneficiary . “Beneficiary” means the
person or persons designated as such in accordance with Article
X.
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Change in Control . “Change in Control”
means the earliest of the following to occur: (a) any person (which
shall not include the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the
Company) ("Person") or group (as that term is defined in Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)) acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the
stock of the Company; (b) any Person or group (as that term is
defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B))
acquires ownership of the stock of the Company that, together with
stock held by such Person or group, constitutes more than 50% of
the total fair market value or total voting power of the stock of
the Company (this part (b) applies only when there is a transfer of
stock of the Company and the Company's stock remains outstanding
after the transaction); (c) a majority of the members of the Board
of Directors of the Company is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a
majority of the members of the Board of Directors of the Company;
or (d) any Person or group (as that term is defined in Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)) acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) assets from the Company that
have a gross fair market value equal to or more than 40% of the
total gross fair market value of all of the assets of the Company
immediately before such acquisition or acquisitions.
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Notwithstanding anything contained herein to the
contrary, no transaction or event shall constitute a Change in
Control for purposes of the Plan unless the transaction or event
constitutes a change in the ownership of a corporation (as defined
in Treasury Regulation Section 1.409A-3(i)(5)(v)), a change in
effective control of a corporation (as defined in Treasury
Regulation Section 1.409A-3(i)(5)(vi)) or a change in the ownership
of a substantial portion of the assets of a corporation (as defined
in Treasury Regulation Section 1.409A-3(i)(5)(vii)) and the term
Change in Control shall be interpreted in a manner consistent with
the proper interpretation of the similar provisions in the Section
409A Treasury Regulations.
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Code . “Code” means the
Internal Revenue Code of 1986, as amended.
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Compensation . “Compensation” means
any cash retainer, meeting fees and any other cash compensation
payable to Eligible Directors by the Company for services as a
Director.
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Deferral Amount . “Deferral Amount” means
the Compensation Participants elect to defer and have credited to
their Deferred Compensation Accounts.
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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.
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Disability . “Disability” means
those circumstances where the Participant is unable to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months.
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Effective Date. “Effective
Date” means May 15, 2008, the date on which the amendment and
restatement of the Plan became effective.
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Eligible Director . “Eligible Director”
means those Directors of the Company who are not employees of the
Company.
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Investment Units . This term shall have the meaning
defined in Article VI.B.
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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.
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Participant . “Participant” means an
Eligible Director participating in the Plan in accordance with the
provisions of Article IV.
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Separation from Service . “Separation from
Service” means a Participant's separation from service (as
that term is used in Section 409A(a)(2)(A)(i) of the Code) with the
Company.
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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 had a Separation from Service 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.
All Eligible Directors, including any person who
becomes a Director after the Effective Date, 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.
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 specify the percentage
of Compensation to be deferred and, if a Beneficiary designation
has not been made or the Participant wishes to change an existing
Beneficiary designation, the Beneficiary designations of the
Director.
Except as provided in the last sentence of this
paragraph, a Notice of Election shall be valid only if it is
delivered prior to the first day of the calendar year in which the
services giving rise to the Compensation being deferred are to be
performed. A Participant's Notice of Election shall
become irrevocable as of the last date the Notice of Election could
be delivered or such earlier date as may be established by the
Board of Directors. A Participant may revoke or change a
Notice of Elect
