Document:

ex-10b.htm

    

    

    

    

    

    

    

    

    

    

    

    

    MDU
RESOURCES GROUP, INC.

    

    SUPPLEMENTAL
INCOME SECURITY PLAN

    

    (As
Amended and Restated Effective as of November 12, 2009)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    

    Page

    

    
      	
              INTRODUCTION

            	
              1

            
	 
      	 
      
	
              ARTICLE
      I – DEFINITIONS

            	
              1

            
	 
      	 
      
	
              ARTICLE
      II -- ELIGIBILITY

            	
               5

            
	 
      	 
      
	
              ARTICLE
      III -- SUPPLEMENTAL DEATH AND RETIREMENT BENEFITS

            	
              7

            
	 
      	 
      
	
              ARTICLE
      IV -- REPLACEMENT RETIREMENT BENEFITS

            	
               17

            
	 
      	 
      
	
              ARTICLE
      V -- DISABILITY BENEFITS

            	
               21

            
	 
      	 
      
	
              ARTICLE
      VI -- MISCELLANEOUS

            	
               21

            
	 
      	 
      
	
              ARTICLE
      VII -- ADDITIONAL AFFILIATE COMPANIES

            	
              30

            
	 
      	 
      
	
              APPENDIX
      A AND A-1 –

            	 
      
	
                   SCHEDULE
      OF RETIREMENT AND SURVIVORS BENEFITS

            	
              32-33

            
	 
      	 
      
	
              APPENDIX
      B-1 AND B-2 –

            	 
      
	
                   CURRENT
      PARTICIPANTS ELIGIBLE FOR ARTICLE IV BENEFITS

            	
              34

            
	 
      	 
      
	
              APPENDIX
      C – MDU RESOURCES GROUP, INC. SPECIFIED EMPLOYEE POLICY 

                  REGARDING
      COMPENSATION

            	
              35

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INTRODUCTION

    

    The objective of the MDU Resources
Group, Inc. Supplemental Income Security Plan (the "Plan") is to provide certain
levels of death 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 MDU Resources Group, Inc. ("Company") Board of
Director’s Compensation Committee (“Compensation Committee”) upon recommendation
of the Chief Executive Officer of the Company (“CEO”).  This Plan
became effective January 1, 1982, has been amended from time to time thereafter,
and most recently has been amended and restated effective as of November 13,
2008.

    The Plan is intended to constitute an
unfunded deferred compensation plan 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 Compensation Committee or any other person to whom the Compensation
Committee has delegated the authority to administer the Plan.  The
Vice President - Human Resources 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 (a) 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 (b) has been approved by the Compensation
Committee

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    upon
recommendation of the Chief Executive Officer 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 November 12, 2009.

    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           “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    1.10           "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 the Employer and has attained
at least age 65.  For a Key Employee whose employment ceases (for
reasons other than death) within six months of becoming age 65 or any time
thereafter, the First Eligible Retirement Date that applies to the Monthly
Post-Jobs Act Benefit will be six months after the last day of the month during
which such Key Employee is both no longer actively employed by the Employer and
has attained at least age 65.

    1.11           “Frozen” in
conjunction with the Pension Plan means that benefit accruals ceased for all
participants in these plans as of December 31, 2009.

    1.12           “Key Employee” is a
Participant determined to be a Specified Employee under the Company’s Specified Employee Policy Regarding
Compensation which was previously adopted by the Company and is attached
as Appendix C.

    1.13           "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.

    1.14           “Monthly Post-Jobs Act
Benefit” is the Participant’s total monthly benefit specified in 3.1,
minus the Monthly Pre-Jobs Act Benefit.

    1.15           “Monthly Pre-Jobs Act
Benefit” is the Participant’s total monthly vested benefit specified in
3.3(a), 3.3(b) or 3.3(c), if any, as of December 31, 2004.

    1.16           "Participant" means a
present or former management or highly compensated Employee selected by the
Compensation Committee upon recommendation of the Chief Executive Officer of the
Company to receive benefits under this Plan.  An Employee
will

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    become a
Participant at the time such Employee commences participation hereunder pursuant
to the provisions of Section 2.1 hereof.

    1.17           "Pension Plan" means
the MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees,
the Williston Basin Interstate Pipeline Company Pension Plan, or the Knife River
Corporation Salaried Employees' Pension Plan, as in effect on the Effective
Date, amended from time to time, and Frozen as of December 31,
2009.

    1.18           "Plan" means the MDU
Resources Group, Inc. Supplemental Income Security Plan, as embodied herein, and
any amendments thereto.

    1.19           "Plan Year" means the
calendar year.  The first Plan Year for this Plan shall be the 1982
calendar year.

    1.20           "Salary" means annual
base salary payable by an Employer to a Participant excluding (a) bonuses, (b)
incentive compensation, and (c) any other form of supplemental
income.

    1.21           "Standard Actuarial
Factors" means, with respect to a Participant, the actuarial factors and
assumptions commonly used for the calculation of actuarial equivalents for
retirement plans as determined by the Administrator.

    1.22           "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.

    1.23           "Standard Underwriting
Factors" means life insurance rating factors utilized by a commercial
life insurance company selected by the Administrator 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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    1.24           "Year of
Participation" means each 12 consecutive months of participation in the
Plan by a Participant while actively employed by one or more of the Employers
(including while such Participant is qualified as totally disabled as defined in
Article V), as determined at the sole discretion of the
Administrator.

    ARTICLE II --
ELIGIBILITY

    2.1           Eligibility for
Participation. The Compensation Committee, upon recommendation of the
Chief Executive Officer, shall determine which management or highly compensated
Employees may be eligible to participate in the Plan. The general criteria for
initial consideration of an Employee include, but are not limited to, the
following:  (a) either an officer or a management employee of an
Employer earning an annual base salary of $165,000;  (b) an executive
who makes a significant contribution to the Company's success and profitability;
and (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.  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
month coincident with or next following the date of such Employee's selection.
The annual base salary threshold is $165,000 as of January 1,
2008.  The Administrator will, from time to time, compare and possibly
adjust the annual base salary threshold to competitive practice and recommend
adjustments accordingly to the Compensation Committee.

    2.2           Requirements for
Participation.  In order to be eligible to participate in the
Plan, an Employee selected by the Compensation Committee must (a) be actively at
work for one or more of the Employers; (b) have a current state of health and
physical condition that would satisfy customary requirements for insurability
under Standard Life Insurance; provided,

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    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 (c) 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 Article III, Plan
benefits may commence as of the earlier to occur of (a) the first day of the
month following the date of the Participant's death or (b) the Participant's
First Eligible Retirement Date if the Participant  elects to receive
retirement benefits under Article III hereof.

    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 Compensation
Committee, 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.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    ARTICLE III -- SUPPLEMENTAL
DEATH AND RETIREMENT BENEFITS

    3.1           Amount of
Benefit.

    (a)           Subject
to the vesting requirements of Section 3.2 and provisions of Section 3.3 and 3.4
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 by the Compensation
Committee upon recommendation of the Chief Executive Officer at the time of the
Participant's commencement of participation in the Plan, and may
be  increased from time to time thereafter by the Compensation
Committee upon recommendation of the Chief Executive Officer. Subject to the
discretion of the Compensation Committee upon recommendation of the Chief
Executive Officer, a Participant shall generally 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) equal to 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 herein

    
      	
               
      

            	
              (i)

            	
              Appendix
      A for Participants in the Plan before January 1, 2010, and who have not
      received a benefit level increase after December 31, 2009,
      or

            

    

    
      	
               
      

            	
              (ii)

            	
              Appendix
      A-1 for Participants in the Plan before January 1, 2010, and who have
      received a benefit level increase on or after January 1, 2010,
      or

            

    

    
      	
               
      

            	
              (iii)

            	
              Appendix
      A-1 for Participants who join the Plan on or after January 1,
      2010.

            

    

    
      
         

      

      
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              No
      Participant shall receive a benefit level increase that results in a
      reduced benefit.

            

    

    Increases
in Salary do not automatically result in increases to a Participant's level of
benefits. Without limiting the scope of the immediately preceding sentence, it
is intended that increases to a Participant’s benefit level after commencement
of participation in the Plan will be made only to the extent the Participant’s
current compensation exceeds the then current annual base salary threshold
determined pursuant to Section 2.1 as a general criterion for
eligibility.

    (b)           Participants
who died, terminated employment with, or retired from, the Employers prior to
January 1, 2002, 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 Compensation Committee upon recommendation of
the Chief Executive Officer pursuant to Section 3.1(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 Compensation Committee upon recommendation of the Chief Executive Officer
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 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.

    
      
         

      

      
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    (d)           Participants
who die while actively employed will be considered to be 100% vested for the
death benefit, and not subject to the vesting schedule.  However, once
the participant is no longer actively employed (e.g. resignation, termination,
disability, etc.) Section 3.2 applies.

    3.2           Vesting.

    (a)           If
a Participant retires or terminates employment with an Employer 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 vest as follows:

    

    
      	 
      	
              Vesting
      Schedule

            
	 
      	 
      	 
      	 
      
	 
      	
              Years
      of Participation

            	 
      	
              Percent
      of Section

            
	 
      	
              Completed by the
      Participant

            	 
      	
              3.1 Benefits
      Payable

            
	 
      	 
      	 
      	 
      
	 
      	
                1

            	 
      	
                  0%

            
	 
      	
                2

            	 
      	
                  0%

            
	 
      	
                3

            	 
      	
                20%

            
	 
      	
                4

            	 
      	
                40%

            
	 
      	
                5

            	 
      	
                50%

            
	 
      	
                6

            	 
      	
                60%

            
	 
      	
                7

            	 
      	
                70%

            
	 
      	
                8

            	 
      	
                80%

            
	 
      	
                9

            	 
      	
                90%

            
	 
      	
              10

            	 
      	
              100%

            

    

    

    (b)           Participants
receiving a benefit increase on or after January 1, 2010, will be subject to an
additional vesting period with respect to the benefit level increase. The
additional vesting period will be the longer of:

    
      	
               
      

            	
              (i)

            	
              Three
      Years of Participation, or

            

    

    
      
         

      

      
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              (ii)

            	
              Ten
      Years of Participation minus the Participant’s number of Years of
      Participation at the time the benefit level increase is granted to the
      Participant.

            

    

    If, after
receiving a benefit level increase, a Participant’s employment terminates, for
reasons other than death or being an officer of the Employer who attains age 65
and is required to retire, prior to the end of the additional vesting period
associated with the benefit level increase, the benefit level increase will be
forfeited. In this case, the Participant’s benefit level will revert to the
benefit level in effect immediately prior to the benefit level
increase.

    If, after
receiving a benefit level increase, a Participant’s employment is terminated due
to death, then the additional vesting period is waived and the survivor’s
benefits will reflect the benefit level increase.

    If, after
receiving a benefit level increase, the Participant is a) an officer of the
Employer, b) attains age 65, and c) is required to retire prior to the end of
the additional vesting period associated with the benefit level increase, he or
she will vest in the benefit level increase as follows:

    

    
      	 
      	
              “Years
      of Participation” After

            	 
      	
              Vesting
      Percentage of

            
	 
      	
              Benefit Level
      Increase

            	 
      	
              Benefit Level
      Increase

            
	 
      	 
      	 
      	 
      
	 
      	
              Less
      than 1

            	 
      	
                  0%

            
	 
      	
              Between
      1 and 2

            	 
      	
                33%

            
	 
      	
              Between
      2 and 3

            	 
      	
                66%

            
	 
      	
              3
      or More

            	 
      	
              100%

            

    

    

    The above
vesting schedule under Section 3.2(b) applies only to Participants who are
officers of the Employer, attain age 65, are required to retire, and who have
satisfied the vesting requirements under Section 3.2(a).

    
      
         

      

      
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    The
Compensation Committee, upon recommendation of the Chief Executive Officer, may
waive any or all of the additional vesting requirement associated with a benefit
level increase.

    3.3           Participant’s Election of
Monthly Pre-Jobs Act Benefit .  Upon attainment of age 65 or,
as of such Participant's First Eligible Retirement Date (if later), a
Participant will be entitled to determine the form of benefit payable under
subsection (a) hereof, and the date of commencement of such benefits, subject to
the approval of the Administrator, in accordance with the terms of the
Plan.  The Participant may elect:

    (a)           to
defer any payments and retain a future 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

    (b)           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

    (c)           a percentage of each
benefit described in subsections (a and b) above.  The
percentage of each benefit must be in even increments of ten percent
(10%).

    
      	
               
      

            	
              (i)

            	
              If
      a Participant has elected to receive less than one hundred percent (100%)
      of such Participant's monthly retirement benefit (e.g. 50%), the
      Participant may subsequently elect to begin receiving an additional
      percentage retirement benefit (e.g. another 20%.) There may be no more
      than two (2) such additions during the Participant's lifetime, and no more
      than one (1) such addition during any calendar
  year.

            

    

    
      
         

      

      
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              (ii)

            	
              Any
      such addition in retirement benefit payments will result in an equal
      percentage reduction in death benefits, to the percentage change in
      retirement benefit.

            

    

    
      	
               
      

            	
              (iii)

            	
              Once
      retirement benefit payments have started, Participants shall not be
      entitled to subsequently decrease retirement benefit
    payments.

            

    

    (d)           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.

    3.4           Participant’s Election of
Monthly Post-Jobs Act Benefit.  Upon attainment of age 65, or
as of such Participant’s First Eligible Retirement Date (if later), the
Participant’s Monthly Post-Jobs Act Benefit will automatically be designated as
a retirement benefit.  A Participant may, however, make a one-time
written election to avoid the automatic designation of the Monthly Post-Jobs Act
Benefit as a retirement benefit, and instead designate such benefit as a death
benefit (or a combination of retirement and death benefit).  The
written election must be made by the Participant on or before the Participant
reaches age 64, and once the written election is made it may not be
changed.  Should a Participant elect a retirement benefit and
subsequently die before attaining age 65, the Monthly Post-Jobs Act Benefit will
revert to a death benefit.  Should a Participant who is a Key Employee
elect a retirement benefit and subsequently die before their First Eligible
Retirement Date, the Monthly Post-Jobs Act Benefit will revert to a death
benefit.

    3.5           Payment of Monthly
Benefits.

    (a)           Death
Benefits.  Any death benefits payable with respect to a
Participant

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    pursuant
to Sections 3.3(a)(b) or (c) or Section 3.4 shall commence on the first day of
the calendar month following the date of the Participant's death and shall be
payable in monthly installments for a period of 180 months.

    (b)           Retirement Benefit for the
Monthly Pre-Jobs Act Benefit.  The Monthly Pre-Jobs Act Benefit
elected as retirement benefits payable 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 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 Section 3.3(c)
hereof.  To the extent a Participant elects to commence receiving
increased retirement benefits pursuant to Section 3.3(c) (i), the amount of
increase of retirement benefits shall be in the form of a monthly benefit
payable for a separate 180-month period.

    (c)           Retirement Benefit for the
Monthly Post-Jobs Act Benefit.  Unless the Participant elects
in writing to receive the Monthly Post-Jobs Act Benefit in the form of a monthly
death benefit (as specified in 3.4), the Monthly Post-Jobs Act Benefit will take
the form of a retirement payment and will be payable as follows:

    
      	
               
      

            	
              (i)

            	
              to
      a Key Employee, payments will begin the later of (I) the First Eligible
      Retirement Date, or (II) six months after the last day of the month during
      which such Key Employee is both no longer actively employed by the
      Employer and has attained at least age 65.  If such payments
      begin on (c) (i) (II), the first monthly payment to the Key Employee will
      include a total

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    of seven
months’ payments.  Also, such first monthly payment will include an
interest credit on the first six months’ payments equivalent to one-half of the
annual prime interest rate contained in the Wall Street Journal on the
Key Employee’s last day of employment (or the first business day after the Key
Employee’s last day of employment should the last day of employment be a
non-business day).   Payments to the Key Employee will last 173
months.  Should the Key Employee die prior to the completion of the
173 month 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) hereof.

    
      	
               
      

            	
              (ii)

            	
              to
      a Participant who is not a Key Employee, payments will begin on the First
      Eligible Retirement Date and 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 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).

            

    

    (d)         Actuarial Equivalent
Alternative Forms for the Monthly Pre-Jobs Act Benefit.  The
normal form of retirement benefit for the Monthly Pre-Jobs Act Benefit to which
a Participant shall be entitled shall be determined under paragraph 3.4(b).
Alternatively, a participant may elect to receive their Monthly Pre-Jobs Act
Benefit in the form of a retirement

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    benefit
in one of the following actuarially equivalent forms (as determined by the
Administrator), provided, however, that each alternative form shall also be
payable for a certain period of 180 months:  (i) the lifetime of the
Participant; (ii) the lifetime of the Participant with the same amount payable
to the Participant continued thereafter for the lifetime of the Participant’s
spouse; or (iii) the lifetime of the Participant with 67% of the amount payable
to the Participant continued thereafter for the lifetime of the Participant’s
spouse.  However, in no event will the Company incur more costs in
providing the actuarial equivalent alternative form to the Participant than it
would otherwise incur in providing the normal form of retirement
benefit.  Applying the discount rate used by the Company to calculate
the FAS 87 expense, the present value of the Participant’s retirement benefit
will be calculated by the Administrator.  The Administrator will then
purchase an annuity at a cost no greater than the present value of the
retirement benefit.

    (e)           Actuarial Equivalent
Alternative Forms for the Monthly Post-Jobs Act Benefit.  There
are no Actuarial Equivalent Alternative Forms relating to the Monthly Post-Jobs
Act Benefit.

    (f)           Single Sum
Payment.  Notwithstanding the provisions of subsections
(a),  (b), and (c) of this Section 3.5, the Administrator reserves the
right to pay the Monthly Pre-Jobs Act Benefit 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, or upon
the death of the Participant and the primary beneficiary(ies).  The
Single Sum Payment will not apply to the Monthly Post-Jobs Act
Benefits.

    
      
         

      

      
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    3.6           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.

    3.7           Death of a
Beneficiary.

    (a)           In
the event any Beneficiary predeceases the Participant, is not in existence, is
not ascertainable, or is not locatable (see Section 6.11) 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

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    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 a single sum amount
in accordance with Section 3.5 (f) into any court of competent jurisdiction and
such payment shall be a complete discharge of the liability of the Plan and the
Employer.

    3.8           Discretion As To Benefit
Amount.  Notwithstanding the foregoing, the Compensation
Committee upon recommendation of 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.

    3.9           Suspension of Benefits Upon
Reemployment.  Employment with any Employer subsequent to the
commencement of Pre-Jobs Act benefits under this Article III may, at the sole
discretion of the Compensation Committee upon recommendation of the Chief
Executive Officer of the Company, result in the suspension of Pre-Jobs Act
benefits for the period of such employment or reemployment.

    ARTICLE IV
--  REPLACEMENT RETIREMENT BENEFITS

    4.1           Participation.  Benefits
under this Article IV shall be payable only to those Participants listed on
Appendix B-1 and B-2. These Participants whose benefits, under a Pension Plan
under which they otherwise participate, are reduced or limited by reason of the
Limitation

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    on
Benefits as of December 31, 2009.  Participants listed on Appendix B-1
shall be eligible to receive benefits under Article IV if their employment is
terminated for reasons other than death at any time prior to attaining age 65.
Additionally, Participants listed on Appendix B-2 may receive benefits under
Article IV if they remain continuously employed until attaining age
60.   Benefits under this Article IV (a) shall be payable only
for such period that the benefits under the Pension Plan are actually reduced or
limited and (b) shall terminate as of the last day of the month immediately
preceding the month during which the Participant attains age sixty-five (65).
Should the Participant die before his sixty-fifth (65th)
birthday, and  he had elected a joint and survivor form of payment
(specified in Section 4.2 (c)), the Participant’s surviving spouse will receive
Article IV benefit payments until the date the Participant would have attained
age 65.  Furthermore, benefits under this Article IV also shall be
payable only to those Participants who are active Employees on or after January
1, 1997.  Except for Participants listed on Appendix B-1 or
Appendix B-2, no current or future Participant will be eligible for benefits
under this Article IV.

    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
difference of (i) minus (ii) where:

    
      	
               
      

            	
              (i)

            	
              equals
      the amount of monthly retirement benefits which would be provided to the
      Participant under the Pension Plan as of December 31, 2009, without
      regard to the Limitation of Benefits in effect on December 31, 2009;
      and

            

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

            	
              equals
      the amount of monthly retirement benefits payable to such Participant
      under the Pension Plan as of December 31, 2009, due to the application of
      the Limitation on Benefits in effect on December 31,
  2009.

            

    

    provided,
however, that no benefits 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 as of December 31, 2009.

    (b)           Vesting.  A
Participant shall be vested in benefits under this Article IV to the same extent
as such Participant is vested in benefits under the applicable Pension
Plan.  Although the Pension Plan was Frozen as of December 31, 2009,
vesting will continue for Participants listed on Appendix B-2.

    (c)           Payment of
Benefit.  The benefits provided under this Article IV shall be
paid to each such Participant, surviving spouse (as defined under the applicable
Pension Plan) or joint annuitant (as defined under the applicable Pension
Plan).  Benefits due the Participant under Article IV will commence
automatically upon separation of employment from the Employer regardless of the
Participant’s timing of payment under the applicable Pension Plan, unless the
Participant is a Key Employee, in which case Article IV payments will commence
seven months after separation of employment from the Employer.  If the
Participant is a Key Employee, the payments otherwise due them in months one
through six will be paid cumulatively on the seventh month after separation of
employment.  Also, the payment on the seventh month will include an
interest credit on the first six months’ payments equivalent to one-half of the
annual

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    prime
interest rate contained in the Wall Street Journal on the
Key Employee’s last day of employment (or the first business day after the Key
Employee’s last day of employment should the last day of employment be a
non-business day).   A Participant is limited to receiving
Article IV as either a single life annuity (i.e., the lifetime of the
Participant) or a qualified joint and survivor annuity (i.e., the lifetime of
the Participant with the same amount payable to the Participant continued
thereafter for the lifetime of the Participant’s
spouse).  Notwithstanding the ability for the Participant to receive a
lump-sum payment for their pension benefit under the applicable Pension Plan,
there is no lump-sum payment available to Article IV
benefits.  Payments shall be made in accordance with, and subject to,
the terms and conditions of the applicable Pension Plan; provided, however, that
no spousal consent shall be required to commence any form of payment under this
Article IV.

    (d)           Commencement and Duration of
Payments.  Subject to Section 4.2(c), benefits provided under
this Article IV shall commence automatically when the Participant becomes
eligible for Article IV benefits, without regard to payment under any Pension
Plan, and shall continue to age 65 or the death of the Participant, if prior to
age 65, and, if applicable, in reduced amount until the death of the
Participant's spouse or joint annuitant, whichever is applicable.

    (e)           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 applicable 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 a change in law or regulation liberalizes the
limitations applicable to determining the

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Limitation
on Benefits such that a Participant may receive additional benefits under the
applicable Pension Plan, and the applicable 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 up to two (2)
years of Participation under the Plan for so long as the Participant is totally
disabled.  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, or as determined by Social Security.

    (c)           If
a Participant who is totally disabled dies before attaining age 65, any death
benefit payable to the Participant's Beneficiary will be determined and paid in
accordance with the vesting schedule 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

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    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

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    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 Delaware, except to the
extent such laws are preempted by the laws of the United States of
America.

    6.6           Claims
Procedure.

    (a)           Right to File a
Claim.  Participants and Beneficiaries are entitled to file a
claim with respect to benefits or other aspects of the operation of the
Plan.  The claim is required to be in writing and must be made to the
Administrator.

    (b)           Denial of
Claim.  If the claim is denied by the Administrator, the
claimant shall be notified in writing within ninety (90) days after receipt of
the claim or within one hundred eighty (180) days after such receipt if special
circumstances require an extension of time.  If special circumstances
require an extension of time in order to review the claim, the claimant will be
furnished with a written notice of the extension of time within the initial
ninety (90) day period.  The notice will include an explanation of the
special circumstances that require an extension and the date by which the
Administrator expects to make its determination.  In no event,
however, will the extension of time exceed 180 days from the date of the receipt
of the claim by the Administrator.  A written notice of denial of the
claim shall contain the following information:

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (i)           Specific
reason or reasons for the denial;

     

    (ii)           Specific
reference to the pertinent provisions of the Plan on which the denial is
based;

     

    (iii)           A
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why the material or information is
necessary; and

     

    (iv)           A
description of the Plan’s review procedures and the time limits applicable to
the procedures, including a statement of the claimant’s right to bring a civil
action under Section 502(a) of ERISA following a denial upon review of the
claim.

     

    (c)           Claims Review
Procedure.

    (i)           Participants
or Beneficiaries may request that the Administrator review the denial of the
claim.  Such request must be made within sixty (60) days following the
date the claimant received written notice of the denial of the
claim.  The Administrator shall afford the claimant a full and fair
review of the decision denying the claim and shall:

    (A)           Provide,
upon request and free of charge, reasonable access to and copies of all
documents, records, and other information relevant to the claim;
and

    (B)           Permit
the claimant to submit written comments, documents, records, and other
information relating to the claim.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    (ii)           The
decision on review by the Administrator shall be in writing and shall be issued
within sixty (60) days following receipt of the request for
review.  The period for decision may be extended to a date not later
than one-hundred and twenty (120) days after such receipt if the Administrator
determines that special circumstances require extension.  If special
circumstances require an extension of time, the claimant shall be furnished
written notice prior to the termination of the initial sixty (60) day
period which explains the special circumstances requiring an extension of time
and the date by which the Administrator expects to render its decision on
review.  The decision on review shall include:

     

    (A)           Specific
reason or reasons for the adverse determination;

     

    (B)           References
to the specific provisions in the Plan on which the determination is
based;

     

    (C)           A
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of all documents, records, and other
information relevant to the claimant’s claim; and

     

    (D)           A
statement of the claimant’s right to bring an action under Section 502(c) of
ERISA.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    (iii)           Any
action required or authorized to be taken by the claimant pursuant to this
Section may be taken by a representative authorized in writing by the claimant
to represent the claimant.

    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;

            

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iv)

            	
              to
      advise the Boards of Directors of the Employers regarding the known future
      need for funds to be available for
distribution;

            

    

    
      	
               
      

            	
              (v)

            	
              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;

            

    

    
      	
               
      

            	
              (vi)

            	
              to
      make recommendations to the Board of Directors of the Company with respect
      to proposed amendments to the Plan;

            

    

    
      	
               
      

            	
              (vii)

            	
              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;

            

    

    
      	
               
      

            	
              (viii)

            	
              to
      engage an actuary to the Plan, if necessary, and to cause the liabilities
      of the Plan to be evaluated by such actuary;
and

            

    

    
      	
               
      

            	
              (ix)

            	
              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 , the Administrator, nor any
other officer, director or

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    employee
of the Company or of any Employer acting on behalf of the Board of Directors of
any Employer or the Chief Executive Officer  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  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 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.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    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 therefore, 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 such 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.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    6.14           Plurals.  Where
appearing in the Plan, this 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
Affiliated Company may become an Employer with respect to this Plan with the
consent of the Compensation Committee upon recommendation of the Chief Executive
Officer, 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.

            

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    (b)           Any
such Employer may by action of its Board of Directors withdraw from
participation, subject to approval by the Compensation Committee upon
recommendation of the Chief Executive Officer.

    7.2           Effect of
Participation.  Each Employer which with the consent of the
Compensation Committee upon recommendation 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.

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    

     APPENDIX  A

    SCHEDULE
OF RETIREMENT AND SURVIVORS BENEFITS

    

    For
Participants in the Plan prior to January 1, 2010

    

    AND

    

    Who have
not received a benefit level increase after December 31, 2009

    

    
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
              Monthly

            	 
      	 
      	
              Monthly

            	 
      
	 
      	
              Level

            	 
      	
              Salary

            	 
      	 
      	 
      	
              Retirement

              Benefit

            	 
      	 
      	
              Death
      

              Benefit

               

            	 
      
	 
      	
              50

            	 
      	
              $50,000

            	
              -

            	
              $59,999

            	 
      	
              $1,330

            	 
      	 
      	
              $2,660

            	 
      
	 
      	
              51

            	 
      	 
      	 
      	 
      	 
      	
              $1,728

            	 
      	 
      	
              $3,456

            	 
      
	 
      	
              52

            	 
      	
              $60,000

            	
              -

            	
              $74,999

            	 
      	
              $1,800

            	 
      	 
      	
              $3,600

            	 
      
	 
      	
              53

            	 
      	 
      	 
      	 
      	 
      	
              $2,160

            	 
      	 
      	
              $4,320

            	 
      
	 
      	
              54

            	 
      	
              $75,000

            	
              -

            	
              $99,999

            	 
      	
              $2,580

            	 
      	 
      	
              $5,160

            	 
      
	 
      	
              55

            	 
      	 
      	 
      	 
      	 
      	
              $2,880

            	 
      	 
      	
              $5,760

            	 
      
	 
      	
              56

            	 
      	
              $100,000

            	
              -

            	
              $124,999

            	 
      	
              $3,600

            	 
      	 
      	
              $7,200

            	 
      
	 
      	
              57

            	 
      	
              $125,000

            	
              -

            	
              $149,999

            	 
      	
              $4,470

            	 
      	 
      	
              $8,940

            	 
      
	 
      	
              58

            	 
      	
              $150,000

            	
              -

            	
              $174,999

            	 
      	
              $5,360

            	 
      	 
      	
              $10,720

            	 
      
	 
      	
              59

            	 
      	
              $175,000

            	
              -

            	
              $199,999

            	 
      	
              $6,250

            	 
      	 
      	
              $12,500

            	 
      
	 
      	
              60

            	 
      	
              $200,000

            	
              -

            	
              $224,999

            	 
      	
              $7,300

            	 
      	 
      	
              $14,600

            	 
      
	 
      	
              61

            	 
      	
              $225,000

            	
              -

            	
              $249,999

            	 
      	
              $8,215

            	 
      	 
      	
              $16,430

            	 
      
	 
      	
              62

            	 
      	
              $250,000

            	
              -

            	
              $274,999

            	 
      	
              $9,125

            	 
      	 
      	
              $18,250

            	 
      
	 
      	
              63

            	 
      	
              $275,000

            	
              -

            	
              $299,999

            	 
      	
              $10,475

            	 
      	 
      	
              $20,950

            	 
      
	 
      	
              64

            	 
      	
              $300,000

            	
              -

            	
              $324,999

            	 
      	
              $12,145

            	 
      	 
      	
              $24,290

            	 
      
	 
      	
              65

            	 
      	
              $325,000

            	
              -

            	
              $349,999

            	 
      	
              $13,670

            	 
      	 
      	
              $27,340

            	 
      
	 
      	
              66

            	 
      	
              $350,000

            	
              -

            	
              $399,999

            	 
      	
              $16,110

            	 
      	 
      	
              $32,220

            	 
      
	 
      	
              67

            	 
      	
              $400,000

            	
              -

            	
              $449,999

            	 
      	
              $19,525

            	 
      	 
      	
              $39,050

            	 
      
	 
      	
              68

            	 
      	
              $450,000

            	
              -

            	
              $499,999

            	 
      	
              $22,850

            	 
      	 
      	
              $45,700

            	 
      
	 
      	
              69

            	 
      	
              $500,000

            	
              -

            	
              $599,999

            	 
      	
              $28,800

            	 
      	 
      	
              $57,600

            	 
      
	 
      	
              70

            	 
      	
              $600,000

            	
              -

            	
              $699,999

            	 
      	
              $36,500

            	 
      	 
      	
              $73,000

            	 
      
	 
      	
              71

            	 
      	
              $700,000

            	
              -

            	
              $799,999

            	 
      	
              $42,710

            	 
      	 
      	
              $85,420

            	 
      
	 
      	
              72

            	 
      	
              $800,000

            	
              -

            	
              $899,999

            	 
      	
              $49,220

            	 
      	 
      	
              $98,440

            	 
      
	 
      	
              73

            	 
      	
              $900,000

            	
              -

            	
              $999,999

            	 
      	
              $55,310

            	 
      	 
      	
              $110,620

            	 
      
	 
      	
              74

            	 
      	
              $1,000,000

            	
              -

            	
              $1,099,999

            	 
      	
              $60,200

            	 
      	 
      	
              $120,400

            	 
      

    

    

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    

    
      	
              
APPENDIX A-1

            
	
              SCHEDULE
      OF RETIREMENT AND SURVIVORS 

              BENEFITS

               

            
	
              For
      Participants in the Plan prior to January 1, 2010, and who have received
      a

            
	
              benefit
      level increase on or after January 1, 2010

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              OR

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              For
      Participants who join the Plan on or after January 1,
  2010

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
              Monthly

            	 
      	
              Monthly

            
	 
      	 
      	 
      	 
      	 
      	 
      	
              Retirement

            	 
      	
              Death

            
	
              Level

            	 
      	
              Salary
      Range

            	 
      	
              Benefit

            	 
      	
              Benefit

            
	
              58

            	 
      	
              $165,000

            	
              -

            	
              $174,999

            	 
      	
              $4,288

            	 
      	
              $8,576

            
	
              59

            	 
      	
              $175,000

            	
              -

            	
              $199,999

            	 
      	
              $5,000

            	 
      	
              $10,000

            
	
              60

            	 
      	
              $200,000

            	
              -

            	
              $224,999

            	 
      	
              $5,840

            	 
      	
              $11,680

            
	
              61

            	 
      	
              $225,000

            	
              -

            	
              $249,999

            	 
      	
              $6,572

            	 
      	
              $13,144

            
	
              62

            	 
      	
              $250,000

            	
              -

            	
              $274,999

            	 
      	
              $7,300

            	 
      	
              $14,600

            
	
              63

            	 
      	
              $275,000

            	
              -

            	
              $299,999

            	 
      	
              $8,380

            	 
      	
              $16,760

            
	
              64

            	 
      	
              $300,000

            	
              -

            	
              $324,999

            	 
      	
              $9,716

            	 
      	
              $19,432

            
	
              65

            	 
      	
              $325,000

            	
              -

            	
              $349,999

            	 
      	
              $10,936

            	 
      	
              $21,872

            
	
              66

            	 
      	
              $350,000

            	
              -

            	
              $399,999

            	 
      	
              $12,888

            	 
      	
              $25,776

            
	
              67

            	 
      	
              $400,000

            	
              -

            	
              $449,999

            	 
      	
              $15,620

            	 
      	
              $31,240

            
	
              68

            	 
      	
              $450,000

            	
              -

            	
              $499,999

            	 
      	
              $18,280

            	 
      	
              $36,560

            
	
              69

            	 
      	
              $500,000

            	
              -

            	
              $599,999

            	 
      	
              $23,040

            	 
      	
              $46,080

            
	
              70

            	 
      	
              $600,000

            	
              -

            	
              $699,999

            	 
      	
              $29,200

            	 
      	
              $58,400

            
	
              71

            	 
      	
              $700,000

            	
              -

            	
              $799,999

            	 
      	
              $34,168

            	 
      	
              $68,336

            
	
              72

            	 
      	
              $800,000

            	
              -

            	
              $899,999

            	 
      	
              $39,376

            	 
      	
              $78,752

            
	
              73

            	 
      	
              $900,000

            	
              -

            	
              $999,999

            	 
      	
              $44,248

            	 
      	
              $88,496

            
	
              74

            	 
      	
              $1,000,000

            	
              -

            	
              $1,099,999

            	 
      	
              $48,160

            	 
      	
              $96,320

            

    

    

    

    

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

    

    

    

    

    APPENDIX
B-1

    

    PARTICIPANTS
ELIGIBLE FOR EARLY RETIREMENT BENEFITS UNDER ARTICLE IV

    

    Steven L.
Bietz

    John K.
Castleberry

    Terry D.
Hildestad

    Bruce T.
Imsdahl

    Vernon A.
Raile

    Warren L.
Robinson

    Paul K.
Sandness

    William
E. Schneider

    

    

    

    

    APPENDIX
B-2

    

    PARTICIPANTS
ELIGIBLE FOR AGE 60 RETIREMENT BENEFITS UNDER ARTICLE IV

    

    David L.
Goodin

    John G.
Harp

    

    

    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    APPENDIX
C

    

    MDU RESOURCES GROUP,
INC.

    Specified Employee Policy
Regarding Compensation

    

    Effective
November 14, 2007, for purposes of all plans, agreements and other arrangements
of MDU Resources Group, Inc. (the “Company”) and its affiliates that are subject
to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
the determination of individuals who are “specified employees,” as that term is
defined in Code Section 409A, shall be determined under this policy, as may be
amended from time to time pursuant to paragraph 4 (“Policy”).

    

    
      	
              1.

            	
              Establishment of Specified
      Employee List.  Between January 1st
      and April 1st
      of each calendar year, the Company shall establish a “Specified Employee
      List.”  The Specified Employee List shall become effective on
      April 1st
      of the calendar year in which the Specified Employee List is established
      and shall cease to be effective on March 31st
      of the following calendar year.  Any individual who, as of his
      or her “separation from service” (within the meaning of Code Section
      409A(a)(2)(A)(i)), is on the Specified Employee List then in effect shall
      be considered a “specified employee” for purposes of Section
      409A.

            

    

    

    
      	
              2.

            	
              Inclusion on the Specified
      Employee List.  The Specified Employee List shall include
      all individuals who, at any time during the Determination Year, met the
      requirements of Code Section 416(i)(l)(A)(i), (ii) or (iii) and the
      related regulations (but without regard to Code Section
      415(i)(5)).  For this purpose, “Determination Year” shall mean
      the calendar year ending on the December 31st
      prior to the April 1st
      when the Specified Employee List becomes effective.  For
      purposes of determining which individuals meet the requirements of Code
      Section 416(i)(l)(A)(i), (ii) or (iii) and the related regulations (but
      without regard to Code Section 415(i)(5)), the term gross compensation
      shall have the meaning set forth in the MDU Resources Group, Inc. 401(k)
      Retirement Plan, as may be amended from time to time (the “Retirement
      Plan”).

            

    

    

    
      	
              3.

            	
              Delayed
      Payments.  If any employee is determined to be a
      specified employee under this Policy, any compensation to be provided to
      such specified employee that is required to be delayed to comply with Code
      Section 409A(a)(2)(B)(i) shall not be provided before the date that is six
      months after the date of such separation from service (or, if earlier than
      the end of such six-month period, the date of death of the specified
      employee).  This Policy shall not apply to any payment that is
      not treated as deferred compensation under, or is otherwise excluded from,
      the requirements of Code Section 409A and the regulations promulgated
      thereunder.

            

    

    

    
      	
              4.

            	
              Changes to
      Policy.  The Company may amend or modify this Policy at
      any time; provided, however, that any changes made to the period during
      which the Specified Employee List is effective or the Determination Year
      shall not take effect for a period of at least 12 months and any changes
      made to the definition of compensation (either in
  the

            

    

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    Policy or
in the Retirement Plan) shall not be used to identify specified employees until
the next Specified Employee List is established.

    

     

    

    
      
         

      

      
        36ex-10f.htm

    MDU
RESOURCES GROUP, INC.

    NON-EMPLOYEE
DIRECTOR LONG-TERM INCENTIVE COMPENSATION PLAN

    

    Article
1. Establishment, Purpose and Duration

    

    1.1           Establishment of the
Plan.  MDU Resources Group, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive plan
to be known as the "MDU Resources Group, Inc. Non-Employee Director Long-Term
Incentive Compensation Plan" (hereinafter referred to as the "Plan"), as set
forth in this document.  The Plan permits the grant of Nonqualified
Stock Options (NQSO), Stock Appreciation Rights (SAR), Restricted Stock,
Performance Units, Performance Shares and other awards.

    

    The Plan shall become effective when
approved by the stockholders at the annual meeting on April 22, 1997, (the
"Effective Date"), and shall remain in effect as provided in Section 1.3
herein.

    

    1.2           Purpose of the
Plan.  The purpose of the Plan is to promote the success and
enhance the value of the Company by linking the personal interests of
Participants to those of Company stockholders and customers.  The Plan
is further intended to assist the Company in its ability to motivate, attract
and retain highly qualified individuals to serve as directors of the
Company.

    

    1.3           Duration of the
Plan.  The Plan shall commence on the Effective Date, as
described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 14 herein, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions.

    

    Article
2. Definitions

    

    Whenever used in the Plan, the
following terms shall have the meanings set forth below and, when such meaning
is intended, the initial letter of the word is capitalized:

    

    2.1           "Award" means, individually
or collectively, a grant under the Plan of NQSOs, SARs, Restricted Stock,
Performance Units, Performance Shares or any other type of award permitted under
Article 10 of the Plan.

    

    2.2           "Award Agreement" means an
agreement entered into by each Participant and the Company, setting forth the
terms and provisions applicable to an Award granted to a Participant under the
Plan.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2.3           "Base Value" of an SAR shall
have the meaning set forth in Section 7.1 herein.

    

    2.4           "Board" or "Board of
Directors" means the Board of Directors of the Company.

    

    2.5           A
“Change in Control”
shall mean:

     

    
      	
               
      

            	
              (a)

            	
              The
      acquisition by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
      the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
      more of either (i) the then outstanding shares of common stock of the
      Company (the “Outstanding Company Common Stock”) or (ii) the combined
      voting power of the then outstanding voting securities of the Company
      entitled to vote generally in the election of directors (the “Outstanding
      Company Voting Securities”); provided, however, that for purposes of this
      subsection (a), the following acquisitions shall not constitute a Change
      in Control: (i) any acquisition directly from the Company, (ii) any
      acquisition by the Company, (iii) any acquisition by any employee benefit
      plan (or related trust) sponsored or maintained by the Company or any
      corporation controlled by the Company or (iv) any acquisition by any
      corporation pursuant to a transaction which complies with clauses (i),
      (ii) and (iii) of subsection (c) of this Section 2.5;
  or

            

    

     

    
      	
               
      

            	
              (b)

            	
              Individuals
      who, as of April 22, 1997, which is the effective date of the Plan,
      constitute the Board (the “Incumbent Board”) cease for any reason to
      constitute at least a majority of the Board; provided, however, that any
      individual becoming a director subsequent to the date hereof whose
      election, or nomination for election by the Company’s shareholders, was
      approved by a vote of at least a majority of the directors then comprising
      the Incumbent Board shall be considered as though such individual were a
      member of the Incumbent Board, but excluding, for this purpose, any such
      individual whose initial assumption of office occurs as a result of an
      actual or threatened election contest with respect to the election or
      removal of directors or other actual or threatened solicitation of proxies
      or consents by or on behalf of a Person other than the Board;
      or

            

    

     

    
      	
               
      

            	
              (c)

            	
              Consummation
      of a reorganization, merger or consolidation or sale or other disposition
      of all or

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    substantially
all of the assets of the Company (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

     

    
      	
               
      

            	
              (d)

            	
              Approval
      by the shareholders of the Company of a complete liquidation or
      dissolution of the Company.

            

    

     

    For avoidance of doubt, unless
otherwise determined by the Board, the sale of a subsidiary, operating entity or
business unit of the Company shall not constitute a Change in Control for
purposes of this Agreement.

    

    2.6           "Code" means the Internal
Revenue Code of 1986, as amended from time to time.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    2.7           "Committee" means the
Committee, as specified in Article 3, appointed by the Board to administer the
Plan with respect to Awards.

    

    2.8           "Company" means MDU Resources
Group, Inc., a Delaware corporation, or any successor thereto as provided in
Article 15 herein.

    

    2.9           "Director" means any
individual who is a member of the Board of Directors of the
Company.

    

    2.10           "Dividend Equivalent" means,
with respect to Shares subject to an Award, a right to be paid an amount equal
to dividends declared on an equal number of outstanding Shares.

    

    2.11           "Employee" means any
full-time or regularly-scheduled part-time employee of the Company or of the
Company's Subsidiaries, who is not covered by any collective bargaining
agreement to which the Company or any of its Subsidiaries is a
party.

    

    2.12           "Exchange Act" means the
Securities Exchange Act of 1934, as amended from time to time, or any successor
act thereto.

    

    2.13           "Exercise Period" means the
period during which an SAR or Option is exercisable, as set forth in the related
Award Agreement.

    

    2.14           "Fair Market Value" shall
mean the average of the high and low sale prices as reported in the
consoli­dated transaction reporting system or, if there is no such sale on
the relevant date, then on the last previous day on which a sale was
reported.

    

    2.15           "Freestanding SAR" means an
SAR that is granted independently of any Option.

    

    2.16           "Non-Employee Director" means
any person who is elected or appointed to the Board and who is not an
Employee.

    

    2.17           "Nonqualified Stock Option" or
"NQSO" means an option to purchase Shares, granted under Article 6
herein, which is not intended to be an Incentive Stock Option under Section 422
of the Code.

    

    2.18           "Option" means a Nonqualified
Stock Option.

    

    2.19           "Option Price" means the
price at which a Share may be purchased by a Participant pursuant to an Option,
as determined by the Committee and set forth in the Option Award
Agreement.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    2.20           "Participant" means a
Non-Employee Director who has an outstanding Award granted under the
Plan.

    

    2.21           "Performance Unit" means an
Award granted to a Participant, as described in Article 9 herein.

    

    2.22           "Performance Share" means an
Award granted to a Participant, as described in Article 9 herein.

    

    2.23           "Period of Restriction" means
the period during which the transfer of Restricted Stock is limited in some way,
as provided in Article 8 herein.

    

    2.24           "Person" shall have the
meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, as used in
Sections 13(d) and 14(d) thereof, including usage in the definition of a "group"
in Section 13(d) thereof.

    

    2.25           "Restricted Stock" means an
Award of Shares granted to a Participant pursuant to Article 8
herein.

    

    2.26           "Shares" means the shares of
common stock of the Company.

    

    2.27           "Stock Appreciation Right" or
"SAR" means a right, granted alone or in connection with a related
Option, designated as an SAR, to receive a payment on the day the right is
exercised, pursuant to the terms of Article 7 herein.  Each SAR shall
be denominated in terms of one Share.

    

    2.28           "Subsidiary" means any
corporation that is a "subsidiary corporation" of the Company as that term is
defined in Section 424(f) of the Code.

    

    2.29           "Tandem SAR" means an SAR
that is granted in connection with a related Option, the exercise of which shall
require forfeiture of the right to purchase a Share under the related Option
(and when a Share is purchased under the Option, the Tandem SAR shall be
similarly canceled).

    

    Article
3. Administration

    

    3.1           The Committee.  The
Plan shall be administered by any committee appointed by the Board or by the
Board of Directors (the "Committee").

    

    3.2           Authority of the
Committee.  The Committee shall have full power except as
limited by law, the Articles of Incorporation and the Bylaws of the Company,
subject to such other restricting limitations or directions as may be imposed by
the Board and subject to the provisions herein, to determine
the

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    size and
types of Awards; to deter­mine the terms and conditions of such Awards in a
manner consistent with the Plan; to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; to establish, amend or
waive rules and regulations for the Plan's administration; and (subject to the
provisions of Article 14 herein) to amend the terms and conditions of any
outstanding Award.  Further, the Committee shall make all other
determinations which may be necessary or advisable for the administration of the
Plan.  As permitted by law, the Committee may delegate its authorities
as identified hereunder.

    

    3.3           Restrictions on Share
Transferability.  The Committee may impose such restrictions on
any Shares acquired pursuant to Awards under the Plan as it may deem advisable,
including, without limitation, restrictions to comply with applicable Federal
securities laws, with the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded and with any blue sky or state
securities laws applicable to such Shares.

    

    3.4           Approval.  The
Committee or the Board shall approve all Awards made under the Plan and all
elections made by Participants, prior to their effective date, to the extent
necessary to comply with Rule 16b-3 under the Exchange Act.

    

    3.5           Decisions
Binding.  All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Participants and their estates and
beneficiaries.

    

    3.6           Costs.  The Company
shall pay all costs of administration of the Plan.

    

    Article
4. Shares Subject to the Plan

    

    4.1           Number of
Shares.  Subject to Section 4.2 herein, the maximum number of
Shares that may be issued pursuant to Awards under the Plan shall be
595,125.  Shares underlying lapsed or forfeited Awards of Restricted
Stock shall not be treated as having been issued pursuant to an Award under the
Plan.  Shares that are potentially deliverable under an Award that
expires or is canceled, forfeited, settled in cash or otherwise settled without
the delivery of Shares shall not be treated as having been issued under the
Plan.  Shares that are withheld to satisfy the Option Price related to
an Option, SAR or other Award pursuant to which the Shares withheld have not yet
been issued shall not be deemed to be Shares issued under the
Plan.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Shares issued pursuant to the Plan may
be (i) authorized but unissued Shares of Common Stock, (ii) treasury shares, or
(iii) shares purchased on the open market.

    

    4.2           Adjustments in Authorized
Shares.  In the event of any equity restructuring (within the
meaning of Financial Accounting Standards No. 123(R)), such as a stock dividend,
stock split, spinoff, rights offering or recapitalization through a large,
nonrecurring cash dividend, the Committee shall cause an equitable adjustment to
be made (i) in the number and kind of Shares that may be delivered under the
Plan and (ii) with respect to outstanding Awards, in the number and kind of
Shares subject to outstanding Awards, the Option Exercise Price, Base Value or
other price of Shares subject to outstanding Awards, any performance conditions
relating to Shares, the market price of Shares, or per-Share results, and other
terms and conditions of outstanding Awards, in the case of (i) and (ii) to
prevent dilution or enlargement of rights. In the event of any other change in
corporate capitalization, such as a merger, consolidation or liquidation, the
Committee may, in its sole discretion, cause an equitable adjustment as
described in the foregoing sentence to be made to prevent dilution or
enlargement of rights. The number of Shares subject to any Award shall always be
rounded down to a whole number when adjustments are made pursuant to this
Section 4.2.  Adjustments made by the Committee pursuant to this
Section 4.2 shall be final, binding and conclusive.

    

    Article
5. Eligibility and Participation

    

    5.1           Eligibility.  Persons
eligible to participate in the Plan are any persons elected or appointed to the
Board who are not Employees.

    

    5.2           Actual
Participation.  Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Non-Employee
Directors those to whom Awards shall be granted and shall determine the nature
and amount of each Award.

    

    Article
6. Stock Options

    

    6.1           Grant of
Options.  Subject to the terms and conditions of the Plan,
Options may be granted to a Non-Employee Director at any time and from time to
time, as shall be determined by the Committee.

    

    The Committee shall have complete
discretion in determining the number of Shares subject to Options granted to
each Participant (subject to Article 4 herein) and, consistent with the
provisions of the Plan, in determining the terms and conditions pertaining to
such Options.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    6.2           Option Award
Agreement.  Each Option grant shall be evidenced by an Option
Award Agreement that shall specify the Option Price, the term of the Option, the
number of Shares to which the Option pertains, the Exercise Period and such
other provisions as the Committee shall determine, including but not limited to
any rights to Dividend Equivalents.

    

    6.3           Exercise of and Payment for
Options.  Options granted under the Plan shall be exercisable
at such times and be subject to such restrictions and conditions as the
Committee shall in each instance approve.

    

    A Participant may exercise an Option at
any time during the Exercise Period.  Options shall be exercised by
the delivery of a written notice of exercise to the Company or its designee,
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by provisions for full payment for the
Shares.

    

    The Option Price upon exercise of any
Option shall be payable either: (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that Shares which are
tendered must have been held by the Participant for at least six (6) months
prior to their tender to satisfy the Option Price), (c) by Share withholding,
(d) by cashless exercise or (e) by a combination of (a),(b),(c), and/or
(d).

    

    As soon as practicable after receipt of
a written notification of exercise of an Option and provisions for full payment
therefor, the Company shall (i) deliver to the Participant, in the Participant's
name or the name of the Participant's designee, a Share certificate or
certificates in an appropriate aggregate amount based upon the number of Shares
purchased under the Option, or (ii) cause to be issued in the Participant's name
or the name of the Participant's designee, in book-entry form, an appropriate
number of Shares based upon the number of Shares purchased under the
Option.

    

    6.4           Termination of Director
Status.  Each Option Award Agreement shall set forth the extent
to which the Participant shall have the right to exercise the Option following
termination of the Participant's position on the Board of the
Company.  Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the Option Award Agreement entered into
with Participants, need not be uniform among all Options granted pursuant to the
Plan or among Participants and may reflect distinctions based on the reasons for
termination of director status.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    6.5           Transferability of
Options.  Except as otherwise determined by the Committee and
set forth in the Option Award Agreement, no Option granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution, and all Options
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant or his or her legal
representative.

    

    Article
7. Stock Appreciation Rights

    

    7.1           Grant of
SARs.  Subject to the terms and conditions of the Plan, an SAR
may be granted to a Non-Employee Director at any time and from time to time as
shall be determined by the Committee.  The Committee may grant
Freestanding SARs, Tandem SARs or any combination of these forms of
SAR.

    

    The Committee shall have complete
discretion in determining the number of SARs granted to each Participant
(subject to Article 4 herein) and, consistent with the provisions of the
Plan, in determining the terms and conditions pertaining to such
SARs.

    

    The Base Value of a Freestanding SAR
shall equal the Fair Market Value of a Share on the date of grant of the
SAR.  The Base Value of Tandem SARs shall equal the Option Price of
the related Option.

    

    7.2           SAR Award
Agreement.  Each SAR grant shall be evidenced by an SAR Award
Agreement that shall specify the number of SARs granted, the Base Value, the
term of the SAR, the Exercise Period and such other provisions as the Committee
shall determine.

    

    7.3           Exercise and Payment of
SARs.  Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the right to exercise
the equivalent portion of the related Option.  A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.

    

    Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.

    

    A Participant may exercise an SAR at
any time during the Exercise Period.  SARs shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of SARs being exercised.  Upon exercise of an SAR, a
Participant shall be entitled to receive payment from the Company in an amount
equal to the product of:

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (a)

            	
              the
      excess of (i) the Fair Market Value of a Share on the date of exercise
      over (ii) the Base Value multiplied
by

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      number of Shares with respect to which the SAR is
    exercised.

            

    

    

    At the sole discretion of the
Committee, the payment to the Participant upon SAR exercise may be in cash, in
Shares of equivalent value, or in some combination thereof.

    

    7.4           Termination of Director
Status.  Each SAR Award Agreement shall set forth the extent to
which the Participant shall have the right to exercise the SAR following
termination of the Participant's position on the Board of the
Company.  Such provisions shall be determined in the sole discretion
of the Committee, shall be included in the SAR Award Agreement entered into with
Participants, need not be uniform among all SARs granted pursuant to the Plan or
among Participants and may reflect distinctions based on the reasons for
termination of director status.

    

    7.5           Transferability of
SARs.  Except as otherwise determined by the Committee and set
forth in the SAR Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, and all SARs granted to
a Participant under the Plan shall be exercisable during his or her lifetime
only by such Participant or his or her legal representative.

    

    Article
8. Restricted Stock

    

    8.1           Grant of Restricted
Stock.  Subject to the terms and conditions of the Plan,
Restricted Stock may be granted to a Non-Employee Director at any time and from
time to time, as shall be determined by the Committee.

    

    The Committee shall have complete
discretion in determining the number of shares of Restricted Stock granted to
each Participant (subject to Article 4 herein) and, consistent with the
provisions of the Plan, in determining the terms and conditions pertaining to
such Restricted Stock.

    

    8.2           Restricted Stock Award
Agreement.  Each Restricted Stock grant shall be evidenced by a
Restricted Stock Award Agreement that shall specify the Period or Periods of
Restriction, the number of Restricted Stock Shares granted and such other
provisions as the Committee shall determine.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    8.3           Transferability.  Restricted
Stock granted hereunder may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement.  All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant or his or her legal
representative.

    

    8.4           Certificate
Legend.  Each certificate representing Restricted Stock granted
pursuant to the Plan may bear

    a legend
substantially as follows:

    

    
      	
               
      

            	
              "The
      sale or other transfer of the shares of stock represented by this
      certificate, whether voluntary, involuntary or by operation of law, is
      subject to certain restrictions on transfer as set forth in MDU Resources
      Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan,
      and in a Restricted Stock Award Agreement.  A copy of such Plan
      and such Agreement may be obtained from MDU Resources Group,
      Inc."

            

    

    

    The Company shall have the right to
retain the certificates representing Restricted Stock in the Company's
possession until such time as all restrictions applicable to such Shares have
been satisfied.

    

    8.5           Removal of
Restrictions.  Restricted Stock shall become freely
transferable by the Participant after the last day of the Period of Restriction
applicable thereto.  Once Restricted Stock is released from the
restrictions, the Participant shall be entitled to have the legend referred to
in Section 8.4 removed from his or her stock certificate.

    

    8.6           Voting
Rights.  During the Period of Restriction, Participants holding
Restricted Stock may exercise full voting rights with respect to those
Shares.

    

    8.7           Dividends and Other
Distributions.  Subject to the Committee's right to determine
otherwise at the time of grant, during the Period of Restriction, Participants
holding Restricted Stock shall receive all regular cash dividends paid with
respect to all Shares while they are so held.  All other distributions
paid with respect to such Restricted Stock shall be credited to Participants
subject to the same restrictions on transferability and forfeitability as the
Restricted Stock with respect to which they were paid and shall be paid to the
Participant within forty-five (45) days following the full vesting of the
Restricted Stock with respect to which such distributions were
made.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    8.8           Termination of Director
Status.  Each Restricted Stock Award Agreement shall set forth
the extent to which the Participant shall have the right to receive unvested
Restricted Stock following termination of the Participant's position on the
Board of the Company.  Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Restricted Stock Award
Agreement entered into with Participants, need not be uniform among all grants
of Restricted Stock or among Participants and may reflect distinctions based on
the reasons for termination of director status.

    

    Article
9. Performance Units and Performance Shares

    

    9.1           Grant of Performance Units and
Performance Shares.  Subject to the terms and conditions of the
Plan, Performance Units and/or Performance Shares may be granted to a
Non-Employee Director at any time and from time to time, as shall be determined
by the Committee.

    

    The Committee shall have complete
discretion in determining the number of Performance Units and/or Performance
Shares granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such Awards.

    

    9.2           Performance Unit/Performance Share
Award Agreement.  Each grant of Performance Units and/or
Performance Shares shall be evidenced by a Performance Unit and/or Performance
Share Award Agreement that shall specify the number of Performance Units and/or
Performance Shares granted, the initial value (if applicable), the Performance
Period, the performance goals and such other provisions as the Committee shall
determine, including but not limited to any rights to Dividend
Equivalents.

    

    9.3           Value of Performance
Units/Performance Shares.  Each Performance Unit shall have an
initial value that is established by the Committee at the time of
grant.  The value of a Performance Share shall be equal to the Fair
Market Value of a Share.  The Committee shall set performance goals in
its discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Units/Performance Shares that
will be paid out to the Participants.  The time period during which
the performance goals must be met shall be called a "Performance
Period."

    

    9.4           Earning of Performance
Units/Performance Shares.  After the applicable Performance
Period has ended, the holder of Performance Units/Performance Shares shall be
entitled to receive a payout with respect to the Perfor­mance
Units/Performance Shares earned by the Participant over the Performance Period,
to be

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    determined
as a function of the extent to which the corresponding performance goals have
been achieved.

    

    9.5           Form and Timing of Payment of
Performance Units/Performance Shares.  Payment of earned
Perfor­mance Units/Performance Shares shall be made following the close of
the applicable Performance Period.  The Committee, in its sole
discretion, may pay earned Performance Units/Performance Shares in cash or in
Shares (or in a combination thereof), which have an aggregate Fair Market Value
equal to the value of the earned Performance Units/Performance Shares at the
close of the applicable Performance Period.  Such Shares may be
granted subject to any restrictions deemed appropriate by the
Committee.

    

    9.6           Termination of Director
Status.  Each Performance Unit/Performance Share Award
Agreement shall set forth the extent to which the Participant shall have the
right to receive a Performance Unit/Performance Share payment following
termination of the Participant's position on the Board of the Company during a
Performance Period.  Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with Participants, need not be uniform among all grants of Performance
Units/Performance Shares or among Participants and may reflect distinctions
based on reasons for termination of director status.

    

    9.7           Transferability.  Except
as otherwise determined by the Committee and set forth in the Performance
Unit/Performance Share Award Agreement, Performance Units/Performance Shares may
not be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution, and
a Participant's rights with respect to Performance Units/Performance Shares
granted under the Plan shall be available during the Participant's lifetime only
to such Participant or the Participant's legal representative.

    

    Article
10.  Other Awards

    

    The Committee shall have the right to
grant other Awards which may include, without limitation, the grant of Shares
based on certain conditions, the payment of Shares in lieu of cash, or the
payment of cash based on performance criteria established by the
Committee.  Payment under or settlement of any such Awards shall be
made in such manner and at such times as the Committee may
determine.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Article
11.  Beneficiary Designation

    

    Each Participant under the Plan may,
from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all of such
benefit.  Each such designation shall revoke all prior designations by
the same Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company during
the Participant's lifetime.  In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
Participant's estate.

    

    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.

    

    Article
12.  Deferrals

    

    The Committee may permit a Participant
to defer the Participant's receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under the
Plan.  If any such deferral election is permitted, the Committee
shall, in its sole discretion, establish rules and procedures for such payment
deferrals.

    

    Article
13.  Change in Control

    

    The terms of this Article 13 shall
immediately become operative, without further action or consent by any person or
entity, upon a Change in Control, and once operative shall supersede and take
control over any other provisions of this Plan.

    

    Upon a Change in Control

    

    
      	
               
      

            	
              (a)

            	
              Any
      and all Options and SARs granted hereunder shall become immediately
      exercisable;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Any
      restriction periods and restrictions imposed on Restricted Stock or Awards
      granted pursuant to Article 10 (if not performance-based) shall be deemed
      to have expired and such Restricted Stock or Awards shall become
      immediately vested in full; and

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      target payout opportunity attainable under all outstanding Awards of
      Performance Units, Performance Shares and Awards granted pursuant to
      Article 10 (if performance-based) shall be deemed to have been fully
      earned for the entire Performance Period(s) as of
  the

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    effective
date of the Change in Control, and shall be paid out promptly in Shares or cash
pursuant to the terms of the Award Agreement, or in the absence of such
designation, as the Committee shall determine.

    

    Article
14.  Amendment, Modification and Termination

    

    14.1           Amendment, Modification and
Termination.  The Board may, at any time and from time to time,
alter, amend, suspend or terminate the Plan in whole or in part.

    

    14.2           Awards Previously
Granted.  No termination, amendment or modification of the Plan
shall adversely affect in any material way any Award previously granted under
the Plan, without the written consent of the Participant holding such Award,
unless such termination, modification or amendment is required by applicable
law.

    

    Article
15.  Successors

    

    All obligations of the Company under
the Plan, with respect to Awards granted hereunder, shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or otherwise, of all or
substantially all of the business and/or assets of the Company.

    

    Article
16.  Legal Construction

    

    16.1           Gender and
Number.  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the
plural.

    

    16.2           Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

    

    16.3           Requirements of
Law.  The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.

    

    16.4           Governing Law.  To
the extent not preempted by Federal law, the Plan, and all agreements hereunder,
shall be construed in accordance with, and governed by, the laws of the State of
Delaware.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    Article
17.  Code Section 409A Compliance

    

    To the extent applicable, it is
intended that this Plan and any Awards granted hereunder comply with the
requirements of Section 409A of the Code and any related regulations or other
guidance promulgated with respect to such Section by the U.S. Department of the
Treasury or the Internal Revenue Service, and the terms of the Plan and any
Awards shall be interpreted accordingly.

    
      
         

      

      
        16

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