Document:

exhibit10-1farcf2012q2.htm

 

 

 

 

                                             Exhibit 10.1

 

 

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

First Amendment to Loan Agreement, dated the 1st day of March, 2012, by and among Matthews International Corporation, a Pennsylvania corporation (the "Borrower"), the Banks (as defined in the Loan Agreement (as hereinafter defined)), Citizens Bank of Pennsylvania, a Pennsylvania banking institution, in its capacity as administrative agent for the Banks (in such capacity, the "Agent"), and PNC Bank, National Association, a national banking association, in its capacity as syndication agent for the Banks (in such capacity, the "Syndication Agent") (the "First Amendment").

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Loan Agreement, dated December 21, 2010, by and among the Borrower, the Banks, the Agent, and the Syndication Agent (the "Loan Agreement"), pursuant to which, among other things, the Banks agreed to extend a revolving credit facility to the Borrower in an aggregate principal amount not to exceed Three Hundred Million and 00/100 Dollars ($300,000,000.00); and

 

WHEREAS, the Borrower desires to amend certain provisions of the Loan Agreement and the Banks, the Agent and the Syndication Agent desire to permit such amendments pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1. All capitalized terms used herein which are defined in the Loan Agreement shall have the same meaning herein as in the Loan Agreement unless the context clearly indicates otherwise.

 

2. The cover page to the Loan Agreement is hereby deleted in its entirety and in its stead is inserted the cover page attached hereto as Exhibit A.

 

3. The introductory recital paragraph of the Loan Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

Agreement, dated the 21st day of December, 2010, by and among Matthews International Corporation, a Pennsylvania corporation (the "Borrower"), the Banks (as hereinafter defined), Citizens Bank of Pennsylvania, a Pennsylvania banking institution, in its capacity as administrative agent for the Banks (in such capacity, the "Agent"), PNC Bank, National Association, a national banking association, in its capacity as syndication agent for the Banks (in such capacity, the "Syndication Agent").

 

4. The first (1st) WHEREAS clause of the Loan Agreement is hereby amended to delete therefrom the reference to "Three Hundred Million and 00/100 Dollars ($300,000,000.00)" in its entirety and to insert in its stead a reference to "Four Hundred Million and 00/100 Dollars ($400,000,000.00)."

 

5. Section 1.01 of the Loan Agreement is hereby amended by deleting the following definitions in their entirety and in their stead inserting the following:

 

"EBIT" shall mean, for the period of determination, (i) Net Income, plus (ii) Interest Expense, plus (iii) all income taxes included in Net Income plus, in each case to the extent deducted in determining Net Income, (iv) all other non-cash expenses included in Net Income (excluding depreciation, depletion and amortization), (v) losses from asset dispositions (for all transactions greater than Three Million and 00/100 Dollars ($3,000,000.00)), (vi) other extraordinary, non-recurring losses, (vii) and non-cash losses from discontinued operations, minus, in each case to the extent added in determining Net Income, (viii) non-cash credits to income, (ix) gains from asset dispositions (for all transactions greater than Three Million and 00/100 Dollars ($3,000,000.00)), (x) non-cash gains from discontinued operations and (xi) other extraordinary, non-recurring income, in each case determined and Consolidated for the Borrower and its Subsidiaries in accordance with GAAP; provided, however, subject in all respects to the approval of the Agent, in its sole but reasonable discretion, in the event of an acquisition or disposition of a Subsidiary or material line of business or a material division during the period of determination and solely for the purposes of determining the Applicable Rate and/or the Leverage Ratio, as the case may be, such calculation shall (a) in the case of such a disposition, exclude for the period of determination, EBIT attributable to the disposed of Subsidiary, line of business, or division as if such disposition had occurred at the beginning of such period of determination and (b) in the case of such an acquisition, include for the period of determination the EBIT attributable to the acquired Subsidiary, line of business, or division as if such acquisition had occurred at the beginning of such period of determination.

 

"EBITDA" shall mean, for the period of determination, (i) EBIT, plus (ii) depreciation, depletion and amortization, in each case determined and Consolidated for the Borrower and its Subsidiaries in accordance with GAAP; provided, however, subject in all respects to the approval of the Agent, in its sole but reasonable discretion, in the event of an acquisition or disposition of a Subsidiary or material line of business or a material division during the period of determination and solely for the purposes of determining the Applicable Rate and/or the Leverage Ratio, as the case may be, such calculation shall (a) in the case of such a disposition, exclude for the period of determination, depreciation, depletion and amortization attributable to the disposed of Subsidiary, line of business, or division as if such disposition had occurred at the beginning of such period of determination and (b) in the case of such an acquisition, include for the period of determination the depreciation, depletion and amortization attributable to the acquired Subsidiary, line of business, or division as if such acquisition had occurred at the beginning of such period of determination.

 

"Expiry Date" shall mean March 1, 2017 or such earlier date on which the Revolving Credit Facility Commitment shall have been terminated pursuant to this Agreement.

 

"Net Income" shall mean, for the period of determination, net income (or loss), in each case determined and Consolidated for the Borrower and its Subsidiaries in accordance with GAAP.

 

"Official Body" means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

 

"Revolving Credit Facility Commitment" shall mean Four Hundred Million and 00/100 Dollars ($400,000,000.00) or such greater amount as may be applicable in accordance with the provisions of Section 2.21 hereof.

 

"Total Commitment Amount" shall mean the obligation of the Banks hereunder to make Loans (other than Swing Line Loans) and to issue Letters of Credit up to the maximum aggregate principal Dollar Equivalent amount of Four Hundred Million and 00/100 Dollars ($400,000,000.00) or such greater amount as may be applicable in accordance with the provisions of Section 2.21 hereof.

 

6. Subsections (a) and (b) of Section 2.12 of the Loan Agreement are hereby deleted in their entirety and in their stead is inserted the following:

 

(a)           If, due to either (i) the introduction of, or any change in, or in the interpretation of, any Law or (ii) the compliance with any guideline or request from any central bank or other Official Body (whether or not having the force of Law), there shall be any increase in the cost to, or reduction in income receivable by, a Bank of making, funding or maintaining Loans (or commitments to make the Loans), then the Borrower shall from time to time, upon demand by such Bank made within a reasonable time after such Bank's determination thereof, pay to the Agent for the account of such Bank additional amounts sufficient to reimburse such Bank for any such additional costs or reduction in income.  All such additional amounts shall be determined by such Bank in good faith using appropriate attribution and averaging methods ordinarily employed by such Bank.  A certificate of such Bank submitted to the Borrower in good faith as to the amount of such additional costs shall be conclusive and binding for all purposes, absent manifest error.  Within ten (10) Business Days after the Agent or such Bank notifies the Borrower in writing of any such additional costs pursuant to this Section 2.12(a), the Borrower may (A) repay in full all Loans of any types or currencies so affected then outstanding, together with interest accrued thereon to the date of such repayment, or (B) convert all Loans of any types or currencies so affected then outstanding into Loans of any other type or currency not so affected upon not less than four (4) Business Days’ notice to the Agent.  If any such repayment or conversion of any Libor Rate Loan occurs on any day other than the last day of the applicable Interest Period for such Loan, the Borrower also shall pay to the Agent for the ratable account of the Banks such additional amounts as set forth in Section 2.12(c); provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

(b)           If either (i) the introduction of, or any change in, or in the interpretation of, any Law or (ii) the compliance with any guideline or request from any central bank or other Official Body (whether or not having the force of Law), affects the amount of capital required to be maintained by any Bank or any corporation controlling any Bank and such Bank determines in good faith that the amount of such capital is increased by or based upon the existence of the Loans (or commitment to make the Loans), then,  within ten (10) Business Days of demand by such Bank, the Borrower shall pay to the Agent for the account of such Bank from time to time as specified by such Bank, additional amounts sufficient to compensate such Bank in the light of such circumstances, to the extent that such Bank determines in good faith such increase in capital to be allocable to the existence of such Bank's Loans (or commitment to make the Loans).  Any such demand by a Bank must be made within a reasonable time after such Bank's determination as set forth in the immediately preceding sentence.  A certificate of such Bank in good faith submitted to the Borrower as to such amounts shall be presumptive evidence of such amounts.  Within ten (10) Business Days after the Agent or such Bank notifies the Borrower in writing of any such additional costs pursuant to this Section 2.12(b), the Borrower may (A) repay in full all Loans of any types or currencies so affected then outstanding, together with interest accrued thereon to the date of such prepayment, or (B) convert all Loans of any types or currencies so affected then outstanding into Loans of any other type or currency not so affected upon not less than four (4) Business Days’ notice to such Bank.  If any such prepayment or conversion of any Libor Rate Loan occurs on any day other than the last day of the applicable Interest Period for such Loan, the Borrower also shall pay to the Agent for the ratable account of the Banks such additional amounts as set forth in Section 2.12(c); provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

7. Section 2.17(c) of the Loan Agreement is hereby deleted in its entirety and in its stead is inserted the following:

 

(c)           Notices From Banks That Optional Currencies Are Unavailable to Fund Renewals of Libor Rate Loans Denominated in an Optional Currency.  If the Borrower delivers a loan request requesting that the Banks renew any Libor Rate Loan which is denominated in an Optional Currency, the Banks shall be under no obligation to renew such Libor Rate Loan if any Bank delivers to the Agent a notice by 5:00 p.m. (Pittsburgh, Pennsylvania time), four (4) Business Days prior to effective date of such renewal that such Bank cannot continue to provide Loans in such Optional Currency due to the introduction of, or any change in, any applicable Law or any change in the interpretation or administration thereof by any Official Body charged with the interpretation or administration thereof, or compliance by such Bank (or any of its lending offices) with any request or directive (whether or not having the force of Law) of any such Official Body which would make it unlawful or impossible for such Bank (or any of its lending offices) to honor its obligations hereunder to make a Loan in an Optional Currency.  In the event the Agent timely receives a notice from a Bank pursuant to the preceding sentence, the Agent will notify the Borrower no later than 12:00 noon (Pittsburgh, Pennsylvania time), three (3) Business Days prior to the renewal date that the renewal of such Loans in such Optional Currency is not then available, and the Agent shall promptly thereafter notify the Banks of the same.  If the Agent shall have so notified the Borrower that any such continuation of Optional Currency Loans is not then available, any notice of renewal with respect thereto shall be deemed withdrawn, and such Optional Currency Loans shall be redenominated into Base Rate Loans with effect from the last day of the Interest Period with respect to any such Optional Currency Loans.  The Agent will promptly notify the Borrower and the Banks of any such redenomination, and in such notice, the Agent will state the aggregate Dollar Equivalent amount of the redenominated Optional Currency Loans as of the Computation Date with respect thereto and such Bank's Pro Rate Share thereof; provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

8. Article II of the Loan Agreement is hereby amended by inserting therein as a new Section 2.22 the following:

 

2.22           Impacted Banks.  Notwithstanding any provision of this Agreement to the contrary, if any Bank becomes an Impacted Bank, then the following provisions shall apply for so long as such Bank is an Impacted Bank:

 

(a)           fees shall cease to accrue on the unfunded portion of the Commitment of such Impacted Bank pursuant to Section 2.05;

 

(b)           if any Swing Line Loans are outstanding or any Letters of Credit Outstanding exist at the time such Bank becomes an Impacted Bank, then:

 

(i)           all or any part of the outstanding Swing Line Loans and Letters of Credit Outstanding of such Impacted Bank shall be reallocated among the non-Impacted Banks in accordance with their respective Pro Rata Share but only to the extent that (x) sum of (1) the aggregate Dollar Equivalent principal amount of all Revolving Credit Loans outstanding, plus, (2) the sum of the aggregate principal amount of all Swing Line Loans outstanding, plus (3) the aggregate Dollar Equivalent amount of Letters of Credit Outstanding shall not exceed the total of all non-Impacted Banks' Revolving Credit Facility Commitments, and (y) no Potential Default or Event of Default has occurred and is continuing at such time;

 

(ii)            if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Agent (x) first, prepay such outstanding Swing Line Loans, and (y) second, cash collateralize for the benefit of the Issuing Bank the Borrowers' obligations corresponding to such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding (after giving effect to any partial reallocation pursuant to clause (i) above) in a deposit account held at the Agent for so long as such Letters of Credit Outstanding exist;

 

(iii)           if the Borrower cash collateralizes any portion of such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Impacted Bank pursuant to Section 2.07 with respect to such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding during the period such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding are cash collateralized;

 

(iv)           if the Letters of Credit Outstanding of the non-Impacted Banks are reallocated pursuant to clause (i) above, then the fees payable to the Banks pursuant to Section 2.07 shall be adjusted in accordance with such non-Impacted Banks' Pro Rata Share; and

 

(v)           if all or any portion of such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding are neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Bank hereunder, all Letter of Credit Commissions payable under Section 2.07 with respect to such Impacted Bank's Pro Rata Share of Letters of Credit Outstanding shall be payable to the Issuing Bank (and not to such Impacted Bank) until and to the extent that such Letters of Credit Outstanding are reallocated and/or cash collateralized.

 

9. Schedule 1 to the Loan Agreement is hereby deleted in its entirety and replaced by Schedule 1 attached hereto.

 

10. The provisions of Section 2 through 9 of this First Amendment shall not become effective until the Agent has received the following, each in form and substance acceptable to the Agent:

 

	
  

	
(a)

	
this First Amendment, duly executed by the Borrower and the Banks;

 

	
  

	
(b)

	
the documents listed in the Preliminary Closing Checklist set forth on Exhibit B attached hereto and made a part hereof; and

 

	
  

	
(c)

	
such other documents as may be reasonably requested by the Agent.

 

11. The Borrower hereby reconfirms and reaffirms all representations and warranties, agreements and covenants made by and pursuant to the terms and conditions of the Loan Agreement, except as such representations and warranties, agreements and covenants may have heretofore been amended, modified or waived in writing in accordance with the Loan Agreement, and except any such representations or warranties made as of a specific date or time, which shall have been true and correct in all material respects as of such date or time.

 

12. The Borrower acknowledges and agrees that each and every document, instrument or agreement which at any time has secured payment of the Borrower's Indebtedness under the Loan Agreement including, but not limited to, (i) the Loan Agreement and (ii) the Guaranty Agreements continue to secure prompt payment when due of the Borrower's Indebtedness under the Loan Agreement.

 

13. The Borrower hereby represents and warrants to the Banks and the Agent that (i) the Borrower has the legal power and authority to execute and deliver this First Amendment; (ii) the officers of the Borrower executing this First Amendment have been duly authorized to execute and deliver the same and bind the Borrower with respect to the provisions hereof; (iii) the execution and delivery hereof by the Borrower and the performance and observance by the Borrower of the provisions hereof and of the Loan Agreement and all documents executed or to be executed therewith, do not violate or conflict with the organizational documents of the Borrower or any Law applicable to the Borrower or result in a breach of any provision of or constitute a default which would have a Material Adverse Effect under any other agreement, instrument or document binding upon or enforceable against the Borrower and (iv) this First Amendment, the Loan Agreement and the documents executed or to be executed by the Borrower in connection herewith or therewith constitute valid and binding obligations of the Borrower in every respect, enforceable in accordance with their respective terms.

 

14. The Borrower represents and warrants that (i) no Event of Default exists under the Loan Agreement, nor will any occur as a result of the execution and delivery of this First Amendment or the performance or observance of any provision hereof; (ii) the Schedules attached to and made part of the Loan Agreement are true and correct as of the date hereof in all material respects and there are no material modifications or supplements thereto; and (iii) it presently has no claims or actions of any kind at law or in equity against the Banks or the Agent arising out of or in any way relating to the Loan Agreement or the other Loan Documents.

 

15. Each reference to the Loan Agreement that is made in the Loan Agreement or any other document executed or to be executed in connection therewith shall hereafter be construed as a reference to the Loan Agreement as amended hereby.

 

16. The agreements contained in this First Amendment are limited to the specific agreements made herein.  Except as amended hereby, all of the terms and conditions of the Loan Agreement shall remain in full force and effect.  This First Amendment amends the Loan Agreement and is not a novation thereof.

 

17. This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

 

18. This First Amendment shall be governed by, and shall be construed and enforced in accordance with, the Laws of the Commonwealth of Pennsylvania without regard to the principles or the conflicts thereof.  The Borrower hereby consents to the jurisdiction and venue of the Court of Common Pleas of Allegheny County, Pennsylvania and the United States District Court for the Western District of Pennsylvania with respect to any suit arising out of or mentioning this First Amendment.

 

[INTENTIONALLY LEFT BLANK]

{01327130}

  

  

  

IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto, have caused this First Amendment to be duly executed, as a document under seal, by their duly authorized officers on the day and year first above written.

 

	
ATTEST

 

 

By:                                                                

Name:                                                                

Title:                                                                

	
Matthews International Corporation

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
Citizens Bank of Pennsylvania, as Agent and for itself as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
PNC Bank, National Association, as Syndication Agent and for itself as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
Fifth Third Bank, as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
HSBC Bank USA, National Association, as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
 

 

 

 

The Huntington National Bank, as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
First Commonwealth Bank, as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

	  	  
	  	
First National Bank of Pennsylvania, as a Bank

 

 

By:___________________________________

Name:  _______________________________

Title:  ________________________________

{01327130}

  

  

  

EXHIBIT A

 

Cover Page

 

See Attached

 

{01327130}

  

  

  

LOAN AGREEMENT

 

by and among

 

MATTHEWS INTERNATIONAL CORPORATION

 

and

 

THE BANKS PARTY HERETO,

 

CITIZENS BANK OF PENNSYLVANIA, as Administrative Agent,

 

RBS Citizens, N.A., Joint Lead Arranger and Joint Bookrunner,

 

PNC CAPITAL MARKETS LLC, as Joint Lead Arranger and Joint Bookrunner

 

and

 

PNC BANK, NATIONAL ASSOCIATION, as Syndication Agent

 

Dated December 21, 2010

 

{01327130}

  

  

  

EXHIBIT B

 

Preliminary Closing Checklist

See Attached

 

{01327130}

  

  

  

Schedule 1

 

Schedule of Banks and Commitments

 

 

	
Bank

 

	
Commitment For Revolving Credit Loans

 

	  	
Commitment Percentage

	
Citizens Bank of Pennsylvania

525 William Penn Place

Pittsburgh, PA 15219

Attn:  Philip R. Medsger

 

	
$115,000,000.00

	  	
%28.750

	
PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

Pittsburgh, PA  15222

Attn:  David G. Schaich

 

	
$115,000,000.00

	  	
%28.750

	
Fifth Third Bank

707 Grant Street

Pittsburgh, PA 15219

Attn:  Jim Janovsky

 

	
$47,500,000.00

	  	
%11.875

	
HSBC Bank USA, National Association

1 HSBC Center

Commercial Banking, Lobby

Buffalo, NY 14201

Attn:  Christopher S. Helmeci

 

	
$30,000,000.00

	  	
%7.500

	
The Huntington National Bank

41 S. High Street

Columbus, Ohio 43215

Attn:  Chad A. Lowe

 

	
$47,500,000.00

	  	
%11.875

	
First Commonwealth Bank

437 Grant Street, Suite 1600

Pittsburgh, PA 15219

Attn:  Stephen J. Orban

 

	
$20,000,000.00

	  	
%5.000

	
First National Bank of Pennsylvania

One Northshore Center, Suite 500

12 Federal Street

Pittsburgh, PA 15212

Attn:  Jeffrey A. Martin

 

	
$25,000,000.00

	  	
%6.250

	
Total Commitment Amount

	
$400,000,000.00

	  	
100%

{01327130}

  

  

  

ACKNOWLEDGMENT

COMMONWEALTH OF PENNSYLVANIA                                                                                                )

 

)           SS:

 

COUNTY OF ALLEGHENY                                                                                     )

 

On this, the _____ day of March, 2012, before me, a Notary Public, the undersigned officer, personally appeared ________________, who acknowledged himself/herself to be the ______________ of Matthews International  Corporation, a Pennsylvania corporation (the "Company"), and that he/she as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the Company as such officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

______________________________

Notary Public

 

My Commission Expires:

{01327130}WebFilings | MDU-3.31.2012Q1 Ex 10a

MDU RESOURCES GROUP, INC.

EXECUTIVE INCENTIVE COMPENSATION PLAN
   ____________________________________________________________

		
	I.
	ESTABLISHMENT AND PURPOSE

The Executive Incentive Compensation Plan (the “Plan”) was adopted by the Board of Directors of MDU Resources Group, Inc. (“MDUR”) on November 4, 1982 and subsequently amended.  Effective January 1, 2012, the Plan was further amended, and the Montana-Dakota Utilities Co. Executive Incentive Compensation Plan, the MDU Construction Services Group, Inc. Executive Incentive Compensation Plan, the Knife River Corporation Executive Incentive Compensation Plan and the WBI Holdings, Inc. Executive Incentive Compensation Plan (collectively, the “Business Unit Plans”) were merged into the Plan.  All awards with respect to services performed in 2011 and earlier that were earned and deferred pursuant to any of the Business Unit Plans shall be subject to the terms of the applicable Business Unit Plans in effect at the time the awards were granted.  Deferral elections for awards relating to services to be performed during 2012 made pursuant to any of the Business Unit Plans shall be deemed to have been made pursuant to the Plan.
The purpose of the Plan is to provide an incentive for key executives of MDUR, its business segments, divisions and subsidiaries to focus their efforts on the achievement of corporate performance goals.  The Plan is designed to reward successful performance as measured against specified performance goals.  When performance reaches or exceeds the performance targets, incentive compensation awards, in conjunction with salaries, will provide a level of compensation which recognizes the skills and efforts of the key executives.

		
	II. 
	DEFINITIONS

Capitalized terms not otherwise defined herein shall have the meanings given them in the Rules and Regulations.

		
	III.
	BASIC PLAN CONCEPT 

The Plan provides an opportunity to earn annual incentive compensation based on the achievement of specified annual performance goals.  A target incentive award for each individual within the Plan is established based on the position level and base salary (“Salary”).  The target incentive award represents the amount to be paid, subject to the achievement of the performance goals established each year.  Larger incentive awards than target may be authorized when performance exceeds targets; lesser or no amounts may be paid when performance is below target.
It is recognized that during a Plan Year major unforeseen changes in economic and environmental conditions or other significant factors beyond the control of management may substantially affect the ability of the Participants to achieve the specified performance goals.  Therefore, in its review of performance the Administrator may modify the performance targets.  However, it is contemplated that such target modifications will be necessary only in years of unusually adverse or favorable external conditions.

		
	IV.
	ADMINISTRATION

The Plan shall be administered by the Compensation Committee of the Board of Directors of MDUR (the “Administrator”).  The Compensation Committee of the Board of Directors of MDUR shall adopt Rules and Regulations for the administration of the Plan.  With respect to employees who are not subject to Section 16 of the Securities Exchange Act of 1934, as amended, the Chief Executive Officer of MDUR, with respect to MDUR employees, and 

MDUR - 2

the chief executive officer of each business segment, in conjunction with the Chief Executive Officer of MDUR, with respect to the business segment’s employees, shall be the Administrator.  
The Administrator shall approve the list of eligible Participants and the target incentive award level for each position within the Plan.  The Plan’s performance targets for the year shall be approved by the Administrator no later than 90 days after the beginning of that Plan Year.  The Administrator shall have final discretion to determine actual award payment levels, method of payment, and whether or not payments shall be made for any Plan Year.
The Board of Directors of MDUR may, at any time and from time to time, alter, amend, supersede or terminate the Plan in whole or in part, provided that no termination, amendment or modification of the Plan shall adversely affect in any material way an award that has met all requirements for payment without the written consent of the Participant holding such award, unless such termination, modification or amendment is required by applicable law.

		
	V.
	ELIGIBILITY

Executives who are determined by the Administrator to have a key role in both the establishment and achievement of their company’s objectives shall be eligible to participate in the Plan.
Nothing in the Plan shall interfere with or limit in any way the right of an employer to terminate any Participant’s employment at any time, for any reason or no reason in its sole discretion, or confer upon any Participant any right to remain employed by the employer.  No executive shall have the right to be selected to receive an award under the Plan, or, having been so selected, to be selected to receive a future award.

MDUR - 3

		
	VI.
	PLAN PERFORMANCE MEASURES

Performance measures shall be established that consider shareholder and/or customer interests.  These measures shall be evaluated annually based on achievement of specified goals.  
The performance measures will be determined by the Administrator.  These measures may be applied at the MDUR level, the business segment level and/or a division or subsidiary level.  The Administrator may assign different performance measures and/or different weights to performance measures for each Participant.
The Administrator may establish threshold, target and/or maximum award levels annually for some or all of the performance measures.  The Administrator will retain the right to make all interpretations as to the actual attainment of the desired results and will determine whether any circumstances beyond the control of management need to be considered.

		
	VII.
	TARGET INCENTIVE AWARDS  

Target incentive awards will be expressed as a percentage of each Participant’s Salary.  These percentages shall vary by position and reflect larger reward opportunity for positions having greater effect on the establishment and accomplishment of the corporate objectives.  A schedule showing the target awards as a percentage of Salary for eligible positions will be prepared for each Plan Year.

		
	VIII.
	INCENTIVE FUND DETERMINATION

The target incentive fund is the sum of the individual target incentive awards for all eligible Participants.  Once the incentive targets have been determined by the Administrator, a target incentive fund shall be established and accrued ratably by MDUR and each of its business segments, divisions and/or 

MDUR - 4

subsidiaries, as applicable.  The incentive fund and accruals may be adjusted during the year.
At the close of each Plan Year, the Chief Executive Officer of MDUR will cause to be prepared an analysis showing performance in relation to each of the performance measures employed.  This will be provided to the Administrator for review and comparison to threshold, target and/or maximum, if applicable, performance levels.  In addition, any recommendations of the Chief Executive Officer of MDUR or the Administrator will be presented at this time.  The Administrator will then determine the amount of the target incentive fund earned.

		
	IX.
	INDIVIDUAL AWARD DETERMINATION

Each individual Participant's award will be based upon the level of performance achieved relative to the established performance measures, as determined by a percentage from 0 percent to a maximum of 200 percent, as determined by the Administrator.

		
	X.
	PAYMENT OF AWARDS

Except as provided below or as otherwise determined by the Administrator, in order to receive an award under the Plan, the Participant must remain in the employment of the Participant’s employer for the entire Service Year.  If a Participant terminates employment with MDUR pursuant to Section 5.01 of MDUR’s Bylaws which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a business segment, division and/or subsidiary of MDUR pursuant to a similar company Bylaw provision) and if the Participant’s 65th birthday occurs during the Service Year, determination of whether the performance measures have been met will be made at the end of the Service Year, and to the extent met, payment of the award will be made to the Participant, prorated.  Proration of awards 

MDUR - 5

shall be based upon the number of full months elapsed from and including January to and including the month in which the Participant’s 65th birthday occurs.  The prorated award shall be paid as soon as practicable in the year following the Service Year, but in all events between January 1 and March 10.
A Participant who transfers between the Participant’s employer at the time the award is granted and MDUR or any of its business segments, divisions or subsidiaries may receive a prorated award at the discretion of the Administrator.  
Payments made under the Plan will not be considered part of compensation for pension purposes.  Payments will be made in cash as soon as practicable in the year following the Service Year, but in all events between January 1 and March 10.
To the extent approved by the Administrator of the Plan with respect to executives of MDUR, its business segments, divisions or subsidiaries, as applicable, incentive awards may be deferred if the appropriate elections have been executed prior to the beginning of the Service Year.  A deferral election will be effective only for the incentive award earned in the Service Year following the Plan Year in which the election is made.  Deferral elections may not be changed or revoked after the Service Year begins.  Deferred amounts shall be subject to the terms of the Plan and the Rules and Regulations and, to the extent not inconsistent therewith, the deferral election forms pursuant to which the amounts were deferred.  Deferred amounts will accrue interest at a rate determined annually by the Compensation Committee of the Board of Directors of MDUR and specified in the Rules and Regulations.
In the event of a "Change in Control" (as defined in the Rules and Regulations) then any award deferred by each Participant shall become immediately payable to the Participant in cash, together with accrued interest thereon to the date of payment.  In the event the Participant files suit to collect the 

MDUR - 6

Participant's deferred award then all of the court costs, other expenses of litigation, and attorneys' fees shall be paid by MDUR or one of its business segments, divisions or subsidiaries, as applicable, in the event the Participant prevails upon any of the Participant's claims for payment of a deferred award.

		
	XI.
	ACCOUNTING RESTATEMENTS

This Section XI shall apply to incentive awards granted to all Participants in the Plan.  Notwithstanding anything in the Plan or the Rules and Regulations to the contrary, if MDUR’s audited financial statements are restated, the Compensation Committee of the Board of Directors of MDUR (the “Compensation Committee”) may, in accordance with its Guidelines for Repayment of Incentives Due to Accounting Restatements, take such actions as it deems appropriate (in its sole discretion) with respect to 
(a)    unpaid incentive awards under the Plan (including incentive awards relating to completed Plan Years, but with respect to which payments have not yet been made or deferred) ("Outstanding Awards") and 
(b)    prior incentive awards that were paid (or deferred) within the three-year period preceding the restatement ("Prior Awards"), provided such Prior Awards were not paid prior to the date the Plan was amended to add this Section XI, 
if the calculation of the amounts payable, paid or deferred under such awards are, or would have been, directly impacted by the restatement, including, without limitation, (i) securing (or causing to be secured) repayment of some or all payments made pursuant to (or deferrals relating to) Prior Awards, (ii) making (or causing to be made) additional payments (or crediting additional deferrals), (iii) reducing or otherwise adjusting the amount payable pursuant to Outstanding Awards and/or (iv) causing the forfeiture of Outstanding Awards.  The Compensation Committee 

MDUR - 7

may, in its sole discretion, take different actions pursuant to this Section XI with respect to different awards, different Participants (or beneficiaries) and/or different classes of awards or Participants (or beneficiaries).  The Compensation Committee has no obligation to take any action permitted by this Section XI.  The Compensation Committee may consider any factors it chooses in taking (or determining whether to take) any action permitted by this Section XI, including, without limitation, the following:
(A)    The reason for the restatement of the financial statements;
(B)    The amount of time between the initial publication and subsequent restatement of the financial statements; and
(C)    The Participant's current employment status, and the viability of successfully obtaining repayment.
If the Compensation Committee requires repayment of all or part of a Prior Award, the amount of repayment may be based on, among other things, the difference between the amount paid to the individual and the amount that the Compensation Committee determines in its sole discretion should have been paid based on the restated results.  The Compensation Committee shall determine whether repayment shall be effected (i) by seeking repayment from the Participant, (ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be provided to the Participant under any compensatory plan, program or arrangement maintained by MDUR or any of its business segments, divisions or subsidiaries, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with otherwise applicable compensation practices of MDUR or its business segments, divisions or subsidiaries, as applicable, or (iv) by any 

MDUR - 8

combination of the foregoing.  Additionally, by accepting an incentive award under the Plan, Participants acknowledge and agree that the Compensation Committee may take any actions permitted by this Section XI with respect to Outstanding Awards to the extent repayment is to be made pursuant to another plan, program or arrangement maintained by MDUR or any of its business segments, divisions or subsidiaries.

MDUR - 9

MDU RESOURCES GROUP, INC.

EXECUTIVE INCENTIVE COMPENSATION PLAN

RULES AND REGULATIONS

The Compensation Committee of the Board of Directors of MDU Resources Group, Inc. (“MDUR”) adopted Rules and Regulations for the administration of the Executive Incentive Compensation Plan (the "Plan") on February 9, 1983, following adoption of the Plan by the Board of Directors of MDUR on November 4, l982, which Rules and Regulations were subsequently amended and are hereby further amended effective January 1, 2012.

		
	I.
	DEFINITIONS

The following definitions shall be used for purposes of these Rules and Regulations and for the purpose of administering the Plan:
		
	1.
	The “Administrator” shall be the Compensation Committee of the Board of Directors of MDUR with respect to employees subject to Section 16 of the Securities Exchange Act of 1934, as amended.  With respect to employees who are not subject to Section 16, the Chief Executive Officer of MDUR, with respect to MDUR employees, and the chief executive officer of each business segment, in conjunction with the Chief Executive Officer of MDUR, with respect to the business segment’s employees, shall be the Administrator.

		
	2.
	"Change in Control" shall mean the occurrence of any of the following transactions or events: (a) any person (which shall not include MDUR, any subsidiary of MDUR or any employee benefit plan of MDUR or of any subsidiary of MDUR) ("Person") or group (as that term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of MDUR possessing 30% or more of 

MDUR - 10

the total voting power of the stock of MDUR; (b) any Person or group (as that term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires ownership of the stock of MDUR that, together with stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of MDUR (this part (b) applies only when there is a transfer of stock of MDUR and MDUR's stock remains outstanding after the transaction); (c) a majority of the members of the Board of Directors of MDUR is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors of MDUR; or (d) any Person or group (as that term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) assets from MDUR that have a gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of MDUR immediately before such acquisition or acquisitions.
Notwithstanding anything contained herein to the contrary, no transaction or event shall constitute a Change in Control for purposes of the Plan unless the transaction or event constitutes a change in the ownership of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)), a change in effective control of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)) or a change in the ownership of a substantial portion of the assets of a corporation (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vii)) and the term Change in Control shall be interpreted in a manner consistent with the proper interpretation of the similar provisions in the Section 409A Treasury Regulations.
		
	3.
	The “Code” shall mean the Internal Revenue Code of 1986, as amended.

		
	4.
	The “Compensation Committee” shall be the Compensation Committee of the Board of Directors of MDUR.

MDUR - 11

		
	5.
	"MDUR" shall refer to MDU Resources Group, Inc. alone and shall not refer to any of its business segments, divisions or subsidiaries.

		
	6.
	The "Moody's Rate" is defined as the average of (i) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “A” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12 and (ii) the number that results from adding the daily Moody’s U.S. Long-Term Corporate Bond Yield Average for “BBB” rated companies as of the last day of each month for the 12-month period ending October 31 and dividing by 12.

		
	7.
	"Participants" for any Plan Year shall be those executives who have been approved by the Administrator as eligible for participation in the Plan for such Plan Year.    

		
	8.
	"Payment Date" shall be the date set by the Administrator for payment of awards pursuant to Section X of the Plan, other than those awards deferred pursuant to Section X of the Plan and Section VII of these Rules and Regulations.

		
	9.
	The "Plan" shall refer to the Executive Incentive Compensation Plan, as it has been and may be amended.

		
	10.
	The "Plan Year" shall be the calendar year.

		
	11.
	“Retirement” means the later of the day the Participant attains age 55 or the day the Participant ceases to be an employee of MDUR or any of its business segments, divisions or subsidiaries.

		
	12.
	“Service Year” means the Plan Year during which the services giving rise to the incentive award are performed.

		
	13.
	“Specified Employee” means an employee who, as of the date the employee separates from service, is a “specified employee” (as that term is used in Section 409A(a)(2)(B) of the Code), as determined under MDUR's policy for determining specified employees. 

MDUR - 12

		
	II.
	ADMINISTRATION

		
	1.
	The Compensation Committee shall have the full power to construe and interpret the Plan and to establish and to amend these Rules and Regulations for its administration.

		
	2.
	The Administrator shall not participate in a decision as to the Administrator’s eligibility for, or award of, an incentive award payment.

		
	3.
	For each Plan Year, the Administrator shall approve a list of eligible executives and notify those so approved that they are eligible to participate in the Plan for such Plan Year.

		
	4.
	No later than 90 days after the beginning of each Plan Year, the Administrator shall approve the Plan’s performance measures, performance targets and target incentive award levels for each salary grade covered by the Plan for the Plan Year.  

		
	5.
	The Administrator shall have final discretion to determine actual award payment levels, method of payment, and whether or not payments shall be made for any Plan Year.  However, unless the Plan's performance goals are met for the Plan Year, no award shall be made for that Plan Year.  Performance targets modified pursuant to Section III of the Plan will be deemed performance targets for purposes of determining whether or not these targets have been met.

		
	III.
	PLAN PERFORMANCE MEASURES

		
	1.
	The Administrator shall establish the percentage attainment of performance measures.  The Administrator may establish more or fewer performance measures as it deems necessary.

		
	2.
	The performance measures may be set by reference to earnings, return on invested capital or any other measure or combination of measures deemed appropriate by the Administrator.  They may be established for MDUR or any of its business segments, divisions or subsidiaries.  The Administrator may assign different performance 

MDUR - 13

measures and/or different weights to performance measures for each Participant.
		
	3.
	The Administrator shall cause to be prepared a list of individuals to whom the Plan performance measures will be applied and shall identify the applicable performance measures for each Participant, which may vary among Participants.  

		
	4.
	The Administrator may set threshold, target and/or maximum award levels for some or all of the performance measures, and those levels shall be included on the list referred to in paragraph 3 above.

		
	5.
	The Administrator will retain the authority to determine whether or not the actual attainment of these measures has been made.

		
	IV.
	TARGET INCENTIVE AWARDS  

		
	1.
	Target incentive awards will be a percentage of each Participant’s Salary, as defined in the Plan.

		
	2.
	Target incentive awards shall be set by the Administrator annually and will be included on the list referred to above.

		
	V.
	INCENTIVE FUND DETERMINATION

		
	1.
	The target incentive fund is the sum of the individual target incentive awards for all eligible Participants.

		
	2.
	Once individual incentive targets have been determined, a target incentive fund shall be established and accrued ratably by MDUR and each of its business segments, divisions and/or subsidiaries, as applicable.  The incentive fund and accruals may be adjusted during the year.

		
	3.
	As soon as practicable following the close of each Plan Year, the Chief Executive Officer of MDUR will cause to be prepared an analysis showing performance in relation to the performance measures.  The Administrator will review the analysis and 

MDUR - 14

determine, in its sole discretion, the amount of the actual incentive fund.
		
	4.
	In determining the actual incentive fund, any recommendations of the Chief Executive Officer of MDUR or the Administrator will be considered.

		
	VI.
	INDIVIDUAL AWARD DETERMINATION

		
	1.
	The Administrator shall have the sole discretion to determine each individual Participant's award. The Administrator's decision will be based upon the level of performance achieved.

		
	2.
	Each individual Participant’s award will be based upon the level of performance achieved relative to the established performance measures, as determined by a percentage from 0 percent to a maximum of 200 percent, as determined by the Administrator.

		
	VII.
	PAYMENT OF AWARDS

		
	1.
	On the date the Administrator determines the awards to be made to individual Participants, it shall also establish the Payment Date.

		
	2.
	Except as provided below or in the Plan or as the Administrator otherwise determines, in order to receive an award under the Plan, a Participant must remain in the employment of the Participant’s employer for the entire Service Year.

		
	3.
	If a Participant terminates employment with MDUR pursuant to Section 5.01 of MDUR’s Bylaws, which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a business segment, division and/or subsidiary of MDUR pursuant to a similar company Bylaw provision), and if the Participant’s 65th birthday occurs during the Service Year, determination of whether the performance measures have been met will be made at the end of the Service Year, and to the extent met, payment of the award will be made to the Participant, prorated.  Proration of awards shall be based upon the number of full months elapsed from and including January to 

MDUR - 15

and including the month in which the Participant’s 65th birthday occurs.
		
	4.
	Payment of the awards shall be made in cash.  Payments shall be made on the Payment Date unless the Participant has deferred, in whole or in part, the receipt of the award by making an election on the deferral form attached hereto, prior to the beginning of the Service Year.  Deferral elections may not be changed or revoked after the Service Year begins.

		
	5.
	In the event a Participant has elected to defer receipt of all or a portion of the award, MDUR or one of its business segments, divisions or subsidiaries, as applicable shall set up an account in the Participant's name.  The amount of the Participant's award to the extent deferred will be credited to the Participant's account on the Payment Date.

		
	6.
	The balance credited to an account of a Participant who has elected to defer receipt of an award will be an unsecured, unfunded obligation of MDUR or one of its business segments, divisions or subsidiaries, as applicable.

		
	7.
	Interest shall accrue on the balance credited to a Participant's account from the date the balance is credited.  The rate of interest for each Plan Year shall be the Moody’s Rate.  

		
	8.
	Interest shall be compounded and credited to the account monthly.

		
	9.
	A Participant may elect to defer any percentage, not to exceed l00, of an annual award.

		
	10.
	A Participant electing to defer any part of an award must elect one of the following dates on which (a) payment will be made, if payment will be made in a lump sum or (b) payments will commence, if payment will be made in monthly installments:

		
	(1)
	Between January 1 and March 10 next following termination of employment with MDUR, its business segments, divisions and subsidiaries, as applicable; or

MDUR - 16

		
	(2)
	Between January 1 and March 10 of the fifth year following the year in which the award would have been paid had it not been deferred.

For Participants who previously elected to have payments made or commence on the Payment Date next following termination of employment, their payments will be made or commence between January 1 and March 10 next following their termination of employment with MDUR, its business segments, divisions and subsidiaries, as applicable.  For Participants who elected to have payments made or commence on the Payment Date of the fifth year following the year in which the award may be made, their payments will be made or commence between January 1 and March 10 of the fifth year following the year in which the award would have been paid had it not been deferred.

		
	11.
	A Participant may elect to receive the deferred amounts accumulated in the Participant's account in monthly installments, not to exceed 120.  In the event the Participant elects to receive the amounts in the Participant's account in more than one installment, interest shall continue to accrue on the balance remaining in their account at the applicable rate or rates determined annually by the Compensation Committee.

		
	12.
	Notwithstanding anything contained in the Plan or these Rules and Regulations to the contrary, if a Specified Employee's employment terminates, to the extent required by Section 409A(a)(2)(B) of the Code, except as otherwise provided in paragraph 13 below of this Section VII of these Rules and Regulations, payment of any deferred amounts under the Plan that are to be paid during the 6-month period following the Specified Employee's termination of employment shall not be paid or provided until the first business day after the date that is 6 months following the Specified Employee's termination of employment.  Any payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the 6-month period following the Specified Employee's termination of employment.  To 

MDUR - 17

the extent payments are deferred pursuant to the prior sentence, such deferred amounts shall continue to accrue interest pursuant to Section VII of these Rules and Regulations until payment occurs.
For all purposes under the Plan and these Rules and Regulations, references to termination of employment and similar terms shall be interpreted to mean “separation from service,” as that term is used in Section 409A of the Code, and the Participant's employment shall not be deemed to have terminated for purposes of the Plan or these Rules and Regulations unless and until a separation from service shall have occurred for purposes of Section 409A of the Code.
		
	13.
	In the event of the death of a Participant in whose name a deferred account has been set up, MDUR or one of its business segments, divisions or subsidiaries, as applicable, shall, within 90 days thereafter, pay to the Participant's estate or the designated beneficiary the entire amount in the deferred account.

		
	14.
	In the event of a "Change in Control" then any award deferred by each Participant shall become immediately payable to the Participant.  In the event the Participant files suit to collect a deferred award then all of the Participant's court costs, other expenses of litigation, and attorneys' fees shall be paid by MDUR or one of its business segments, divisions or subsidiaries, as applicable, in the event the Participant prevails upon any of the Participant's claims for payment.

MDUR - 18

PAYROLL ELECTION FORM

Election for Deferred Compensation
and Beneficiary Designation

Pursuant to the MDU Resources Group, Inc. Executive Incentive Compensation Plan (the "Plan"), I elect to defer receipt of _______________ percent of the cash
(not to exceed 100)

portion of any award which may be payable to me in [    ] for Plan Year incentive earned in [    ], until the event specified below:
Check one:
Between January 1 and March 10 of the year following the year I cease to be an employee of MDU Resources Group, Inc., its business segments, divisions and subsidiaries, 
		
	_______________
	as applicable.

		
	_______________
	Between January 1 and March 10 of [    ].

I elect to receive any amounts deferred pursuant to the designation above and accumulated in my account in ______________________________monthly installments.
  (not to exceed 120)

In the event of my death prior to receipt of the balance of such accumulated amounts, I designate
____________________________________________________________ whose address is
____________________________________________________________ as my beneficiary
to receive such balance.

(continued)

I understand that this election shall become irrevocable on December 31, 20[    ].  I further understand that (1) if I am a “specified employee” (as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) when my employment terminates, to the extent required by Section 409A(a)(2)(B), payment of any deferred amounts under the Plan that are subject to Section 409A of the Code and that are to be paid during the 6 month period following my termination of employment shall not be paid or provided until the first business day after the date that is 6 months following termination of my employment or, if earlier, within 90 days after my death and (2) for purposes of this election form, I shall not be deemed to have terminated employment with MDU Resources Group, Inc. or an affiliated company unless and until a "separation from service" (as that term is used in Section 409A of the Code) shall have occurred.

	
			
	 
	 
	 

	(Print Name)
	 
	(Signature)

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	(Date)

2

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