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    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, and subsidiaries to focus their efforts on the achievement of performance objectives.  The Plan is designed to reward successful performance as measured against specified performance measures.  When performance reaches or exceeds the target performance measures, incentive compensation awards, in conjunction with salaries, 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 measures.  A target incentive award for each Participant within the Plan is established based on the approved salary grade structure.  The target incentive award represents the amount to be paid, subject to the achievement of the performance measures 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 measures.  Therefore, in its review of performance the Administrator may modify the performance measure targets.  However, it is contemplated that such modifications to the performance measure target will be necessary only in years of unusually adverse or favorable external conditions or other unforeseen significant factors beyond the control of management.

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 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 Participant within the Plan.  It is contemplated that the Plan’s performance measure 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 

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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.

VI.    PLAN PERFORMANCE MEASURES
    Performance measures shall be established that consider stakeholder interests and shall be evaluated annually based on achievement of specified objectives.  
    The performance measures will be determined by the Administrator.  These measures may be applied at the MDUR level, the business segment level and/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 maximum or other 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 performance measure 

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and will determine whether any circumstances beyond the control of management need to be considered.

VII.    TARGET INCENTIVE AWARDS  
    Target incentive awards are expressed as a percentage of each Participant’s Salary.  These percentages may vary by position and reflect larger reward opportunity for positions having greater effect on the establishment and accomplishment of the performance 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 and/or 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 an analysis to be prepared showing the actual performance results in relation to each of the target performance measures.  This will be provided to the Administrator for review and comparison to threshold, target and maximum or other performance levels, if applicable.  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 each Participant’s incentive award and the total target incentive fund earned.

IX.    INDIVIDUAL AWARD DETERMINATION
    Each Participant's award will be based upon the level of actual performance achieved relative to the established performance measures, as determined by a percentage from 0 percent to a maximum of 250 percent, as determined by the Administrator.

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X.    PAYMENT OF AWARDS
    Except as provided below or as otherwise determined by the Administrator, in order to receive an award payment under the Plan, the Participant must remain in the employment of MDUR or one of its subsidiaries for the entire Service Year.  If a Participant terminates employment after the Participant’s 65th birthday and if the employment termination 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 and including the month in which the employment termination 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 MDUR and one of its subsidiaries during the plan year 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 or 401k Plan employer matching 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 or its subsidiaries, as applicable, incentive awards may be deferred.  Deferred amounts for Service Years prior to 2021 shall comply with and 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 for Service Years after 2020 shall comply with and be subject to the terms of the MDU Resources Group, Inc. Deferred Compensation Plan.
    
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 is required to prepare an accounting restatement due to material noncompliance with any 

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financial reporting requirements under the securities laws, MDUR or the Administrator  may, or shall if required, take action to recover incentive-based compensation from specific executive officers in accordance with its Guidelines for Repayment of Incentives Due to Accounting Restatements, as they may be amended or substituted from time to time, and in accordance with applicable law and applicable rules of the Securities and Exchange Commission and the New York Stock Exchange. 

MDUR - 6Document

MDU RESOURCES GROUP, INC.
LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

  February 11, 2021

{Participant Name}

In accordance with the terms of the MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan (the "Plan"), pursuant to action of the Compensation Committee of the Board of Directors of MDU Resources Group, Inc. (the "Committee"), MDU Resources Group, Inc. (the "Company") hereby grants to you (the "Participant") Performance Shares (the "Award"), subject to the terms and conditions set forth in this Award Agreement (including Annexes A and B hereto and all documents incorporated herein by reference), as set forth below:

						
	Target Award:
 
	{No. of Shares}Performance Shares (the "Target Award")
 

	Performance Period:
 
	January 1, 2021 through
December 31, 2023 (the "Performance Period")
 

	Date of Grant:
 
	February 11, 2021

	Dividend Equivalents:
	Yes

THESE PERFORMANCE SHARES ARE SUBJECT TO FORFEITURE AS PROVIDED HEREIN.  THIS AWARD AND AMOUNTS RECEIVED IN CONNECTION WITH THIS AWARD ARE ALSO SUBJECT TO FORFEITURE, RECAPTURE OR OTHER ACTION IN THE EVENT OF AN ACCOUNTING RESTATEMENT, AS PROVIDED IN THE PLAN.  

Further terms and conditions of the Award are set forth in Annexes A and B hereto, which are integral parts of this Award Agreement.  Subject to the terms of the Plan, decisions and interpretations of the Committee are binding, conclusive and final upon any questions arising under the Award Agreement or the Plan.
  
 You must accept this Award Notice by logging onto your account with Fidelity Investments and accepting this grant agreement. If you fail to do so, the award will be null and void. By accepting this Award, you agree to be bound by all of the provisions set forth in this Award Notice, the Agreement, and the Plan.

Attachments:      
Annex A:  Performance Share Award Agreement
Annex B

ANNEX A

TO

MDU RESOURCES GROUP, INC.
LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

It is understood and agreed that the Award of Performance Shares evidenced by the Award Agreement to which this is annexed is subject to the following additional terms and conditions.

1.            Nature of Award.  The Target Award represents the opportunity to receive shares of Company common stock, $1.00 par value ("Shares") and Dividend Equivalents on such Shares.  The number of Shares that may be earned under this Award shall be determined pursuant to Section 4 hereof.  The amount of Dividend Equivalents that may be earned under this Award shall be determined pursuant to Section 6 hereof.  Except for Dividend Equivalents, which are paid in cash, Awards will be paid in Shares.

2.      Performance Measures.  The following performance measures will be used to determine the Payout Percentage.
•Fifty percent (50%) of the Award is based on the Company's total shareholder return ("TSR") relative to that of the Peer Group listed on Annex B (the "Percentile Rank") for the Performance Period.  
•Fifty percent (50%) of the Award is based on the Company’s Earnings Growth which is defined as the compound annual growth rate in income from continuing operations for the Performance Period.

(a) The achievement of the relative TSR performance measure will be determined in accordance with the following table:

						
	Percentile Rank
	Payout Percentage
(% of Target Award)

	[ ]th or [ ]
	[ ]

	[ ]th
	[ ]

	[ ]th
	[ ]

	less than [ ]th
	[ ]

Payout percentages for results achieved between the stated percentile ranks will be determined by linear interpolation.    The Percentile Rank of a given company's TSR is defined as the percentage of the Peer Group companies' returns falling at or below the given company's TSR.  The formula for calculating the Percentile Rank follows:

						
		Percentile Rank = (n - r + 1)/n x 100

 

Annex A - 1

						
	Where:	

									
		n =	total number of companies in the Peer Group at the end of the Performance Period, including the Company

									
		r  =	the numeric rank of the Company's TSR relative to the Peer Group at the end of the Performance Period, where the highest return in the group is ranked number 1

To illustrate, if the Company's TSR is the third highest in the Peer Group comprised of 50 companies, its Percentile Rank would be 96.  The calculation is: (50 - 3 + 1)/50 x 100 = 96.

The Percentile Rank shall be rounded to the nearest whole percentage.

If a Peer Group company is removed from the Standard & Poors MidCap 400 Index during the Performance Period, the company will be deleted from the Peer Group except companies that become bankrupt during the Performance Period will be moved to the bottom of the performance array.  Percentile Rank will be calculated without regard to the return of the deleted company.

If the Company or a company in the Peer Group spins off a segment of its business, the shares of the spun-off entity will be treated as a cash dividend that is reinvested in the Company or the company in the Peer Group.

Total shareholder return is the percentage change in the value of an investment in the common stock of a company based on the average closing prices for the last twenty trading days in the calendar year preceding the beginning of the Performance Period through the average closing prices for the last twenty trading days in the final year of the Performance Period.  It is assumed that dividends are reinvested in additional shares of common stock at the frequency paid.

(b)The achievement of the Earnings Growth performance measure will be determined in accordance with the following table:

						
	Earnings Growth	Payout Percentage
 (% of Target Award)

	Less than [ ]%	[ ]%
	[ ]%	[ ]%
	[ ]%	[ ]%
	[ ]%	[ ]%

Payout percentages for results achieved between the stated performance levels will be determined by linear interpolation.

For purposes of calculating Earnings Growth, income from continuing operations will be the amount reported in the Company’s financial statements at the beginning and end of the Performance Period. Income from continuing operations for the year ended December 31, 2023 will be adjusted, as such adjustments are approved by the Compensation Committee, to remove:
•The effect on earnings from losses/impairments on asset sales/dispositions/retirements
•The effect on earnings from withdrawal liabilities relating to multiemployer pension plans

Annex A - 2

•The effect on earnings from costs incurred for acquisitions or mergers
•The effect on earnings from any unanticipated tax law changes.

For calculation of the 2021-2023 Performance Period, the beginning Performance Period income from continuing operations used in the denominator (base year) will be the 2020 income from continuing operations of $[ ] million. The Compensation Committee reserves the right to equitably adjust the target Earnings Growth rate and the beginning and end of period income from continuing operations to reflect the effect of business segment changes during the Performance Period and prevent dilution or enlargement of rights.

The Earnings Growth rate for the Performance Period will be determined by the following formula:

Earnings Growth   =   ( EV / BV)1 / n – 1
Where:
    EV = Income from continuing operations for the year ended December 31, 2023, as adjusted (end of the Performance Period.)
    BV = Income from continuing operations for the year ended December 31, 2020 (beginning of the Performance Period.
    N = number of years in the Performance Period (i.e. 3)

To illustrate, if the Company’s income from continuing operations for the year ended December 31,  2020 was $250 million and the Company’s income from continuing operations for the year ended December 31, 2023 was $300 million, the compound annual growth rate at the end of the 3 year period would be 6.3%.  The calculation is:

6.3%   =   ( 300 / 250)1 / 3 – 1

3.    Total Percentage Payout.  The Total Percentage Payout is the sum of the payout percentages for each of the performance measures multiplied by the weighting percentage for such performance measure.

i.e.
Total Percentage Payout = (50% x relative TSR payout) + (50% x Earnings Growth payout)

4.             Determination of Number of Shares Earned.  The number of Shares earned, if any, for the Performance Period shall be determined in accordance with the following formula:

# of Shares = Total Payout Percentage x Target Award

All Performance Shares that are not earned for the Performance Period shall be forfeited

5.            Issuance of Shares and Mandatory Holding Period.  Subject to any restrictions on distributions of Shares under the Plan, and subject to Section 6 of this Annex A, the Shares earned under the Award, if any, shall be issued to the Participant as soon as practicable (but no later than the next March 10) following the close of the Performance Period.  The Participant shall retain 50% of the net after-tax Shares that are earned under this Award until the earlier of (i) the end of the two-year period commencing on the date any Shares earned under this Award are issued and (ii) the Participant’s termination of employment.  Executives are required to own Shares at designated 
Annex A - 3

multiples of their base salary. If a Participant has not achieved an applicable stock ownership requirement, the Participant shall hold additional net after-tax Shares received under this award until the requirement is met.  
6.            Dividend Equivalents.  Dividend Equivalents shall be earned with respect to any Shares issued to the Participant pursuant to this Award.  The amount of Dividend Equivalents earned shall be equal to the total dividends declared on a Share for stockholders of record between the Date of Grant of this Award and the last day of the Performance Period, multiplied by the number of Shares issued to the Participant pursuant to the Award Agreement.  Any Dividend Equivalents earned shall be paid in cash to the Participant when the Shares to which they relate are issued or as soon as practicable thereafter, but no later than the next March 10 following the close of the Performance Period.  If the Award is forfeited or if no Shares are issued, no Dividend Equivalents shall be paid.

7.            Termination of Employment.  
(a)           If the Participant's employment with the Company is terminated during the Performance Period (i) for "Cause" (as defined below) at any time or (ii) for any reason other than "Cause" before the Participant, as of the effective date of termination, has reached age 55 and completed 10 "Years of Service" (as defined below), all Performance Shares (and related Dividend Equivalents) shall be forfeited.

(b)           If the Participant's employment with the Company is terminated for any reason other than "Cause" after the Participant, as of the effective date of termination, has reached age 55 and completed 10 "Years of Service" (i) during the first year of the Performance Period, all Performance Shares (and related Dividend Equivalents) shall be forfeited; (ii) during the second year of the Performance Period, determination of the Company's Payout Percentage for the Performance Period will be made by the Committee at the end of the Performance Period, and Shares (and related Dividend Equivalents) earned, if any, will be paid based on the Payout Percentage, prorated for the number of full months elapsed from and including the month in which the Performance Period began to and including the month in which the termination of employment occurs; and (iii) during the third year of the Performance Period, determination of the Company's Payout Percentage for the Performance Period will be made by the Committee at the end of the Performance Period, and Shares (and related Dividend Equivalents) earned, if any, will be paid based on the Payout Percentage without prorating.

(c)           For purposes of the Award Agreement, the term "Cause" shall mean the Participant's fraud or dishonesty that has resulted or is likely to result in material economic damage to the Company or a Subsidiary, or the Participant's willful nonfeasance if such nonfeasance is not cured within ten days of written notice from the Company or a Subsidiary, as determined in good faith by a vote of at least two-thirds of the non-employee directors of the Company at a meeting of the Board at which the Participant is provided an opportunity to be heard.  For purposes of the Award Agreement, the term "Years of Service" shall mean the years a Participant is employed by the Company and/or a Subsidiary.

8.            Tax Withholding.  Pursuant to Article 14 of the Plan, the Committee has the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state and local taxes (including the Participant's FICA obligations) required by law to be withheld with respect to the Award and Dividend Equivalents.  The Committee may condition the delivery of Shares upon the Participant's satisfaction of such withholding obligations.  
Annex A - 4

The withholding requirement for Shares will be satisfied by the Company withholding Shares having a Fair Market Value equal to federal income tax withholding obligations using an IRS accepted methodology plus additional amounts for state and local tax purposes, as applicable, including payroll taxes, that are applicable to such supplemental taxable income but with rates not to exceed the maximum effective statutory rates, unless the Participant elects, in a manner satisfactory to the Committee, to remit an amount to satisfy the withholding requirement subject to such restrictions or limitations that the Committee, in its sole discretion, deems appropriate.  Such election must be made before, and is irrevocable after, December 15 of the last year of the Performance Period, and cannot be made or revoked while the Participant possesses information that will be material nonpublic information at the time the Shares are issued such that the Participant would be prohibited from trading on the Company’s stock under its Insider Trading Policy.

9.            Ratification of Actions.  By accepting the Award or other benefit under the Plan, the Participant and each person claiming under or through him or her shall be conclusively deemed to have indicated the Participant's acceptance and ratification of, and consent to, any action taken under the Plan or the Award by the Company, its Board of Directors, or the Committee.

10.            Notices.  Any notice hereunder to the Company shall be addressed to its office, 1200 West Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506; Attention: Corporate Secretary, and any notice hereunder to the Participant shall be addressed to him or her at the address specified on the Award Agreement, subject to the right of either party to designate at any time hereafter in writing some other address.

11.            Definitions.  Capitalized terms not otherwise defined herein or in the Award Agreement shall have the meanings given them in the Plan.

12.           Governing Law and Severability.  To the extent not preempted by federal law, the Award Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions.  In the event any provision of the Award Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Award Agreement, and the Award Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

13.           No Rights to Continued Employment.  The Award Agreement is not a contract of employment.  Nothing in the Plan or in the Award Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate the Participant's employment at any time, for any reason or no reason, or confer upon the Participant the right to continue in the employ of the Company or a Subsidiary.
Annex A - 5

ANNEX B

TO

MDU RESOURCES GROUP, INC.
LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

PEER GROUP COMPANIES

						
	AECOM	New Jersey Resources Corporation
	Allegheny Technologies Corporation	NewMarket Corporation
	Allete, Inc	NorthWestern Corporation
	AptarGroup, Inc.	OGE Energy Corp.
	Ashland Global Holdings Inc.	O-I Glass, Inc.
	Black Hills Corporation	Olin Corporation
	Cabot Corporation	ONE Gas, Inc.
	Carpenter Technology Corporation	PNM Resources, Inc.
	Commercial Metals Company	PolyOne Corporation
	Compass Minerals International, Inc.	Reliance Steel & Aluminum Co.
	Domtar Corporation	Royal Gold, Inc.
	Dycom Industries, Inc.	RPM International Inc.
	Eagle Materials Inc.	Sensient Technologies Corporation
	EMCOR Group, Inc.	Silgan Holdings Inc.
	Essential Utilities, Inc.	Sonoco Products Company
	Fluor Corporation	Southwest Gas Holdings, Inc.
	Greif, Inc.	Spire Inc.
	Hawaiian Electric Industries, Inc.	Steel Dynamics, Inc.
	IDACORP, Inc.	The Chemours Company
	Ingevity Corporation	The Scotts Miracle-Gro Company
	Louisiana-Pacific Corporation	UGI Corporation
	MasTec, Inc.	United States Steel Corporation
	Minerals Technologies Inc.	Valmont Industries, Inc.
	National Fuel Gas Company	Valvoline Inc.
		Worthington Industries, Inc.

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