Document:

Steven L. Bietz Change of Control Employment Agreement

    CHANGE
      OF CONTROL

     

    EMPLOYMENT
      AGREEMENT

     

     

    AGREEMENT
      by and between MDU Resources Group, Inc., a Delaware corporation (the "Company")
      and Steven L. Bietz (the "Executive"), dated as of the 16th
      day of
      February, 2006.

     

    The
      Board
      of Directors of the Company (the "Board"), has determined that it is in the
      best
      interests of the Company and its shareholders to assure that the Company will
      have the continued dedication of the Executive, notwithstanding the possibility,
      threat or occurrence of a Change of Control (as defined below) of the Company.
      The Board believes it is imperative to diminish the inevitable distraction
      of
      the Executive by virtue of the personal uncertainties and risks created by
      a
      pending or threatened Change of Control and to encourage the Executive's full
      attention and dedication to the Company currently and in the event of any
      threatened or pending Change of Control, and to provide the Executive with
      compensation and benefits arrangements upon a Change of Control which ensure
      that the compensation and benefits expectations of the Executive will be
      satisfied and which are competitive with those of other corporations. Therefore,
      in order to accomplish these objectives, the Board has caused the Company to
      enter into this Agreement.

    

    NOW,
      THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     

    1.  Certain
      Definitions.
      (a) The
      "Effective Date" shall mean the first date during the Change of Control Period
      (as defined in Section 1(b)) on which a Change of Control (as defined in Section
      2) occurs. Anything in this Agreement to the contrary notwithstanding, if a
      Change of Control occurs and if the Executive's employment with the Company
      is
      terminated prior to the date on which the Change of Control occurs, and if
      it is
      reasonably demonstrated by the Executive that such termination of employment
      (i)
      was at the request of a third party who has taken steps reasonably calculated
      to
      effect a Change of Control or (ii) otherwise arose in connection with or
      anticipation of a Change of Control, then for all purposes of this Agreement
      the
      "Effective Date" shall mean the date immediately prior to the date of such
      termination of employment.

     

    (b)  The
      "Change of Control Period" shall mean the period commencing on the date hereof
      and ending on the third anniversary of the date hereof; provided, however,
      that
      commencing on the date one year after the date hereof, and on each annual
      anniversary of such date (such date and each annual anniversary thereof shall
      be
      hereinafter referred to as the "Renewal Date"), unless previously terminated,
      the Change of Control Period shall be automatically extended so as to terminate
      three years from such Renewal Date, unless at least 60 days prior to the Renewal
      Date the Company shall give notice to the Executive that the Change of Control
      Period shall not be so extended.

     

    2.  Change
      of Control.
      For the
      purpose of this Agreement, a "Change of 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 of 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; or

     

    (b)  Individuals
      who, as of the date hereof, 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 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.

     

    3.  Employment
      Period.
      The
      Company hereby agrees to continue the Executive in its employ, and the Executive
      hereby agrees to remain in the employ of the Company subject to the terms and
      conditions of this Agreement, for the period commencing on the Effective Date
      and ending on the third anniversary of such date (the "Employment
      Period").

     

    4.  Terms
      of Employment.
      (a)
Position
      and Duties.
      (i)
      During the Employment Period, (A) the Executive's position (including status,
      offices, titles and reporting requirements), authority, duties and
      responsibilities shall be at least commensurate in all material respects with
      the most significant of those held, exercised and assigned at any time during
      the 120-day period immediately preceding the Effective Date and (B) the
      Executive's services shall be performed at the location where the Executive
      was
      employed immediately preceding the Effective Date or any office or location
      less
      than 35 miles from such location.

     

    (ii)  During
      the Employment Period, and excluding any periods of vacation and sick leave
      to
      which the Executive is entitled, the Executive agrees to devote reasonable
      attention and time during normal business hours to the business and affairs
      of
      the Company and, to the extent necessary to discharge the responsibilities
      assigned to the Executive hereunder, to use the Executive's reasonable best
      efforts to perform faithfully and efficiently such responsibilities. During
      the
      Employment Period it shall not be a violation of this Agreement for the
      Executive to (A) serve on corporate, civic or charitable boards or committees,
      (B) deliver lectures, fulfill speaking engagements or teach at educational
      institutions and (C) manage personal investments, so long as such activities
      do
      not significantly interfere with the performance of the Executive's
      responsibilities as an employee of the Company in accordance with this
      Agreement. It is expressly understood and agreed that to the extent that any
      such activities have been conducted by the Executive prior to the Effective
      Date, the continued conduct of such activities (or the conduct of activities
      similar in nature and scope thereto) subsequent to the Effective Date shall
      not
      thereafter be deemed to interfere with the performance of the Executive's
      responsibilities to the Company.

     

    (b)  Compensation.
      (i)
Base
      Salary.
      During
      the Employment Period, the Executive shall receive an annual base salary
      ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal
      to
      twelve times the highest monthly base salary paid or payable, including any
      base
      salary which has been earned but deferred, to the Executive by the Company
      and
      its affiliated companies in respect of the twelve-month period immediately
      preceding the month in which the Effective Date occurs. During the Employment
      Period, the Annual Base Salary shall be reviewed no more than 12 months after
      the last salary increase awarded to the Executive prior to the Effective Date
      and thereafter at least annually. Any increase in Annual Base Salary shall
      not
      serve to limit or reduce any other obligation to the Executive under this
      Agreement. Annual Base Salary shall not be reduced after any such increase
      and
      the term Annual Base Salary as utilized in this Agreement shall refer to Annual
      Base Salary as so increased. As used in this Agreement, the term "affiliated
      companies" shall include any company controlled by, controlling or under common
      control with the Company.

     

    (ii)  Annual
      Bonus.
      In
      addition to Annual Base Salary, the Executive shall be awarded, for each fiscal
      year ending during the Employment Period, an annual bonus (the "Annual Bonus")
      in cash at least equal to the Executive's highest bonus under the Company's
      Executive Incentive Compensation Plan, or any comparable bonus under any
      predecessor or successor plan, for the last three full fiscal years prior to
      the
      Effective Date (annualized in the event that the Executive was not employed
      by
      the Company for the whole of such fiscal year) (the "Recent Annual Bonus").
      Each
      such Annual Bonus shall be paid no later than the end of the third month of
      the
      fiscal year next following the fiscal year for which the Annual Bonus is
      awarded, unless the Executive shall elect to defer the receipt of such Annual
      Bonus.

     

    (iii)  Incentive,
      Savings and Retirement Plans.
      During
      the Employment Period, the Executive shall be entitled to participate in all
      incentive, savings and retirement plans, practices, policies and programs
      applicable generally to other peer executives of the Company and its affiliated
      companies, but in no event shall such plans, practices, policies and programs
      provide the Executive with incentive opportunities (measured with respect to
      both regular and special incentive opportunities, to the extent, if any, that
      such distinction is applicable), savings opportunities and retirement benefit
      opportunities, in each case, less favorable, in the aggregate, than the most
      favorable of those provided by the Company and its affiliated companies for
      the
      Executive under such plans, practices, policies and programs as in effect at
      any
      time during the 120-day period immediately preceding the Effective Date or
      if
      more favorable to the Executive, those provided generally at any time after
      the
      Effective Date to other peer executives of the Company and its affiliated
      companies.

     

    (iv)  Welfare
      Benefit Plans.
      During
      the Employment Period, the Executive and/or the Executive's family, as the
      case
      may be, shall be eligible for participation in and shall receive all benefits
      under welfare benefit plans, practices, policies and programs provided by the
      Company and its affiliated companies (including, without limitation, medical,
      prescription, dental, disability, employee life, group life, accidental death
      and travel accident insurance plans and programs) to the extent applicable
      generally to other peer executives of the Company and its affiliated companies,
      but in no event shall such plans, practices, policies and programs provide
      the
      Executive with benefits which are less favorable, in the aggregate, than the
      most favorable of such plans, practices, policies and programs in effect for
      the
      Executive at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive, those provided generally
      at any time after the Effective Date to other peer executives of the Company
      and
      its affiliated companies.

     

    (v)  Expenses.
      During
      the Employment Period, the Executive shall be entitled to receive prompt
      reimbursement for all reasonable expenses incurred by the Executive in
      accordance with the most favorable policies, practices and procedures of the
      Company and its affiliated companies in effect for the Executive at any time
      during the 120-day period immediately preceding the Effective Date or, if more
      favorable to the Executive, as in effect generally at any time thereafter with
      respect to other peer executives of the Company and its affiliated
      companies.

     

    (vi)  Fringe
      Benefits.
      During
      the Employment Period, the Executive shall be entitled to fringe benefits,
      including, without limitation, tax and financial planning services, payment
      of
      club dues, and, if applicable, use of an automobile and payment of related
      expenses, in accordance with the most favorable plans, practices, programs
      and
      policies of the Company and its affiliated companies in effect for the Executive
      at any time during the 120-day period immediately preceding the Effective Date
      or, if more favorable to the Executive, as in effect generally at any time
      thereafter with respect to other peer executives of the Company and its
      affiliated companies.

     

    (vii)  Office
      and Support Staff.
      During
      the Employment Period, the Executive shall be entitled to an office or offices
      of a size and with furnishings and other appointments, and to exclusive personal
      secretarial and other assistance, at least equal to the most favorable of the
      foregoing provided to the Executive by the Company and its affiliated companies
      at any time during the 120-day period immediately preceding the Effective Date
      or, if more favorable to the Executive, as provided generally at any time
      thereafter with respect to other peer executives of the Company and its
      affiliated companies.

     

    (viii)  Vacation.
      During
      the Employment Period, the Executive shall be entitled to paid vacation in
      accordance with the most favorable plans, policies, programs and practices
      of
      the Company and its affiliated companies as in effect for the Executive at
      any
      time during the 120-day period immediately preceding the Effective Date or,
      if
      more favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and its affiliated
      companies.

     

    5.  Termination
      of Employment.
      (a)
Death
      or Disability.
      The
      Executive's employment shall terminate automatically upon the Executive's death
      during the Employment Period. If the Company determines in good faith that
      the
      Disability of the Executive has occurred during the Employment Period (pursuant
      to the definition of Disability set forth below), it may give to the Executive
      written notice in accordance with Section 12(b) of this Agreement of its
      intention to terminate the Executive's employment. In such event, the
      Executive's employment with the Company shall terminate effective on the 30th
      day after receipt of such notice by the Executive (the "Disability Effective
      Date"), provided that, within the 30 days after such receipt, the Executive
      shall not have returned to full-time performance of the Executive's duties.
      For
      purposes of this Agreement, "Disability" shall mean the absence of the Executive
      from the Executive's duties with the Company on a full-time basis for 180
      consecutive business days as a result of incapacity due to mental or physical
      illness which is determined to be total and permanent by a physician selected
      by
      the Company or its insurers and acceptable to the Executive or the Executive's
      legal representative.

     

    (b)  Cause.
      The
      Company may terminate the Executive's employment during the Employment Period
      for Cause. For purposes of this Agreement, "Cause" shall mean:

     

    (i)  the
      willful and continued failure of the Executive to perform substantially the
      Executive's duties with the Company or one of its affiliates (other than any
      such failure resulting from incapacity due to physical or mental illness),
      after
      a written demand for substantial performance is delivered to the Executive
      by
      the Board or the Chief Executive Officer of the Company which specifically
      identifies the manner in which the Board or Chief Executive Officer believes
      that the Executive has not substantially performed the Executive's duties,
      or

     

    (ii)  the
      willful engaging by the Executive in illegal conduct or gross misconduct which
      is materially and demonstrably injurious to the Company.

    

      For
        purposes of this provision, no act or failure to act, on the part of the
        Executive, shall be considered "willful" unless it is done, or omitted to
        be
        done, by the Executive in bad faith or without reasonable belief that the
        Executive's action or omission was in the best interests of the Company.
        Any
        act, or failure to act, based upon authority given pursuant to a resolution
        duly
        adopted by the Board or upon the instructions of the Chief Executive Officer
        or
        a senior officer of the Company or based upon the advice of counsel for the
        Company shall be conclusively presumed to be done, or omitted to be done,
        by the
        Executive in good faith and in the best interests of the Company. The cessation
        of employment of the Executive shall not be deemed to be for Cause unless
        and
        until there shall have been delivered to the Executive a copy of a resolution
        duly adopted by the affirmative vote of not less than three-quarters of the
        entire membership of the Board at a meeting of the Board called and held
        for
        such purpose (after reasonable notice is provided to the Executive and the
        Executive is given an opportunity, together with counsel, to be heard before
        the
        Board), finding that, in the good faith opinion of the Board, the Executive
        is
        guilty of the conduct described in subparagraph (i) or (ii) above, and
        specifying the particulars thereof in detail.

       

    

    (c)  Good
      Reason.
      The
      Executive's employment may be terminated by the Executive for Good Reason.
      For
      purposes of this Agreement, "Good Reason" shall mean:

     

    (i)  the
      assignment to the Executive of any duties inconsistent in any respect with
      the
      Executive's position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      4(a) of this Agreement, or any other action by the Company which results in
      a
      diminution in such position, authority, duties or responsibilities, excluding
      for this purpose an isolated, insubstantial and inadvertent action not taken
      in
      bad faith and which is remedied by the Company promptly after receipt of notice
      thereof given by the Executive;

     

    (ii)  any
      failure by the Company to comply with any of the provisions of Section 4(b)
      of
      this Agreement, other than an isolated, insubstantial and inadvertent failure
      not occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

     

    (iii)  the
      Company's requiring the Executive to be based at any office or location other
      than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the
      Executive to travel on Company business to a substantially greater extent than
      required immediately prior to the Effective Date;

     

    (iv)  any
      purported termination by the Company of the Executive's employment otherwise
      than as expressly permitted by this Agreement; or

     

    (v)  any
      failure by the Company to comply with and satisfy Section 11(c) of this
      Agreement.

    

      For
        purposes of this Section 5(c), any good faith determination of "Good Reason"
        made by the Executive shall be conclusive. Anything in this Agreement to
        the
        contrary notwithstanding, a termination by the Executive for any reason during
        the 30-day period immediately following the first anniversary of the Effective
        Date shall be deemed to be a termination for Good Reason for all purposes
        of
        this Agreement.

       

    

    (d)  Notice
      of Termination.
      Any
      termination by the Company for Cause, or by the Executive for Good Reason,
      shall
      be communicated by Notice of Termination to the other party hereto given in
      accordance with Section 12(b) of this Agreement. For purposes of this Agreement,
      a "Notice of Termination" means a written notice which (i) indicates the
      specific termination provision in this Agreement relied upon, (ii) to the extent
      applicable, sets forth in reasonable detail the facts and circumstances claimed
      to provide a basis for termination of the Executive's employment under the
      provision so indicated and (iii) if the Date of Termination (as defined below)
      is other than the date of receipt of such notice, specifies the termination
      date
      (which date shall be not more than thirty days after the giving of such notice).
      The failure by the Executive or the Company to set forth in the Notice of
      Termination any fact or circumstance which contributes to a showing of Good
      Reason or Cause shall not waive any right of the Executive or the Company,
      respectively, hereunder or preclude the Executive or the Company, respectively,
      from asserting such fact or circumstance in enforcing the Executive's or the
      Company's rights hereunder.

     

    (e)  Date
      of Termination.
      "Date
      of Termination" means (i) if the Executive's employment is terminated by the
      Company for Cause, or by the Executive for Good Reason, the date of receipt
      of
      the Notice of Termination or any later date specified therein, as the case
      may
      be, (ii) if the Executive's employment is terminated by the Company other than
      for Cause or Disability, the Date of Termination shall be the date on which
      the
      Company notifies the Executive of such termination and (iii) if the Executive's
      employment is terminated by reason of death or Disability, the Date of
      Termination shall be the date of death of the Executive or the Disability
      Effective Date, as the case may be.

     

    6.  Obligations
      of the Company upon Termination.
      (a)
Good
      Reason; Other Than for Cause, Death or Disability.
      If,
      during the Employment Period, the Company shall terminate the Executive's
      employment other than for Cause or Disability or the Executive shall terminate
      employment for Good Reason:

     

    (i)  the
      Company shall pay to the Executive in a lump sum in cash within 30 days after
      the Date of Termination the aggregate of the following amounts:

     

    A.  the
      sum
      of (1) the Executive's Annual Base Salary through the Date of Termination to
      the
      extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent
      Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus
      or
      portion thereof which has been earned but deferred (and annualized for any
      fiscal year consisting of less than twelve full months or during which the
      Executive was employed for less than twelve full months), for the most recently
      completed fiscal year during the Employment Period, if any (such higher amount
      being referred to as the "Highest Annual Bonus") and (y) a fraction, the
      numerator of which is the number of days in the current fiscal year through
      the
      Date of Termination, and the denominator of which is 365 and (3) any
      compensation previously deferred by the Executive (together with any accrued
      interest or earnings thereon) and any accrued vacation pay, in each case to
      the
      extent not theretofore paid (the sum of the amounts described in clauses (1),
      (2), and (3) shall be hereinafter referred to as the "Accrued Obligations");
      and

     

    B.  the
      amount equal to the product of (1) three and
      (2)
      the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual
      Bonus; and

     

    C.  an
      amount
      equal to the excess of (a) the actuarial equivalent of the benefit under the
      Company's Pension Plan for Non-Bargaining Unit Employees and/or any other
      Company-sponsored qualified defined benefit retirement plan in which the
      Executive participates (collectively, the "Retirement Plan") (utilizing
      actuarial assumptions no less favorable to the Executive than those in effect
      under the Company's Retirement Plan immediately prior to the Effective Date),
      and the Company's Supplemental Income Security Plan and/or any other
      Company-sponsored excess or supplemental defined benefit retirement plan in
      which the Executive participates (collectively, the "SISP") which the Executive
      would receive if the Executive's employment continued for three years after
      the
      Date of Termination assuming for this purpose that all accrued benefits are
      fully vested, and, assuming that the Executive's compensation in each of the
      three years is that required by Section 4(b)(i) and Section 4(b)(ii), over
      (b)
      the actuarial equivalent of the Executive's actual benefit (paid or payable),
      if
      any, under the Retirement Plan and the SISP as of the Date of Termination;
      

     

    (ii)  for
      three
      years after the Executive's Date of Termination, or such longer period as may
      be
      provided by the terms of the appropriate plan, program, practice or policy,
      the
      Company shall continue benefits to the Executive and/or the Executive's family
      at least equal to those which would have been provided to them in accordance
      with the plans, programs, practices and policies described in Section 4(b)(iv)
      of this Agreement if the Executive's employment had not been terminated or,
      if
      more favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and its affiliated
      companies and their families, provided, however, that if the Executive becomes
      reemployed with another employer and is eligible to receive medical or other
      welfare benefits under another employer provided plan, the medical and other
      welfare benefits described herein shall be secondary to those provided under
      such other plan during such applicable period of eligibility. For purposes
      of
      determining eligibility (but not the time of commencement of benefits) of the
      Executive for retiree benefits pursuant to such plans, practices, programs
      and
      policies, the Executive shall be considered to have remained employed until
      three years after the Date of Termination and to have retired on the last day
      of
      such period; 

     

    (iii)  the
      Company shall, at its sole expense as incurred, provide the Executive with
      outplacement services the scope and provider of which shall be selected by
      the
      Executive in his sole discretion; and 

     

    (iv)  to
      the
      extent not theretofore paid or provided, the Company shall timely pay or provide
      to the Executive any other amounts or benefits required to be paid or provided
      or which the Executive is eligible to receive under any plan, program, policy
      or
      practice or contract or agreement of the Company and its affiliated companies
      (such other amounts and benefits shall be hereinafter referred to as the "Other
      Benefits").

     

    (b)  Death.
      If the
      Executive's employment is terminated by reason of the Executive's death during
      the Employment Period, this Agreement shall terminate without further
      obligations to the Executive's legal representatives under this Agreement,
      other
      than for payment of Accrued Obligations and the timely payment or provision
      of
      Other Benefits. Accrued Obligations shall be paid to the Executive's estate
      or
      beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
      of
      Termination. With respect to the provision of Other Benefits, the term Other
      Benefits as utilized in this Section 6(b) shall include, without limitation,
      and
      the Executive's estate and/or beneficiaries shall be entitled to receive,
      benefits at least equal to the most favorable benefits provided by the Company
      and affiliated companies to the estates and beneficiaries of peer executives
      of
      the Company and such affiliated companies under such plans, programs, practices
      and policies relating to death benefits, if any, as in effect with respect
      to
      other peer executives and their beneficiaries at any time during the 120-day
      period immediately preceding the Effective Date or, if more favorable to the
      Executive's estate and/or the Executive's beneficiaries, as in effect on the
      date of the Executive's death with respect to other peer executives of the
      Company and its affiliated companies and their beneficiaries.

     

    (c)  Disability.
      If the
      Executive's employment is terminated by reason of the Executive's Disability
      during the Employment Period, this Agreement shall terminate without further
      obligations to the Executive, other than for payment of Accrued Obligations
      and
      the timely payment or provision of Other Benefits. Accrued Obligations shall
      be
      paid to the Executive in a lump sum in cash within 30 days of the Date of
      Termination. With respect to the provision of Other Benefits, the term Other
      Benefits as utilized in this Section 6(c) shall include, and the Executive
      shall
      be entitled after the Disability Effective Date to receive, disability and
      other
      benefits at least equal to the most favorable of those generally provided by
      the
      Company and its affiliated companies to disabled executives and/or their
      families in accordance with such plans, programs, practices and policies
      relating to disability, if any, as in effect generally with respect to other
      peer executives and their families at any time during the 120-day period
      immediately preceding the Effective Date or, if more favorable to the Executive
      and/or the Executive's family, as in effect at any time thereafter generally
      with respect to other peer executives of the Company and its affiliated
      companies and their families.

     

    (d)  Cause;
      Other than for Good Reason.
      If the
      Executive's employment shall be terminated for Cause during the Employment
      Period, this Agreement shall terminate without further obligations to the
      Executive other than the obligation to pay to the Executive (x) his Annual
      Base
      Salary through the Date of Termination, (y) the amount of any compensation
      previously deferred by the Executive, and (z) Other Benefits, in each case
      to
      the extent theretofore unpaid. If the Executive voluntarily terminates
      employment during the Employment Period, excluding a termination for Good
      Reason, this Agreement shall terminate without further obligations to the
      Executive, other than for Accrued Obligations and the timely payment or
      provision of Other Benefits. In such case, all Accrued Obligations shall be
      paid
      to the Executive in a lump sum in cash within 30 days of the Date of
      Termination.

     

    7.  Non-exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit the Executive's continuing or future
      participation in any plan, program, policy or practice provided by the Company
      or any of its affiliated companies and for which the Executive may qualify,
      nor,
      subject to Section 12(f), shall anything herein limit or otherwise affect such
      rights as the Executive may have under any contract or agreement with the
      Company or any of its affiliated companies. Amounts which are vested benefits
      or
      which the Executive is otherwise entitled to receive under any plan, policy,
      practice or program of or any contract or agreement with the Company or any
      of
      its affiliated companies at or subsequent to the Date of Termination shall
      be
      payable in accordance with such plan, policy, practice or program or contract
      or
      agreement except as explicitly modified by this Agreement.

     

    8.  Full
      Settlement.
      The
      Company's obligation to make the payments provided for in this Agreement and
      otherwise to perform its obligations hereunder shall not be affected by any
      set-off, counterclaim, recoupment, defense or other claim, right or action
      which
      the Company may have against the Executive or others. In no event shall the
      Executive be obligated to seek other employment or take any other action by
      way
      of mitigation of the amounts payable to the Executive under any of the
      provisions of this Agreement and such amounts shall not be reduced whether
      or
      not the Executive obtains other employment. The Company agrees to pay as
      incurred, to the full extent permitted by law, all legal fees and expenses
      which
      the Executive may reasonably incur as a result of any contest (regardless of
      the
      outcome thereof) by the Company, the Executive or others of the validity or
      enforceability of, or liability under, any provision of this Agreement or any
      guarantee of performance thereof (including as a result of any contest by the
      Executive about the amount of any payment pursuant to this Agreement), plus
      in
      each case interest on any delayed payment at the applicable Federal rate
      provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
      as
      amended (the "Code").

     

    9.  Certain
      Additional Payments by the Company.

     

    (a)  Anything
      in this Agreement to the contrary notwithstanding and except as set forth below,
      in the event it shall be determined that any payment or distribution by the
      Company or its affiliates to or for the benefit of the Executive (whether paid
      or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise, but determined without regard to any additional payments
      required under this Section 9) (a "Payment") would be subject to the excise
      tax imposed by Section 4999 of the Code or any interest or penalties are
      incurred by the Executive with respect to such excise tax (such excise tax,
      together with any such interest and penalties, are hereinafter collectively
      referred to as the "Excise Tax"), then the Executive shall be entitled to
      receive an additional payment (a "Gross-Up Payment") in an amount such that
      after payment by the Executive of all taxes (including any interest or penalties
      imposed with respect to such taxes), including, without limitation, any income
      taxes (and any interest and penalties imposed with respect thereto) and Excise
      Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
      Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
      Notwithstanding the foregoing provisions of this Section 9(a), if it shall
      be
      determined that the Executive is entitled to a Gross-Up Payment, but that the
      Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that
      could be paid to the Executive such that the receipt of Payments would not
      give
      rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive
      and the Payments, in the aggregate, shall be reduced to the Reduced
      Amount.

     

    (b)  Subject
      to the provisions of Section 9(c), all determinations required to be made
      under this Section 9, including whether and when a Gross-Up Payment is required
      and the amount of such Gross-Up Payment and the assumptions to be utilized
      in
      arriving at such determination, shall be made by Ernst & Young or such other
      certified public accounting firm as may be designated by the Executive (the
      "Accounting Firm") which shall provide detailed supporting calculations both
      to
      the Company and the Executive within 15 business days of the receipt of notice
      from the Executive that there has been a Payment, or such earlier time as is
      requested by the Company. In the event that the Accounting Firm is serving
      as
      accountant or auditor for the individual, entity or group effecting the Change
      of Control, the Executive shall appoint another nationally recognized accounting
      firm to make the determinations required hereunder (which accounting firm shall
      then be referred to as the Accounting Firm hereunder). All fees and expenses
      of
      the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
      as determined pursuant to this Section 9, shall be paid by the Company to the
      Executive within five days of the receipt of the Accounting Firm's
      determination. Any determination by the Accounting Firm shall be binding upon
      the Company and the Executive. As a result of the uncertainty in the application
      of Section 4999 of the Code at the time of the initial determination by the
      Accounting Firm hereunder, it is possible that Gross-Up Payments which will
      not
      have been made by the Company should have been made ("Underpayment"), consistent
      with the calculations required to be made hereunder. In the event that the
      Company exhausts its remedies pursuant to Section 9(c) and the Executive
      thereafter is required to make a payment of any Excise Tax, the Accounting
      Firm
      shall determine the amount of the Underpayment that has occurred and any such
      Underpayment shall be promptly paid by the Company to or for the benefit of
      the
      Executive.

     

    (c)  The
      Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service that, if successful, would require the payment by the Company
      of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than ten business days after the Executive is informed in writing
      of such claim and shall apprise the Company of the nature of such claim and
      the
      date on which such claim is requested to be paid. The Executive shall not pay
      such claim prior to the expiration of the 30-day period following the date
      on
      which it gives such notice to the Company (or such shorter period ending on
      the
      date that any payment of taxes with respect to such claim is due). If the
      Company notifies the Executive in writing prior to the expiration of such period
      that it desires to contest such claim, the Executive shall:

     

    (i)  give
      the
      Company any information reasonably requested by the Company relating to such
      claim,

     

    (ii)  take
      such
      action in connection with contesting such claim as the Company shall reasonably
      request in writing from time to time, including, without limitation, accepting
      legal representation with respect to such claim by an attorney reasonably
      selected by the Company,

     

    (iii)  cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

     

    (iv)  permit
      the Company to participate in any proceedings relating to such
      claim;

     

    provided,
      however, that the Company shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      contest and shall indemnify and hold the Executive harmless, on an after-tax
      basis, for any Excise Tax or income tax (including interest and penalties with
      respect thereto) imposed as a result of such representation and payment of
      costs
      and expenses. Without limitation on the foregoing provisions of this Section
      9(c), the Company shall control all proceedings taken in connection with such
      contest and, at its sole option, may pursue or forgo any and all administrative
      appeals, proceedings, hearings and conferences with the taxing authority in
      respect of such claim and may, at its sole option, either direct the Executive
      to pay the tax claimed and sue for a refund or contest the claim in any
      permissible manner, and the Executive agrees to prosecute such contest to a
      determination before any administrative tribunal, in a court of initial
      jurisdiction and in one or more appellate courts, as the Company shall
      determine; provided, however, that if the Company directs the Executive to
      pay
      such claim and sue for a refund, the Company shall advance the amount of such
      payment to the Executive, on an interest-free basis and shall indemnify and
      hold
      the Executive harmless, on an after-tax basis, from any Excise Tax or income
      tax
      (including interest or penalties with respect thereto) imposed with respect
      to
      such advance or with respect to any imputed income with respect to such advance;
      and further provided that any extension of the statute of limitations relating
      to payment of taxes for the taxable year of the Executive with respect to which
      such contested amount is claimed to be due is limited solely to such contested
      amount. Furthermore, the Company's control of the contest shall be limited
      to
      issues with respect to which a Gross-Up Payment would be payable hereunder
      and
      the Executive shall be entitled to settle or contest, as the case may be, any
      other issue raised by the Internal Revenue Service or any other taxing
      authority.

     

    (d)  If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 9(c), the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall (subject to the Company's complying
      with the requirements of Section 9(c)) promptly pay to the Company the
      amount of such refund (together with any interest paid or credited thereon
      after
      taxes applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 9(c), a determination is made
      that the Executive shall not be entitled to any refund with respect to such
      claim and the Company does not notify the Executive in writing of its intent
      to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

     

    10.  Confidential
      Information.
      The
      Executive shall hold in a fiduciary capacity for the benefit of the Company
      all
      secret or confidential information, knowledge or data relating to the Company
      or
      any of its affiliated companies, and their respective businesses, which shall
      have been obtained by the Executive during the Executive's employment by the
      Company or any of its affiliated companies and which shall not be or become
      public knowledge (other than by acts by the Executive or representatives of
      the
      Executive in violation of this Agreement). After termination of the Executive's
      employment with the Company, the Executive shall not, without the prior written
      consent of the Company or as may otherwise be required by law or legal process,
      communicate or divulge any such information, knowledge or data to anyone other
      than the Company and those designated by it. In no event shall an asserted
      violation of the provisions of this Section 10 constitute a basis for deferring
      or withholding any amounts otherwise payable to the Executive under this
      Agreement.

     

    11.  Successors.
      (a)
      This Agreement is personal to the Executive and without the prior written
      consent of the Company shall not be assignable by the Executive otherwise than
      by will or the laws of descent and distribution. This Agreement shall inure
      to
      the benefit of and be enforceable by the Executive's legal
      representatives.

     

    (b)  This
      Agreement shall inure to the benefit of and be binding upon the Company and
      its
      successors and assigns.

     

    (c)  The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to assume expressly and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. As used in this
      Agreement, "Company" shall mean the Company as hereinbefore defined and any
      successor to its business and/or assets as aforesaid which assumes and agrees
      to
      perform this Agreement by operation of law, or otherwise.

     

    12.  Miscellaneous.
      (a)
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Delaware, without reference to principles of conflict of laws.
      The
      captions of this Agreement are not part of the provisions hereof and shall
      have
      no force or effect. This Agreement may not be amended or modified otherwise
      than
      by a written agreement executed by the parties hereto or their respective
      successors and legal representatives.

     

    (b)  All
      notices and other communications hereunder shall be in writing and shall be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed as follows: 

     

    If
      to the
      Executive:

    

    Steven
      L. Bietz

    3722
      Ridge Way

    Bismarck,
      ND 58503

    

    If
      to the
      Company:

    

    MDU
      Resources Group, Inc.

    1200
      West
      Century Avenue

    

    Mailing
      Address:

    P.O.
      Box
      5650

    Bismarck,
      ND 58506-5650

    Attention:
      General Counsel

     

    or
      to
      such other address as either party shall have furnished to the other in writing
      in accordance herewith. Notice and communications shall be effective when
      actually received by the addressee.

     

    (c)  The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

     

    (d)  The
      Company may withhold from any amounts payable under this Agreement such Federal,
      state, local or foreign taxes as shall be required to be withheld pursuant
      to
      any applicable law or regulation.

     

    (e)  The
      Executive's or the Company's failure to insist upon strict compliance with
      any
      provision of this Agreement or the failure to assert any right the Executive
      or
      the Company may have hereunder, including, without limitation, the right of
      the
      Executive to terminate employment for Good Reason pursuant to
      Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver
      of such provision or right or any other provision or right of this
      Agreement.

     

    (f)  The
      Executive and the Company acknowledge that, except as may otherwise be provided
      under any other written agreement between the Executive and the Company, the
      employment of the Executive by the Company is "at will" and, subject to Section
      1(a) hereof, prior to the Effective Date, the Executive's employment may
      be
      terminated by either the Executive or the Company at any time prior to the
      Effective Date, in which case the Executive shall have no further rights under
      this Agreement. From and after the Effective Date this Agreement shall supersede
      any other agreement between the parties with respect to the subject matter
      hereof.

     

    
      IN
        WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
        pursuant to the authorization from its Board of Directors, the Company has
        caused these presents to be executed in its name on its behalf, all as of
        the
        day and year first above written.

       

    

    
      
        	 	
                /s/
                  STEVEN L. BIETZ

                Steven
                  L. Bietz

                 

              
	 	
                MDU
                  RESOURCES GROUP, INC.

                 

              
	
                Attest:

                 

              	 
	
                /s/
                  PAUL K. SANDNESS

                Paul
                  K. Sandness

                Secretary

                 

              	
                By:
                  /s/
                  MARTIN A. WHITE

                Martin
                  A. White

                Chairman
                  of the Board and

                Chief
                  Executive OfficerNicole A. Kivisto Change of Control Employement Agreement

    CHANGE
      OF CONTROL

     

    EMPLOYMENT
      AGREEMENT

     

    AGREEMENT
      by and between MDU Resources Group, Inc., a Delaware corporation (the "Company")
      and Nicole A. Kivisto (the "Executive"), dated as of the 16th
      day of
      February, 2006.

     

    The
      Board
      of Directors of the Company (the "Board"), has determined that it is in the
      best
      interests of the Company and its shareholders to assure that the Company will
      have the continued dedication of the Executive, notwithstanding the possibility,
      threat or occurrence of a Change of Control (as defined below) of the Company.
      The Board believes it is imperative to diminish the inevitable distraction
      of
      the Executive by virtue of the personal uncertainties and risks created by
      a
      pending or threatened Change of Control and to encourage the Executive's full
      attention and dedication to the Company currently and in the event of any
      threatened or pending Change of Control, and to provide the Executive with
      compensation and benefits arrangements upon a Change of Control which ensure
      that the compensation and benefits expectations of the Executive will be
      satisfied and which are competitive with those of other corporations. Therefore,
      in order to accomplish these objectives, the Board has caused the Company to
      enter into this Agreement.

    

    NOW,
      THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     

    1.  Certain
      Definitions.
      (a) The
      "Effective Date" shall mean the first date during the Change of Control Period
      (as defined in Section 1(b)) on which a Change of Control (as defined in Section
      2) occurs. Anything in this Agreement to the contrary notwithstanding, if a
      Change of Control occurs and if the Executive's employment with the Company
      is
      terminated prior to the date on which the Change of Control occurs, and if
      it is
      reasonably demonstrated by the Executive that such termination of employment
      (i)
      was at the request of a third party who has taken steps reasonably calculated
      to
      effect a Change of Control or (ii) otherwise arose in connection with or
      anticipation of a Change of Control, then for all purposes of this Agreement
      the
      "Effective Date" shall mean the date immediately prior to the date of such
      termination of employment.

     

    (b)  The
      "Change of Control Period" shall mean the period commencing on the date hereof
      and ending on the third anniversary of the date hereof; provided, however,
      that
      commencing on the date one year after the date hereof, and on each annual
      anniversary of such date (such date and each annual anniversary thereof shall
      be
      hereinafter referred to as the "Renewal Date"), unless previously terminated,
      the Change of Control Period shall be automatically extended so as to terminate
      three years from such Renewal Date, unless at least 60 days prior to the Renewal
      Date the Company shall give notice to the Executive that the Change of Control
      Period shall not be so extended.

     

    2.  Change
      of Control.
      For the
      purpose of this Agreement, a "Change of 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 of 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; or

     

    (b)  Individuals
      who, as of the date hereof, 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 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.

     

    3.  Employment
      Period.
      The
      Company hereby agrees to continue the Executive in its employ, and the Executive
      hereby agrees to remain in the employ of the Company subject to the terms and
      conditions of this Agreement, for the period commencing on the Effective Date
      and ending on the third anniversary of such date (the "Employment
      Period").

     

    4.  Terms
      of Employment.
      (a)
Position
      and Duties.
      (i)
      During the Employment Period, (A) the Executive's position (including status,
      offices, titles and reporting requirements), authority, duties and
      responsibilities shall be at least commensurate in all material respects with
      the most significant of those held, exercised and assigned at any time during
      the 120-day period immediately preceding the Effective Date and (B) the
      Executive's services shall be performed at the location where the Executive
      was
      employed immediately preceding the Effective Date or any office or location
      less
      than 35 miles from such location.

     

    (ii)  During
      the Employment Period, and excluding any periods of vacation and sick leave
      to
      which the Executive is entitled, the Executive agrees to devote reasonable
      attention and time during normal business hours to the business and affairs
      of
      the Company and, to the extent necessary to discharge the responsibilities
      assigned to the Executive hereunder, to use the Executive's reasonable best
      efforts to perform faithfully and efficiently such responsibilities. During
      the
      Employment Period it shall not be a violation of this Agreement for the
      Executive to (A) serve on corporate, civic or charitable boards or committees,
      (B) deliver lectures, fulfill speaking engagements or teach at educational
      institutions and (C) manage personal investments, so long as such activities
      do
      not significantly interfere with the performance of the Executive's
      responsibilities as an employee of the Company in accordance with this
      Agreement. It is expressly understood and agreed that to the extent that any
      such activities have been conducted by the Executive prior to the Effective
      Date, the continued conduct of such activities (or the conduct of activities
      similar in nature and scope thereto) subsequent to the Effective Date shall
      not
      thereafter be deemed to interfere with the performance of the Executive's
      responsibilities to the Company.

     

    (b)  Compensation.
      (i)
Base
      Salary.
      During
      the Employment Period, the Executive shall receive an annual base salary
      ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal
      to
      twelve times the highest monthly base salary paid or payable, including any
      base
      salary which has been earned but deferred, to the Executive by the Company
      and
      its affiliated companies in respect of the twelve-month period immediately
      preceding the month in which the Effective Date occurs. During the Employment
      Period, the Annual Base Salary shall be reviewed no more than 12 months after
      the last salary increase awarded to the Executive prior to the Effective Date
      and thereafter at least annually. Any increase in Annual Base Salary shall
      not
      serve to limit or reduce any other obligation to the Executive under this
      Agreement. Annual Base Salary shall not be reduced after any such increase
      and
      the term Annual Base Salary as utilized in this Agreement shall refer to Annual
      Base Salary as so increased. As used in this Agreement, the term "affiliated
      companies" shall include any company controlled by, controlling or under common
      control with the Company.

     

    (ii)  Annual
      Bonus.
      In
      addition to Annual Base Salary, the Executive shall be awarded, for each fiscal
      year ending during the Employment Period, an annual bonus (the "Annual Bonus")
      in cash at least equal to the Executive's highest bonus under the Company's
      Executive Incentive Compensation Plan, or any comparable bonus under any
      predecessor or successor plan, for the last three full fiscal years prior to
      the
      Effective Date (annualized in the event that the Executive was not employed
      by
      the Company for the whole of such fiscal year) (the "Recent Annual Bonus").
      Each
      such Annual Bonus shall be paid no later than the end of the third month of
      the
      fiscal year next following the fiscal year for which the Annual Bonus is
      awarded, unless the Executive shall elect to defer the receipt of such Annual
      Bonus.

     

    (iii)  Incentive,
      Savings and Retirement Plans.
      During
      the Employment Period, the Executive shall be entitled to participate in all
      incentive, savings and retirement plans, practices, policies and programs
      applicable generally to other peer executives of the Company and its affiliated
      companies, but in no event shall such plans, practices, policies and programs
      provide the Executive with incentive opportunities (measured with respect to
      both regular and special incentive opportunities, to the extent, if any, that
      such distinction is applicable), savings opportunities and retirement benefit
      opportunities, in each case, less favorable, in the aggregate, than the most
      favorable of those provided by the Company and its affiliated companies for
      the
      Executive under such plans, practices, policies and programs as in effect at
      any
      time during the 120-day period immediately preceding the Effective Date or
      if
      more favorable to the Executive, those provided generally at any time after
      the
      Effective Date to other peer executives of the Company and its affiliated
      companies.

     

    (iv)  Welfare
      Benefit Plans.
      During
      the Employment Period, the Executive and/or the Executive's family, as the
      case
      may be, shall be eligible for participation in and shall receive all benefits
      under welfare benefit plans, practices, policies and programs provided by the
      Company and its affiliated companies (including, without limitation, medical,
      prescription, dental, disability, employee life, group life, accidental death
      and travel accident insurance plans and programs) to the extent applicable
      generally to other peer executives of the Company and its affiliated companies,
      but in no event shall such plans, practices, policies and programs provide
      the
      Executive with benefits which are less favorable, in the aggregate, than the
      most favorable of such plans, practices, policies and programs in effect for
      the
      Executive at any time during the 120-day period immediately preceding the
      Effective Date or, if more favorable to the Executive, those provided generally
      at any time after the Effective Date to other peer executives of the Company
      and
      its affiliated companies.

     

    (v)  Expenses.
      During
      the Employment Period, the Executive shall be entitled to receive prompt
      reimbursement for all reasonable expenses incurred by the Executive in
      accordance with the most favorable policies, practices and procedures of the
      Company and its affiliated companies in effect for the Executive at any time
      during the 120-day period immediately preceding the Effective Date or, if more
      favorable to the Executive, as in effect generally at any time thereafter with
      respect to other peer executives of the Company and its affiliated
      companies.

     

    (vi)  Fringe
      Benefits.
      During
      the Employment Period, the Executive shall be entitled to fringe benefits,
      including, without limitation, tax and financial planning services, payment
      of
      club dues, and, if applicable, use of an automobile and payment of related
      expenses, in accordance with the most favorable plans, practices, programs
      and
      policies of the Company and its affiliated companies in effect for the Executive
      at any time during the 120-day period immediately preceding the Effective Date
      or, if more favorable to the Executive, as in effect generally at any time
      thereafter with respect to other peer executives of the Company and its
      affiliated companies.

     

    (vii)  Office
      and Support Staff.
      During
      the Employment Period, the Executive shall be entitled to an office or offices
      of a size and with furnishings and other appointments, and to exclusive personal
      secretarial and other assistance, at least equal to the most favorable of the
      foregoing provided to the Executive by the Company and its affiliated companies
      at any time during the 120-day period immediately preceding the Effective Date
      or, if more favorable to the Executive, as provided generally at any time
      thereafter with respect to other peer executives of the Company and its
      affiliated companies.

     

    (viii)  Vacation.
      During
      the Employment Period, the Executive shall be entitled to paid vacation in
      accordance with the most favorable plans, policies, programs and practices
      of
      the Company and its affiliated companies as in effect for the Executive at
      any
      time during the 120-day period immediately preceding the Effective Date or,
      if
      more favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and its affiliated
      companies.

     

    5.  Termination
      of Employment.
      (a)
Death
      or Disability.
      The
      Executive's employment shall terminate automatically upon the Executive's death
      during the Employment Period. If the Company determines in good faith that
      the
      Disability of the Executive has occurred during the Employment Period (pursuant
      to the definition of Disability set forth below), it may give to the Executive
      written notice in accordance with Section 12(b) of this Agreement of its
      intention to terminate the Executive's employment. In such event, the
      Executive's employment with the Company shall terminate effective on the 30th
      day after receipt of such notice by the Executive (the "Disability Effective
      Date"), provided that, within the 30 days after such receipt, the Executive
      shall not have returned to full-time performance of the Executive's duties.
      For
      purposes of this Agreement, "Disability" shall mean the absence of the Executive
      from the Executive's duties with the Company on a full-time basis for 180
      consecutive business days as a result of incapacity due to mental or physical
      illness which is determined to be total and permanent by a physician selected
      by
      the Company or its insurers and acceptable to the Executive or the Executive's
      legal representative.

     

    (b)  Cause.
      The
      Company may terminate the Executive's employment during the Employment Period
      for Cause. For purposes of this Agreement, "Cause" shall mean:

     

    (i)  the
      willful and continued failure of the Executive to perform substantially the
      Executive's duties with the Company or one of its affiliates (other than any
      such failure resulting from incapacity due to physical or mental illness),
      after
      a written demand for substantial performance is delivered to the Executive
      by
      the Board or the Chief Executive Officer of the Company which specifically
      identifies the manner in which the Board or Chief Executive Officer believes
      that the Executive has not substantially performed the Executive's duties,
      or

     

    (ii)  the
      willful engaging by the Executive in illegal conduct or gross misconduct which
      is materially and demonstrably injurious to the Company.

    

      For
        purposes of this provision, no act or failure to act, on the part of the
        Executive, shall be considered "willful" unless it is done, or omitted to
        be
        done, by the Executive in bad faith or without reasonable belief that the
        Executive's action or omission was in the best interests of the Company.
        Any
        act, or failure to act, based upon authority given pursuant to a resolution
        duly
        adopted by the Board or upon the instructions of the Chief Executive Officer
        or
        a senior officer of the Company or based upon the advice of counsel for the
        Company shall be conclusively presumed to be done, or omitted to be done,
        by the
        Executive in good faith and in the best interests of the Company. The cessation
        of employment of the Executive shall not be deemed to be for Cause unless
        and
        until there shall have been delivered to the Executive a copy of a resolution
        duly adopted by the affirmative vote of not less than three-quarters of the
        entire membership of the Board at a meeting of the Board called and held
        for
        such purpose (after reasonable notice is provided to the Executive and the
        Executive is given an opportunity, together with counsel, to be heard before
        the
        Board), finding that, in the good faith opinion of the Board, the Executive
        is
        guilty of the conduct described in subparagraph (i) or (ii) above, and
        specifying the particulars thereof in detail.

       

    

    (c)  Good
      Reason.
      The
      Executive's employment may be terminated by the Executive for Good Reason.
      For
      purposes of this Agreement, "Good Reason" shall mean:

     

    (i)  the
      assignment to the Executive of any duties inconsistent in any respect with
      the
      Executive's position (including status, offices, titles and reporting
      requirements), authority, duties or responsibilities as contemplated by Section
      4(a) of this Agreement, or any other action by the Company which results in
      a
      diminution in such position, authority, duties or responsibilities, excluding
      for this purpose an isolated, insubstantial and inadvertent action not taken
      in
      bad faith and which is remedied by the Company promptly after receipt of notice
      thereof given by the Executive;

     

    (ii)  any
      failure by the Company to comply with any of the provisions of Section 4(b)
      of
      this Agreement, other than an isolated, insubstantial and inadvertent failure
      not occurring in bad faith and which is remedied by the Company promptly after
      receipt of notice thereof given by the Executive;

     

    (iii)  the
      Company's requiring the Executive to be based at any office or location other
      than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the
      Executive to travel on Company business to a substantially greater extent than
      required immediately prior to the Effective Date;

     

    (iv)  any
      purported termination by the Company of the Executive's employment otherwise
      than as expressly permitted by this Agreement; or

     

    (v)  any
      failure by the Company to comply with and satisfy Section 11(c) of this
      Agreement.

    

      For
        purposes of this Section 5(c), any good faith determination of "Good Reason"
        made by the Executive shall be conclusive. Anything in this Agreement to
        the
        contrary notwithstanding, a termination by the Executive for any reason during
        the 30-day period immediately following the first anniversary of the Effective
        Date shall be deemed to be a termination for Good Reason for all purposes
        of
        this Agreement.

    

     

    (d)  Notice
      of Termination.
      Any
      termination by the Company for Cause, or by the Executive for Good Reason,
      shall
      be communicated by Notice of Termination to the other party hereto given in
      accordance with Section 12(b) of this Agreement. For purposes of this Agreement,
      a "Notice of Termination" means a written notice which (i) indicates the
      specific termination provision in this Agreement relied upon, (ii) to the extent
      applicable, sets forth in reasonable detail the facts and circumstances claimed
      to provide a basis for termination of the Executive's employment under the
      provision so indicated and (iii) if the Date of Termination (as defined below)
      is other than the date of receipt of such notice, specifies the termination
      date
      (which date shall be not more than thirty days after the giving of such notice).
      The failure by the Executive or the Company to set forth in the Notice of
      Termination any fact or circumstance which contributes to a showing of Good
      Reason or Cause shall not waive any right of the Executive or the Company,
      respectively, hereunder or preclude the Executive or the Company, respectively,
      from asserting such fact or circumstance in enforcing the Executive's or the
      Company's rights hereunder.

     

    (e)  Date
      of Termination.
      "Date
      of Termination" means (i) if the Executive's employment is terminated by the
      Company for Cause, or by the Executive for Good Reason, the date of receipt
      of
      the Notice of Termination or any later date specified therein, as the case
      may
      be, (ii) if the Executive's employment is terminated by the Company other than
      for Cause or Disability, the Date of Termination shall be the date on which
      the
      Company notifies the Executive of such termination and (iii) if the Executive's
      employment is terminated by reason of death or Disability, the Date of
      Termination shall be the date of death of the Executive or the Disability
      Effective Date, as the case may be.

     

    6.  Obligations
      of the Company upon Termination.
      (a)
Good
      Reason; Other Than for Cause, Death or Disability.
      If,
      during the Employment Period, the Company shall terminate the Executive's
      employment other than for Cause or Disability or the Executive shall terminate
      employment for Good Reason:

     

    (i)  the
      Company shall pay to the Executive in a lump sum in cash within 30 days after
      the Date of Termination the aggregate of the following amounts:

     

    A.  the
      sum
      of (1) the Executive's Annual Base Salary through the Date of Termination to
      the
      extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent
      Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus
      or
      portion thereof which has been earned but deferred (and annualized for any
      fiscal year consisting of less than twelve full months or during which the
      Executive was employed for less than twelve full months), for the most recently
      completed fiscal year during the Employment Period, if any (such higher amount
      being referred to as the "Highest Annual Bonus") and (y) a fraction, the
      numerator of which is the number of days in the current fiscal year through
      the
      Date of Termination, and the denominator of which is 365 and (3) any
      compensation previously deferred by the Executive (together with any accrued
      interest or earnings thereon) and any accrued vacation pay, in each case to
      the
      extent not theretofore paid (the sum of the amounts described in clauses (1),
      (2), and (3) shall be hereinafter referred to as the "Accrued Obligations");
      and

     

    B.  the
      amount equal to the product of (1) three and
      (2)
      the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual
      Bonus; and

     

    C.  an
      amount
      equal to the excess of (a) the actuarial equivalent of the benefit under the
      Company's Pension Plan for Non-Bargaining Unit Employees and/or any other
      Company-sponsored qualified defined benefit retirement plan in which the
      Executive participates (collectively, the "Retirement Plan") (utilizing
      actuarial assumptions no less favorable to the Executive than those in effect
      under the Company's Retirement Plan immediately prior to the Effective Date),
      and the Company's Supplemental Income Security Plan and/or any other
      Company-sponsored excess or supplemental defined benefit retirement plan in
      which the Executive participates (collectively, the "SISP") which the Executive
      would receive if the Executive's employment continued for three years after
      the
      Date of Termination assuming for this purpose that all accrued benefits are
      fully vested, and, assuming that the Executive's compensation in each of the
      three years is that required by Section 4(b)(i) and Section 4(b)(ii), over
      (b)
      the actuarial equivalent of the Executive's actual benefit (paid or payable),
      if
      any, under the Retirement Plan and the SISP as of the Date of Termination;
      

     

    (ii)  for
      three
      years after the Executive's Date of Termination, or such longer period as may
      be
      provided by the terms of the appropriate plan, program, practice or policy,
      the
      Company shall continue benefits to the Executive and/or the Executive's family
      at least equal to those which would have been provided to them in accordance
      with the plans, programs, practices and policies described in Section 4(b)(iv)
      of this Agreement if the Executive's employment had not been terminated or,
      if
      more favorable to the Executive, as in effect generally at any time thereafter
      with respect to other peer executives of the Company and its affiliated
      companies and their families, provided, however, that if the Executive becomes
      reemployed with another employer and is eligible to receive medical or other
      welfare benefits under another employer provided plan, the medical and other
      welfare benefits described herein shall be secondary to those provided under
      such other plan during such applicable period of eligibility. For purposes
      of
      determining eligibility (but not the time of commencement of benefits) of the
      Executive for retiree benefits pursuant to such plans, practices, programs
      and
      policies, the Executive shall be considered to have remained employed until
      three years after the Date of Termination and to have retired on the last day
      of
      such period; 

     

    (iii)  the
      Company shall, at its sole expense as incurred, provide the Executive with
      outplacement services the scope and provider of which shall be selected by
      the
      Executive in his sole discretion; and 

     

    (iv)  to
      the
      extent not theretofore paid or provided, the Company shall timely pay or provide
      to the Executive any other amounts or benefits required to be paid or provided
      or which the Executive is eligible to receive under any plan, program, policy
      or
      practice or contract or agreement of the Company and its affiliated companies
      (such other amounts and benefits shall be hereinafter referred to as the "Other
      Benefits").

     

    (b)  Death.
      If the
      Executive's employment is terminated by reason of the Executive's death during
      the Employment Period, this Agreement shall terminate without further
      obligations to the Executive's legal representatives under this Agreement,
      other
      than for payment of Accrued Obligations and the timely payment or provision
      of
      Other Benefits. Accrued Obligations shall be paid to the Executive's estate
      or
      beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
      of
      Termination. With respect to the provision of Other Benefits, the term Other
      Benefits as utilized in this Section 6(b) shall include, without limitation,
      and
      the Executive's estate and/or beneficiaries shall be entitled to receive,
      benefits at least equal to the most favorable benefits provided by the Company
      and affiliated companies to the estates and beneficiaries of peer executives
      of
      the Company and such affiliated companies under such plans, programs, practices
      and policies relating to death benefits, if any, as in effect with respect
      to
      other peer executives and their beneficiaries at any time during the 120-day
      period immediately preceding the Effective Date or, if more favorable to the
      Executive's estate and/or the Executive's beneficiaries, as in effect on the
      date of the Executive's death with respect to other peer executives of the
      Company and its affiliated companies and their beneficiaries.

     

    (c)  Disability.
      If the
      Executive's employment is terminated by reason of the Executive's Disability
      during the Employment Period, this Agreement shall terminate without further
      obligations to the Executive, other than for payment of Accrued Obligations
      and
      the timely payment or provision of Other Benefits. Accrued Obligations shall
      be
      paid to the Executive in a lump sum in cash within 30 days of the Date of
      Termination. With respect to the provision of Other Benefits, the term Other
      Benefits as utilized in this Section 6(c) shall include, and the Executive
      shall
      be entitled after the Disability Effective Date to receive, disability and
      other
      benefits at least equal to the most favorable of those generally provided by
      the
      Company and its affiliated companies to disabled executives and/or their
      families in accordance with such plans, programs, practices and policies
      relating to disability, if any, as in effect generally with respect to other
      peer executives and their families at any time during the 120-day period
      immediately preceding the Effective Date or, if more favorable to the Executive
      and/or the Executive's family, as in effect at any time thereafter generally
      with respect to other peer executives of the Company and its affiliated
      companies and their families.

     

    (d)  Cause;
      Other than for Good Reason.
      If the
      Executive's employment shall be terminated for Cause during the Employment
      Period, this Agreement shall terminate without further obligations to the
      Executive other than the obligation to pay to the Executive (x) his Annual
      Base
      Salary through the Date of Termination, (y) the amount of any compensation
      previously deferred by the Executive, and (z) Other Benefits, in each case
      to
      the extent theretofore unpaid. If the Executive voluntarily terminates
      employment during the Employment Period, excluding a termination for Good
      Reason, this Agreement shall terminate without further obligations to the
      Executive, other than for Accrued Obligations and the timely payment or
      provision of Other Benefits. In such case, all Accrued Obligations shall be
      paid
      to the Executive in a lump sum in cash within 30 days of the Date of
      Termination.

     

    7.  Non-exclusivity
      of Rights.
      Nothing
      in this Agreement shall prevent or limit the Executive's continuing or future
      participation in any plan, program, policy or practice provided by the Company
      or any of its affiliated companies and for which the Executive may qualify,
      nor,
      subject to Section 12(f), shall anything herein limit or otherwise affect such
      rights as the Executive may have under any contract or agreement with the
      Company or any of its affiliated companies. Amounts which are vested benefits
      or
      which the Executive is otherwise entitled to receive under any plan, policy,
      practice or program of or any contract or agreement with the Company or any
      of
      its affiliated companies at or subsequent to the Date of Termination shall
      be
      payable in accordance with such plan, policy, practice or program or contract
      or
      agreement except as explicitly modified by this Agreement.

     

    8.  Full
      Settlement.
      The
      Company's obligation to make the payments provided for in this Agreement and
      otherwise to perform its obligations hereunder shall not be affected by any
      set-off, counterclaim, recoupment, defense or other claim, right or action
      which
      the Company may have against the Executive or others. In no event shall the
      Executive be obligated to seek other employment or take any other action by
      way
      of mitigation of the amounts payable to the Executive under any of the
      provisions of this Agreement and such amounts shall not be reduced whether
      or
      not the Executive obtains other employment. The Company agrees to pay as
      incurred, to the full extent permitted by law, all legal fees and expenses
      which
      the Executive may reasonably incur as a result of any contest (regardless of
      the
      outcome thereof) by the Company, the Executive or others of the validity or
      enforceability of, or liability under, any provision of this Agreement or any
      guarantee of performance thereof (including as a result of any contest by the
      Executive about the amount of any payment pursuant to this Agreement), plus
      in
      each case interest on any delayed payment at the applicable Federal rate
      provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
      as
      amended (the "Code").

     

    9.  Certain
      Additional Payments by the Company.

     

    (a)  Anything
      in this Agreement to the contrary notwithstanding and except as set forth below,
      in the event it shall be determined that any payment or distribution by the
      Company or its affiliates to or for the benefit of the Executive (whether paid
      or payable or distributed or distributable pursuant to the terms of this
      Agreement or otherwise, but determined without regard to any additional payments
      required under this Section 9) (a "Payment") would be subject to the excise
      tax imposed by Section 4999 of the Code or any interest or penalties are
      incurred by the Executive with respect to such excise tax (such excise tax,
      together with any such interest and penalties, are hereinafter collectively
      referred to as the "Excise Tax"), then the Executive shall be entitled to
      receive an additional payment (a "Gross-Up Payment") in an amount such that
      after payment by the Executive of all taxes (including any interest or penalties
      imposed with respect to such taxes), including, without limitation, any income
      taxes (and any interest and penalties imposed with respect thereto) and Excise
      Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
      Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
      Notwithstanding the foregoing provisions of this Section 9(a), if it shall
      be
      determined that the Executive is entitled to a Gross-Up Payment, but that the
      Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that
      could be paid to the Executive such that the receipt of Payments would not
      give
      rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive
      and the Payments, in the aggregate, shall be reduced to the Reduced
      Amount.

     

    (b)  Subject
      to the provisions of Section 9(c), all determinations required to be made
      under this Section 9, including whether and when a Gross-Up Payment is required
      and the amount of such Gross-Up Payment and the assumptions to be utilized
      in
      arriving at such determination, shall be made by Ernst & Young or such other
      certified public accounting firm as may be designated by the Executive (the
      "Accounting Firm") which shall provide detailed supporting calculations both
      to
      the Company and the Executive within 15 business days of the receipt of notice
      from the Executive that there has been a Payment, or such earlier time as is
      requested by the Company. In the event that the Accounting Firm is serving
      as
      accountant or auditor for the individual, entity or group effecting the Change
      of Control, the Executive shall appoint another nationally recognized accounting
      firm to make the determinations required hereunder (which accounting firm shall
      then be referred to as the Accounting Firm hereunder). All fees and expenses
      of
      the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
      as determined pursuant to this Section 9, shall be paid by the Company to the
      Executive within five days of the receipt of the Accounting Firm's
      determination. Any determination by the Accounting Firm shall be binding upon
      the Company and the Executive. As a result of the uncertainty in the application
      of Section 4999 of the Code at the time of the initial determination by the
      Accounting Firm hereunder, it is possible that Gross-Up Payments which will
      not
      have been made by the Company should have been made ("Underpayment"), consistent
      with the calculations required to be made hereunder. In the event that the
      Company exhausts its remedies pursuant to Section 9(c) and the Executive
      thereafter is required to make a payment of any Excise Tax, the Accounting
      Firm
      shall determine the amount of the Underpayment that has occurred and any such
      Underpayment shall be promptly paid by the Company to or for the benefit of
      the
      Executive.

     

    (c)  The
      Executive shall notify the Company in writing of any claim by the Internal
      Revenue Service that, if successful, would require the payment by the Company
      of
      the Gross-Up Payment. Such notification shall be given as soon as practicable
      but no later than ten business days after the Executive is informed in writing
      of such claim and shall apprise the Company of the nature of such claim and
      the
      date on which such claim is requested to be paid. The Executive shall not pay
      such claim prior to the expiration of the 30-day period following the date
      on
      which it gives such notice to the Company (or such shorter period ending on
      the
      date that any payment of taxes with respect to such claim is due). If the
      Company notifies the Executive in writing prior to the expiration of such period
      that it desires to contest such claim, the Executive shall:

     

    (i)  give
      the
      Company any information reasonably requested by the Company relating to such
      claim,

     

    (ii)  take
      such
      action in connection with contesting such claim as the Company shall reasonably
      request in writing from time to time, including, without limitation, accepting
      legal representation with respect to such claim by an attorney reasonably
      selected by the Company,

     

    (iii)  cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

     

    (iv)  permit
      the Company to participate in any proceedings relating to such
      claim;

     

    provided,
      however, that the Company shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      contest and shall indemnify and hold the Executive harmless, on an after-tax
      basis, for any Excise Tax or income tax (including interest and penalties with
      respect thereto) imposed as a result of such representation and payment of
      costs
      and expenses. Without limitation on the foregoing provisions of this Section
      9(c), the Company shall control all proceedings taken in connection with such
      contest and, at its sole option, may pursue or forgo any and all administrative
      appeals, proceedings, hearings and conferences with the taxing authority in
      respect of such claim and may, at its sole option, either direct the Executive
      to pay the tax claimed and sue for a refund or contest the claim in any
      permissible manner, and the Executive agrees to prosecute such contest to a
      determination before any administrative tribunal, in a court of initial
      jurisdiction and in one or more appellate courts, as the Company shall
      determine; provided, however, that if the Company directs the Executive to
      pay
      such claim and sue for a refund, the Company shall advance the amount of such
      payment to the Executive, on an interest-free basis and shall indemnify and
      hold
      the Executive harmless, on an after-tax basis, from any Excise Tax or income
      tax
      (including interest or penalties with respect thereto) imposed with respect
      to
      such advance or with respect to any imputed income with respect to such advance;
      and further provided that any extension of the statute of limitations relating
      to payment of taxes for the taxable year of the Executive with respect to which
      such contested amount is claimed to be due is limited solely to such contested
      amount. Furthermore, the Company's control of the contest shall be limited
      to
      issues with respect to which a Gross-Up Payment would be payable hereunder
      and
      the Executive shall be entitled to settle or contest, as the case may be, any
      other issue raised by the Internal Revenue Service or any other taxing
      authority.

     

    (d)  If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 9(c), the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall (subject to the Company's complying
      with the requirements of Section 9(c)) promptly pay to the Company the
      amount of such refund (together with any interest paid or credited thereon
      after
      taxes applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 9(c), a determination is made
      that the Executive shall not be entitled to any refund with respect to such
      claim and the Company does not notify the Executive in writing of its intent
      to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

     

    10.  Confidential
      Information.
      The
      Executive shall hold in a fiduciary capacity for the benefit of the Company
      all
      secret or confidential information, knowledge or data relating to the Company
      or
      any of its affiliated companies, and their respective businesses, which shall
      have been obtained by the Executive during the Executive's employment by the
      Company or any of its affiliated companies and which shall not be or become
      public knowledge (other than by acts by the Executive or representatives of
      the
      Executive in violation of this Agreement). After termination of the Executive's
      employment with the Company, the Executive shall not, without the prior written
      consent of the Company or as may otherwise be required by law or legal process,
      communicate or divulge any such information, knowledge or data to anyone other
      than the Company and those designated by it. In no event shall an asserted
      violation of the provisions of this Section 10 constitute a basis for deferring
      or withholding any amounts otherwise payable to the Executive under this
      Agreement.

     

    11.  Successors.
      (a)
      This Agreement is personal to the Executive and without the prior written
      consent of the Company shall not be assignable by the Executive otherwise than
      by will or the laws of descent and distribution. This Agreement shall inure
      to
      the benefit of and be enforceable by the Executive's legal
      representatives.

     

    (b)  This
      Agreement shall inure to the benefit of and be binding upon the Company and
      its
      successors and assigns.

     

    (c)  The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Company to assume expressly and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. As used in this
      Agreement, "Company" shall mean the Company as hereinbefore defined and any
      successor to its business and/or assets as aforesaid which assumes and agrees
      to
      perform this Agreement by operation of law, or otherwise.

     

    12.  Miscellaneous.
      (a)
      This Agreement shall be governed by and construed in accordance with the laws
      of
      the State of Delaware, without reference to principles of conflict of laws.
      The
      captions of this Agreement are not part of the provisions hereof and shall
      have
      no force or effect. This Agreement may not be amended or modified otherwise
      than
      by a written agreement executed by the parties hereto or their respective
      successors and legal representatives.

     

    (b)  All
      notices and other communications hereunder shall be in writing and shall be
      given by hand delivery to the other party or by registered or certified mail,
      return receipt requested, postage prepaid, addressed as follows: 

     

    If
      to the
      Executive:

    

    Nicole
      A. Kivisto

    761
      San Angelo Drive

    Bismarck,
      ND 58504

    

    If
      to the
      Company:

    

    MDU
      Resources Group, Inc.

    1200
      West
      Century Avenue

    

    Mailing
      Address:

    P.O.
      Box
      5650

    Bismarck,
      ND 58506-5650

    Attention:
      General Counsel

     

    or
      to
      such other address as either party shall have furnished to the other in writing
      in accordance herewith. Notice and communications shall be effective when
      actually received by the addressee.

     

    (c)  The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

     

    (d)  The
      Company may withhold from any amounts payable under this Agreement such Federal,
      state, local or foreign taxes as shall be required to be withheld pursuant
      to
      any applicable law or regulation.

     

    (e)  The
      Executive's or the Company's failure to insist upon strict compliance with
      any
      provision of this Agreement or the failure to assert any right the Executive
      or
      the Company may have hereunder, including, without limitation, the right of
      the
      Executive to terminate employment for Good Reason pursuant to
      Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver
      of such provision or right or any other provision or right of this
      Agreement.

     

    (f)  The
      Executive and the Company acknowledge that, except as may otherwise be provided
      under any other written agreement between the Executive and the Company, the
      employment of the Executive by the Company is "at will" and, subject to Section
      1(a) hereof, prior to the Effective Date, the Executive's employment may
      be
      terminated by either the Executive or the Company at any time prior to the
      Effective Date, in which case the Executive shall have no further rights under
      this Agreement. From and after the Effective Date this Agreement shall supersede
      any other agreement between the parties with respect to the subject matter
      hereof.

    

      IN
        WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
        pursuant to the authorization from its Board of Directors, the Company has
        caused these presents to be executed in its name on its behalf, all as of
        the
        day and year first above written.

       

    

    
      
        	 	
                /s/
                  NICOLE A. KIVISTO

                Nicole
                  A. Kivisto

                 

              
	 	
                MDU
                  RESOURCES GROUP, INC.

                 

              
	
                Attest:

                 

              	 
	
                /s/
                  PAUL K. SANDNESS

                Paul
                  K. Sandness

                Secretary

                 

              	
                By:
                  /s/
                  MARTIN A. WHITE

                Martin
                  A. White

                Chairman
                  of the Board and

                Chief
                  Executive Officer

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