Document:

exhibit_10o5.htm

    Exhibit 10(o)5

     

    ALLETE 2008
Form 10-K

    

     

    

     

    ALLETE

    NON-EMPLOYEE
DIRECTOR COMPENSATION DEFERRAL PLAN II

     

     

     

     

     

    
 

     

    Effective
January 1, 2009

     

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    TABLE OF
CONTENTS

    

    
      
        	
                 

              	
                 

              	
                PAGE

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      1

              	
                Establishment
      and Purpose

              	
                2

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      2

              	
                Administration

              	
                2

              
	 
      	
                2.1

              	
                Administrator

              	
                2

              
	 
      	
                2.2

              	
                Duties

              	
                2

              
	 
      	
                2.3

              	
                Agents

              	
                2

              
	 
      	
                2.4

              	
                Binding
      Effect of Decisions

              	
                2

              
	 
      	
                2.5

              	
                Company
      Information

              	
                3

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      3

              	
                Participation

              	
                3

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      4

              	
                Deferrals

              	
                3

              
	 
      	
                4.1

              	
                Annual
      Deferral Election

              	
                3

              
	 
      	
                4.2

              	
                Cancellations
      of Deferral Elections due to Unforeseeable Emergency

              	
                3

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      5

              	
                Accounts
      and Investments

              	
                4

              
	 
      	
                5.1

              	
                Establishment
      of Accounts

              	
                4

              
	 
      	
                5.2

              	
                Timing
      of Credits to Accounts

              	
                4

              
	 
      	
                5.3

              	
                Vesting

              	
                4

              
	 
      	
                5.4

              	
                Investments

              	
                4

              
	 
      	
                5.5

              	
                Valuation
      Date

              	
                4

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      6

              	
                Distributions

              	
                4

              
	 
      	
                6.1

              	
                Distributions

              	
                4

              
	 
      	
                6.2

              	
                Additional
      Distribution Rules

              	
                5

              
	 
      	
                6.3

              	
                Subsequent
      Changes in Time and Form of Payment

              	
                6

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      7

              	
                Payment
      Acceleration and Delay

              	
                6

              
	 
      	
                7.1

              	
                Permitted
      Accelerations of Payment

              	
                6

              
	 
      	
                7.2

              	
                Permissible
      Distribution Delays

              	
                7

              
	 
      	
                7.3

              	
                Suspension
      Not Allowed

              	
                8

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      8

              	
                Beneficiary
      Designation

              	
                8

              
	 
      	
                8.1

              	
                Beneficiary

              	
                8

              
	 
      	
                8.2

              	
                No
      Beneficiary Designation

              	
                8

              

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    
      
        	 
      	 
      	 
      	 
      
	
                 

              	
                 

              	
                PAGE

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      9

              	
                Claims
      Procedures

              	
                8

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      10

              	
                Amendment
      or Termination

              	
                8

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      11

              	
                Miscellaneous
      Provisions

              	
                9

              
	 
      	
                11.1

              	
                Unsecured
      General Creditor

              	
                9

              
	 
      	
                11.2

              	
                Trust
      Fund

              	
                9

              
	 
      	
                11.3

              	
                Section
      409A Compliance

              	
                9

              
	 
      	
                11.4

              	
                Company’s
      Liability

              	
                9

              
	 
      	
                11.5

              	
                Nonassignability

              	
                9

              
	 
      	
                11.6

              	
                No
      Right to Board Position

              	
                10

              
	 
      	
                11.7

              	
                Incompetency

              	
                10

              
	 
      	
                11.8

              	
                Furnishing
      Information

              	
                10

              
	 
      	
                11.9

              	
                Notice

              	
                10

              
	 
      	
                11.10

              	
                Gender
      and Number

              	
                10

              
	 
      	
                11.11

              	
                Headings

              	
                10

              
	 
      	
                11.12

              	
                Applicable
      Law and Construction

              	
                10

              
	 
      	
                11.13

              	
                Invalid
      or Unenforceable Provisions

              	
                10

              
	 
      	
                11.14

              	
                Successors

              	
                10

              
	 
      	 
      	 
      	 
      
	
                ARTICLE
      12

              	
                Definitions

              	
                11

              

      

    

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ALLETE

    NON-EMPLOYEE
DIRECTOR COMPENSATION DEFERRAL PLAN II

    

     

    Effective
January 1, 2009

     

    

     

    ARTICLE
1

     

    Establishment and
Purpose

     

    This
document includes the terms of the ALLETE Non-Employee Director Compensation
Deferral Plan II, the purpose of which is to provide Directors an opportunity to
elect to defer Compensation.  The Plan is a successor to the ALLETE
Director Compensation Deferral Plan (the “Predecessor Plan”).  On
December 31, 2004, the Company froze the Predecessor Plan, and on January 1,
2005, the Company established the Plan to govern amounts initially deferred
after December 31, 2004 and investment earnings thereon.  From
January 1, 2005 to the effective date hereof, the Company operated and
administered the Plan in all material respects in good faith compliance with the
applicable requirements of Section 409A, the final and proposed Treasury
Regulations, IRS Notice 2005-1, and all other IRS guidance.  Effective
January 1, 2009, the Company amends and restates the Plan in its entirety
to comply with Section 409A.  Capitalized terms, unless otherwise
defined herein, shall have the meaning provided in Article 12.

     

    ARTICLE
2

     

    Administration

     

    
      	
              2.1

            	
              Administrator.

            

    

     

    The
Executive Compensation Committee of the Board shall administer the
Plan.  Notwithstanding the foregoing, the Administrator may delegate
any of its duties to such other person or persons from time to time as it may
designate.  Members of the Executive Compensation Committee may
participate in the Plan; however, any Director serving on the Executive
Compensation Committee shall not vote or act on any matter relating solely to
himself or herself.

     

    
      	
              2.2

            	
              Duties.

            

    

     

    The
Administrator has the authority to construe and interpret all provisions of the
Plan, to resolve any ambiguities, to adopt rules and practices concerning the
administration of the Plan, to make any determinations and calculations
necessary or appropriate hereunder, and, to the maximum extent permitted by
Section 409A, the authority to remedy any errors, inconsistencies or
omissions.  The Company shall pay all expenses and liabilities
incurred in connection with Plan administration.

     

    
      	
              2.3

            	
              Agents.

            

    

     

    The
Administrator may engage the services of accountants, attorneys, actuaries,
investment consultants, and such other professional personnel as are deemed
necessary or advisable to assist in fulfilling the Administrator’s
responsibilities.  The Administrator, the Company and the Board may
rely upon the advice, opinions or valuations of any such persons.

     

    
      	
              2.4

            	
              Binding
      Effect of Decisions.

            

    

     

    The
decision or action of the Administrator with respect to any question arising out
of or in connection with the administration, interpretation and

     

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    application
of the Plan and the rules and regulations promulgated hereunder shall be final,
conclusive and binding upon all persons having any interest in the
Plan.  Neither the Administrator, its delegates, nor the Board shall
be personally liable for any good faith action, determination or interpretation
with respect to the Plan, and each shall be fully protected by the Company in
respect of any such action, determination or interpretation.

     

    
      	
              2.5

            	
              Company
      Information.

            

    

     

    To enable
the Administrator to perform its duties, the Company shall supply full and
timely information to the Administrator on all matters relating to the
Compensation, the Directors, the date and circumstances of a Director’s
Separation from Service, and other pertinent information as the Administrator
may reasonably require.

     

    

    ARTICLE
3

     

    Participation

     

    Directors
may participate in the Plan, but only with respect to Plan Years commencing
after an individual first becomes a Director.  Each Plan Year, the
Administrator shall notify Directors of their eligibility to participate in the
Plan during the following Plan Year.  A Director who is eligible to
participate shall become a participant by completing an election form on which
the Director elects Deferrals and delivering the completed form to the Company
as specified in the Plan.  The terms of this Plan shall continue to
govern a Director’s Account until the Account is paid in full.

     

    

     

    ARTICLE
4

     

    Deferrals

     

    
      	
              4.1

            	
              Annual
      Deferral Election.

            

    

     

    For each
Plan Year, a Director may elect:  (i) to defer some or all of the
Director’s Compensation and (ii) to the extent permitted by this Plan, the time
and form of distribution of Deferrals.  Elections are effective on a
calendar-year basis and become irrevocable no later than the date specified by
the Administrator, but in any event before the beginning of the Plan Year to
which the elections relate.  A Director’s election will become
effective only if the forms required by the Administrator have been properly
completed and signed by the Director, timely delivered to the Administrator, and
accepted by the Administrator.  A Director who fails to file the
election before the required date will be treated as having elected not to defer
any amounts for the following Plan Year.

     

    
      	
              4.2

            	
              Cancellations
      of Deferral Elections due to Unforeseeable
    Emergency.

            

    

     

    If a
Director experiences an Unforeseeable Emergency during a Plan Year, the Director
may submit to the Administrator a written request to cancel Deferrals for the
Plan Year to satisfy the Unforeseeable Emergency.  If the
Administrator either approves the Director’s request to cancel Deferrals for the
Plan Year, or approves a request for a distribution of prior Deferrals in
accordance with Section 6.1.3, then effective as of the date the request is
approved the Administrator shall cancel the Director’s deferral elections for
the

     

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    remainder
of the Plan Year.  A Director whose Deferrals are canceled during a
Plan Year in accordance with this section may elect Deferrals for the following
Plan Year.

     

    ARTICLE
5

     

    Accounts and
Investments

     

    
      	
              5.1

            	
              Establishment
      of Accounts.

            

    

     

    The
Company will establish notional accounts for each Director as the Administrator
deems necessary or advisable from time to time to be consistent with 2.1 and 5.4
below.  The Company will establish a Director’s Account no later than
the date on which the Director first elects to defer any amounts into the
Account.  Each Account shall be credited as appropriate for Deferrals
and earnings with respect to Deferrals and debited for distributions from the
Account.

     

    
      	
              5.2

            	
              Timing
      of Credits to Accounts.

            

    

     

    The
Administrator shall credit a Director’s Deferrals to the Director’s Account not
later than the end of the calendar year during which the Company would otherwise
have paid the amounts to the Director but for the Director’s deferral
election.

     

    
      	
              5.3

            	
              Vesting.

            

    

     

    All
Director Accounts are fully vested at all times.

     

    
      	
              5.4

            	
              Investments.

            

    

     

    The
Administrator may select investment funds to use for measuring notional gains
and losses.  The Administrator will establish, from time to time,
rules and procedures for allowing each Director, who has not had a Separation
from Service, to designate which one or more of the selected investment funds
will be used to determine the notional gains and losses credited or debited to
the Director’s Account prior to Separation from Service.

     

    
      	
              5.5

            	
              Valuation
      Date.

            

    

     

    As of
each Valuation Date, each Account will be adjusted to reflect the effect of
notional investment gains or losses, additions, distributions, transfers and all
other transactions with respect to that Account since the previous Valuation
Date.

     

    
       

      ARTICLE
6

       

      Distributions

       

      
        	
                6.1  

              	
                Distributions.

              

      

       

      The Plan
provides for distributions in a Specified Year, upon a Separation from Service
or upon an Unforeseeable Emergency.  As described in Section 6.1.1,
each Plan Year a Director may elect to have all or a portion of the Deferrals
for that year distributed in a Specified Year.  With respect to
amounts not subject to distribution in a Specified Year, the Plan requires
distribution upon Separation from Service at a time and in a form elected by the
Director, or for Directors who fail to elect, at a time and in a form specified
by the Plan.  A Director wishing to elect a time and form of
distribution upon Separation from Service must submit a distribution election at
the time of the Director’s initial Deferrals.  A Director’s
distribution elections are irrevocable and will govern the Deferrals to which
the election relates until the amounts covered by the election are paid in full
or until subsequently changed in accordance with Section
6.3.  Notwithstanding any elections by a Director, all distributions
are subject to the provisions of Section 6.2.

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

         

      

      
        	
                6.1.1  

              	
                Specified
      Year.  A Director may elect to receive a distribution of
      Deferrals in a Specified Year, which may be no earlier than the third Plan
      Year beginning after the date on which the Director initially elects to
      receive a distribution in a Specified Year.  Except as otherwise
      provided in this subsection or in Section 6.3, once a Director has elected
      to receive a distribution in a Specified Year, the Director may not elect
      to receive a distribution in a different Specified
      Year.  Beginning during the year preceding a Specified Year
      previously elected by the Director, the Director may elect to receive a
      distribution of Deferrals in a later Specified Year, subject, however, to
      the restrictions of this subsection.  All amounts distributable
      in a Specified Year will be paid in a single lump
  sum.

              

      

       

      
        	
                6.1.2  

              	
                Separation
      from Service.  A Director may elect to receive a
      distribution of Deferrals commencing upon Separation from Service or
      during any of the first five years following the year of the Separation
      from Service.  A Director may elect to receive the distribution
      in the form of a lump sum, annual installments over a period of five (5),
      ten (10), or fifteen (15) years, or a combination of both a lump sum and
      installments.

              

      

       

      
        	
                6.1.3  

              	
                Unforeseeable
      Emergency.  A Director may submit a written request for a
      distribution on account of an Unforeseeable Emergency.  Upon
      approval by the Administrator of a Director’s request, the Director’s
      Account, or that portion of the Director’s Account deemed necessary by the
      Administrator to satisfy the Unforeseeable Emergency plus amounts
      necessary to pay taxes reasonably anticipated because of the distribution,
      will be distributed in a single lump sum in a manner consistent with
      Section 409A.

              

      

       

      
        	
                6.2  

              	
                Additional
      Distribution Rules.

              

      

       

      

       

      
        	
                6.2.1  

              	
                Default
      Time and Form of Payment.  If a
      Director fails timely to elect a time and form of payment, the Director’s
      Account will be distributed upon any Separation from Service in the form
      of a single lump sum payment.

              

      

       

      
        	
                6.2.2  

              	
                Rules
      Applicable to All Distributions.  Except as
      otherwise provided in this section, if a Director has elected to receive a
      distribution commencing upon a Distribution Event, or if the distribution
      is required upon Separation from Service, the distribution will commence
      between the date of the Distribution Event and the end of the year in
      which the Distribution Event occurs.  If a Director has elected,
      or is required, to receive a distribution commencing upon a Distribution
      Event, and the Distribution Event occurs on or after October 1 of a Plan
      Year, the distribution may, to the extent permitted by Section 409A,
      commence after the Distribution Event and on or before the 15th
      day of the third calendar month following the Distribution Event, even if
      after the end of the year during which the Distribution Event occurs;
      provided, however, the Director will not be permitted, directly or
      indirectly, to designate the taxable year of the
      distribution.  If a Director has elected to receive a
      distribution commencing during any of the first five years following a
      Separation from Service, the distribution will commence during the year
      elected by the Director.  If a Director has elected to receive a
      distribution in a Specified Year, the distribution will occur during the
      Specified Year.  Any distribution that complies with this
      section shall be deemed for all purposes to comply with the Plan
      requirements regarding the time and form of
  distributions.

              

      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                6.2.3  

              	
                Installment
      Payments.  If a
      Director elects to receive distributions in annual installments, the
      Director’s Account will be paid in substantially equal installments in
      consecutive years over the period elected by the
      Director.  During the distribution period the Director’s Account
      will be credited with interest compounded monthly at a rate of 7.5% per
      year.  Each annual installment will be paid during the Plan Year
      in which it is due.  Any installment distribution that complies
      with this section shall be deemed for all purposes to comply with the Plan
      requirements regarding the time and form of
  distributions.

              

      

       

      
        	
                6.2.4  

              	
                Death
      After Commencement of Distributions.  Upon the
      death of a Director after distributions of the Director’s Account have
      commenced, the balance of the Director’s Account will be distributed to
      the Director’s Beneficiary at the same times and in the same forms that
      the Account would have been distributed to the Director if the Director
      had survived.

              

      

       

      
        	
                6.3  

              	
                Subsequent
      Changes in Time and Form of Payment.

              

      

       

      A
Director may, in accordance with rules, procedures and forms specified from time
to time by the Administrator, elect to change the time of payment or change the
form in which the Director’s Account is distributed or both, provided
that:  (i) the Director elects at least twelve (12) months prior to
the date on which payments are otherwise scheduled to commence; (ii) the new
election does not take effect for at least twelve (12) months; and (iii) with
respect to changes applicable to distributions in a Specified Year or upon
Separation from Service, the distributions must be deferred for at least five
years from the date the distributions would otherwise have been paid, or in the
case of installment payments, five years from the date the installments were
scheduled to commence.  For purposes of this section, distributions on
account of a Specified Year are considered scheduled to commence on January 1 of
the Specified Year and distributions on account of a Separation from Service are
considered to commence on the date of the Separation from Service, or if the
Director has elected to receive a distribution of Deferrals commencing during
any of the first five years following the year of the Separation from Service,
January 1 of the year elected by the Director.  Any such election
shall be irrevocable on the date it is filed with the Administrator unless
subsequently changed pursuant to this Section.

       

    

    ARTICLE
7

     

    Payment Acceleration and
Delay

     

    
      	
              7.1

            	
              Permitted
      Accelerations of Payment.

            

    

     

    Except as
otherwise provided herein or permitted by Section 409A, the Plan prohibits the
acceleration of the time or schedule of any payment due under the
Plan.

     

    

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    

    Distribution
in the Event of Taxation.  If, for any
reason, all or any portion of any benefit provided by the Plan becomes taxable
to a Director because of a violation of Section 409A prior to receipt, the
Director may file a written request with the Administrator for a distribution of
that portion of the Plan benefit that has become taxable.  Upon the
grant of such a request, which grant shall not be unreasonably withheld, the
Director shall receive a distribution equal to the taxable portion of the plan
benefit.  If the request is granted, the tax liability distribution
shall be paid between the date on which the Director’s request is approved and
the end of the Plan Year during which the approval occurred, or if later, the
15th
day of the third calendar month following the date on which the Director’s
request is approved.

     

    
      	
               
      

            	
              7.1.1

            	
              Compliance
      with Ethics Laws or Conflicts of Interests Laws.  The
      Administrator may, in its sole discretion, accelerate the time or schedule
      of a payment to the extent necessary to avoid the violation of any
      applicable Federal, state, local, or foreign ethics law or conflicts of
      interest law as provided in Treasury Regulations section
      1.409A-3(j)(4)(iii)(B).

            

    

     

    
      	
               
      

            	
              7.1.2

            	
              Small
      Accounts.  The
      Administrator may, in its sole discretion, distribute the Director’s
      Account in a single lump sum provided: (i) the distribution results in the
      payment of the Director’s entire Account and all other account balance
      plans required to be aggregated with the Director’s Account pursuant to
      Section 409A and (ii) the total distribution does not exceed the
      applicable dollar limit under Code section 402(g)(1)(B).  The
      Administrator shall notify the Director in writing if the Administrator
      exercises its discretion pursuant to this
  Section.

            

    

     

    
      	
               
      

            	
              7.1.3

            	
              Settlement
      of a Bona Fide Dispute.  The
      Administrator may, in its sole discretion, accelerate the time or schedule
      of a distribution as part of a settlement of a bona fide dispute between
      the Director and the Company over a Director’s right to a distribution
      provided that the distribution relates only to the deferred compensation
      in dispute and the Company is not experiencing a downturn in financial
      health.

            

    

     

    
      	
              7.2

            	
              Permissible
      Distribution Delays.

            

    

     

    Notwithstanding
anything in the Plan to the contrary, to the extent permitted by Section 409A,
the Administrator may, in its sole discretion, delay distribution to a
Director:

     

    
      	
               
      

            	
              7.2.1

            	
              If
      the distribution would jeopardize the Company’s ability to continue as a
      going concern, provided that the delayed distribution is distributed in
      the first calendar year in which the distribution would not have such
      effect.

            

    

     

    
      	
               
      

            	
              7.2.2

            	
              If
      the distribution would violate Federal securities or other applicable
      laws, provided that the delayed distribution is distributed at the
      earliest date at which the Administrator reasonably anticipates that the
      distribution will not cause such
violation.

            

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      
        	
                 
      

              	
                7.2.3

              	 If
      calculation of the distribution is not administratively practicable due to
      events beyond the control of the Director, provided that the delayed
      distribution is paid in the first calendar year in which the calculation
      of the distribution is administratively
  practicable.

      

    

     

     

    
      	
              7.3

            	
              Suspension
      Not Allowed.

            

    

     

    If a
Director whose distributions have commenced becomes eligible again to defer
Compensation under any plan maintained by a Related Company, distribution of any
remaining amounts in his Account may not be suspended.

     

    

    ARTICLE
8

     

    Beneficiary
Designation

     

    
      	
              8.1

            	
              Beneficiary.

            

    

     

    Each
Director shall have the right, at any time, to designate a Beneficiary(ies)
(both primary as well as contingent) to whom a Director’s Account shall be paid
if a Director dies prior to complete distribution of the
Account.  Each Beneficiary designation shall be in a written form
prescribed by the Administrator, and will be effective only when filed with the
Administrator during the Director’s lifetime.  Any Beneficiary
designation may be changed by a Director without the consent of the previously
named Beneficiary by filing a new Beneficiary designation with the
Administrator.  The most recent Beneficiary designation received by
the Administrator shall control the distribution of a Director’s Account in the
event of the Director’s death.

     

    
      	
              8.2

            	
              No
      Beneficiary Designation.

            

    

     

    In the
absence of an effective Beneficiary designation, or if all designated
Beneficiaries predecease the Director or die prior to the complete distribution
of the Director’s Account, the Account shall be paid in the following order of
precedence: (a) the Director’s surviving spouse; (b) the Director’s children
(including adopted children), per stirpes; or (c) the Director’s
estate.

     

    ARTICLE
9

     

    Claims
Procedures

     

    Any
Director or Beneficiary, or his or her authorized representative, may file a
claim for benefits due him or her under the Plan by written request to the
Company, setting forth with specificity the facts and events which give rise to
the claim.  The Company shall promptly respond, consistent with any
legal requirements that might apply.

     

    ARTICLE
10

     

    Amendment or
Termination

     

    The
Company hereby reserves the right to amend, modify, or terminate the Plan at
any time by action of the Board, with or without prior notice.  No
amendment or termination shall reduce any Director’s Account without the written
consent of the affected Director.  Notwithstanding anything herein to
the contrary, to the extent consistent with Section 409A, the Board may
terminate the Plan and distribute to each Director the amount in his or her
Account in a lump sum; provided that all distributions (i) commence no
earlier than the date that is twelve (12) months following the termination date
(or any earlier date that would comply with Section 409A) and (ii) are
completed by the date that is twenty-four (24) months following the

     

    

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

     

    termination
date (or any later date that would comply with Section 409A).  In
addition, distributions may be accelerated upon a Plan termination as provided
above only if, to the extent required under Section 409A, (i) all
other nonqualified deferred compensation “account balance plans” (within the
meaning of Section 409A), in which any Director participates are terminated
along with the Plan, and (ii) the Company does not adopt any new
nonqualified deferred compensation “account balance plan” (within the meaning of
Section 409A), for three years following the date of Plan
termination.

     

    ARTICLE
11

     

    Miscellaneous
Provisions

     

    
      	
              11.1

            	
              Unsecured
      General Creditor.

            

    

     

    Directors
and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the
Company.  Any and all of the Company’s assets shall be, and remain,
the general, unpledged unrestricted assets of the Company.  The
Company’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.

     

    
      	
              11.2

            	
              Trust
      Fund.

            

    

     

    At its
discretion, the Company may establish a Trust, with such trustees as the Company
may approve, for the purpose of providing for the distribution of benefits owed
under this Plan.  The Trust’s assets shall be held for distribution of
all the Company’s general creditors in the event of insolvency or
bankruptcy.  To the extent any Plan benefits are paid from any such
Trust, the Company shall have no further obligations to pay them.  If
not paid from the Trust, such benefits shall remain the obligation of the
Company.

     

    
      	
              11.3

            	
              Section
      409A Compliance.

            

    

     

    All
provisions of the Plan shall be interpreted and administered to the extent
possible in a manner consistent with Section 409A.  To the extent that any
provision of the Plan would cause a conflict with the requirements of Section
409A, or would cause the administration of the Plan to fail to satisfy Section
409A, such provision shall be deemed null and void to the extent permitted by
applicable law.  Nothing herein shall be construed as a guarantee of
any particular tax treatment to a Director.

     

    
      	
              11.4

            	
              Company’s
      Liability.

            

    

     

    The
Company’s liability for the distribution of benefits shall be defined only by
the Plan.  The Company shall have no obligation to a Director except
as expressly provided in the Plan.

     

    
      	
              11.5

            	
              Nonassignability.

            

    

     

    Neither a
Director nor any other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are expressly declared to be, unassignable and non-transferable.  No
part of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Director or any other
person, be transferable by operation of law in the event of a Director’s or any
other person’s bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.

     

    

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

     

    
      	
              11.6

            	
              No
      Right to Board Position.
  

            

    

     

    
      Nothing
in the Plan shall be deemed to create any obligation on the part of the Board to
nominate any of its members for reelection by the Company’s stockholders, nor
confer upon any Director the right to remain a member of the Board for any
period of time, or at any particular rate of compensation.

       

    

    
      	
              11.7

            	
              Incompetency.

            

    

     

    If the
Administrator determines that a distribution under this Plan is to be paid to a
minor, to a person declared incompetent or to a person incapable of handling the
disposition of that person’s property, the Administrator may direct such
distribution to be paid to the guardian, legal representative or person having
the care and custody of such minor, incompetent or incapable
person.  The Administrator may require proof of majority, competence,
capacity, guardianship or status as a legal representative, as it may deem
appropriate prior to distribution.  Any distribution shall be for the
account of the Director and the Director’s Beneficiary, as the case may be, and
shall completely discharge any liability for such amount.

     

    
      	
              11.8

            	
              Furnishing
      Information.

            

    

     

    A
Director or his Beneficiary will cooperate with the Administrator by furnishing
any and all information requested by the Administrator and take such other
actions as may be requested in order to facilitate the administration of the
Plan and the distributions hereunder.

     

    
      	
              11.9

            	
              Notice.

            

    

     

    Any
notice or filing required or permitted under the Plan shall be sufficient if in
writing and if (i) hand-delivered or sent by telecopy, (ii) sent by registered
or certified mail, or (iii) sent by nationally-recognized overnight
courier.  Such notice shall be deemed given as of  (i) the
date of delivery if hand-delivered or sent by telecopy, (ii) as of the date
shown on the postmark on the receipt for registration or certification, if
delivery is by mail, or (iii) on the first business day after dispatch, if sent
by nationally-recognized overnight courier.

     

    
      	
              11.10

            	
              Gender
      and Number.

            

    

     

    Except
when otherwise indicated by context, words in the masculine gender shall include
the feminine and neuter genders, the singular shall include the plural, and the
plural shall include the singular.

     

    
      	
              11.11

            	
              Headings.

            

    

     

    The
headings contained in this Plan are for convenience only and will not control or
affect the meaning or construction of any of the terms or provisions of this
Plan.

     

    
      	
              11.12

            	
              Applicable
      Law and Construction.

            

    

     

    This Plan
shall be governed by, construed and administered in accordance with the laws of
the State of Minnesota, other than its laws respecting choice of
law.

     

    
      	
              11.13

            	
              Invalid
      or Unenforceable Provisions.

            

    

     

    If any
provision of this Plan shall be held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof and the
Administrator may elect in its sole discretion to construe such invalid or
unenforceable provisions in a manner that conforms to applicable law or as if
such provisions, to the extent invalid or unenforceable, had not been
included.

     

    
      	
              11.14

            	
              Successors.

            

    

     

    This Plan
shall bind any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of

     

    

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    the
Company, in the same manner and to the same extent that the Company would be
obligated under this Plan if no succession had taken place.  In the
case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the obligations of the Company and each Company under this Plan, in the
same manner and to the same extent that the Company and each Company would be
required to perform if no such succession had taken place.

     

    ARTICLE
12

     

    Definitions

     

    The
following terms shall have the meanings set forth below:

     

    “Account”
means the Company’s bookkeeping entry representing the Director’s Deferrals, and
such other accounts or sub-accounts as the Administrator deems necessary or
appropriate.

     

    “Administrator”
means the Executive Compensation Committee of the Board.

     

    “Beneficiary”
means one or more persons, trusts, estates or other entities, designated in
accordance with this Plan, that are entitled to receive Plan benefits upon the
death of a Director.

     

    “Board”
means the Board of Directors of the Company.

     

    “Code”
means the Internal Revenue Code of 1986, as it may be amended from time to
time.

     

    “Company”
means ALLETE, Inc., a Minnesota Corporation, and any successor to all, or
substantially all, of the Company’s assets or business.

     

    “Compensation”
means the cash compensation for services as a Director, excluding perquisites
and reimbursements.

     

    “Deferrals”
means any portion of a Director’s Compensation that a Director elects to defer
in accordance with the Plan.

     

    “Director”
means a member of the Board who is not an employee of any Related
Company.

     

    “Distribution
Event” means a Specified Year, a Separation from Service or the Administrator’s
determination regarding the occurrence of an Unforeseeable
Emergency.

     

    “IRS”
means the Internal Revenue Service.

     

    “Plan”
means the ALLETE Non-Employee Director Compensation Deferral Plan II, as amended
from time to time.

     

    

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

    “Plan
Year” means a period beginning on January 1 of each calendar year and continuing
through December 31 of such calendar year.

     

    “Related
Company” means the Company and all persons with whom the Company would be
considered a single employer under Code section 414(b) (employees of controlled
group of corporations), and all persons with whom such person would be
considered a single employer under Code section 414(c) (employees of
partnerships, proprietorships, etc., under common control); provided that in
applying Code sections 1563(a)(1), (2), and (3) for purposes of determining a
controlled group of corporations under Code section 414(b), the language “at
least 50 percent” is used instead of “at least 80 percent” each place it appears
in Code sections 1563(a)(1), (2), and (3), and in applying Treasury Regulations
section 1.414(c)-2 for purposes of determining trades or businesses (whether or
not incorporated) that are under common control for purposes of Code section
414(c), “at least 50 percent” is used instead of “at least 80 percent” each
place it appears in Treasury Regulations section 1.414(c)-2.

     

    “Section
409A” means section 409A of the Code (and any successor provision), and
regulations and other guidance issued by the Treasury Department and Internal
Revenue Service thereunder.

     

    “Separation
from Service” means that the Director ceases to perform services as a Director
and the Company does not then anticipate that the Director will continue to
perform services in any capacity for any Related Company.

     

    “Specified
Year” means the year specified by a Director as the year in which the Director
will receive a distribution payment of all or a portion of his
Account.  The Specified Year must be at least two years after the year
the compensation would have been paid but for the Director’s deferral
election.

     

    “Trust”
means one or more trusts established pursuant to the ALLETE, Inc. Non-Employee
Director Compensation Trust Agreement, effective October 11, 2004, between the
Company and the trustee named therein, as amended from time to
time.

     

    “Unforeseeable
Emergency” means an unanticipated emergency that is caused by an event beyond
the control of the Director that would result in severe financial hardship to
the Director resulting from (i) an illness or accident of the Director or the
Director’s spouse, the Director’s beneficiary, or the Director’s dependent (as
defined in Code section 152, without regard to Code sections 152(b)(1), (b)(2),
and (d)(1)(B)), (ii) a loss of the Director’s property due to casualty, or (iii)
such other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Director, all as determined in the
sole discretion of the Administrator.

     

    “Valuation
Date” means each day that the U.S. stock markets are open or such other dates as
may be set by the Administrator from time to time.

     

    

     

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, ALLETE, Inc. has caused these presents to be signed and its
corporate seal to be hereunto affixed by its duly authorized officers, effective
as of January 1, 2009

     

    

     

    

     

    ALLETE, Inc.

     

    

     

    By: Donald J.
Shippar   

                                                                

                                                           Donald
J. Shippar

     

    
      	
               
      

            	
              Its:

            	
              Chairman,
      President and Chief Executive
Officer

            

    

     

    

     

    ATTEST

     

    By:   Deborah A.
Amberg                                                                      

     

     Deborah A. Amberg

     

    Its:    
 Senior Vice President, General Counsel and Secretary

     

    

     

    

     

    

    

     

    

    

    

    
      
        
           

        

        
          13ex-10b.htm

    
 

    MDU
RESOURCES GROUP, INC.

    

    SUPPLEMENTAL
INCOME SECURITY PLAN

    

    (As
Amended and Restated Effective as of November 13, 2008)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    

    
      
        
          
            
              
                	
                        Page

                      
	 
      	 
      
	
                        INTRODUCTION

                      	
                        1

                      
	 
      	 
      
	
                        ARTICLE
      I – DEFINITIONS

                      	
                        1

                      
	 
      	 
      
	
                        ARTICLE
      II -- ELIGIBILITY

                      	
                        5

                      
	 
      	 
      
	
                        ARTICLE
      III -- SUPPLEMENTAL DEATH AND RETIREMENT BENEFITS

                      	
                        7

                      
	 
      	 
      
	
                        ARTICLE
      IV -- REPLACEMENT RETIREMENT BENEFITS

                      	
                        16

                      
	 
      	 
      
	
                        ARTICLE
      V -- DISABILITY BENEFITS

                      	
                        19

                      
	 
      	 
      
	
                        ARTICLE
      VI -- MISCELLANEOUS

                      	
                        20

                      
	 
      	 
      
	
                        ARTICLE
      VII -- ADDITIONAL AFFILIATE COMPANIES

                      	
                        29

                      
	 
      	 
      
	
                        APPENDIX
      A – SCHEDULE OF RETIREMENT AND SURVIVORS BENEFITS

                      	
                        31

                      
	 
      	 
      
	
                        APPENDIX
      B – CURRENT PARTICIPANTS ELIGIBLE FOR ARTICLE IV BENEFITS

                      	
                        32

                      
	 	 
	APPENDIX
      C – MDU RESOURCES GROUP, INC. SPECIFIED EMPLOYEE POLICY REGARDING
      COMPENSATION	
                        33

                      

              

            

          

        

      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INTRODUCTION

    

    The objective of the MDU Resources
Group, Inc. Supplemental Income Security Plan (the "Plan") is to provide certain
levels of death benefits and retirement income for a select group of management
or highly compensated employees and their families.  Eligibility for
participation in this Plan shall be limited to management or highly compensated
employees who are selected by the MDU Resources Group, Inc. ("Company") Board of
Director’s Compensation Committee (“Compensation Committee”) upon recommendation
of the Chief Executive Officer of the Company (“CEO”).  This Plan
became effective January 1, 1982, has been amended from time to time thereafter,
and most recently has been amended and restated effective as of November 13,
2008.

    The Plan is intended to constitute an
unfunded deferred compensation plan maintained by the Company primarily for the
purpose of providing non-elective deferred compensation for a select group of
management or highly compensated employees.

    ARTICLE I --
DEFINITIONS

    Unless a different meaning is plainly
implied by the context, the following terms as used in this Plan shall have the
following meanings:

    1.1           "Administrator" means
the Compensation Committee or any other person to whom the Compensation
Committee has delegated the authority to administer the Plan.  The
Vice President - Human Resources of the Company is initially delegated the
authority to perform the administrative responsibilities required under the
Plan.

    1.2           "Affiliated Company"
means any current or future corporation which (a) is in a controlled group of
corporations (within the meaning of Section 414(b) of the Code)
of

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    which the
Company is a member and (b) has been approved by the Compensation Committee upon
recommendation of the Chief Executive Officer to adopt the Plan for the benefit
of its Employees.

    1.3           "Beneficiary" means an
individual or individuals, any entity or entities (including corporations,
partnerships, estates or trusts) that shall be entitled to receive benefits
payable pursuant to the provisions of this Plan by virtue of a Participant's
death; provided, however, that if more than one such person is designated as a
Beneficiary hereunder, each such person's proportionate share of the death
benefit hereunder must clearly be set forth in a written statement of the
Participant received by and filed with the Administrator prior to the
Participant's death.  If such proportionate share for each Beneficiary
is not set forth in the designation, each Beneficiary shall receive an equal
share of the death benefits provided hereunder.

    1.4           "Company" means MDU
Resources Group, Inc., and its successors, if any.

    1.5           "Effective Date" of
the Plan means January 1, 1982.  The Effective Date of this amendment
and restatement of the Plan is November 13, 2008.

    1.6           "Eligible Retirement
Date" means the First Eligible Retirement Date and the last day of each
subsequent calendar month.

    1.7           "Employee" means each
person actively employed by an Employer, as determined by such Employer in
accordance with its practices and procedures.

    1.8           "Employer" means the
Company and any Affiliated Company which shall adopt this Plan with respect to
its Employees with the prior approval of the Company as set forth in Article 7
of the Plan.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

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

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

    1.12           "Limitation on
Benefits" shall mean the statutory limitation on the maximum benefit that
may be payable to participants under a Pension Plan due to the application of
certain provisions contained in the Code.

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

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

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

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

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

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

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

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

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

    1.21           "Standard Life
Insurance" means life insurance that could be purchased from a commercial
life insurance company at standard rates without a surcharge assessed, based on
an individual's general good health.

    1.22           "Standard Underwriting
Factors" means life insurance rating factors utilized by a commercial
life insurance company selected by the  Administrator which are
based

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    on the
risk assessment classifications utilized by such insurer to determine if an
applicant qualifies for insurance at standard rates or if health or other
factors might require a surcharge.

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

    ARTICLE II --
ELIGIBILITY

    2.1           Eligibility for
Participation.  The Compensation Committee upon recommendation
of the Chief Executive Officer shall determine which management or highly
compensated Employees may be eligible to participate in the
Plan.  Effective after January 1, 2005, general criteria for initial
consideration of an Employee include, but are not limited to, the
following:  (a) either an officer or a management employee of an
Employer earning an annual  base salary  of $150,000 or
more, indexed in a manner described below;  (b) an executive who makes
a significant contribution to the Company's success and profitability; and (c)
an executive in a business unit where benefits of this nature are a common
practice, or there is a specific need to recruit and retain key
executives.  Each Employee who is selected as eligible to participate
hereunder and who meets the requirements for participation set forth under
Section 2.2 hereof shall commence participation of the first day of the month
coincident with or next following the date of such Employee's
selection.  The annual base salary threshold of $150,000 will be
indexed each year after 2005 by the Administrator according to the average
salary growth assumptions used in the Pension Plans, or other appropriate
executive salary growth reference.  In addition to the annual
indexing, the Administrator will, from time to time, compare the annual base
salary

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    threshold
to competitive practice and recommend adjustments accordingly to the
Compensation Committee.

    2.2           Requirements for
Participation.  In order to be eligible to participate in the
Plan, an Employee selected by the Compensation Committee must (a) be actively at
work for one or more of the Employers; (b) have a current state of health and
physical condition that would satisfy customary requirements for insurability
under Standard Life Insurance; provided, however, that no provision of this Plan
shall be construed or interpreted to limit participation in the Plan in
contravention of the Americans With Disabilities Act and related federal and
state laws; and (c) consent to supply information or to otherwise cooperate as
necessary to allow the Company to obtain life insurance on behalf of such
Employee (as set forth under Section 6.3 of the Plan).

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

    2.4           Relationship to Other
Plans.  Participation in the Plan shall not preclude or limit
the participation of the Participant in any other benefit plan sponsored by one
or more of the Employers for which such Participant otherwise would be
eligible.  However, any benefits payable under this Plan shall not be
deemed salary or compensation to the Participant for purposes of determining
benefits under any other employee benefit plan maintained by one or more of the
Employers.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    2.5           Forfeiture of
Benefits.  Notwithstanding any provision of this Plan to the
contrary, if any Participant is discharged from employment by one or more of the
Employers for cause due to willful misconduct, dishonesty, or conviction of a
crime or felony, all as determined at the sole discretion of the Compensation
Committee, the rights of such Participant (or any Beneficiary of such
Participant) to any present or future benefit under this Plan shall be forfeited
to the extent not prohibited by applicable law.

    ARTICLE III -- SUPPLEMENTAL
DEATH AND RETIREMENT BENEFITS

    3.1           Amount of
Benefit.

    (a)           Subject
to the provisions of Section 3.3 or 3.4 of the Plan, the monthly supplemental
death and/or retirement benefits payable on behalf of (or to) a Participant as
of such Participant's date of death (or First Eligible Retirement Date) will be
an amount determined by the Compensation Committee upon recommendation of the
Chief Executive Officer at the time of the Participant's commencement of
participation in the Plan, and may be  increased from time to time
thereafter by the Compensation Committee upon recommendation of the Chief
Executive Officer.  Subject to the discretion of the Compensation
Committee upon recommendation of the Chief Executive Officer, a Participant
shall generally  be entitled to have a monthly supplemental death
benefit paid on such Participant's behalf (or be entitled to receive a monthly
supplemental retirement benefit) equal to the monthly death benefit or monthly
retirement benefit (as applicable) corresponding to the Participant's Salary in
effect at the date such initial or revised benefit determination is to be
effective, all as set forth in the applicable Appendix A
hereto.   Increases in Salary do not automatically result in
increases to a Participant's level of benefits.  Without limiting the
scope of the immediately preceding sentence, it is

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    intended
that increases to a Participant’s benefit level after commencement of
participation in the Plan will be made only to the extent the Participant’s
current compensation exceeds the then current annual base salary threshold
determined pursuant to Section 2.1 as a general criterion for
eligibility.

    (b)           Participants
who died, terminated employment with, or retired from, the Employers prior to
January 1, 2002, will receive benefits hereunder in accordance with the terms of
the Plan as in effect at the time of the Participant's death, termination of
employment or retirement from the Employers.

    (c)           The
benefit amounts determined by the Compensation Committee upon recommendation of
the Chief Executive Officer pursuant to Section 3.1(a) above are based on the
assumption that each Participant's health and physical condition at the time of
such Participant's commencement of participation in the Plan meets customary
requirements for Standard Life Insurance.  Benefits under the Plan may
be reduced by the Compensation Committee upon recommendation of the Chief
Executive Officer within a reasonable period following the establishment of such
benefit level in accordance with Standard Underwriting Factors, but only with
respect to that portion of the monthly death or retirement benefit for which the
criteria for health and physical condition are not met.  Participants
will be notified of any such reduction within a reasonable period following
participation in the Plan.  Once benefits have been reduced under this
Section 3.1, such benefits shall not be further reduced for the remainder of the
Participant's participation in the Plan.

    (d)           Participants
who die while actively employed will be considered to be 100% vested for the
death benefit, and not subject to the vesting schedule.  However, once
the

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    participant
is no longer actively employed (e.g. resignation, termination, disability, etc.)
Section 3.2 applies.

    3.2           Vesting.  If
a Participant retires or terminates employment with an Employer before the
Participant completes at least 10 years of Participation, the monthly death
and/or retirement benefits to which such Participant otherwise would be entitled
under the terms of Section 3.1 hereof shall vest as follows:

    
      
        
          
            	
                    Vesting
      Schedule

                  
	 
      	 
      
	
                        
      Years of Participation

                  	
                     
      Percent of Section

                  
	
                    Completed by the
      Participant

                  	
                    3.1 Benefits
      Payable

                  
	 
      	 
      
	
                    1

                  	
                    0%

                  
	
                    2

                  	
                    0%

                  
	
                    3

                  	
                    20%

                  
	
                    4

                  	
                    40%

                  
	
                    5

                  	
                    50%

                  
	
                    6

                  	
                    60%

                  
	
                    7

                  	
                    70%

                  
	
                    8

                  	
                    80%

                  
	
                    9

                  	
                    90%

                  
	
                    10

                  	
                    100%

                  

          

        

      

    

    

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

    (a) to
defer any payments and retain a future monthly death benefit
in amounts determined pursuant to Section 3.1 hereof, multiplied by the
appropriate percentage amount set forth in section 3.2, or

    
      
         

      

      
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    (b) in
lieu of any death benefits under this Plan, a monthly retirement
benefit determined in accordance with Section 3.1, multiplied by the
appropriate percentage amount set forth in Section 3.2, with no death benefit,
or

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

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

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

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

    (d)
Elections under this Section 3.3 must be communicated in writing to the
Administrator and will be effective as of the first day of the first month
following the Administrator's receipt and the approval of such request by the
Chief Executive Officer.

    3.4           Participant’s Election of
Monthly Post-Jobs Act Benefit.  Upon attainment of age 65, or
as of such Participant’s First Eligible Retirement Date (if later), the
Participant’s Monthly Post-Jobs Act Benefit will automatically be designated as
a retirement benefit.  A

    
      
         

      

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

    3.5           Payment of Monthly
Benefits.

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

    (b)           Retirement Benefit for the
Monthly Pre-Jobs Act Benefit.  The Monthly Pre-Jobs Act Benefit
elected as retirement benefits payable under this Plan shall commence on the
Eligible Retirement Date selected by the Participant (upon 30 day's written
notice to the Administrator) and will be payable to such Participant in monthly
installments for a period of 180 months.  In the event the Participant
dies prior to the completion of such 180-month period, the balance of such
retirement benefits shall be paid to the Participant's Beneficiary at such times
and in such amounts as if the Participant had not died, such payment being made
in addition to any death benefits payable under Sections 3.3(a)
hereof.  To the extent a Participant elects to

    
      
         

      

      
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    commence
receiving increased retirement benefits pursuant to Section 3.3(c) (i), the
amount of increase of retirement benefits shall be in the form of a monthly
benefit payable for a separate 180-month period.

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

    
      	
               
      

            	
              (i)

            	
              to
      a Key Employee, payments will begin the later of (I) the First Eligible
      Retirement Date, or (II) six months after the last day of the month during
      which such Key Employee is both no longer actively employed by the
      Employer and has attained at least age 65.  If such payments
      begin on (c) (i) (II), the first monthly payment to the Key Employee will
      include a total of seven months’ payments.  Also, such first
      monthly payment will include an interest credit on the first six months’
      payments equivalent to one-half of the annual prime interest rate
      contained in the Wall
      Street Journal on the Key Employee’s last day of employment (or the
      first business day after the Key Employee’s last day of employment should
      the last day of employment be a non-business
      day).   Payments to the Key Employee will last 173
      months.  Should the Key Employee die prior to the completion of
      the 173 month period, the balance of such retirement benefits shall be
      paid to the Participant's Beneficiary at such times and in such amounts as
      if the

            

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Participant
had not died, such payment being made in addition to any death benefits payable
under Sections 3.3(a) hereof.

    

    
      	
               
      

            	
              (ii)

            	
              to
      a Participant who is not a Key Employee, payments will begin on the First
      Eligible Retirement Date and be payable to such Participant in monthly
      installments for a period of 180 months.  In the event the
      Participant dies prior to the completion of such 180-month period, the
      balance of such retirement benefits shall be paid to the Participant's
      Beneficiary at such times and in such amounts as if the Participant had
      not died, such payment being made in addition to any death benefits
      payable under Sections 3.3(a).

            

    

    (d)           Actuarial Equivalent
Alternative Forms for the Monthly Pre-Jobs Act Benefit.  The
normal form of retirement benefit for the Monthly Pre-Jobs Act Benefit to which
a Participant shall be entitled shall be determined under paragraph
3.4(b).  Alternatively, a participant may elect to receive their
Monthly Pre-Jobs Act Benefit in the form of a retirement benefit in one of the
following actuarially equivalent forms (as determined by the Administrator),
provided however that each alternative form shall also be payable for a certain
period of 180 months:  (i) the lifetime of the Participant; (ii) the
lifetime of the Participant with the same amount payable to the Participant
continued thereafter for the lifetime of the Participant’s spouse; or (iii) the
lifetime of the Participant with 67% of the amount payable to the Participant
continued thereafter for the lifetime of the Participant’s
spouse.  However, in no event will the Company incur more costs in
providing the actuarial equivalent alternative form to the Participant than it
would otherwise incur in providing the normal form of retirement
benefit.

    
      
         

      

      
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    Applying
the discount rate used by the Company to calculate the FAS 87 expense, the
present value of the Participant’s retirement benefit will be calculated by the
Administrator.  The Administrator will then purchase an annuity at a
cost no greater than the present value of the retirement benefit.

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

    (f)           Single Sum
Payment.  Notwithstanding the provisions of subsections
(a),  (b) and (c) of this Section 3.5, the  Administrator
reserves the right to pay the Monthly Pre-Jobs Act Benefit  in the
form of an actuarially equivalent single sum (as determined by the
Administrator) when retirement or death benefits are payable due to termination
of employment, excluding disability, or death prior to the Participant's
attainment of age 55, or upon the death of the Participant and the primary
beneficiary(ies).  The Single Sum Payment will not apply to the
Monthly Post-Jobs Act Benefits.

    3.6           Exclusions and
Limitations.

    (a)           No
death benefits will be payable with respect to a Participant in the event of
such Participant's death by suicide within two (2) years after commencement of
participation in the Plan, and no benefit increase will apply in the event of
any such Participant's death by suicide within two (2) years after such
Participant becomes eligible for an increase in death benefits.

    (b)           In
the event that a Participant misrepresents any health or physical condition at
the time of commencement of participation in the Plan or at the time of a
retirement

    
      
         

      

      
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    or death
benefit increase, no retirement or death benefit or retirement or death benefit
increase will be payable under the Plan within two (2) years of such
misrepresentation.

    3.7           Death of a
Beneficiary.

    (a)           In
the event any Beneficiary predeceases the Participant, is not in existence, is
not ascertainable, or is not locatable (see Section 6.11) as of the date
benefits under the Plan become payable to such Beneficiary, Plan benefits shall
be paid to such contingent Beneficiary or Beneficiaries as shall have been named
by the Participant on the Participant's most recent Beneficiary election form
that has been received and filed with the Administrator prior to the
Participant's death.  If no contingent Beneficiary has been named, the
contingent Beneficiary shall be the Participant's estate.

    (b)           In
the event any Beneficiary dies after commencing to receive monthly benefits
under the Plan but prior to the payment of all monthly benefits to which such
Beneficiary is entitled, remaining benefits shall be paid to a beneficiary
designated by the deceased Beneficiary (the "Secondary Beneficiary"), provided
such designation has been received and filed with the Administrator prior to the
death of the Beneficiary.  If no such person has been designated by
the deceased Beneficiary, the Secondary Beneficiary shall be the estate of the
Beneficiary.  In the event the Secondary Beneficiary shall die prior
to the payment of all benefits to which such Secondary Beneficiary is entitled,
the remainder of such payments shall be made to such Secondary Beneficiary's
estate.  If the Administrator is in doubt as to the right of any
person to receive benefits under the Plan, the Administrator may retain such
amount, without liability for any interest thereon, until the rights thereto are
determined, or the Administrator may pay a single sum amount in accordance with
Section 3.5 (f) into any court of competent

    
      
         

      

      
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    jurisdiction
and such payment shall be a complete discharge of the liability of the Plan and
the Employer.

    3.8           Discretion As To Benefit
Amount.  Notwithstanding the foregoing, the Compensation
Committee upon recommendation of the Chief Executive Officer of the Company may,
with full and complete discretion, disregard Standard Underwriting Factors and
customary requirements for Standard Life Insurance in establishing and/or
increasing the amount of any Participant's retirement or death benefit under the
Plan.

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

    ARTICLE IV
--  REPLACEMENT RETIREMENT BENEFITS

    4.1           Participation.  Benefits
under this Article IV shall be payable only to those Participants whose
benefits, under a Pension Plan under which they otherwise participate, are
reduced or limited by reason of the Limitation on Benefits.  Except
for those Participants listed on Appendix B, benefits under Article IV are
limited to Participants who retire or terminate from the Employer no earlier
than the age at which there is no Pension Plan benefit reduction due to early
retirement.  Participants listed on Appendix B shall be eligible to
receive benefits under Article IV if they begin receiving benefits under a
Pension Plan at any time prior to age 65.  Benefits under this Article
IV (a) shall be payable only for such period that the benefits under the Pension
Plan are actually reduced or limited and (b) shall terminate as of the last day
of the

    
      
         

      

      
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    month
immediately preceding the month during which occurs the Participant's
sixty-fifth (65th)
birthday.  Should the Participant die before their sixty-fifth
(65th)
birthday, and they had elected a joint and survivor form of payment (specified
in 4.2 (c)), their surviving spouse will receive Article IV benefit payments
until the date the Participant would have turned 65 years
old.  Furthermore, benefits under this Article IV also shall be
payable only to those Participants who are active Employees on or after January
1, 1997.

    4.2           Amount and Method of
Payment.

    (a)           Amount of
Benefit.  The amount, if any, of the monthly benefit payable to
or on account of a Participant pursuant to this Article IV shall equal the
difference of (i) minus (ii) where:

    
      	
               
      

            	
              (i)

            	
              equals
      the amount of monthly retirement benefits which would be provided to the
      Participant under the Pension Plan without regard to the Limitation of
      Benefits; and

            

    

    
      	
               
      

            	
              (ii)

            	
              equals
      the amount of monthly retirement benefits payable to such Participant
      under the Pension Plan due to the application of the Limitation on
      Benefits;

            

    

    provided,
however, that no benefits shall be payable to a Participant under this Article
IV unless the amount of such monthly benefit is at least fifty dollars
($50).  The benefit amount provided under this Section 4.2(a) shall be
determined with reference to the form of benefit determined under section 4.2(c)
hereof and shall be calculated in accordance with the Standard Actuarial Factors
utilized under the Pension Plan.

    
      
         

      

      
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    (b)           Vesting.  A
Participant shall be vested in benefits under this Article IV to the same extent
as such Participant is vested in benefits under the applicable Pension
Plan.

    (c)           Payment of
Benefit.  The benefits provided under this Article IV shall be
paid to each such Participant, surviving spouse (as defined under the applicable
Pension Plan) or joint annuitant (as defined under the applicable Pension
Plan).  Benefits due the Participant under Article IV will commence
automatically upon separation of employment from the Employer regardless of the
Participant’s timing of payment under the applicable Pension Plan, unless the
Participant is a Key Employee, in which case Article IV payments will commence
seven months after separation of employment from the Employer.  If the
Participant is a Key Employee, the payments otherwise due them in months one
through six will be paid cumulatively on the seventh month after separation of
employment.  Also, the payment on the seventh month will include an
interest credit on the first six months’ payments equivalent to one-half of the
annual prime interest rate contained in the Wall Street Journal on the
Key Employee’s last day of employment (or the first business day after the Key
Employee’s last day of employment should the last day of employment be a
non-business day).   A Participant is limited to receiving
Article IV as either a single life annuity (i.e., the lifetime of the
Participant) or a qualified joint and survivor annuity (i.e., the lifetime of
the Participant with the same amount payable to the Participant continued
thereafter for the lifetime of the Participant’s
spouse).  Notwithstanding the ability for the Participant to receive a
lump-sum payment for their pension benefit under the applicable Pension Plan,
there is no lump-sum payment available to Article IV
benefits.  Payments shall be made in accordance with, and subject to,
the terms and conditions of the

    
      
         

      

      
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    applicable
Pension Plan; provided, however, that no spousal consent shall be required to
commence any form of payment under this Article IV.

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

    (e)           Necessity of Actual
Reduction.  Notwithstanding any other provision of this Plan,
no amount shall be payable under this Article IV unless the Participant's
monthly benefit paid under the applicable Pension Plan is actually reduced
because of application of the Limitation on Benefits.  Benefits
payable to a Participant under this Article IV shall not duplicate benefits
payable to such Participant from any other plan or arrangement of the
Company.  In the event a change in law or regulation liberalizes the
limitations applicable to determining the Limitation on Benefits such that a
Participant may receive additional benefits under the applicable Pension Plan,
and the applicable Pension Plan provides for the payment of such additional
benefits to the Participant, the amount payable under this Article IV shall be
reduced by a corresponding amount.

    ARTICLE V -- DISABILITY
BENEFITS

    5.1           Monthly Disability
Benefit.

    (a)           If
a Participant becomes totally disabled following commencement of participation
in the Plan, the Participant shall continue to receive credit for up to two (2)
years of

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    Participation
under the Plan for so long as the Participant is totally
disabled.  Following termination of the participant's employment with
the Employer, the Participant's monthly retirement benefits under Article III of
the Plan shall commence beginning on or after the Participant's First Eligible
Retirement Date.

    (b)           A
Participant is "totally disabled" if such Participant is disabled within the
meaning of the applicable long-term disability plan sponsored by such
Participant's Employer, or as determined by Social Security.

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

    ARTICLE VI -
MISCELLANEOUS

    6.1           Amendment and
Termination.  Any action to amend, modify, suspend or terminate
the Plan may be taken at any time, and from time to time, by resolution of the
Board of Directors of the Company (or any person or persons duly authorized by
resolution of the Board of Directors of the Company to take such action) in its
sole discretion and without the consent of any Participant or Beneficiary, but
no such action shall retroactively reduce any benefits accrued by any
Participant under this Plan prior to the time of such action.

    6.2           No Guarantee of
Employment.  Nothing contained herein shall be construed as a
contract of employment between a Participant and any Employer or shall be deemed
to give any Participant the right to be retained in the employ of any
Employer.

    6.3           Funding of Plan and Benefit
Payments.  This Plan is unfunded within the meaning of
ERISA.  Each Employer will make Plan benefit payments from its general
assets.

    
      
         

      

      
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    Each
Employer may purchase policies of life insurance on the lives of Plan
Participants and to refuse participation in the Plan to any Employee who, if
requested to do so, declines to supply information or to otherwise cooperate so
that the Employer may obtain life insurance on behalf of such
Participant.  The Employer will be the owner and the beneficiary of
any such policy, and Plan benefits will be neither limited to nor secured by any
such policy or its proceeds.  Participants and their Beneficiaries
shall have no right, title or interest in any such life insurance policies, in
any other assets of any Employer or in any investments any Employer may make to
assist it in meeting its obligations under the Plan.  All such assets
shall be solely the property of such Employer and shall be subject to the claims
of such Employer's general creditors.  There are no assets of any
Employer that are identified or segregated for purposes of the payment of any
benefits under this Plan.  To the extent a Participant or any other
person acquires a right to receive payments from an Employer under the Plan,
such right shall be no greater than the right of any unsecured general creditor
of such Employer and such person shall have only the unsecured promise of the
Employer that such payments shall be made.

    6.4           Payment Not
Assignable.  Except in the case of a Qualified Domestic
Relations Order described under Code Section 414(p), Participants and their
Beneficiaries shall not have the right to alienate, anticipate, commute, sell,
assign, transfer, pledge, encumber or otherwise convey the right to receive any
payments under the Plan, and any payments under the Plan or rights thereto shall
not be subject to the debts, liabilities, contracts, engagements or torts of
Participants or their Beneficiaries nor to attachment, garnishment or execution,
nor shall they be transferable by operation of law in the event of bankruptcy or
insolvency.  Any attempt, whether voluntary or involuntary, to effect
any such action shall be null, void and of no effect.

    
      
         

      

      
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    6.5           Applicable
Law.  The Plan and all rights hereunder shall be governed by
and construed according to the laws of the State of Delaware, except to the
extent such laws are preempted by the laws of the United States of
America.

    6.6           Claims
Procedure.

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

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

     

    (i)           Specific
reason or reasons for the denial;

     

     

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

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

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

     

     

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

     

    (c)           Claims Review
Procedure.

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

     

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

     

     

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

     

     

    (ii)           The
decision on review by the Administrator shall be in writing and shall be issued
within sixty (60) days following receipt of the request

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

     

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

     

     

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

     

     

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

     

     

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

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

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

     

    6.7           Plan
Administration.

    (a)           The
Plan shall be administered by the Administrator.  The Administrator
shall serve as the final review under the Plan and shall have sole and complete
discretionary authority to determine conclusively for all persons, and in
accordance with the terms of the documents or instruments governing the Plan,
any and all questions arising from the administration of the Plan and
interpretation of all Plan provisions.  The Administrator shall make
the final determination of all questions relating to participation of employees
and eligibility for benefits, and the amount and type of benefits payable to any
Participant or Beneficiary.  In no way limiting the foregoing, the
Administrator shall have the following specific duties and obligations in
connection with the administration of the Plan:

    
      	
               
      

            	
              (i)

            	
              to
      promulgate and enforce such rules, regulations and procedures as may be
      proper for the efficient administration of the
  Plan;

            

    

    
      	
               
      

            	
              (ii)

            	
              to
      determine all questions arising in the administration, interpretation and
      application of the Plan, including questions of eligibility and of the
      status and rights of Participants and any other persons
      hereunder;

            

    

    
      	
               
      

            	
              (iii)

            	
              to
      decide any dispute arising hereunder; provided, however, that the
      Administrator shall not participate in any matter involving
      any

            

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    questions
relating solely to the Administrator's own participation or benefit under this
Plan;

    
      	
               
      

            	
              (iv)

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

            

    

    
      	
               
      

            	
              (v)

            	
              to
      compute the amount of benefits and other payments which shall be payable
      to any Participant or Beneficiary in accordance with the provisions of the
      Plan and to determine the person or persons to whom such benefits shall be
      paid;

            

    

    
      	
               
      

            	
              (vi)

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

            

    

    
      	
               
      

            	
              (vii)

            	
              to
      file all reports with government agencies, Participants and other parties
      as may be required by law, whether such reports are initially the
      obligation of the Employers, or the
Plan;

            

    

    
      	
               
      

            	
                             
      (viii)

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

            

    

    
      	
               
      

            	
              (ix)

            	
              to
      have all such other powers as may be necessary to discharge its duties
      hereunder.

            

    

    (b)           Decisions
by the Administrator shall be final, conclusive and binding on all parties and
not subject to further review.

    (c)           The
Administrator may employ attorneys, consultants, accountants or other persons
(who may be attorneys, consultants, actuaries, accountants or persons performing
other services for, or are employed by, any Employer or any affiliate of any
Employer), and the

    
      
         

      

      
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    Administrator,
the Employers and their other officers and directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons.  No
member of the Board of Directors of any Employer, the  Chief Executive
Officer , the Administrator, nor any other officer, director or employee of the
Company or of any Employer acting on behalf of the Board of Directors of any
Employer or the Chief Executive Officer  or the Administrator, shall
be personally liable for any action, determination or interpretation taken or
made in good faith with respect to the Plan, and all members of the Boards of
Directors of the Employers, the Chief Executive Officer  and the
Administrator and each officer or employee of the Company or of an Employer
acting on their behalf shall be fully indemnified and protected by the Company
for all costs, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees and court costs) relating to any such action,
determination or interpretation.

    6.8           Binding
Nature.  This Plan shall be binding upon and inure to the
benefit of the Employers and their successors and assigns and to the
Participants, their Beneficiaries and their estates.  Nothing in this
Plan shall preclude any Employer from consolidating or merging into or with, or
transferring all or substantially all of its assets to another company or
corporation, whether or not such company or corporation assumes this Plan and
any obligation of the Employer hereunder.

    6.9           Withholding
Taxes.  The Employers may withhold from any benefits payable
under this Plan all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

    6.10           Action Affecting Chief
Executive Officer.  To the extent any action required to be
taken by the Chief Executive Officer of the Company would decrease,
increase,

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    accelerate,
delay or otherwise materially impact such individual's benefits under the Plan,
such action shall be taken instead by the Compensation Committee of the Board of
Directors of the Company.

    6.11           Payments Due Missing
Persons.  The Administrator shall make a reasonable effort to
locate all persons entitled to benefits (including retirement benefits and death
benefits for Beneficiaries) under the Plan; however, notwithstanding any
provisions of this Plan to the contrary, if, after a period of five years from
the date such benefits first become due, any such persons entitled to benefits
have not been located, their rights under the Plan shall stand
suspended.  Before this provision becomes operative, the Administrator
shall send a certified letter to all such persons at their last known address
advising them that their benefits under the Plan shall be
suspended.  Any such suspended amounts shall be held by the Employer
for a period of three additional years (or a total of eight years from the time
the benefits first became payable) and thereafter such amounts shall be
forfeited and non-payable.

    6.12           Liability
Limited.  Neither the Employers, the Administrator, nor any
agents, employees, officers, directors or shareholders of any of them, nor any
other person shall have any liability or responsibility with respect to this
Plan, except as expressly provided herein.

    6.13           Incapacity.  If
the Administrator shall receive evidence satisfactory to it that a Participant
or Beneficiary entitled to receive any benefit under the Plan is, at the time
when such benefit becomes payable, a minor or is physically or mentally
incompetent to receive such benefit and to give a valid release therefor, and
that another person or an institution is then maintaining or has custody of such
Participant or Beneficiary and that no guardian, committee or other
representative of the estate of such Participant or Beneficiary shall have been
duly

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    appointed,
the Administrator may make payment of such benefit otherwise payable to such
Participant or Beneficiary (or to such guardian, committee or other
representative of such person's estate) to such other person or institution, and
the release of such other person or institution shall be a valid and complete
discharge for the payment of such benefit.

    6.14           Plurals.  Where
appearing in the Plan, this singular shall include the plural, and vice versa,
unless the context clearly indicates a different meaning.

    6.15           Headings.  The
headings and sub-headings in this Plan are inserted for the convenience of
reference only and are to be ignored in any construction of the provisions
hereof.

    6.16           Severability.  In
case any provision of this Plan shall be held illegal or void, such illegality
or invalidity shall not affect the remaining provisions of this Plan, but shall
be fully severable, and the Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.

    6.17           Payment of
Benefits.  All amounts payable hereunder may be paid directly
by the Employer or pursuant to the terms of the grantor trust, if any,
established as a funding vehicle for benefits provided hereunder.

    ARTICLE VII -- ADDITIONAL
AFFILIATED COMPANIES

    7.1           Participation in the
Plan.

    (a)           Any
Affiliated Company may become an Employer with respect to this Plan with the
consent of the Compensation Committee upon recommendation of the Chief Executive
Officer, upon the following conditions:

    
      	
               
      

            	
              (i)

            	
              such
      Employer shall make, execute and deliver such instruments as the Company
      requires; and

            

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (ii)

            	
              such
      Employer shall designate the Company, the Chief Executive Officer of the
      Company and the Administrator, as its agents for purposes of this
      Plan.

            

    

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

    7.2           Effect of
Participation.  Each Employer which with the consent of the
Compensation Committee upon recommendation of the Chief Executive Officer of the
Company complies with Section 7.1(a) shall be deemed to have adopted this Plan
for the benefit of its Employees who participate in this Plan.

    

    

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    APPENDIX  A

    SCHEDULE
OF RETIREMENT AND SURVIVORS BENEFITS

    
      
        
          	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	
                  Monthly

                	 
      	
                  Monthly

                	 
      
	 
      	
                  Level

                	
                  Salary

                	 
      	 
      	 
      	
                  Retirement
      Benefit

                	 
      	
                  Death
      Benefit

                   

                	 
      
	 
      	
                  50

                	
                  $50,000

                	
                  -

                	
                  $59,999

                	 
      	
                  $1,330

                	 
      	
                  $2,660

                	 
      
	 
      	
                  51

                	 
      	 
      	 
      	 
      	
                  $1,728

                	 
      	
                  $3,456

                	 
      
	 
      	
                  52

                	
                  $60,000

                	
                  -

                	
                  $74,999

                	 
      	
                  $1,800

                	 
      	
                  $3,600

                	 
      
	 
      	
                  53

                	 
      	 
      	 
      	 
      	
                  $2,160

                	 
      	
                  $4,320

                	 
      
	 
      	
                  54

                	
                  $75,000

                	
                  -

                	
                  $99,999

                	 
      	
                  $2,580

                	 
      	
                  $5,160

                	 
      
	 
      	
                  55

                	 
      	 
      	 
      	 
      	
                  $2,880

                	 
      	
                  $5,760

                	 
      
	 
      	
                  56

                	
                  $100,000

                	
                  -

                	
                  $124,999

                	 
      	
                  $3,600

                	 
      	
                  $7,200

                	 
      
	 
      	
                  57

                	
                  $125,000

                	
                  -

                	
                  $149,999

                	 
      	
                  $4,470

                	 
      	
                  $8,940

                	 
      
	 
      	
                  58

                	
                  $150,000

                	
                  -

                	
                  $174,999

                	 
      	
                  $5,360

                	 
      	
                  $10,720

                	 
      
	 
      	
                  59

                	
                  $175,000

                	
                  -

                	
                  $199,999

                	 
      	
                  $6,250

                	 
      	
                  $12,500

                	 
      
	 
      	
                  60

                	
                  $200,000

                	
                  -

                	
                  $224,999

                	 
      	
                  $7,300

                	 
      	
                  $14,600

                	 
      
	 
      	
                  61

                	
                  $225,000

                	
                  -

                	
                  $249,999

                	 
      	
                  $8,215

                	 
      	
                  $16,430

                	 
      
	 
      	
                  62

                	
                  $250,000

                	
                  -

                	
                  $274,999

                	 
      	
                  $9,125

                	 
      	
                  $18,250

                	 
      
	 
      	
                  63

                	
                  $275,000

                	
                  -

                	
                  $299,999

                	 
      	
                  $10,475

                	 
      	
                  $20,950

                	 
      
	 
      	
                  64

                	
                  $300,000

                	
                  -

                	
                  $324,999

                	 
      	
                  $12,145

                	 
      	
                  $24,290

                	 
      
	 
      	
                  65

                	
                  $325,000

                	
                  -

                	
                  $349,999

                	 
      	
                  $13,670

                	 
      	
                  $27,340

                	 
      
	 
      	
                  66

                	
                  $350,000

                	
                  -

                	
                  $399,999

                	 
      	
                  $16,110

                	 
      	
                  $32,220

                	 
      
	 
      	
                  67

                	
                  $400,000

                	
                  -

                	
                  $449,999

                	 
      	
                  $19,525

                	 
      	
                  $39,050

                	 
      
	 
      	
                  68

                	
                  $450,000

                	
                  -

                	
                  $499,999

                	 
      	
                  $22,850

                	 
      	
                  $45,700

                	 
      
	 
      	
                  69

                	
                  $500,000

                	
                  -

                	
                  $599,999

                	 
      	
                  $28,800

                	 
      	
                  $57,600

                	 
      
	 
      	
                  70

                	
                  $600,000

                	
                  -

                	
                  $699,999

                	 
      	
                  $36,500

                	 
      	
                  $73,000

                	 
      
	 
      	
                  71

                	
                  $700,000

                	
                  -

                	
                  $799,999

                	 
      	
                  $42,710

                	 
      	
                  $85,420

                	 
      
	 
      	
                  72

                	
                  $800,000

                	
                  -

                	
                  $899,999

                	 
      	
                  $49,220

                	 
      	
                  $98,440

                	 
      
	 
      	
                  73

                	
                  $900,000

                	
                  -

                	
                  $999,999

                	 
      	
                  $55,310

                	 
      	
                  $110,620

                	 
      
	 
      	
                  74

                	
                  $1,000,000

                	
                  -

                	
                  $1,099,999

                	 
      	
                  $60,200

                	 
      	
                  $120,400

                	 
      

        

      

    

    

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    APPENDIX
B

    

    CURRENT
PARTICIPANTS ELIGIBLE FOR ARTICLE IV BENEFITS

    

    Steven L.
Bietz

    John K.
Castleberry

    Terry D.
Hildestad

    Bruce T.
Imsdahl

    Vernon A.
Raile

    Warren L.
Robinson

    Paul K.
Sandness

    William
E. Schneider

    Martin A.
White

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    APPENDIX
C

    

    MDU RESOURCES GROUP,
INC.

    Specified Employee Policy
Regarding Compensation

    

    Effective
November 14, 2007, for purposes of all plans, agreements and other arrangements
of MDU Resources Group, Inc. (the “Company”) and its affiliates that are subject
to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
the determination of employees who are “Specified Employees,” shall be
determined under this policy (“Policy”).

    

    
      	
              1.

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

            

    

    

    
      	
              2.

            	
              Inclusion on the Specified
      Employee List.  The Specified Employee List shall include
      all employees who, at any time during the Determination Year, met the
      requirements of Code Section 416(i)(l)(A)(i), (ii) or (iii) and the
      related regulations (but without regard to Code Section
      415(i)(5)).  For this purpose, “Determination Year” shall mean
      the calendar year ending on the December 31st
      prior to the April 1st
      when the Specified Employee List becomes effective.  For
      purposes of determining which employees met the requirements of Code
      Section 416(i)(l)(A)(i), (ii) or (iii) and the related regulations (but
      without regard to Code Section 415(i)(5)), the term compensation shall
      have the meaning set forth in Treas. Reg.
  §1.415(c)-2(a).

            

    

    

    
      	
              3.

            	
              Delayed
      Payments.  If any employee is determined to be a
      Specified Employee under this Policy, any payment made to such employee
      under any plan, agreement or arrangement that is subject to Code Section
      409A may not be made before the date that is six months after the date of
      such separation from service (or, if earlier than the end of such
      six-month period, the date of death of the Specified
      Employee).  This Policy shall not apply to any payment that is
      not treated as deferred compensation under, or is otherwise excluded from,
      the requirements of Code Section 409A and the regulations promulgated
      thereunder.

            

    

    

    
      	
              4.

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

            

    

    

    
      
         

      

      
        33

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