MDU RESOURCES GROUP, INC. LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN PERFORMANCE SHARE AWARD AGREEMENT
MDU
RESOURCES GROUP, INC.
LONG-TERM
PERFORMANCE-BASED INCENTIVE PLAN
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In
accordance with the terms of the MDU
Resources Group, Inc. Long-Term Performance-Based Incentive Plan (the "Plan"),
pursuant to action of the Compensation Committee of the Board of Directors
of
MDU Resources Group, Inc. (the "Committee"), MDU Resources Group, Inc. (the
"Company") hereby grants to you (the "Participant") Performance Shares (the
"Award"), subject to the terms and conditions set forth in this Award Agreement
(including Annexes A and B hereto and all documents incorporated herein by
reference), as set forth below:
Target
Award:
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Performance Shares (the "Target Award")
|
Performance
Period:
|
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through
{ }
(the "Performance Period")
|
Date
of Grant:
|
{ }
|
Dividend
Equivalents:
|
Yes
|
THESE
PERFORMANCE SHARES ARE SUBJECT TO FORFEITURE AS PROVIDED HEREIN. THIS
AWARD AND AMOUNTS RECEIVED IN CONNECTION WITH THIS AWARD ARE ALSO SUBJECT TO
FORFEITURE, RECAPTURE OR OTHER ACTION IN THE EVENT OF AN ACCOUNTING RESTATEMENT,
AS PROVIDED IN ARTICLE 19 OF THE PLAN. ADDITIONALLY, BY SIGNING THIS
AWARD AGREEMENT YOU ARE ACKNOWLEDGING AND AGREEING THAT ANY PERFORMANCE SHARE
AWARD GRANTED TO YOU IN 2005 AND ANY AMOUNTS PAID OR PAYABLE OR DISTRIBUTED
OR
DISTRIBUTABLE PURSUANT TO ANY SUCH PRIOR 2005 AWARD SHALL ALSO BE SUBJECT TO
FORFEITURE, RECAPTURE OR OTHER ACTION IN THE EVENT OF AN ACCOUNTING RESTATEMENT,
AS PROVIDED IN ARTICLE 19 OF THE PLAN.
Further
terms and conditions of the
Award are set forth in Annexes A and B hereto, which are integral parts of
this
Award Agreement.
All
terms, provisions and conditions
applicable to the Award set forth in the Plan and not set forth in this Award
Agreement are hereby incorporated herein by reference. To the extent
any provision hereof is inconsistent with a provision of the Plan; the
provisions of the Plan will govern. The Participant hereby
acknowledges receipt of a copy of this Award Agreement, including Annexes A
and
B hereto, and a copy of the Plan and agrees to be bound by all the terms and
provisions hereof and thereof.
MDU
RESOURCES GROUP, INC.
By:
Xxxxx
X. Xxxxxxxxx
President
and
Chief
Executive Officer
Agreed:
___________________
Participant
ANNEX
A
TO
MDU
RESOURCES GROUP, INC.
LONG-TERM
PERFORMANCE-BASED INCENTIVE PLAN
It
is
understood and agreed that the Award of Performance Shares evidenced by the
Award Agreement to which this is annexed is subject to the following additional
terms and conditions.
The
number of Shares earned, if any,
for the Performance Period shall be determined in accordance with the following
formula:
#
of Shares = Payout Percentage X Target Award
The
"Payout Percentage" is based on the Company's total shareholder return ("TSR")
relative to that of the Peer Group listed on Annex B (the "Percentile Rank")
for
the Performance Period, determined in accordance with the following
table:
Percentile
Rank
|
Payout
Percentage
(%
of Target Award)
|
100th
|
200%
|
75th
|
150%
|
50th
|
100%
|
40th
|
10%
|
less
than 40th
|
0%
|
If
the
Company achieves a Percentile Ranking between the 40th and 50th percentiles,
the
Payout Percentage shall be equal to 10%, plus 9% for each Percentile Rank whole
percentage above the 40th percentile. If the Company achieves a
Percentile Ranking between the 50th and 100th percentiles, the Payout Percentage
shall be equal to 100%, plus 2% for each Percentile Rank whole percentage above
the 50th percentile.
The
Percentile Rank of a given company's TSR is defined as the percentage of the
Peer Group companies' returns falling at or below the given company's
TSR. The formula for calculating the Percentile Rank
follows:
|
Percentile
Rank = (n - r + 1)/n x 100
|
|
Where:
|
|
n
=
|
total
number of companies in the Peer Group, including the
Company
|
|
r
=
|
the
numeric rank of the Company's TSR relative to the Peer Group, where
the
highest return in the group is ranked number
1
|
To
illustrate, if the Company's TSR is the third highest in the Peer Group
comprised of 26 companies, its Percentile Rank would be 92. The
calculation is: (26 - 3 + 1)/26 x 100 = 92.
The
Percentile Rank shall be rounded to the nearest whole percentage.
If
the
common stock of a company in the Peer Group ceases to be traded during the
Performance Period, the company will be deleted from the Peer
Group. Percentile Rank will be calculated without regard to the
return of the deleted company.
Total
shareholder return is the percentage change in the value of an investment in
the
common stock of a company from the initial investment made on the last trading
day in the calendar year preceding the beginning of the performance period
through the last trading day in the final year of the performance
period. It is assumed that dividends are reinvested in additional
shares of common stock at the frequency paid.
All
Performance Shares that are not earned for the Performance Period shall be
forfeited.
(a) If
the Participant's employment with the Company is terminated for any reason
other
than "Cause" (as defined below) (1) during the first year of the Performance
Period, all Performance Shares (and related Dividend Equivalents) shall be
forfeited; (2) during the second year of the Performance Period, determination
of the Company's Percentile Rank for the Performance Period will be made by
the
Committee at the end of the Performance Period, and Shares (and related Dividend
Equivalents) earned, if any, will be paid based on the Payout Percentage,
prorated for the number of full months elapsed from and including the month
in
which the Performance Period began to and including the month in which the
termination of employment occurs; and (3) during the third year of the
Performance Period, determination of the Company's Percentile Rank for the
Performance Period will be made by the Committee at the end of the Performance
Period, and Shares (and related Dividend Equivalents) earned, if any, will
be
paid based on the Payout Percentage without prorating.
(b) If
the Participant's employment is terminated for "Cause" (as defined below) during
the Performance Period, all Performance Shares (and related Dividend
Equivalents) shall be forfeited.
(c) For
purposes of the Award Agreement, the term "Cause" shall mean the Participant's
fraud or dishonesty that has resulted or is likely to result in material
economic damage to the Company or a Subsidiary, or the Participant's willful
nonfeasance if such nonfeasance is not cured within ten days of written notice
from the Company or a Subsidiary, as determined in good faith by a vote of
at
least two-thirds of the non-employee directors of the Company at a meeting
of
the Board at which the Participant is provided an opportunity to be
heard.
10. Governing
Law and Severability. To the extent not preempted by Federal law, the Award
Agreement will be governed by and construed in accordance with the laws of
the
State of Delaware, without regard to conflicts of law provisions. In
the event any provision of the Award Agreement shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of the Award Agreement, and the Award Agreement shall be construed and
enforced as if the illegal or invalid provision had not been
included.
ANNEX
B
TO
MDU
RESOURCES GROUP, INC.
LONG-TERM
PERFORMANCE-BASED INCENTIVE PLAN
PEER
GROUP COMPANIES
Alliant
Energy Corporation
Xxxxx
Petroleum Company – CL A
Black
Hills Corporation
Xxxxxxxx
Resources, Inc.
Dycom
Industries, Inc.
EMCOR
Group Inc.
Encore
Acquisition Company
Equitable
Resources, Inc.
Granite
Construction Incorporated
Xxxxxx
Xxxxxxxx Materials, Inc.
National
Fuel Gas Company
Northwest
Natural Gas Company
NSTAR
OGE
Energy Corp.
ONEOK,
Inc.
Quanta
Services, Inc.
Questar
Corporation
SCANA
Corporation
Southwest
Gas Corporation
St.
Xxxx
Xxxx & Exploration Company
Swift
Energy Company
US
Concrete, Inc.
Vectren
Corporation
Vulcan
Materials Company
Xxxxxxx
Petroleum Corporation