Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Mdu Resources Group, Inc. 2003 10-K 154± 680K
2: EX-4.E Certificate of Adjustment to Purchase Price & 1 11K
Redemption Price
3: EX-10.A Executive Incentive Compensation Plan 11± 41K
9: EX-10.AA Bauerly Brothers, Inc. Deferred Compensation Plan 9± 37K
10: EX-10.AB Oregon Electric Construction, Inc. Deferred 8± 37K
Compensation Plan
4: EX-10.V Agreement on Retirement 6± 34K
5: EX-10.W Wagner-Smith Company Deferred Compensation Plan 8± 34K
6: EX-10.X Wagner-Smith Equipment Co. Deferred Compensation 8± 34K
Plan
7: EX-10.Y Capital Electric Construction Company, Inc. 8± 34K
Compensation Plan
8: EX-10.Z Capital Electric Line Builders, Inc. Deferred 8± 35K
Compensation Plan
11: EX-12 Computation of Ratio of Earnings 2± 11K
12: EX-21 List of Subsidiaries 2± 13K
13: EX-23.A Independent Auditors' Consent 1 12K
14: EX-23.B Notice Regarding Consent of Arthur Andersen LLP 1 11K
15: EX-31.A Section 302 Certification of CEO 2± 12K
16: EX-31.B Section 302 Certification of CFO 2± 12K
17: EX-32 Section 906 Certifications 1 9K
EX-10.AA — Bauerly Brothers, Inc. Deferred Compensation Plan
THE BAUERLY BROTHERS, INC.
DEFERRED COMPENSATION PLAN
Effective April 19, 2001
BAUERLY BROTHERS, INC.
DEFERRED COMPENSATION PLAN
This is the Bauerly Brothers, Inc. Deferred Compensation
Plan (the "Plan"), and is adopted by BAUERLY BROTHERS, INC., a
Minnesota corporation (the "Company"), for the purpose of
providing an inducement for continued service by designated key
employees of the Company following the merger of the Company with
MDU RESOURCES GROUP, INC., a Delaware corporation ("MDU").
Benefits due under the Plan constitute a mere promise by the
Company to pay benefits as the Plan provides. Accordingly,
Participants are general unsecured creditors of the Company with
respect to their benefit, and the Plan is unfunded for tax
purposes. This document contemplates the establishment of a
trust after the Acquisition for the purpose of holding MDU Shares
under this Plan, subject to the claims of the general creditors
of MDU and the Company.
ARTICLE I
ADOPTION OF PLAN; PARTICIPATION
The Plan is adopted effective this 19th day of April, 2001;
provided, however, that the Plan shall automatically terminate
(and any Account balances shall be forfeited entirely) on the
30th day thereafter if the Acquisition has not then occurred.
Each individual listed on Schedule A shall be a Participant,
provided that such individual is an employee of the Company in
good standing on the Effective Date.
ARTICLE II
VESTING
2.1 Vesting. A Participant who has not incurred a Termination before a
Distribution Date will become vested in that percentage of his or
her Account remaining on that Distribution Date as specified
below:
First Distribution Date 25.00%
Second Distribution Date 33.33%
Third Distribution Date 50.00%
Fourth Distribution Date 100.00%
A Participant who incurs a Termination shall forfeit any
remaining unvested portion of his or her Account on the date of
such Termination; provided, however, that a Participant who dies
or becomes totally disabled before having incurred a Termination
shall fully vest in his or her Account.
2.2 Forfeitures. The MDU Shares forfeited under Section 2.1 shall be
reallocated among the Accounts of Participants immediately before
the next following Distribution Date in proportion to the Account
balances that have not been forfeited as of that Distribution
Date. A Participant's allocation under this section shall
include any fractional MDU Share that results from the pro rata
computation.
ARTICLE III
CREDITS AND CHARGES TO ACCOUNTS
3.1 Account. An Account shall be established and maintained for each
Participant, which Account shall be credited initially with the
number of MDU Shares set forth opposite the Participant's name on
Schedule A. Subject to all of the terms and conditions of this
Plan, each Participant shall be entitled to receive the MDU
Shares credited to his or her Account. Each Account shall be
charged with distributions, income taxes and any other amounts
required to be withheld under Section 4.6, and credited with
forfeitures as described in Section 2.2.
3.2 Earnings. Dividends paid on MDU Shares held by the Trust shall be
accumulated in the Trust and allocated to Accounts as of the next
following Distribution Date in proportion to the Account balances
that have not been forfeited as of that Distribution Date.
ARTICLE IV
DISTRIBUTIONS
4.1 No Withdrawals. Except as otherwise provided in this article,
withdrawals are not available from an Account.
4.2 Timing of Distribution. On each Distribution Date (or as soon
as is practicable thereafter), and subject to the fractional share rule
in Section 4.7, the Participant shall receive a distribution of the portion
of his or her Account that became vested on that date under
Section 2.1, plus cash in the amount of any dividends credited to
the Account under Section 3.2 (regardless of whether the
dividends were paid on vested or unvested MDU Shares), all
appropriately adjusted for withholding taxes under Section 4.6.
4.3 Death or Disability. Should a Participant die or become
totally disabled before incurring a Termination, the Participant's Account
shall vest in full and be paid to his or her Beneficiary under Article
V, or to the Participant, on the next Distribution Date (or as
soon as is practicable thereafter).
4.4 Limitation on Distributions to Covered Employee. Notwithstanding
any other provision of this article, if a Participant is a "covered
employee" as defined in Code Section162(m)(3) at the time of any
distribution, the maximum amount which may be distributed from such a
Participant's Account in any Plan Year shall not exceed $1,000,000, less
the amount of compensation paid to the Participant by the Company in such Plan
Year which is not "performance-based" (as defined in Code Section
162(m)(4)(C)). Such amount shall be reasonably determined by the
Administrator at the time of the proposed distribution. Any
amount not distributed to a Participant in a Plan Year as a
result of the limitation set forth in this section shall be
distributed in the next Plan Year, which may again be subject to
the limitation of this section.
4.5 Payments to Minors and Incompetents. If any person entitled to
any payment under this Plan is, in the judgment of the Administrator,
incapable of giving receipt for such payment because of minority, illness,
infirmity or other incapacity, the Administrator may pay the amount due such
person to a duly appointed legal representative, if there is one, or, if
none, to the spouse, children, dependents, or such other persons
with whom the person entitled to payment resides. Any such
payment shall be a complete discharge of the liability of the
Company, its Affiliates, and the Plan with respect to such
payment.
4.6 Tax Withholding. The Company (or Trustee, as the case may be)
shall deduct from any payment or share delivery made under this Plan an amount
equal to, or shares having a value equal to, all or part of any
taxes required by law to be withheld by the Company (including
withholding and employment taxes), and any other amounts required
to be withheld by applicable law or court order. The Company or
Trustee may sell, on the Participant's behalf, shares that would
otherwise be distributed if the proceeds are used to satisfy the
Participant's tax withholding and other obligations described in
this section.
4.7 Fractional Shares. In general, fractional MDU Shares shall not be
distributed under the Plan, and the fractional MDU Share that
would otherwise be distributed shall instead remain in the
Participant's Account. Immediately before the fourth and final
Distribution Date, any fractional MDU Share in an Account, that
is at least one-half of one share, shall be rounded up to a whole
share, and all other fractional MDU Shares in an Account shall be
forfeited without compensation; provided, however, that the
Administrator may make an appropriate adjustment to this
calculation to eliminate any rounding errors and ensure that all
MDU Shares in the Trust are allocated to Accounts.
ARTICLE V
BENEFICIARY DESIGNATIONS
5.1 Designation of Beneficiary. Each Participant may designate
in the form and the manner specified by the Administrator a Beneficiary to
receive the payment (if any) due under Article IV at the Participant's death.
The Beneficiary of a married Participant shall be the
Participant's spouse, unless the Participant designates a
Beneficiary other than the spouse and the spouse consents in
writing to the designation in the form and the manner prescribed
by the Administrator. A Participant may revoke such designation
at any time and substitute therefor another Beneficiary. A
married Participant may revoke a prior Beneficiary designation
only with the consent of his or her spouse in the form and the
manner prescribed by the Administrator. A designated spousal
Beneficiary who becomes divorced from the Participant shall be
deemed to have predeceased the Participant on the date the
divorce is final; subject, however, to redesignation thereafter
under this section.
5.2 Failure To Designate a Beneficiary. If upon the death of an
unmarried Participant a Beneficiary has not been validly designated, the
Beneficiary shall be the Participant's estate.
ARTICLE VI
TRUST OBLIGATION TO PAY BENEFITS
6.1 Establishment of Trust. Immediately following the Acquisition,
MDU shall establish a Trust to hold the MDU Shares credited to all Accounts
as described in Section 3.1. The assets of any such Trust shall
be subject to the claims of MDU's creditors and the Company's
creditors and shall be maintained pursuant to a separate trust
document generally conforming to the terms of the model trust
described in Revenue Procedure 92-64.
6.2 Benefits Paid From Trust. Any payment required to be made under
this Plan to a Participant or Beneficiary shall be paid by the Trustee to the
extent of the assets held in the Trust by the Trustee, and by the
Company to the extent the assets in the Trust are unavailable to
pay such amount.
6.3 Conditions Upon Issuance of Shares. MDU Shares shall not be
issued to a Participant unless the issuance and delivery of such shares
complies with state and federal law. As a condition to the issuance of
MDU Shares hereunder, the Company may require the person receiving the
shares to represent and warrant at the time of any such issuance
that the shares are being acquired only for investment and
without any intention to sell or distribute the shares if, in the
opinion of counsel for the Company, such a representation is
required by law.
ARTICLE VII
ADMINISTRATION AND CLAIMS
7.1 Plan Administration. The Administrator shall have sole
discretionary responsibility for the operation, interpretation, and
administration of the Plan. The Company shall make available to
the Administrator all information necessary and appropriate to
the proper administration of the Plan. Any action taken on any
matter within the discretion of the Administrator shall be final,
conclusive, and binding on all parties. In order to discharge
its duties hereunder, the Administrator shall have the power and
authority to adopt, interpret, alter, amend or revoke rules
necessary to administer the Plan, to delegate its duties and to
employ such outside professionals as may be required for prudent
administration of the Plan. The Administrator shall also have
the right within the scope of the Administrator's authority (if a
designee of the Company) to enter into agreements on behalf of
the Company necessary to administer the Plan. Any Participant
who is acting as Administrator shall not be entitled to make
decisions with respect to his or her own participation and
entitlement to payment under the Plan.
7.2 Plan Documents. Upon becoming a Participant the Company shall
provide each Participant (i) a copy of this Plan document (without Schedule A)
and (ii) the information contained in Schedule A specifying the
Participant's award under the Plan. At no time shall a
Participant be entitled to information relating to awards made to
other Participants.
7.3 Claims Procedures
(a) Applicability. This section sets forth the exclusive
procedures governing benefits under the Plan. No legal action may be
brought by any person claiming entitlement to benefits until
after the procedures set forth herein have been exhausted.
(b) Administrator Computes and Communicates Benefit. Before
each Distribution Date, the Administrator shall compute on a preliminary
basis the balance of each Account, the number of MDU Shares and amount of
cash to be distributed on that Distribution Date to each Participant
(or Beneficiary, as the case may be), and the MDU Shares and cash to be
withheld from the distribution under Section 4.6. The Administrator shall
provide written notice of these computations to the Trustee and the
affected Participant. Unless the Company notifies the Trustee
before the Distribution Date that an adjustment should be made to
the preliminary computation (due to a forfeiture or for any other
reason), the Trustee shall deliver the cash and vested MDU Shares
in the Participant's Account (adjusted for taxes described in
Section 4.6) automatically as soon as is practicable after the
Distribution Date.
(c) Claim for Benefits. Any person claiming entitlement to
benefits for which the Administrator refuses to authorize payment shall file
a written claim for benefits with the Administrator at the offices of the
Company. The claim must set forth the basis for the claim and be
signed by the claimant.
(d) Determination. Within 60 days of receiving a claim for
benefits, the Administrator shall make a determination on the claim, and
notify the claimant in writing of the determination. If the claim is
approved, the Administrator shall direct the Trustee to commence
payment in accordance with the provisions of Article IV. If the
claim is denied, in whole or in part, the Administrator's notice
to the claimant shall explain the specific reasons for the
denial, refer to the specific Plan provisions on which the denial
is based, describe any additional material or information
necessary for the claimant to perfect the claim (if possible),
and explain the steps and time limit for requesting appeal of the
determination.
(e) Appeal of Determination. A claimant (or authorized
representative) shall have 60 days in which to file an appeal of the
determination, measured from the date the Administrator's notice described
in paragraph (d) is mailed. An appeal must (i) be in writing, (ii) set forth
each ground and supporting fact on which the appeal is based and
(iii) provide any other comments the claimant believes pertinent
and helpful to his or her appeal. When making an appeal, a
claimant may review the documents that were pertinent to the
Administrator's denial of the claim. Any claimant who fails to
file an appeal timely shall be estopped and barred from any
further challenge to the Administrator's determination to deny
the claim.
(f) Review by Committee. Upon receipt of a written appeal,
the Company shall appoint a committee, composed of at least 2 individuals who
did not participate in the original denial of the claim, to conduct a
full and fair review of the appeal. The committee shall complete
its review and decide the appeal within 60 days after the written
appeal was received by the Company. In conducting its review,
the committee may, in its sole discretion, require the Company or
the claimant to submit such additional documents or other
evidence as the committee deems necessary or appropriate. The
review committee's decision shall be final and binding on all
persons with respect to the claimant's appeal. If the appeal is
denied in whole or in part, the committee shall notify the
claimant in writing, setting forth the specific reasons for the
denial and the specific plan provisions on which the denial is
based. The committee shall have the sole discretion to interpret
any provision of the Plan that is pertinent to the outcome of the
appeal.
7.4 Reimbursement of Costs. If any person institutes legal action
to enforce any of the provisions of the Plan, the prevailing party in such
legal action shall be reimbursed by the other party for the prevailing
party's costs, including, without limitation, reasonable fees of
attorneys, accountants and similar advisors, and expert
witnesses.
ARTICLE VIII
MISCELLANEOUS
8.1 Nontransferability. The right of a Participant or Beneficiary
to benefits under the Plan shall not be assigned, alienated, transferred,
pledged or encumbered. Neither the Company, its Affiliates, nor
the Plan shall be liable for or subject to the debts or
liabilities of a Participant.
8.2 Binding Effect. The Plan shall be binding upon and inure
to the benefit of the Company, its successors and assigns, and the
Participant and his or her heirs, executors, administrators and legal
representatives.
8.3 No Rights Implied. No Plan provision shall confer upon any
Participant the right to continue as a member of the Board or as an
employee of the Company or any Affiliate.
8.4 Applicable State Law. The Plan shall be construed in accordance
with and governed by the laws of the State of Minnesota.
8.5 Entire Agreement. The Plan constitutes the entire understanding
and agreement with respect to the subject matter contained herein,
and there are no agreements, understandings, restrictions,
representations or warranties among any Participant or
Beneficiary and the Company other than those set forth or
provided for herein.
8.6 Amendment or Termination of Plan. The Company may amend or
terminate the Plan at any time; provided, however, that, except as provided
in Article I, no such amendment or termination shall be effective if it has
the effect of eliminating or reducing a Participant's Account below the
balance calculated under the Plan immediately before giving
effect to such amendment or termination. In the event the Plan
terminates, any residual assets of the Plan's Trust that are not
allocable to any Participant shall be returned to MDU.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings set forth in
this article, unless a different meaning is plainly required by
the context:
"Account" means the book entry account established and
maintained for each Participant under Section 3.1.
"Acquisition" means the acquisition of all of the Company's
common stock by MDU through the reverse triangular merger under
the Agreement and Plan of Reorganization and Merger dated April
19, 2001.
"Administrator" means a committee of two or more individuals
as selected to serve by the Board. If no such committee exists,
then the Administrator means the Board.
"Affiliate" means any parent corporation (within the meaning
of Code Section 424(e)) or subsidiary corporation (within the
meaning of Code Section 424(f)).
"Beneficiary" means an individual, trust or other entity
entitled to receive payment on account of a Participant's death.
"Board" means the board of directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Bauerly Brothers, Inc., a Minnesota
corporation.
"Distribution Date" means each of the first four
anniversaries of the Effective Date.
"Effective Date" means April 19, 2001.
"KRC" means KRC Holdings, Inc., a Delaware Corporation.
"MDU" means MDU Resources Group, Inc., a Delaware
corporation.
"MDU Share" means one share of the Common Stock, and the
associated preference share purchase rights, of MDU.
"Participant" means an individual named in Schedule A until
such time as the individual has forfeited or been paid his or her
Account.
"Plan" means this Bauerly Brothers, Inc. Deferred
Compensation Plan as set forth herein, as it may be amended from
time to time.
"Plan Year" means each calendar year.
"Termination" means the Participant terminates employment
with all of (i) MDU, (ii) any Affiliates of MDU (including the
Company) and (iii) any other entity to which substantially all
the assets of the trade or business of the Company have been
transferred (directly or indirectly).
"Trust" means the legal entity created by the Trust
Agreement.
"Trust Agreement" means the trust instrument entered among
MDU, the Company and a trustee, as it may be amended from time to
time.
"Trustee" means the trustee serving from time to time under
the Trust Agreement.
IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by a duly authorized officer effective as of the
Effective Date.
BAUERLY BROTHERS, INC.
By: /s/ GERALD J. BAUERLY
GERALD J. BAUERLY
BAUERLY BROTHERS, INC.
DEFERRED COMPENSATION PLAN
SCHEDULE A
The maximum number of shares that could be issued under this
Plan, as of the Plan's adoption date, was 93,750 shares (not
adjusted for the October 2003 three-for-two stock split).
Dates Referenced Herein and Documents Incorporated by Reference
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