-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TN/AZ253znT+CfCa6oBrQIaNFXMovjsx0wrT0zlkrgTcwYWANyZefP827I59IBQN o4uD4//CLofxxTZPMKes6g== 0000898080-05-000115.txt : 20050224 0000898080-05-000115.hdr.sgml : 20050224 20050224153054 ACCESSION NUMBER: 0000898080-05-000115 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050217 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050224 DATE AS OF CHANGE: 20050224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MDU RESOURCES GROUP INC CENTRAL INDEX KEY: 0000067716 STANDARD INDUSTRIAL CLASSIFICATION: MINING, QUARRYING OF NONMETALLIC MINERALS (NO FUELS) [1400] IRS NUMBER: 410423660 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03480 FILM NUMBER: 05637357 BUSINESS ADDRESS: STREET 1: 918 EAST DIVIDE AVENUE CITY: BISMARCK STATE: ND ZIP: 58506-5650 BUSINESS PHONE: 7012227900 MAIL ADDRESS: STREET 1: 918 EAST DIVIDE AVENUE CITY: BISMARCK STATE: ND ZIP: 58506-5650 FORMER COMPANY: FORMER CONFORMED NAME: MONTANA DAKOTA UTILITIES CO DATE OF NAME CHANGE: 19850429 8-K 1 form8k.txt CURRENT REPORT ON FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 17, 2005 MDU Resources Group, Inc. (Exact name of registrant as specified in its charter) Delaware 1-3480 41-0423660 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) Schuchart Building 918 East Divide Avenue P.O. Box 5650 Bismarck, North Dakota 58506-5650 (Address of principal executive offices) (Zip Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Short-Term Incentive Compensation - --------------------------------- 2004 - ---- On February 15, 2005, the Compensation Commmittee (the "Committee") of the Board of Directors (the "Board") of MDU Resources Group, Inc. (the "Company") approved the payment of annual awards under the existing executive incentive compensation plans with respect to 2004. On February 17, 2005, the Board approved the payments. Award payments made in 2004 pursuant to the existing executive incentive compensation plans to those executive officers who will be named executive officers in the proxy statement for the 2005 Annual Meeting of Stockholders (the "NEOs") is contained in the Executive Incentive Compensation Plan 2004 NEO Payment Chart which is attached hereto as Exhibit 10.2 and incorporated herein by reference. The terms of the executive incentive compensation plans provide for annual cash incentive awards based upon achievement of annual performance measures with a threshold, target and maximum level. A target incentive award is established based upon the position level and actual base salary, or in the Committee's discretion, the assigned salary grade market value. Actual payment may range from zero to 200% of the target based upon achievement of corporate goals and individual performance. Participants who retire, die or become disabled during the year remain eligible to receive an award. Subject to the Committee's discretion, participants who terminate employment for other reasons are not eligible for an award. The Committee has full discretion to determine the extent to which goals have been achieved, the payment level, whether any final payment will be made and whether to adjust awards. The performance goals for 2004 under the MDU Resources Group, Inc. Executive Incentive Compensation Plan (the "MDU EICP"), which applies to Mr. White and Mr. Robinson, were (i) budgeted earnings per share achieved (weighted 75%) and (ii) budgeted return on invested capital achieved (weighted 25%). Achievement of budgeted levels of earnings per share and return on invested capital would result in a potential award of 100% of the target amount. Achievement of less than 85% would result in no payment, while achievement of 114% would result in a payment of 200% of the target amount. The goals were met at near maximum level ($1.76 EPS, 9.4% ROIC) and resulted in a potential payment of 194.7% of the target amount. The Committee then used its discretion and adjusted Mr. Robinson's payment percentage as reflected in the chart. Mr. Tipton, the retired Chief Executive Officer of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co., received his award pursuant to the Montana-Dakota Utilities Co. Executive Incentive Compensation Plan, based upon (i) business units actual earnings per allocated share as a percentage of planned earnings per allocated share (weighted 75%) and (ii) business units actual return on invested capital as a percentage of planned return on invested capital (weighted 25%). The target amounts were: Montana-Dakota Utilities ($0.61 EPS, 6.42% ROIC), weighted 66% and Utility Services, Inc. ($1.97 EPS and 7.27% ROIC), weighted 34%. Mr. Tipton's award was earned at 100.3% of target for the Montana-Dakota Utilities Co. portion and 0% of target for the Utility Services, Inc. portion and resulted in a potential payment of 67.3% of the target amount. The Committee then used its discretion and adjusted Mr. Tipton's payment percentage as reflected in the chart. Mr. Castleberry received his award pursuant to the WBI Holdings, Inc. Executive Incentive Compensation Plan, based upon (i) actual earnings per allocated share as a percentage of planned earnings per allocated share (weighted 75%) and (ii) actual return on invested capital as a percentage of planned 2 return on invested capital (weighted 25%) for WBI Holdings, Inc. ($2.37 EPS, 11.42% ROIC). Mr. Castleberry's award was earned at 114% of target on a weighted basis and resulted in a potential payment of 200% of the target amount. No adjustment was made by the Committee. Mr. Hildestad received his award pursuant to the Knife River Corporation Executive Incentive Compensation Plan, based upon (i) actual earnings per allocated share as a percentage of planned earnings per allocated share (weighted 75%) and (ii) actual return on invested capital as a percentage of planned return on invested capital (weighted 25%) for Knife River Corporation. The target amounts were $1.21 EPS and 6.95% ROIC. His award was earned at 92.6% of target on a weighted basis and resulted in a potential payment of 69.1% of the target amount. No adjustment was made by the Committee. Mr. Gatzemeier received his award based upon (i) actual return on invested capital (weighted 25%) and earnings per allocated share (weighted 37.5%), in each case compared to planned return on invested capital and planned earnings per allocated share for Centennial Power and Centennial Energy Resources International of 5.55% and $1.64, and 21.36% and $5.94, respectively; and (ii) corporate growth goals for acquisition of additional capacity in domestic projects (weighted 25%) and a feasibility study for international development projects (weighted 12.5%). Based on his performance with respect to these targets, the award was earned at 100% of target and resulted in a potential payment of 100% of the target amount. The Committee then used its discretion and adjusted Mr. Gatzemeier's payment percentage as reflected in the chart. 2005 - ---- On November 9, 2004 and February 15, 2005, the Committee established 2005 annual award opportunities for the NEOs. The Board approved the award opportunities at its meetings on November 11, 2004 and February 17, 2005. Attached hereto as Exhibit 10.3 and incorporated herein by reference is the 2005 NEO Annual Award Opportunity Chart. The terms of the executive incentive compensation plans, which apply to Mr. Castleberry and Mr. Hildestad, provide for annual cash incentive awards based upon achievement of annual performance measures with a threshold, target and maximum level. A target incentive award is established based upon the position level and actual base salary, or in the Committee's discretion, the assigned salary grade market value. Actual payment may range from zero to 200% of the target based upon achievement of corporate goals and individual performance. Participants who retire, die or become disabled during the year remain eligible to receive an award. Subject to the Committee's discretion, participants who terminate employment for other reasons are not eligible for an award. The Committee has full discretion to determine the extent to which goals have been achieved, the payment level, whether any final payment will be made and whether to adjust awards. Mr. Castleberry's 2005 award is pursuant to the WBI Holdings, Inc. Executive Incentive Compensation Plan, based upon (i) actual earnings per allocated share (weighted 75%) and (ii) actual return on invested capital (weighted 25%), expressed as a percentage of targeted earnings per allocated share and return on invested capital, for WBI Holdings, Inc. Achievement of targeted levels of earnings per allocated share and return on invested capital would result in a potential award of 100% of the target amount. Achievement of less than 85% would result in no payment, while achievement of 114% would result in a payment of 200% of the target amount. Actual payment will be equal to 95% of the potential amount plus up to 5% based on achievement of company-wide safety related goals. 3 Mr. Hildestad's 2005 award is pursuant to the Knife River Corporation Executive Incentive Compensation Plan, based upon (i) actual earnings per allocated share as a percentage of planned earnings per allocated share (weighted 75%) and (ii) return on invested capital as a percentage of planned return on invested capital (weighted 25%). Achievement of budgeted levels of earnings per allocated share and return on invested capital would result in a potential award of 100% of the target amount. Achievement of less than 80% would result in no payment, while achievement of 120% would result in a payment of 200% of the target amount. Mr. Gatzemeier's 2005 award is based upon a combination of (i) actual return on invested capital (weighted 25%) and (ii) actual earnings per allocated share (weighted 75%) expressed as a percentage of budgeted earnings per allocated share and return on invested capital, with respect to Centennial Energy Resources LLC. Achievement of budgeted levels of earnings per allocated share and return on invested capital would result in a potential award of 100% of the target amount. Achievement of less than 90% would result in no payment, while achievement of 110% would result in a payment of 200% of the target amount. Mr. White's and Mr. Robinson's 2005 awards were made pursuant to the 1997 Executive Long-Term Incentive Plan. The performance goals for 2005 for Mr. White and Mr. Robinson are (i) budgeted earnings per share achieved (weighted 75%) and (ii) budgeted return on invested capital achieved (weighted 25%), with respect to the Company. Achievement of budgeted levels of earnings per share and return on invested capital would result in a potential award of 100% of the target amount. Achievement of less than 85% would result in no payment, while achievement of 114% would result in a payment of 200% of the target amount. Named Executive Officer Base Compensation - ----------------------------------------- On November 9, 2004, the Committee approved new base compensation, effective January 1, 2005, for executive officers of MDU Resources Group, Inc. The Board approved the new base compensation on November 11, 2004. Base compensation for the NEOs is contained in the NEO 2005 Base Compensation Table, which is attached hereto as Exhibit 10.1 and incorporated herein by reference. Amendment of Plan - ----------------- On February 17, 2005, the Board amended the 1997 Executive Long-Term Incentive Plan to reduce the aggregate number of shares that may be issued under the plan from 8,625,581 to 6,625,581. 4 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. Exhibit Number Description of Exhibit 10.1 MDU Resources Group, Inc. NEO 2005 Base Compensation Table 10.2 MDU Resources Group, Inc. Executive Incentive Compensation Plan 2004 NEO Payment Chart 10.3 MDU Resources Group, Inc. 2005 NEO Annual Award Opportunity Chart 10.4 WBI Holdings, Inc. Executive Incentive Compensation Plan 10.5 Knife River Corporation Executive Incentive Compensation Plan 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 24, 2005 MDU Resources Group, Inc. By: /s/ Vernon A. Raile ------------------------------- Vernon A. Raile Senior Vice President and Chief Accounting Officer 6 EXHIBIT INDEX Exhibit Number Description of Exhibit 10.1 MDU Resources Group, Inc. NEO 2005 Base Compensation Table 10.2 MDU Resources Group, Inc. Executive Incentive Compensation Plan 2004 NEO Payment Chart 10.3 MDU Resources Group, Inc. 2005 NEO Annual Award Opportunity Chart 10.4 WBI Holdings, Inc. Executive Incentive Compensation Plan 10.5 Knife River Corporation Executive Incentive Compensation Plan EX-10.1 2 ex10-1.txt COMPENSATION TABLE Exhibit 10.1 MDU Resources Group, Inc. NEO 2005 Base Compensation Table Current Base New Base Name Title Compensation ($) Compensation ($) - ---- ----- ---------------- ---------------- Martin A. White Chairman of the 650,000 700,000 Board, President and Chief Executive Officer Warren L. Robinson Executive Vice 350,000 370,000 President and Chief Financial Officer John K. Castleberry President and Chief 350,000 370,000 Executive Officer, WBI Holdings, Inc. Terry D. Hildestad President and Chief 350,000 370,000 Executive Officer, Knife River Corporation Paul E. Gatzemeier President and Chief 245,000 285,000 Executive Officer, Centennial Energy Resources LLC EX-10.2 3 ex10-2.txt 2004 NEO PAYMENT CHART Exhibit 10.2 MDU Resources Group, Inc. Executive Incentive Compensation Plan 2004 NEO Payment Chart
Name Title Payment($) % of Target - ---- ----- ---------- ----------- Martin A. White Chairman of the Board, $ 1,265,550 194.7% President and Chief Executive Officer Ronald D. Tipton Retired Chief Executive 152,460 87.1 Officer of Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. Warren L. Robinson Executive Vice President and 350,000 200 Chief Financial Officer John K. Castleberry President and Chief Executive 350,000 200 Officer, WBI Holdings, Inc. Terry D. Hildestad President and Chief Executive 120,925 69.1 Officer, Knife River Corporation Paul E. Gatzemeier President and Chief Executive 257,250 175 Officer, Centennial Energy Resources LLC
EX-10.3 4 ex10-3.txt 2005 AWARD OPPORTUNITY CHART Exhibit 10.3 MDU Resources Group, Inc. 2005 NEO Annual Award Opportunity Chart
1/1/2005 Base Name Title Compensation Threshold ($) Target ($) Maximum ($) - ---- ----- ------------ ------------- ---------- ----------- Martin A. White Chairman of the $ 700,000 100% 70,000 700,000 1,400,000 Board, President and Chief Executive Officer Warren L. Executive Vice $ 370,000 50% 18,500 185,000 370,000 Robinson President and Chief Financial Officer John K. President and $ 370,000 50% 46,250 185,000 370,000 Castleberry Chief Executive Officer, WBI Holdings, Inc. Terry D. President and $ 370,000 50% 46,250 185,000 370,000 Hildestad Chief Executive Officer, Knife River Corporation Paul E. President and $ 285,000 50% 14,250 142,500 285,000 Gatzemeier Chief Executive Officer, Centennial Energy Resources LLC
EX-10.4 5 ex10-4.txt WBI EICP Exhibit 10.4 WBI Holdings, Inc. Executive Incentive Compensation Plan Exhibit 10.4 WBI HOLDINGS, INC EXECUTIVE INCENTIVE COMPENSATION PLAN ------------------------------------------------------------ I. PURPOSE The purpose of the Executive Incentive Compensation Plan (the "Plan") is to provide an incentive for key executives of WBI Holdings, Inc. and any subsidiaries participating in the Plan (the "Company") to focus their efforts on the achievement of challenging and demanding corporate objectives. The Plan is designed to reward successful corporate performance as measured against specified performance goals as well as exceptional individual performance. When corporate performance reaches or exceeds the performance targets and individual performance is exemplary, incentive compensation awards, in conjunction with salaries, will provide a level of compensation which recognizes the skills and efforts of the key executives. II. BASIC PLAN CONCEPT The Plan provides an opportunity to earn annual incentive compensation based on the achievement of specified annual performance objectives. A target incentive award for each individual within the Plan is established based on the position level and actual base salary, provided, however, that the Compensation Committee of the Board of Directors (the "Committee") in its sole discretion, may, instead of actual base salary, use the assigned salary grade market value (midpoint) ("Salary"). The target incentive award represents the amount to be paid, subject to the achievement of the performance objective targets established each year. Larger incentive awards than target may be authorized when performance exceeds targets; lesser or no amounts may be paid when performance is below target. It is recognized that during a Plan Year major unforeseen changes in economic and environmental conditions or other significant factors beyond the control of management may substantially affect the ability of the Plan Participants to achieve the specified performance goals. Therefore, in its review of corporate performance the Committee, in consultation with the Chief Executive Officer of MDU Resources Group, Inc., may modify the performance targets. WBI-1 However, it is contemplated that such target modifications will be necessary only in years of unusually adverse or favorable external conditions. III. ADMINISTRATION The Plan shall be administered by the Committee with the assistance of the President of the Company. The Committee shall approve annually, prior to the beginning of each Plan Year, the list of eligible Participants, and the target incentive award level for each position within the Plan. The Plan's performance targets for the year shall be approved by the Committee no later than its regularly scheduled February meeting during that Plan Year. The Committee shall have final discretion to determine actual award payment levels, method of payment, and whether or not payments shall be made for any Plan Year. The Board of Directors of the Company may, at any time and from time to time, alter, amend, supersede or terminate the Plan in whole or in part, provided that no termination, amendment or modification of the Plan shall adversely affect in any material way an award that has met all requirements for payment without the written consent of the Participant holding such award, unless such termination, modification or amendment is required by applicable law. IV. ELIGIBILITY Executives who are determined by the Committee to have a key role in both the establishment and achievement of Company objectives shall be eligible to participate in the Plan. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, for any reason or no reason in the Company's sole discretion, or confer upon any Participant any right to continue in the employment of the Company. No executive shall have the right to be selected to receive an award under the Plan, or, having been so selected, to be selected to receive a future award. V. PLAN PERFORMANCE MEASURES Performance measures shall be established that consider shareholder and customer interests. These measures shall be evaluated annually based on achievement of specified goals. WBI-2 The performance measure reflective of shareholder's interest will be the percentage attainment of corporate goals, as determined each year by the Committee. This measure may be applied at the corporate level for individuals, such as the Chief Executive Officer, or at the business unit level for individuals whose major or sole impact is on business unit results. Individual performance will be assessed based on the achievement of annually established individual objectives. Threshold, target and maximum award levels will be established annually for each performance measure and business unit. The Committee will retain the right to make all interpretations as to the actual attainment of the desired results and will determine whether any circumstances beyond the control of management need to be considered. VI. TARGET INCENTIVE AWARDS Target incentive awards will be expressed as a percentage of each Participant's Salary. These percentages shall vary by position and reflect larger reward opportunity for positions having greater effect on the establishment and accomplishment of the Company's or business unit's objectives. An exhibit showing the target awards as a percentage of Salary for eligible positions will be attached to this Plan at the beginning of each Plan Year. VII. INCENTIVE FUND DETERMINATION The target incentive fund is the sum of the individual target incentive awards for all eligible Participants. Once the incentive targets have been determined by the Committee, a target incentive fund shall be established and accrued ratably by the Company. The incentive fund and accruals may be adjusted during the year. At the close of each Plan Year, the Company will prepare an analysis showing the Company's or business unit's performance in relation to each of the performance measures employed. This will be provided to the Committee for review and comparison to threshold, target and maximum performance levels. In addition, any recommendations of the President will be presented at this time. The Committee will then determine the amount of the target incentive fund earned. WBI-3 VIII. INDIVIDUAL AWARD DETERMINATION Each individual Participant's award will be based first upon the level of performance achieved by the Company and secondly based upon the individual's performance. The criteria applicable for assessing individual performance will be established at the beginning of each Plan Year. The assessment by the Committee, after consultation with the President, of achievement relative to the established criteria, as determined by a percentage from 0 percent to 200 percent, will be applied to the Participant's target incentive award which has been first adjusted for Company or business unit performance. IX. PAYMENT OF AWARDS Except as provided below or as otherwise determined by the Committee, in order to receive an award under the Plan, the Participant must remain in the employment of the Company or business unit for the entire Plan Year. If a Participant terminates employment with MDU Resources Group, Inc. pursuant to Section 5.01 of the Company's Bylaws which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a subsidiary of the Company pursuant to a similar subsidiary Bylaw provision) and if the Participant's 65th birthday occurs during the Plan Year, determination of whether the performance measures have been met will be made at the end of the Plan Year, and to the extent met, payment of the award will be made to the Participant, prorated. Proration of awards shall be based upon the number of full months elapsed from and including January to and including the month in which the Participant's 65th birthday occurs. An individual Participant who transfers between the Company and business units may receive a prorated award at the discretion of the Committee. Payments made under this Plan will not be considered part of compensation for pension purposes. Payments when made will be in cash. Incentive awards may be deferred if the appropriate elections have been executed prior to the end of the Plan Year. Deferred amounts will accrue interest at a rate determined annually by the Committee. In the event of a "Change in Control" (as defined by the Committee in its Rules and Regulations) then any award deferred by each Participant shall become immediately payable to the Participant in cash, together with accrued interest thereon to the date of payment. In the WBI-4 event the Participant files suit to collect the Participant's deferred award then all of the court costs, other expenses of litigation, and attorneys' fees shall be paid by the Company in the event the Participant prevails upon any of the Participant's claims for payment of a deferred award. - ------------------------- Plan adopted October 15, 1985 Plan amended November 4, 1986 Plan amended July 9, 1996, effective January 1, 1996 Plan amended November 8, 1996, effective January 1, 1997 Plan amended August 5, 1999, effective January 1, 1999 Plan amended November 8, 2001, effective January 1, 2001 Plan amended by Written Consent February 25, 2002, effective January 1, 2002 Plan amended by Written Consent November 17, 2003, effective January 1, 2003 Plan amended by Written Consent August 24, 2004, effective January 1, 2004, per Written Consent dated December 29, 2004 WBI-5 WBI HOLDINGS, INC. EXECUTIVE INCENTIVE COMPENSATION PLAN RULES AND REGULATIONS The Board of Directors of WBI Holdings, Inc. (formerly known as Williston Basin Interstate Pipeline Company) (the "Company") hereby amends the Rules and Regulations for the administration of the Executive Incentive Compensation Plan (the "Plan") and the Plan first adopted at a Board of Directors meeting of the Company on October 15, 1985. I. DEFINITIONS The following definitions shall be used for purposes of these Rules and Regulations and for the purpose of administering the Plan: 1. The "Company" shall refer to WBI Holdings, Inc. and any subsidiaries participating in the Plan. No member of the Committee shall participate in a decision as to the member's own eligibility for, or award of, an incentive award payment. 2. "Participants" for any Plan Year shall be those executives who have been approved by the Compensation Committee as eligible for participation in the Plan for such Plan Year. 3. "Payment Date" shall be the date set by the Compensation Committee for payment of awards, other than those awards deferred pursuant to Section IX of the Plan and Section VII of these Rules and Regulations. 4. The "Plan" shall refer to the Executive Incentive Compensation Plan. 5. The "Plan Year" shall be the calendar year. 6. "Change in Control" shall mean the earliest of the following to occur: (a) the sale or other disposition of all or substantially all of the assets of the Company, other than to a subsidiary of MDU Resources Group, Inc. or to a subsidiary of the Company; or (b) the sale or other disposition of voting stock of the Company, other than to a subsidiary of MDU Resources Group, Inc. or to a subsidiary of the Company, such that, immediately following such sale or other disposition, MDU Resources Group, Inc. and/or its subsidiaries would own less than 50 percent of the outstanding voting stock of the Company; or (c) the sale or other disposition of voting stock of the Company, other than to a subsidiary of MDU Resources Group, Inc. or to a subsidiary of the Company, such that, immediately following such sale or other disposition, MDU Resources Group, Inc, and/or its subsidiaries WBI-6 would no longer possess the ability to elect a majority of the Board of Directors of the Company; or (d) any other event which shall be deemed by a majority of the Compensation Committee of the Board of Directors of the Company to constitute a "Change in Control" of the Company; and provided, further, that the Compensation Committee of the Board of Directors of the Company shall have the right to deem any event to constitute a "Change in Control" of any particular subsidiary of the Company, even if no Change in Control shall have occurred with regard to the Company. 7. The "Prime Rate" shall be the base rate on corporate loans posted by at least 75 percent of the nation's 30 largest banks as reported daily in The Wall Street Journal. 8. "Retirement" means the later of the day the Participant attains age 55 or the day the Participant ceases to be an employee of the Company or any of its subsidiary corporations. II. ADMINISTRATION 1. The Chairman of the Board (the "Chairman") shall not participate in the Plan. No member of the Committee shall participate in a decision as to the member's own eligibility for, or award of, an incentive award payment. 2. The Compensation Committee shall have the full power to construe and interpret the Plan and to establish and to amend these Rules and Regulations for its administration. 3. Prior to the beginning of each Plan Year, the Compensation Committee shall approve a list of eligible officers and notify those so approved that they are eligible to participate in the Plan for such Plan Year. 4. Prior to the beginning of each Plan Year, the Committee shall approve an Annual Operating Plan. The Annual Operating Plan shall include the Plan's performance measures, a list of individuals to be included in the Plan and the target incentive award levels for each salary grade covered by the Plan for the following Plan Year. The Plan's performance targets for the year shall be approved by the Committee no later than its regularly scheduled February meeting during the Plan Year. The Annual Operating Plan, insofar as it is relevant to each individual Participant, shall be made available by the President to each Participant in the Plan at the beginning of each Plan Year. 5. The Compensation Committee shall have final discretion to determine actual award payment levels and whether or not payments shall be made for any Plan Year. However, unless the Plan's performance objectives are met for the Plan Year, no award shall be made for that Plan Year. Performance targets modified pursuant to Section II of the Plan will be deemed performance targets for purposes of determining whether or not the targets have been met. WBI-7 III. PLAN PERFORMANCE MEASURES 1. The Committee shall establish the percentage attainment of corporate performance measure and the percentage attainment of individual goals measure. The Committee may establish more or fewer performance measures as it deems necessary. 2. The corporate performance measure may be set by reference to earnings, return on invested capital or any other measure or combination of measures deemed appropriate by the Committee. It may be established for the Company or for the individual business unit. 3. Individual performance will be assessed based on the achievement of annually established individual objectives. 4. Plan performance measures may be applied at the corporate level for individuals such as the Chief Executive Officer whose major or sole impact is Company-wide, or at the business unit level for individuals whose major or sole impact is on the business unit results. The Annual Operating Plan shall contain a list of individuals to whom the Plan performance measures will be applied at the corporate level and a list of those individuals for whom the Plan performance measures will be applied at the business unit level. The relevant business unit for each individual will be identified. 5. The Committee shall set threshold, target and maximum award levels for the performance measures, for each business unit, and for the Company. Those levels shall be included in the Annual Operating Plan. 6. The Committee will retain the authority to determine whether or not the actual attainment of these measures has been made. IV. TARGET INCENTIVE AWARDS 1. Target incentive awards will be a percentage of each Participant's Salary, as defined in the Plan. 2. Target incentive awards shall be set by the Committee annually and will be included in the Annual Operating Plan. V. INCENTIVE FUND DETERMINATION 1. The target incentive fund is the sum of the individual target incentive awards for all eligible Participants. 2. Once individual incentive targets have been determined, a target incentive fund shall be established and accrued ratably by the Company. The incentive fund and accruals may be adjusted during the year. WBI-8 3. As soon as practicable following the close of each Plan Year, the President will provide the Committee with an analysis showing the Company's performance in relation to the performance measures. The Committee will review the analysis and determine, in the Committee's sole discretion, the amount of the actual incentive fund. 4. In determining the actual incentive fund, the Committee may consider any recommendations of the President. VI. INDIVIDUAL AWARD DETERMINATION 1. The Compensation Committee shall have the sole discretion to determine each individual Participant's award. The Committee's decision will be based first upon the level of performance achieved by the Company and second upon the individual's performance. 2. The Committee, after consultation with the President, shall set the award as a percentage from 0 percent to 200 percent of the Participant's target incentive award, adjusted for Company performance. VII. PAYMENT OF AWARDS 1. On the date the Compensation Committee determines the awards to be made to individual Participants, it shall also establish the Payment Date. 2. Except as provided below or as the Committee otherwise determines, in order to receive an award under the Plan, a Participant must remain in the employment of MDU Resources Group, Inc., its Utility Division or a Subsidiary Company for the entire Plan Year. 3. If a Participant terminates employment with the Company pursuant to Section 5.01 of the Company's Bylaws which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a subsidiary of the Company pursuant to a similar subsidiary Bylaw provision) and if the Participant's 65th birthday occurs during the Plan Year, determination of whether the performance measures have been met will be made at the end of the Plan Year, and to the extent met, payment of the award will be made to the Participant, prorated. Proration of awards shall be based upon the number of full months elapsed from and including January to and including the month in which the Participant's 65th birthday occurs. 4. Payment of the award shall be made in cash. Payments shall be made on the Payment Date unless the Participant has deferred, in whole or in part, the receipt of the award by making an election on the deferral form attached hereto, prior to the end of the Plan Year immediately preceding the Payment Date. 5. In the event a Participant has elected to defer receipt of all or a portion of the award, the Company shall set up an account in the Participant's name. The WBI-9 amount of the Participant's award to the extent deferred will be credited to the Participant's account on the Payment Date. 6. The balance credited to an account of a Participant who has elected to defer receipt of an award will be an unsecured, unfunded obligation of the Company. 7. Interest shall accrue on the balance credited to a Participant's account. The rate of interest shall be the Prime Rate plus 1 percentage point as reported on the last Friday in January of each year. Interest on the balance in an account shall accrue at the rate so determined from the Payment Date immediately following the determination to the Payment Date of the following year. 8. Interest shall be credited to the account on the day preceding Payment Date and shall be calculated on the balance in the Participant's account as of that date. 9. A Participant may elect to defer any percentage, not to exceed l00, of an annual award. 10. A Participant electing to defer any part of an award must elect one of the following dates for payment: (1) Payment Date next following termination of employment with the Company or an affiliated company; or (2) Payment Date of the fifth year following the year in which the award may be made. 11. A Participant may elect to receive the deferred amounts accumulated in the Participant's account in monthly installments, not to exceed 120. In the event the Participant elects to receive the amounts in the Participant's account in more than one installment, interest shall continue to accrue on the balance remaining in their account at the applicable rate determined by the Committee. 12. In the event of the death of a Participant in whose name a deferred account has been set up, the Company shall, within six months thereafter, pay to the Participant's estate or the designated beneficiary the entire amount in the deferred account. 13. In the event of a "Change in Control" then any award deferred by each Participant shall become immediately payable to the Participant. In the event the Participant files suit to collect a deferred award then all of the Participant's court costs, other expenses of litigation, and attorneys' fees shall be paid by the company in the event the Participant prevails upon any of the claims for payment. ____________________________________________________ Rules and Regulations adopted October 15, 1985 Rules and Regulations amended September 3, 1987 WBI-10 Rules and Regulations amended July 31, 1989 Rules and Regulations amended July 9, 1996, effective January 1, 1996 Rules and Regulations adopted November 8, 1996, effective January 1, 1997 Rules and Regulations amended January 30, 1997, effective January 1, 1997 Rules and Regulations amended August 5, 1999, effective January 1, 1999 Rules and Regulations amended November 8, 2001, effective January 1, 2001 Rules and Regulations amended by Written Consent February 25, 2002, effective January 1, 2002 Rules and Regulations amended by Written Consent November 17, 2003, effective January 1, 2003 Rules and Regulations amended by Written Consent August 24, 2004, effective January 1, 2004, per Written Consent dated December 29, 2004 WBI-11 EX-10.5 6 ex10-5.txt KNIFE RIVER EICP Exhibit 10.5 Knife River Corporation Executive Incentive Compensation Plan Exhibit 10.5 KNIFE RIVER CORPORATION EXECUTIVE INCENTIVE COMPENSATION PLAN RESOLVED, that there is hereby established the Executive Incentive Compensation Plan ("the Plan") which shall be effective as of this date. I. PURPOSE The purpose of the Plan is to provide an incentive for key executives of Knife River Corporation and any subsidiaries participating in the Plan (the "Company") to focus their efforts on the achievement of challenging and demanding corporate objectives. The Plan is designed to reward successful corporate performance calculated from January 1 to December 31, of each Plan Year, as measured against specified performance goals as well as exceptional individual performance. When corporate or subsidiary performance reaches or exceeds the performance targets and individual performance is exemplary, incentive compensation awards, in conjunction with salaries, will provide a level of compensation which recognizes the skills and efforts of the key executives. II. BASIC PLAN CONCEPT The Plan provides an opportunity to earn annual incentive compensation based on the achievement of specified annual performance objectives. A target incentive award for each individual within the Plan is established based on the position level and actual base salary, provided, however, that the Compensation Committee of the Board of Directors (the "Committee") in its sole discretion, may, instead of actual base salary, use the assigned salary grade market value (midpoint) ("Salary"). The target incentive award represents the amount to be paid, subject to the achievement of the performance objective targets established each year. Larger incentive awards than target may be authorized when performance exceeds targets; lesser or no amounts may be paid when performance is below target. It is recognized that during a Plan Year major unforeseen changes in economic and environmental conditions or other significant factors beyond the control of management may KR-1 substantially affect the ability of the Plan Participants to achieve the specified performance goals. Therefore, in its review of corporate performance the Committee, in consultation with the Chief Executive Officer of MDU Resources Group, Inc., may modify the performance targets. However, it is contemplated that such target modifications will be necessary only in years of unusually adverse or favorable external conditions. III. ADMINISTRATION The Plan shall be administered by the Committee with the assistance of the President of the Company. The Committee shall approve annually, prior to the beginning of each Plan Year, the list of eligible Participants, and the target incentive award level for each position within the Plan. The Plan's performance targets for the year shall be approved by the Committee no later than its regularly scheduled February meeting during that Plan Year. The Committee shall have final discretion to determine actual award payment levels, method of payment, and whether or not payments shall be made for any Plan Year. The Board of Directors of the Company may, at any time and from time to time, alter, amend, supersede or terminate the Plan in whole or in part, provided that no termination, amendment or modification of the Plan shall adversely affect in any material way an award that has met all requirements for payment without the written consent of the Participant holding such award, unless such termination, modification or amendment is required by applicable law. IV. ELIGIBILITY Key executives who are determined by the Committee to have a key role in both the establishment and achievement of Company objectives shall be eligible to participate in the Plan. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, for any reason or no reason in the Company's sole discretion, or confer upon any Participant any right to continue in the employment of the Company. No executive shall have the right to be selected to receive an award under the Plan, or, having been so selected, to be selected to receive a future award. KR-2 V. PLAN PERFORMANCE MEASURES Performance measures shall be established that consider shareholder and customer interests. These measures shall be evaluated annually based on achievement of specified goals. The performance measure reflective of shareholder's interest will be the percentage attainment of corporate goals, as determined each year by the Committee. This measure may be applied at the corporate level for individuals, such as the Chief Executive Officer, or at the business unit level for individuals whose major or sole impact is on business unit results. Individual performance will be assessed based on the achievement of annually established individual objectives. Threshold, target and maximum award levels will be established annually for each performance measure and business unit. The Committee will retain the right to make all interpretations as to the actual attainment of the desired results and will determine whether any circumstances beyond the control of management need to be considered. VI. TARGET INCENTIVE AWARDS Target incentive awards will be expressed as a percentage of each Participant's Salary. These percentages shall vary by position and reflect larger reward opportunity for positions having greater effect on the establishment and accomplishment of the Company's or business unit's objectives. An exhibit showing the target awards as a percentage of Salary for eligible positions will be attached to this Plan at the beginning of each Plan Year. VII. INCENTIVE FUND DETERMINATION The target incentive fund is the sum of the individual target incentive awards for all eligible Participants. Once the incentive targets have been determined by the Committee, a target incentive fund shall be established and accrued ratably by the Company. The incentive fund and accruals may be adjusted during the year. At the close of each Plan Year, the Company will prepare an analysis showing the Company's or business unit's performance in relation to each of the performance measures employed. This will be provided to the Committee for review and comparison to threshold, KR-3 target and maximum performance levels. In addition, any recommendations of the President will be presented at this time. The Committee will then determine the amount of the target incentive fund earned. VIII. INDIVIDUAL AWARD DETERMINATION Each individual Participant's award will be based first upon the level of performance achieved by the Company and secondly based upon the individual's performance. The criteria applicable for assessing individual performance will be established at the beginning of each Plan Year. The assessment by the Committee, after consultation with the President, of achievement relative to the established criteria, as determined by a percentage from 0 percent to 200 percent, will be applied to the Participant's target incentive award which has been first adjusted for Company or business unit performance. IX. PAYMENT OF AWARDS Except as provided below or as otherwise determined by the Committee, in order to receive an award under the Plan, the Participant must remain in the employment of the Company or business unit for the entire Plan Year. If a Participant terminates employment with MDU Resources Group, Inc. pursuant to Section 5.01 of the Company's Bylaws which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a subsidiary of the Company pursuant to a similar subsidiary Bylaw provision) and if the Participant's 65th birthday occurs during the Plan Year, determination of whether the performance measures have been met will be made at the end of the Plan Year, and to the extent met, payment of the award will be made to the Participant, prorated. Proration of awards shall be based upon the number of full months elapsed from and including January to and including the month in which the Participant's 65th birthday occurs. An individual Participant who transfers between the Company and business units may receive a prorated award at the discretion of the Committee. Payments made under this Plan will not be considered part of compensation for pension purposes. Payments when made will be in cash. Incentive awards may be deferred if the appropriate elections have been executed prior to the end of the Plan Year. Deferred amounts will accrue interest at a rate determined annually by the Committee. KR-4 In the event of a "Change in Control" (as defined by the Committee in its Rules and Regulations) then any award deferred by each Participant shall become immediately payable to the Participant in cash, together with accrued interest thereon to the date of payment. In the event the Participant files suit to collect the Participant's deferred award then all of the court costs, other expenses of litigation, and attorneys' fees shall be paid by the Company in the event the Participant prevails upon any of the Participant's claims for payment of a deferred award. _______________________________________________ Plan adopted November 22, 1983 Plan amended July 26, 1991 Plan amended November 8, 1996, effective January 1, 1997 Plan amended August 6, 1999, effective January 1, 1999 Plan amended February 10, 2000, effective January 1, 2000 Plan amended November 7, 2001, effective January 1, 2001 Plan amended by written consent February 25, 2002, effective January 1, 2002 Plan amended by written consent November 17, 2003, effective January 1, 2003 Plan amended by written consent August 24, 2004, effective January 1, 2004, per Written Consent dated December 29, 2004 KR-5 KNIFE RIVER CORPORATION EXECUTIVE INCENTIVE COMPENSATION PLAN RULES AND REGULATIONS -------------------------------------------------- The Compensation Committee of the Board of Directors of Knife River Corporation (formerly known as Knife River Coal Mining Company) (the "Company") hereby amends the following Rules and Regulations for the administration of the Executive Incentive Compensation Plan (the "Plan"), first adopted at a meeting of the Board of Directors of the Company held on November 22, 1983. I. DEFINITIONS The following definitions shall be used for purposes of these Rules and Regulations and for purposes of administering the Plan: 1. The "Committee" shall be the Compensation Committee of the Board of Directors of the Company. 2. The "Company" shall refer to Knife River Corporation and any subsidiaries participating in the Plan. 3. "Participants" for any Plan Year shall be those key executives who have been approved by the Committee as eligible for participation in the Plan for such Plan Year. 4. "Payment Date" shall be the date set by the Committee for payment of awards, other than those awards deferred pursuant to Section VII of these Rules and Regulations. 5. The "Plan" shall refer to the Executive Incentive Compensation Plan. 6. The "Plan Year" shall be January 1 through December 31. 7. "Change in Control" shall mean the earliest of the following to occur: (a) the sale or other disposition of all or substantially all of the assets of the Company, other than to a subsidiary of MDU Resources Group, Inc. or to a subsidiary of the Company; or (b) the sale or other disposition of voting stock of the Company, other than to a subsidiary of MDU Resources Group, Inc. or to a subsidiary of the Company, such that, immediately following such sale or other disposition, MDU Resources Group, Inc. and/or its subsidiaries would own less than 50 percent of the outstanding voting stock of the Company; or (c) the sale or other disposition of voting stock of the Company, other than to a subsidiary of MDU Resources KR-6 Group, Inc. or to a subsidiary of the Company, such that, immediately following such sale or other disposition, MDU Resources Group, Inc, and/or its subsidiaries would no longer possess the ability to elect a majority of the Board of Directors of the Company; or (d) any other event which shall be deemed by a majority of the Compensation Committee of the Board of Directors of the Company to constitute a "Change in Control" of the Company; and provided, further, that the Compensation Committee of the Board of Directors of the Company shall have the right to deem any event to constitute a "Change in Control" of any particular subsidiary of the Company, even if no Change in Control shall have occurred with regard to the Company. 8. The "Prime Rate" shall be the base rate on corporate loans posted by at least 75 percent of the nation's 30 largest banks as reported daily in The Wall Street Journal. 9. "Retirement" means the later of the day the Participant attains age 55 or the day the Participant ceases to be an employee of the Company or any of its subsidiary corporations. II. ADMINISTRATION 1. The Committee shall have the full power to construe and interpret the Plan and to establish and to amend these Rules and Regulations for its administration. 2. No member of the Committee shall participate in a decision as to their own eligibility for, or award of, an incentive award payment. 3. Prior to the beginning of each Plan Year, the Committee shall approve a list of eligible key executives and notify those so approved that they are eligible to participate in the Plan for such Plan Year. 4. Prior to the beginning of each Plan Year, the Committee shall approve an Annual Operating Plan. The Annual Operating Plan shall include the Plan's performance measures and target incentive award levels for each salary grade covered by the Plan for the following Plan Year. The Committee shall set threshold, target and maximum award levels for performance. These levels shall be included in the Annual Operating Plan. The Plan's performance targets for the year shall be approved by the Committee no later than its regularly scheduled February meeting during the Plan Year. The Annual Operating Plan, insofar as it is relevant to each individual Participant, shall be made available by the Committee to each Participant in the Plan at the beginning of each Plan Year. 5. The Committee shall have final discretion to determine actual award payment levels and whether or not payments shall be made for any Plan Year. However, unless the Plan's performance objectives are met for the Plan Year, no award shall be made for that Plan Year. Performance targets modified pursuant to Section II of the Plan will be deemed performance targets for purposes of determining whether or not these targets have been met. KR-7 III. PLAN PERFORMANCE MEASURES 1. The Committee shall establish the percentage attainment of corporate performance measure and the percentage attainment of individual goals measure. The Committee may establish more or fewer performance measures as it deems necessary. 2. The corporate performance measure may be set by reference to earnings, return on invested capital or any other measure or combination of measures deemed appropriate by the Committee. It may be established for the Company or for the individual business unit. 3. Individual performance will be assessed based on the achievement of annually established individual objectives. 4. Plan performance measures may be applied at the corporate level for individuals such as the Chief Executive Officer whose major or sole impact is Company-wide, or at the business unit level for individuals whose major or sole impact is on the business unit results. The Annual Operating Plan shall contain a list of individuals to whom the Plan performance measures will be applied at the corporate level and a list of those individuals for whom the Plan performance measures will be applied at the business unit level. The relevant business unit for each individual will be identified. 5. The Committee shall set threshold, target and maximum award levels for the performance measures, for each business unit, and for the Company. Those levels shall be included in the Annual Operating Plan. 6. The Committee will retain the authority to determine whether or not the actual attainment of these measures has been made. IV. TARGET INCENTIVE AWARDS 1. Target incentive awards will be a percentage of each Participant's Salary, as defined in the Plan. 2. Target incentive awards shall be set by the Committee annually and will be included in the Annual Operating Plan. V. INCENTIVE FUND DETERMINATION 1. The target incentive fund is the sum of the individual target incentive awards for all eligible Participants. 2. Once individual incentive targets have been determined, a target incentive fund shall be established and accrued ratably by the Company. The incentive fund and accruals may be adjusted during the year. KR-8 3. As soon as practicable following the close of each Plan Year, the President will provide the Committee with an analysis showing the Company's performance. The Committee will review the analysis and determine, in its sole discretion, the amount of the actual incentive fund. 4. In determining the actual incentive fund, the Committee may consider any recommendations of the President. VI. INDIVIDUAL AWARD DETERMINATION 1. The Committee shall have the sole discretion to determine each individual Participant's award. The Committee's decision will be based first upon the level of performance achieved by the Company and second upon the individual's performance. 2. The Committee, after consultation with the President, shall set the award as a percentage from 0 to 200 percent of the Participant's target incentive award, adjusted for Company performance. VII. PAYMENT OF AWARDS 1. On the date the Compensation Committee determines the awards to be made to individual Participants, it shall also establish the Payment Date. 2. Except as provided below or as the Committee otherwise determines, in order to receive an award under the Plan, a Participant must remain in the employment of MDU Resources Group, Inc., its Utility Division or a Subsidiary Company for the entire Plan Year. 3. If a Participant terminates employment with the Company pursuant to Section 5.01 of the Company's Bylaws which provides for mandatory retirement for certain officers on their 65th birthday (or terminates employment with a subsidiary of the Company pursuant to a similar subsidiary Bylaw provision) and if the Participant's 65th birthday occurs during the Plan Year, determination of whether the performance measures have been met will be made at the end of the Plan Year, and to the extent met, payment of the award will be made to the Participant, prorated. Proration of awards shall be based upon the number of full months elapsed from and including January to and including the month in which the Participant's 65th birthday occurs. 4. Payment of the awards shall be made in cash. Payments shall be made on the Payment Date unless the Participant has deferred, in whole or in part, the receipt of the award by making an election on the deferral form attached hereto, prior to the end of the Plan Year immediately preceding the Payment Date. 5. In the event a Participant has elected to defer receipt of all or a portion of the award, the Company shall set up an account in the Participant's name. The KR-9 amount of the Participant's award to the extent deferred will be credited to the Participant's account on the Payment Date. 6. The balance credited to an account of a Participant who has elected to defer receipt of an award will be an unsecured, unfunded obligation of the Company. 7. Interest shall accrue on the balance credited to a Participant's account. The rate of interest shall be the Prime Rate plus 1 percentage point as reported on the last Friday in January of each year. Interest on the balance in an account shall accrue at the rate so determined from the Payment Date immediately following the determination to the Payment Date of the following year. 8. Interest shall be credited to the account on the day preceding Payment Date and shall be calculated on the balance in the Participant's account as of that date. 9. A Participant may elect to defer any percentage, not to exceed 100, of an annual award. 10. A Participant electing to defer any part of an award must elect one of the following dates for payment: (a) Payment Date next following termination of employment with the Company or an affiliated company; or (b) Payment Date of the fifth year following the year in which the award may be made. 11. A Participant may elect to receive the deferred amounts accumulated in the Participant's account in monthly installments, not to exceed 120. In the event the Participant elects to receive the amounts in the Participant's account in more than one installment, interest shall continue to accrue on the balance remaining in their account at the applicable rate or rates determined annually by the Committee. 12. In the event of the death of a Participant in whose name a deferred account has been set up, the Company shall, within six months thereafter, pay to the Participant's estate or the designated beneficiary the entire amount in the deferred account. 13. In the event of a "Change in Control" then any award deferred by each participant shall become immediately payable to the Participant. In the event the Participant files suit to collect a deferred award then all of the Participant's court costs, other expenses of litigation, and attorneys' fees shall be paid by the Company in the event the Participant prevails upon any of the claims for payment. _____________________________________________________ Rules and Regulations adopted November 22, 1983 KR-10 Rules and Regulations amended for 1985 Plan Year -- the methodology set forth in calculating Plan performance was adjusted Rules and Regulations amended November 8, 1996, effective January 1, 1997 Rules and Regulations amended January 30, 1997, effective January 1, 1997 Rules and Regulations amended August 6, 1999, effective January 1, 1999 Rules and Regulations amended February 10, 2000, effective January 1, 2000 Rules and Regulations amended November 7, 2001, effective January 1, 2001 Rules and Regulations amended by Written Consent February 25, 2002, effective January 1, 2002 Rules and Regulations amended by Written Consent November 17, 2003, effective January 1, 2003 Rules and Regulations amended by Written Consent August 24, 2004, effective January 1, 2004, per Written Consent December 29, 2004 KR-11 -----END PRIVACY-ENHANCED MESSAGE-----