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 12,
2009
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MDU
Resources Group, Inc.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-3480
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41-0423660
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(State
or other jurisdiction of incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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1200
West Century Avenue
P.O.
Box 5650
Bismarck,
North Dakota 58506-5650
(Address
of principal executive offices)
(Zip
Code)
Registrant's
telephone number, including area code: (701)
530-1000
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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:
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Annual Incentive
Awards
On
February 11, 2009 the Compensation Committee (the "Committee") of the Board of
Directors (the "Board") of MDU Resources Group, Inc. (the "Company") established
2009 annual award opportunities for its executive officers including those
officers who were named executive officers in the Company's proxy statement for
the 2008 Annual Meeting of Stockholders and those who are expected to be named
executive officers in the Company's proxy statement for the 2009 Annual Meeting
of Stockholders (collectively, "NEOs"). The Board approved the award
opportunities at its meeting on February 12, 2009. The 2009 NEO Annual Award
Opportunity Chart is filed as Exhibit 10.1 and incorporated herein by
reference.
Executive
officers may receive annual cash incentive awards based upon achievement of
annual performance measures with a threshold, target and maximum level. The
target incentive award was established based upon the position level and actual
base salary. Actual payment may range from zero to 200% of the target based upon
achievement of corporate goals.
Except as
the Committee may otherwise determine, in order to be eligible to receive an
annual incentive award under the Long-Term Performance-Based Incentive Plan,
participants must remain employed by the Company through December 31, 2009. 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 downward based upon individual performance. Unless the
Committee determines otherwise, performance measure targets will be adjusted to
take into account unusual or nonrecurring events affecting the Company, a
subsidiary or a division or business unit, or the financial statements thereof,
or changes in applicable laws, regulations or accounting principles to the
extent such unusual or nonrecurring events or changes in applicable laws,
regulations or accounting principles otherwise would result in dilution or
enlargement of the annual incentive award intended to be provided. Such
adjustments shall be made in a manner that will not cause the award to fail to
qualify as performance-based compensation for purposes of Section 162(m) of the
Internal Revenue Code.
With
respect to annual incentive awards granted pursuant to an Executive Incentive
Compensation Plan, participants who retire at age 65 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 and whether any final payment will be
made. Once performance goals are approved by the Committee for Executive
Incentive Compensation Plan awards, the Committee generally does not modify the
goals. However, if major unforeseen changes in economic and environmental
conditions or other significant factors beyond the control of management
substantially affected management's ability to achieve the specified performance
goals, the Committee, in consultation with the chief executive officer, may
modify the performance goals. Such goal modifications will only be considered in
years of unusually adverse or favorable external conditions.
The 2009
awards for Messrs. Hildestad, Raile, Schneider and Harp were made pursuant to
the Long-Term Performance-Based Incentive Plan. The performance goals for 2009
for Messrs. Hildestad and Raile are (i) budgeted earnings per share achieved
(weighted 50%) and (ii) budgeted return on invested capital achieved (weighted
50%) with respect to the Company. The performance goals for 2009 for Mr.
Schneider are (i) budgeted earnings per allocated share achieved (weighted 50%)
and (ii) budgeted return on invested capital achieved (weighted 50%) for Knife
River Corporation. The performance goals for 2009 for Mr. Harp are (i) budgeted
earnings per allocated share achieved (weighted 50%) and (ii) budgeted return on
invested capital achieved (weighted 50%) for MDU Construction Services Group,
Inc.
Mr.
Sandness's 2009 award was made pursuant to the MDU Resources Group, Inc.
Executive Incentive Compensation Plan based upon (i) budgeted earnings per share
achieved (weighted 50%) and (ii) budgeted return on invested capital achieved
(weighted 50%) with respect to the Company.
Incentive
plan performance targets are established in connection with the Company's annual
financial planning process, where it assesses the economic environment,
competitive outlook, industry trends and company specific conditions to set
projections of results. The Committee evaluates the projected
results and uses this evaluation to establish the incentive plan performance
targets. The Committee also considers annual improvement in the return on
invested capital measure for incentive purposes to help ensure that return on
invested capital will equal or exceed the weighted average cost of
capital. Historically, this consideration took the form of a minimum
annual increase in a business unit's and/or the Company's return on invested
capital incentive plan performance target(s). For 2009, in the case
of Knife River Corporation, WBI Holdings, Inc. and the Company, the Committee
chose not to apply the required annual minimum increase in recognition of the
soft economic environment and depressed commodity prices faced by those business
units and the Company. The Committee will again consider the minimum
required return on invested capital increase in 2010. In the
Committee's discretion, they may establish incentive plan performance targets
higher, lower, or at the same level as the prior year's target and/or
results.
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 85% would result in no payment, while achievement of
115% would result in a payment of 200% of the target amount.
The
Company limits the after-tax incentive compensation it will pay above the target
amount to 20% of earnings in excess of planned earnings. The Company
calculates the earnings in excess of planned earnings without regard to the
after-tax incentive amounts above target. The Company measures the 20%
limitation at the major business unit level for business unit and operating
company executives, which include Messrs. Harp and Schneider, and at the
corporate level for corporate executives, which include Messrs. Hildestad, Raile
and Sandness.
Mr. Harp's Additional 2009
Incentive Opportunity
Mr. Harp
was given an additional 2009 incentive opportunity. If MDU
Construction Services Group, Inc.'s 2009 actual return on invested capital
exceeds its 2009 weighted average cost of capital by 100 to 199 basis points,
Mr. Harp will receive $100,000; if it exceeds 2009 weighted average cost of
capital by 200 or more basis points, Mr. Harp will receive an additional
$100,000, for a total of $200,000.
Item
9.01 Financial
Statements and Exhibits
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Exhibit
Number
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Description
of Exhibit
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10.1
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MDU
Resources Group, Inc. 2009 NEO Annual Award Opportunity
Chart
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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
18, 2009
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MDU
Resources Group, Inc.
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By:
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/s/ Paul K. Sandness
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Paul
K. Sandness
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General
Counsel and Secretary
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EXHIBIT
INDEX
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Exhibit
Number
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Description
of Exhibit
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10.1
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MDU
Resources Group, Inc. 2009 NEO Annual Award Opportunity
Chart
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6