MDU RESOURCES GROUP, INC.
NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN

I. Purpose

           The purpose of the MDU Resources Group, Inc. Non-Employee Director
Stock Compensation Plan is to provide ownership of the Company's stock to
non-employee members of the Board of Directors in order to improve the Company's
ability to attract and retain highly qualified individuals to serve as directors
of the Company and to strengthen the commonality of interest between directors
and stockholders.

II. Definitions

When used herein, the following terms shall have the respective meanings set
forth below:

"Agent" means a securities broker-dealer selected by the Company and registered
under the Exchange Act.

"Annual Retainer" means the annual retainer payable by the Company to
Non-Employee Directors and shall include, for purposes of this Plan, meeting
fees, cash retainers and any other cash compensation payable to Non-Employee
Directors by the Company for services as a Director.

"Annual Meeting of Stockholders" means the annual meeting of stockholders of the
Company at which directors of the Company are elected.

"Board" or "Board of Directors" means the Board of Directors of the Company.

"Committee" means a committee whose members meet the requirements of Section
IV(A) hereof, and who are appointed from time to time by the Board to administer
the Plan.

"Common Stock" means the common stock, $1.00 par value, of the Company.

"Company" means MDU Resources Group, Inc., a Delaware corporation, and any
successor corporation.

"Effective Date" means April 25, 1995.

"Employee" means any officer or other common law employee of the Company or of
any of its business units or divisions or of any Subsidiary.

 
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Non-Employee Director" or "Participant" means any person who is elected or
appointed to the Board of Directors of the Company and who is not an Employee.

"Plan" means the Company's Non-Employee Director Stock Compensation Plan,
adopted by the Board on February 9, 1995, and approved by the stockholders on
April 25, 1995, as it may be amended from time to time.

"Plan Year" means the period commencing on the Effective Date of the Plan and
ending the next following December 31 and, thereafter, the calendar year.

"Stock Payment" means that portion of the Annual Retainer to be paid to
Non-Employee Directors in shares of Common Stock rather than cash for services
rendered as a director of the Company, as provided in Section V hereof,
including that portion of the Stock Payment resulting from any election
specified in Section VI hereof.

"Subsidiary" means any corporation that is a "subsidiary corporation" of the
Company, as that term is defined in Section 424(f) of the Internal Revenue Code
of 1986, as amended.

III. Shares of Common Stock Subject to the Plan

           Subject to Section VII below, the maximum aggregate number of shares
of Common Stock that may be delivered under the Plan is 699,897 shares.  The
Common Stock to be delivered under the Plan will be made available from
authorized but unissued shares of Common Stock, treasury stock or shares of
Common Stock purchased on the open market.  Shares of Common Stock purchased on
the open market shall be purchased by the Agent.

 
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IV. Administration

 
           A. The Plan will be administered by a committee appointed by the
Board, consisting of two or more persons who are not eligible to participate in
the Plan.  Members of the Committee need not be members of the Board.  The
Company shall pay all costs of administration of the Plan.

           B. Subject to and not inconsistent with the express provisions of the
Plan, the Committee has and may exercise such powers and authority of the Board
as may be necessary or appropriate for the Committee to carry out its functions
under the Plan.  Without limiting the generality of the foregoing, the Committee
shall have full power and authority (i) to determine all questions of fact that
may arise under the Plan, (ii) to interpret the Plan and to make all other
determinations necessary or advisable for the administration of the Plan and
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including, without limitation, any rules which the Committee determines
are necessary or appropriate to ensure that the Company and the Plan will be
able to comply with all applicable provisions of any federal, state or local
law.  All interpretations, determinations and actions by the Committee will be
final and binding upon all persons, including the Company and the Participants.

V. Determination of Annual Retainer and Stock Payments

           A. The Board shall determine the Annual Retainer payable to all
Non-Employee Directors of the Company.

           B. Each director who is a Non-Employee Director immediately following
the date of the Company's Annual Meeting of Stockholders shall receive by the
fifteenth business day following the Annual Meeting a Stock Payment of 4,050
shares of Common Stock as a portion of the Annual Retainer payable to such
director for the Plan Year in which such date occurs.  Certificates evidencing
the shares of Common Stock constituting Stock Payments shall be registered in
the respective names of the Participants and shall be issued to each
Participant.  The cash portion of the Annual Retainer shall be paid to
Non-Employee Directors at such times and in such manner as may be determined by
the Board of Directors.

           C. Any director may decline a Stock Payment for any Plan Year;
provided, however, that no cash compensation shall be paid in lieu thereof.  Any
director who declines a Stock Payment must do so in writing prior to the
performance of any services as a Non-Employee Director for the Plan Year to
which such Stock Payment relates.

 
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           D. No Non-Employee Director shall be required to forfeit or otherwise
return any shares of Common Stock issued as a Stock Payment pursuant to the Plan
(including any shares of Common Stock received as a result of an election under
Section VI) notwithstanding any change in status of such Non-Employee Director
which renders him ineligible to continue as a Participant in the Plan.  Any
person who is a Non-Employee Director immediately following the Company's Annual
Meeting of Stockholders shall be entitled to receive a Stock Payment as a
portion of the applicable Annual Retainer.

VI. Election to Increase Amount of Stock Payment

           In lieu of receiving the cash portion of the Annual Retainer for any
Plan Year, a Participant may make a written election to reduce the cash portion
of such Annual Retainer by a specified dollar amount and have such amount
applied to purchase additional shares of Common Stock of the Company.  The
election shall be made on a form provided by the Committee and must be returned
to the Committee on or before the last business day of the year prior to the
year in which the election is to be effective.  The election form shall state
the amount by which the Participant desires to reduce the cash portion of the
Annual Retainer, which shall be applied toward the purchase of Common Stock;
provided, however, that no fractional shares shall be purchased.  Stock to be
delivered to Participants pursuant to this election shall be delivered in
December of each year.  Cash in lieu of any fractional share shall be paid to
the Participant.  An election shall continue in effect until changed or revoked
by the Participant.  No Participant shall be allowed to change or revoke any
election for the then current year, but may change an election for any
subsequent Plan Year.  All shares of Common Stock received pursuant to an
election under this Article VI must be held by a Participant for six months
after receipt thereof.

VII. Adjustment For Changes in Capitalization

           In the event of any equity restructuring (within the meaning of
Financial Accounting Standards No. 123(R)), such as a stock dividend, stock
split, spinoff, rights offering or recapitalization through a large,
nonrecurring cash dividend, the Committee shall cause an equitable adjustment to
be made in the number of shares to be granted annually and the maximum number of
shares and/or the kind of shares of Common Stock that may be delivered under the
Plan to prevent dilution or enlargement of rights. In the event of any other
change in corporate capitalization, such as a merger, consolidation or
liquidation, the Committee may, in its sole discretion, cause an equitable
adjustment as described in the foregoing sentence to be made to prevent dilution
or enlargement of rights.  Adjustments made by the Committee pursuant to this
Section VII shall be final, binding and conclusive.  The maximum number of
shares issuable under the Plan as a result of any such adjustment shall be
rounded down to the nearest whole share.

 
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VIII. Amendment and Termination of Plan

           The Board will have the power, in its discretion, to amend, suspend
or terminate the Plan at any time provided; however, that no amendment that is
required by law, rule or regulation to be approved by the Company’s stockholders
shall be effective unless such amendment shall be approved by the requisite vote
of stockholders of the Company entitled to vote thereon.

IX. Effective Date and Duration of the Plan

           The Plan became effective upon the Effective Date, and shall remain
in effect, subject to the right of the Board of Directors to terminate the Plan
at any time pursuant to Section VIII, until all shares subject to the Plan have
been purchased or acquired according to the Plan's provisions.

X. Miscellaneous Provisions

           A.    Continuation of Directors in Same Status

           Nothing in the Plan or any action taken pursuant to the Plan shall be
construed as creating or constituting evidence of any agreement or
understanding, express or implied, that the Company will retain a Non-Employee
Director as a director or in any other capacity for any period of time or at a
particular retainer or other rate of compensation, as conferring upon any
Participant any legal or other right to continue as a director or in any other
capacity, or as limiting, interfering with or otherwise affecting the right of
the Company to terminate a Participant in his capacity as a director or
otherwise at any time for any reason, with or without cause, and without regard
to the effect that such termination might have upon him as a Participant under
the Plan.
 
B.    Compliance with Government Regulations

           Neither the Plan nor the Company shall be obligated to issue any
shares of Common Stock pursuant to the Plan at any time unless and until all
applicable requirements imposed by any federal and state securities and other
laws, rules and regulations, by any regulatory agencies or by any stock
exchanges upon which the Common Stock may be listed have been fully met.  As a
condition precedent to any issuance of shares of Common Stock and delivery of
certificates evidencing such shares pursuant to the Plan, the Board or the
Committee may require a Participant to take any such action and to make any such
covenants, agreements and representations as the Board or the Committee, as the
case may be, in its discretion deems necessary or advisable to ensure compliance
with such requirements.  The Company shall in no event be obligated to register
the shares of Common Stock deliverable under the Plan pursuant to the Securities
Act of 1933, as amended, or to qualify or register such shares under any
securities laws of any state upon their issuance under the Plan or at any time
thereafter, or to take any other action in order to cause the issuance and
delivery of such shares under the Plan or any subsequent offer, sale or other
transfer of such shares to comply with any such law, regulation or
requirement.  Participants are responsible for complying with all applicable
federal and state securities and other laws, rules and regulations in connection
with any offer, sale or other transfer of the shares of Common Stock issued
under the Plan or any interest therein including, without limitation, compliance
with the registration requirements of the Securities Act of 1933, as amended
(unless an exemption therefrom is available), or with the provisions of Rule 144
promulgated thereunder, if applicable, or any successor
provisions.  Certificates for shares of Common Stock may be legended as the
Committee shall deem appropriate.

 
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C.    Nontransferability of Rights
 
           No Participant shall have the right to assign the right to receive
any Stock Payment or any other right or interest under the Plan, contingent or
otherwise, or to cause or permit any encumbrance, pledge or charge of any nature
to be imposed on any such Stock Payment (prior to the issuance of stock
certificates evidencing such Stock Payment) or any such right or interest.

D.    Severability

           In the event that any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of the Plan.
 
E.    Governing Law

           To the extent not preempted by Federal law, the Plan shall be
governed by the laws of the State of Delaware.

 
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