Document:

MDU RESOURCES GROUP, INC.

                      Amended and Restated
            DEFERRED COMPENSATION PLAN FOR DIRECTORS
                    Effective January 1, 1992

   I. PURPOSE

      The Board of Directors of MDU Resources Group,
Inc. (the "Company") established the Deferred
Compensation Plan for Directors (the "Plan") effective
as of September l, 1988.  The Plan is hereby amended
and restated effective January 1, 1992, and is
substituted for the Restated Plan established by the
Company on August 1, 1991.  The Plan shall continue
until terminated by the Board of Directors of the
Company, subject to the provisions of Article XII,
below.

      The purpose of this Plan is to aid the Company
in attracting and retaining as Directors persons
whose abilities, experience and judgment can
contribute to the continued progress of the Company.
The Plan will provide a  method of deferring
compensation to the Directors.

  II. DEFINITIONS

      A.  Beneficiary.  "Beneficiary" means the
          person or persons designated as such in
          accordance with Article XI.

      B.  Change in Control.  "Change in
          Control" means the earliest of the
          following to occur: (a) the public
          announcement by the Company or by any
          person (which shall not include the
          Company, any subsidiary of the Company, or
          any employee benefit plan of the Company or
          of any subsidiary of the Company)
          ("Person") that such Person, who or which,
          together with all Affiliates and Associates
          (within the meanings ascribed to such terms
          in the Rule 12b-2 of the General Rules and
          Regulations under the Exchange Act) of such
          Person, shall be the beneficial owner of
          twenty percent (20%) or more of the voting
          stock of the Company outstanding; (b) the
          commencement of, or after the first public
          announcement of any Person to commence, a
          tender or exchange offer the consummation
          of which would result in any Person
          becoming the beneficial owner of voting
          stock aggregating thirty percent (30%) or
          more of the then outstanding voting stock
          of the Company; (c) the announcement of any
          transaction relating to the Company
          required to be described pursuant to the
          requirements of Item 6(e) of Schedule 14A
          of Regulation 14A under the Exchange Act;
          (d) a proposed change in constituency of
          the Board of Directors such that, during
          any period of two (2) consecutive years,
          individuals who at the beginning of such
          period constitute the Board of Directors
          cease for any reason to constitute at least
          a majority thereof, unless the election or
          nomination for election by the stockholders
          of the Company of each new Director was
          approved by a vote of least two-thirds
          (2/3) of the Directors then still in office
          who were members of the Board of Directors
          at the beginning of the period; or (e) any
          other event which shall be deemed by a
          majority of the Board of Directors to
          constitute a "change in control."

      C.  Compensation and Deferral Amount.  "Compensation"
          means any cash retainer, meeting fees and
          any other cash compensation payable to
          Eligible Directors by the Company for
          services as a Director.  This Deferred
          Compensation Plan for Directors governs any
          or all of that Compensation which the
          Participant elects to credit to his
          Deferred Compensation Account, which is
          hereafter referred to as the "Deferral
          Amount."

      D.  Deferred Compensation Account.  "Deferred
          Compensation Account" means the account
          maintained on the books of account of the
          Company for each Participant pursuant to
          Article VI.

      E.  Effective Date.  "Effective Date" means January 1,
          1992, the date on which the restated and
          amended Plan became effective.

      F.  Eligible Director.  "Eligible Director" means
          those Directors of the Company who are not
          employees of the Company.

      G.  Investment Units.  This term shall have the
          meaning defined in Article VI.B.

      H.  Market Price.  "Market Price" means the average of
          the highest and lowest transaction prices
          for the Company's common stock on the New
          York Stock Exchange for a given day.

      I.  Participant.  "Participant" means an Eligible
          Director participating in the Plan in
          accordance with the provisions of Article IV.

      J.  Plan Year.  "Plan Year" means the calendar year.

 III. ADMINISTRATION OF THE PLAN

      The Board of Directors shall be the sole
administrator of the Plan.

      The Board of Directors may from time to time establish
rules and regulations for the administration of the
Plan.

      All determinations of the  Board of Directors,
irrespective of their character or nature, including,
but not limited to, all questions of construction and
interpretation, shall be final, binding and
conclusive upon all parties.  Without limiting the
generality of the foregoing, the determination of the
Board of Directors as to whether a Participant has
terminated his services and the date thereof shall be
final, binding and conclusive upon all persons.

      The Company and/or the  Board of Directors may
consult with legal counsel, who may be counsel for
the Company or other counsel, with respect to its
obligations and duties hereunder or with respect to
any claim, action or proceeding or any other matter,
and shall not be liable for any action taken or not
taken by it in good faith pursuant to the advice of
such counsel.

    The Chairman, at the direction of the Board of Directors
shall be responsible for maintaining books and
records for the Plan and adopting standard forms for
such matters as beneficiary designations and
applications for benefits, provided such rules and
forms are not inconsistent with the provisions of the
Plan.  Such books and records shall only be open for
examination by a Participant or his duly designated
beneficiary to the extent that they specifically
involve the Deferred Compensation Account created for
his benefit or any payments which are to be made to
him or his beneficiary hereunder.  Each Participant
or his duly designated beneficiary shall be notified
no less frequently than annually of the balance in
his account.

      Neither the  Board of Directors nor any member
of the Board of Directors nor the Company nor any
other person who is acting on behalf of the Board of
Directors or the Company shall be liable for any act
or failure to act hereunder except for gross
negligence or fraud.

  IV. PARTICIPATION

      All Eligible Directors, including any person who
becomes a Director after the effective date hereof,
shall be Participants in the Plan.

      Each Participant in the Plan shall have the
right to elect to defer the payment of all or any
part of his Compensation, with such Deferral Amount
to be payable at the time or times and in the manner
hereinafter stated.

      Each Participant who elects to defer the payment
of all or any part of his Compensation shall execute
and deliver to the Board of Directors a "Notice of
Election."  Such Notice will provide the percentage
of his Compensation to be deferred, the date such
deferral is to commence and the beneficiary
designations of the Director.  Such deferral election
shall be applicable only to Compensation earned by
reason of services rendered after the date of such
Notice.

      An election to defer Compensation shall continue
in effect until revoked or modified by a subsequent
"Notice of Election," provided however, (1) that
every election to defer shall be irrevocable as to
Compensation earned prior to the date of revocation
and (2) that such election may be changed no more
often than annually.  Revocation or modification
shall be made in writing to the Board of Directors
and shall be effective upon the date stated therein.

   V. VESTING OF DEFERRED COMPENSATION ACCOUNT

      A Participant's interest in his Deferred
Compensation Account shall vest immediately with
regard to Deferral Amounts and earnings thereon.

  VI. ACCOUNTS AND VALUATIONS

      A.  Deferred Compensation Accounts.  The
          Board of Directors shall establish and
          maintain a separate Deferred Compensation
          Account for each Participant.  The
          Participant's Deferral Amount shall be
          credited to the Participant's Deferred
          Compensation Account quarterly on the last
          business day of March, June, September, and
          December in amounts as nearly equal as
          possible.

      B.  Conversion to Investment Units.  At
          the time a Deferral Amount is credited to
          the Deferred Compensation Account, it shall
          be converted to Investment Units, by
          dividing the amount deferred by the Market
          Price of the Company's stock on the first
          trading day immediately preceding the
          deferral. Fractional share Investment Units
          will be maintained in the Account.

 VII. DIVIDEND EQUIVALENTS

      If a dividend is declared on the common stock of the
Company, an equivalent amount shall be credited to
the Participant's Deferred Compensation Account for
each Investment Unit.  Such amounts shall be
converted to additional Investment Units, pursuant to
Article VI.B.

VIII. DISTRIBUTION

      A.  Conversion of Investment Units to
          Dollars.  When a Participant leaves the
          Board of Directors, dies, or becomes
          disabled, Investment Units in the
          Participant's Deferred Compensation Account
          shall be converted into dollars, on the
          dates set forth below, based on the Market
          Price of the Company's common stock on the
          date of conversion.  If the New York Stock
          Exchange is not open that day, then it
          shall be the Market Price on the next day
          the New York Stock Exchange is open.
          During the period before conversion, if a
          dividend is declared on common stock of the
          Company, an equivalent amount shall be
          credited to the Participant's Deferred
          Compensation Account for each Investment
          Unit then remaining credited and not
          converted.  Such amounts shall be converted
          into additional Investment Units.

      B.  Payment.  On the day that is six full
          calendar months after the Participant's
          date of leaving the Board, death or
          disability, 20 percent of the value of the
          Investment Units credited to the
          Participant's Deferred Compensation Account
          shall be converted to dollars and paid to
          the Participant in substantially equal
          monthly payments over a one-year period
          (the "First Year Payout").  On the day that
          is one year after the date of the first
          conversion, 25 percent of the remaining
          value of the Investment Units shall be
          converted to dollars and paid to the
          Participant in substantially equal monthly
          payments over a one-year period (the
          "Second Year Payout").  The following year,
          33 1/3 percent of the remaining value shall
          be converted and paid out as above (the
          "Third Year Payout"), the fourth year, 50
          percent of the remaining value shall be
          paid out as the "Fourth Year Payout", and
          the fifth year, the remaining balance shall
          be paid out as the "Fifth Year Payout."  As
          indicated above, "dividends" shall be
          credited on Investment Units before they
          are converted, which shall be converted
          into additional Investment Units.  No
          interest will be paid on amounts in the
          Deferred Compensation Account.

      C.  Change in Control.  The terms of this
          Article VIII.C shall immediately become
          operative, without further action or
          consent by any person or entity, upon
          a Change in Control, and once operative
          shall supersede and take control over any
          other provisions of the Plan.

          Upon a Change in Control, all Investment
          Units in a Participant's Deferred Compensation
          Account shall be multiplied by the Market
          Price of the Company's common stock on
          such day.  If the New York Stock Exchange is
          not open on that day, then it shall be the
          Market Price on the next day the New York
          Stock Exchange is open. The dollar value
          of the Investment Units contained in each
          Participant's Deferred Compensation Account
          shall be paid out immediately thereafter to the
          Participant (a "Change in Control
          Payment").

          In addition, the Company shall pay to
          the Participant an additional payment (a
          "Gross-Up Payment") in an amount such that
          after payment by the Participant of all
          federal and state income taxes (including,
          without limitation, any and all federal and
          state income taxes imposed upon the Gross-
          Up Payment) the Participant retains an
          amount of the Gross-Up Payment equal to the
          federal and state income taxes imposed upon
          the Change in Control Payment.

          All determinations required to be made
          under this Article VIII.C, including when a
          Gross-Up Payment is required, the amount of
          such Gross-Up Payment, and the assumptions
          to be utilized in arriving at such
          determination, shall be made by a certified
          public accounting firm designated by the
          Participant (the "Accounting Firm"), which
          shall provide detailed supporting
          calculations both to the Company and the
          Participant within 15 business days of the
          receipt of notice from the Participant that
          there has been a Change in Control Payment
          (or such earlier time as is requested by
          the Company).  All fees and expenses of the
          Accounting Firm related to the calculations
          required by this Article VIII.C shall be
          borne solely by the Company.  Any Gross-Up
          Payment, as determined pursuant to this
          Article VIII.C, shall be paid by the
          Company to the Participant within five days
          of the receipt of the Accounting Firm's
          determination.  Any determination by the
          Accounting Firm shall be binding upon the
          Company and the Participant.

  IX. TAX WITHHOLDING UPON DISTRIBUTION

      To the extent required by law, the Company shall
withhold from payments made hereunder any taxes
required to be withheld by the federal or any state
or local government.

   X. COMMENCEMENT OF PAYMENTS

      Except as otherwise provided in this Plan,
commencement of payments under this Plan shall begin
as soon as administratively feasible after the value
of the Investment Units is determined according to
Article VIII.

  XI. BENEFICIARY DESIGNATION

      Each Participant shall have the right at any
time to designate any person or persons as
Beneficiary or Beneficiaries (both principal and
contingent) to whom payment under this Plan
shall be paid in the event of death prior to complete
distribution of the deferred amounts under the Plan.
Each beneficiary designation shall become effective
only when filed in writing with the Board of
Directors during the Participant's lifetime on a form
provided by the Board of Directors.

      The filing of a new beneficiary designation form
will cancel all beneficiary designations previously
filed.  Any finalized divorce of a Participant
subsequent to the date of filing of a beneficiary
designation form shall revoke such designation.  The
spouse of a married Participant domiciled in a
community property jurisdiction shall join in any
designation of Beneficiary or Beneficiaries other
than the spouse.

      If a Participant fails to designate a
Beneficiary as provided above or if the beneficiary
designation is revoked by divorce, or otherwise,
without execution of a new designation, or if all
designated Beneficiaries predecease the Participant
or die prior to complete distribution of the
Participant's benefits, then the distribution of such
benefits shall be made to the Participant's estate.

      If any distribution to a Beneficiary is to be
made in installments, and the primary Beneficiary
dies before receiving all installments, the remaining
installments, if any, shall be paid to the estate of
the primary Beneficiary in a lump sum.

 XII. AMENDMENT AND TERMINATION OF PLAN

      A.  Amendment.  The Company may at any time amend the
          Plan in whole or in part, provided,
          however, that except as provided in Article
          XII.B., no amendment shall act to reduce
          the benefits under the Plan payable to any
          Participant with respect to any Deferral
          Amount credited to the Participant's
          Deferred Compensation Account prior to the
          date of the amendment.  Written notice of
          any amendments shall be given to each
          Participant.

      B.  Termination of Plan

          1.  Company's Right to Terminate.  The Board of
              Directors may at any time terminate the Plan.

          2.  Payments Upon Termination.  Upon any
              termination of the Plan under this section
              no additional Deferral Amounts will be
              credited to the Participant's Deferred
              Compensation Account.  The Investment
              Units recorded in such Account shall be
              converted into dollars pursuant to Article
              VIII.A. and paid in a lump sum to the
              Participant or the Participant's Beneficiary.

XIII. MISCELLANEOUS

      A.  Unsecured General Creditor. Participants and
          their beneficiaries, heirs, successors, and
          assigns shall have no legal or equitable
          rights, interests, or other claims in any
          property or assets of the Company, nor
          shall they be beneficiaries of, or have any
          rights, claims, or interests in any
          specified assets of the Company.  Any and
          all of the Company's assets shall be and
          remain general, unpledged, unrestricted
          assets of the Company. The Company's
          obligation under the Plan shall be that
          of an unfunded and unsecured promise of
          Company to pay money in the future.

      B.  Obligations to the Company.  If a Participant
          becomes entitled to a distribution of benefits
          under the Plan, and if at such time the Participant
          has outstanding any debt, obligation, or other
          liability representing an amount owed to the
          Company, then the Company may offset such amounts
          owing it or an affiliate against the amount of
          benefits otherwise distributable.  Such determination
          shall be made by the Board of Directors.

          Establishment of this Plan and the participation by
          any person shall not be construed to confer any right
          on the part of such person to be nominated for
          reelection, or to be reelected, to the Board of
          Directors of the Company.

      C.  Nonassignability.  Neither a Participant nor any
          other person shall have any right to commute, sell,
          assign, transfer, pledge, anticipate, mortgage, or
          otherwise encumber, transfer, hypothecate, or convey
          in advance of actual receipt the amounts, if any,
          payable hereunder, or any part thereof, which are,
          and all rights to which are, expressly declared to be
          unassignable and nontransferable.  No part of the
          amounts payable shall, prior to actual payment, be
          subject to seizure or sequestration for the payment of
          any debts, judgments, alimony or separate maintenance
          owed by a Participant or any other person, nor be
          transferable by operation of law in the event of a
          Participant's or any other person's bankruptcy or
          insolvency.

      D.  Protective Provisions.  A Participant will cooperate
          with the Company by furnishing any and all information
          requested by the Company in order to facilitate the
          payment of any amounts hereunder.  If a Participant
          refuses to cooperate, the Company shall have no further
          obligation to the Participant under the Plan.

      E.  Gender, Singular and Plural.  Wherever the context
          so requires, words in the masculine include the feminine
          and words in the feminine include the masculine and the
          definition of any term in the singular may include the
          plural.

      F.  Captions.  The captions to the articles, sections,
          and paragraphs of this Plan are for convenience only and
          shall not control or affect the meaning or construction
          of any of its provisions.

      G.  Applicable Law.  This Plan shall be construed,
          administered and governed in accordance with the laws of
          the State of North Dakota.

      H.  Validity.  In the event any provision of this Plan
          is held invalid, void, or unenforceable, the same shall
          not affect, in any respect whatsoever, the validity of
          any other provision of this Plan.

      I.  Notice.  Any notice or filing required or
          permitted to be given to the  Board of Directors shall
          be sufficient if in writing and hand delivered, or sent
          by registered or certified mail, to the principal
          office of the Company, directed to the attention of
          the Secretary of the Company.  Such notice shall be
          deemed given as of the date of delivery or, if
          delivery is made by mail, as of the date shown on the
          postmark on the receipt for registration or
          certification.SEPARATION AGREEMENT AND RELEASE

     The following is a Separation Agreement and Release
("Agreement") between Douglas C. Kane, Executive Vice President,
Chief Administrative and Corporate Development Officer and
Director of MDU Resources Group, Inc. and as Director of all of
its subsidiaries and any other currently held positions within
Companies ("Douglas C. Kane") and MDU Resources Group, Inc.,
including all of its subsidiaries, divisions, affiliates, limited
liabilities corporations, partners, partnerships, foreign and
domestic, officers, directors, employees and agents, the
successors and assigns of MDU Resources Group, Inc.
("Companies").

     WHEREAS, Douglas C. Kane and Companies have agreed that,
effective October 31, 2002, Douglas C. Kane will voluntarily
resign from his position as Executive Vice President, Chief
Administrative and Corporate Development Officer and as Officer
and Director of Companies, the form of which resignation is
attached hereto as Exhibit A and is incorporated herein by
reference; and

     WHEREAS, effective November 1, 2002, Douglas C. Kane will be
employed by Companies in the position of Special Projects Advisor
to the Chief Executive Officer.  His employment in that position
will end effective May 31, 2004;

     WHEREAS, compensation for such position will be Twenty Two
Thousand Nine Hundred Sixteen Dollars and Sixty Seven Cents
($22,916.67) per month and other benefits as more fully described
in attachment Exhibit B.  Such sum will be paid in a payroll
check and subject to appropriate withholdings;

     WHEREAS, Douglas C. Kane and Companies desire to set forth
the terms and conditions of their agreement regarding Douglas C.
Kane's separation and release;

     NOW, THEREFORE, in consideration of the mutual covenants,
promises, and agreements contained in this Agreement, Douglas C.
Kane and Companies agree as follows:

     1.   Compensation.

          (a)  Salary.  Salary as Special Projects Advisor to the
Chief Executive Officer will be Twenty Two Thousand Nine Hundred
Sixteen Dollars and Sixty Seven Cents ($22,916.67) per month from
November 1, 2002 through May 31, 2004.

          (b)  Lump Sum Payment.  Companies will pay to Douglas
C. Kane as consideration for settlement and release of all
claims, including, but not limited to, all future participation
or distribution in various stock and bonus plans, the sum of One
Million Sixty Three Thousand and Three Hundred Thirty Three
Dollars ($1,063,333) less legally required deductions, including
deductions for federal income tax, FICA, and state income tax.
Said payment will be made on January 10, 2003, or upon the
expiration of the rescission period set forth in paragraph 4 of
this Agreement, whichever date is later.  Douglas C. Kane
acknowledges and agrees that this sum is good and adequate
consideration for this Agreement and is a sum to which he would
not otherwise be entitled.

          (c)  Other Benefits.  Other benefits are more fully set
forth in Exhibit B to this Agreement, which describes Douglas C.
Kane's and the Companies' agreement on those additional issues
and is incorporated herein by reference.

          (d)  Executive Incentive Compensation Plan.  Douglas C.
Kane will not participate or be eligible for participation in the
Executive Incentive Compensation Plan after October 31, 2002.

          (e)  1992 Key Employee Stock Option Plan.  The lump sum
payment described in paragraph 1(b) fully compensates Douglas C.
Kane for all participation in the 1992 Key Employee Stock Option
Plan through May 31, 2004.

          (f)  1997 Executive Long Term Incentive Plan.  The lump
sum payment described in paragraph 1(b) above fully compensates
him for any and all participation in this plan from the date of
this Agreement through May 31, 2004.  Douglas C. Kane shall
retain any options currently vested under this plan.  Any options
which are not currently vested are forfeited.

          (g)  1999 Accelerated Restricted Stock Program.  The
lump sum payment described in paragraph 1(b) above fully
compensates him for any and all participation in this plan
through May 31, 2004.

          (h)  Stock Options.  Termination of employment for
purposes of vested stock options will be May 31, 2004.

     2.   Release and Covenant Not to Sue.  In exchange for the
severance pay described in paragraph 1(b) and the terms of this
Agreement, Douglas C. Kane, on behalf of himself, his heirs,
executors, and administrators does fully release and discharge
the following entities and persons from all claims: the
Companies, their parents, affiliates, subsidiaries, related
companies, officers, shareholders, directors, employees, agents,
and insurers (hereinafter collectively referred to as
"Releasees").

     Douglas C. Kane understands and acknowledges that he is
releasing the Releasees from and against any and all claims,
demands, actions, liabilities, damages, or rights of any kind
through the date of this Release, whether known or unknown,
arising out of or resulting from Douglas C. Kane's hiring by
Companies, employment with Companies, separation of employment
and resignation from officer and director status with Companies,
and Douglas C. Kane's position as an officer with Companies.
Douglas C. Kane further agrees that he will not institute any
judicial proceedings against Releasees as a result of any claims
of any kind or character which Douglas C. Kane might have arising
out of or resulting from Douglas C. Kane's hiring by Companies,
employment with Companies, separation of employment and
resignation from employment with Companies, and Douglas C. Kane's
position as an officer with Companies.  This includes any claims
based upon:

     -    Federal, state or local employment discrimination laws,
          regulations or requirements, including Title VII of the Civil
          Rights Act, the Age Discrimination in Employment Act, the Older
          Workers Benefit Protection Act, the Americans with Disabilities
          Act, the North Dakota Discrimination Act.

     -    Any other statute, ordinance, or regulation;

     -    Any contract, quasi-contract or promissory estoppel;

     -    Any tort, including wrongful discharge, misrepresentation,
          fraud, infliction of emotional distress, or defamation; or

     -    Any other theory, whether developed or undeveloped.

     3.   Acceptance Period.  The terms of this Agreement will be
open for acceptance by Douglas C. Kane for a period of 21 days,
during which time he may consider whether or not to accept this
Agreement and consult his counsel to advise him regarding the
same.  Douglas C. Kane agrees that changes to this Agreement,
whether material or immaterial, will not restart this acceptance
period.

     4.   Right to Revoke.  Douglas C. Kane acknowledges that he
has the right to revoke this Agreement only insofar as it extends
to potential claims under the Age Discrimination and Employment
Act, by informing the Companies of his intent to revoke this
Agreement within seven (7) calendar days following his signing of
it.  Such revocation, if made, shall be in writing, and either
received by the Companies by the seventh day after signing or
postmarked by the seventh day with a simultaneous telephone
notification to Lester H. Loble, II, General Counsel at telephone
number 701-222-7880.  Douglas C. Kane agrees that if he exercises
this right of revocation, the Companies may, at their option,
either nullify this Agreement in its entirety or kept it in
effect as to all claims not revoked in accordance with the
revocation provisions of this Agreement.  In the event the
Companies opt to nullify the entire Agreement, neither Douglas C.
Kane nor the Companies will have any rights or obligations
whatsoever under this Agreement.

     5.   Nondisclosure of Proprietary and Trade Secret Business
Information.  Douglas C. Kane agrees to retain in strict
confidence and not to use in any way and to not disclose to any
persons any non-public, confidential, proprietary, or trade
secret information of Companies and Companies' affiliates, as
described in the North Dakota Uniform Trade Secret Act.  Douglas
C. Kane further acknowledges that he has returned to the
Companies all documents and information (including but not
limited to disk and information stored on the hard or soft drive
of any computer maintained by Douglas C. Kane) encompassing non-
public, confidential, proprietary, or trade secret information of
the Companies.

     6.   Return of Property  Douglas C. Kane acknowledges that
prior to October 31, 2002, he will have returned company property
in his possession that was used in his positions Executive Vice
President, Chief Administrative and Corporate Development Officer
and Director of MDU Resources Group, Inc. and as Director of all
of its subsidiaries and any other currently held positions within
Companies.  It is further agreed that Douglas C. Kane will vacate
his current office on the Companies' premises and have all
personalty removed from same by the close of business on
October 31, 2002.

          Douglas C. Kane will be provided a computer and
internet access from his office in his home to support his work
in the position of Special Projects Advisor to the Chief
Executive Officer and will perform his duties in that position
from his home office.

     7.   The parties will mutually agree on the wording of (1)
an announcement to the employees of Companies; (2) letter to the
directors of MDU Resource Group, Inc.; and (3) press release to
the media regarding Douglas C. Kane's leaving Companies as
Executive Vice President, Chief Administrative and Corporate
Development Officer and Director of MDU Resources Group, Inc.
including his position as Director of all of its subsidiaries.

     8.   Confidentiality.  Douglas C. Kane agrees to keep the
terms of this Agreement and the facts of this Agreement
confidential and agrees not to disclose any information
concerning this Agreement to any person other than his present or
future attorneys, accountants, tax advisors, investment advisors,
family, or in response to a court order, subpoena, or valid
inquiry by a government agency.  Companies agree to keep the
terms of this Agreement and the facts of this Agreement
confidential and agree not to disclose any information concerning
this Agreement to any person other than their present or future
attorneys, accountants, tax advisors, or in response to a law,
rule or regulation, court order, subpoena, or valid inquiry by a
government agency.

     9.   Nondisparagement.  The parties agree not to make any
disparaging or negative statements about each other which
includes Companies' parent, subsidiaries, successors and assigns,
affiliate and predecessor companies, and their successors and
assigns, and present and former officers, employees, directors
and agents and any of them whether in their individual or
official capacity.

     10.  No Admission of Wrongdoing.  Douglas C. Kane and
Companies agree that this Agreement is not an admission by
Douglas C. Kane or Companies of any acts that might be considered
a violation of federal, state, or local law, and that this
Agreement shall not be interpreted as such.

     11.  Change of Control Employment Agreement.  Douglas C.
Kane and MDU Resources Group Inc. are parties to a Change of
Control Employment Agreement dated November 1, 1998.  Douglas C.
Kane acknowledges that no "Change of Control" has occurred, as
that term is defined in that agreement and that agreement has no
force or effect.

     12.  Agreement Regarding No Right to Future Employment.
Douglas C. Kane's employment in the position as Special Projects
Advisor to the Chief Executive Office will end on May 31, 2004.
Douglas C. Kane agrees that he will not at any time in the future
bring a claim against Companies for any failure to offer him
future employment or failure to accept from him an application
for future employment with Companies.

     13.  Entire Agreement Amendment.  Douglas C. Kane
understands and represents that there is no Agreement or
understanding between him and Companies pertaining to his
retirement from employment and resignation from officer status
with Companies except what is set forth in this Agreement.
Douglas C. Kane and Companies agree that this Agreement can be
modified only in writing and that such writing must be signed by
Douglas C. Kane and an appropriate representative of Companies.

     14.  Severability.  Should any court of competent
jurisdiction or arbitrator determine that any term or provision
of this Agreement is unenforceable, such term or provision shall
be deemed to be deleted as though it had never been a part of
this Agreement, and the validity, legality, and enforceability of
the remaining terms and provisions shall not be in any way
affected or imperiled thereby.

     15.  Assignment.  This Agreement is personal to Douglas C.
Kane.  Douglas C. Kane may not assign any of his rights or
delegate any of his duties or obligations under this Agreement.
The payment to be provided to Douglas C. Kane shall be made to
his spouse, Nora L. Kane, in the event of his death prior to his
receipt thereof.

     16.  Enforceable Contract.  The laws of the state of North
Dakota shall govern this Agreement.  If any part of this
Agreement is construed to be a violation of any law, such part
shall be modified to achieve the objective of the parties to the
fullest extent permitted and the balance of this Agreement shall
remain in full force and effect.

     17.  Affirmation.  Douglas C. Kane affirms that he has read
this Agreement and has been advised to consult with an attorney
prior to signing this Agreement.  Douglas C. Kane acknowledges
that the provisions of the agreement are understandable to him
and that he has entered into this Agreement freely and
voluntarily.

Dated: October 18, 2002       /s/ DOUGLAS C. KANE
                                Douglas C. Kane

                              FOR THE COMPANIES

Dated: October 18, 2002       /s/ MARTIN A. WHITE
                              Martin A. White, President, Chief
                              Executive Officer and Chairman of
                              the Board

                            Exhibit A

    Resignation of Douglas C. Kane as Officer and Director of
    MDU Resources Group, Inc. and Companies, and acceptance of
           position as Special Projects Advisor to the
      Chief Executive Officer of MDU Resources Group, Inc.

     I, Douglas C. Kane, hereby resign from (1) my positions with
MDU Resources Group, Inc. as Executive Vice President, Chief
Administrative and Corporate Development Officer and Director;
and (2) from the Board of Directors of MDU Resources Group, Inc.
and from all the boards of its subsidiaries, affiliates, limited
liability corporations, partnerships and related entities, of
which I am a director effective October 31, 2002; (3) I hereby
accept the position of Special Projects Advisor to the Chief
Executive Officer effective November 1, 2002.

/s/ DOUGLAS C. KANE                     October 18, 2002
  Douglas C. Kane                            Dated

                            EXHIBIT B

                    SUMMARY OF OTHER BENEFITS
                         Douglas C. Kane
                         October 31, 2002

The following is a brief summary of benefit related items for
Douglas C. Kane.  Please refer to the "Benefit Status at
Employment Termination" sections of each Summary Plan Description
in Your Resources book for further details on most of these
benefits.  To the extent that the following is inconsistent with
the terms of the benefit plans, the plans govern.

     MEDICAL AND DENTAL INSURANCE
     Retiree medical coverage would become available to you,
     effective May 31, 2004, as long as it is a benefit offered
     through the company.  Our records indicate that you are
     currently enrolled in the Comp 400 plan with employee plus
     one coverage. The current monthly premium cost for medical
     coverage for an active employee with employee plus one
     coverage is $35.00. This premium is subject to change
     during annual renewal of benefits, which takes place during
     November of each year.

     Once you reach retirement age, you are eligible to continue
     medical coverage at the rate in effect at that time.

     Dental coverage would normally terminate effective May 31,
     2004.  However, you do have an option to elect COBRA
     continuation beyond May 31, 2004.  The COBRA continuation
     coverage is the same coverage as is in effect prior to your
     termination. Our records indicate that you are currently
     enrolled in the dental plan with family coverage. The
     current monthly premium cost for dental coverage for an
     active employee is with family coverage is $26.00.  This
     premium is subject to change during annual renewal of
     benefits, which takes place during November of each year.
     The monthly premium cost for dental COBRA continuation will
     be the COBRA premium in effect on May 31, 2004.  Currently,
     the period of time that coverage can be continued through
     COBRA is 18 months from the date of termination.

     A Notice of Election Form will be provided to you after
     your termination date of May 31, 2004. This form describes
     your option for election of continuation of this benefit.
     If you do not elect dental continuation coverage, dental
     coverage on your behalf will terminate effective May 31,
     2004.

     TAX-FREE OPTIONS PLAN
     Participation in the premium conversion portion of TOP will
     discontinue upon your termination on May 31, 2004.

     Participation in the health care spending portion of this
     plan would normally cease on the date of your termination.
     However, you do have an option to elect COBRA continuation
     beyond May 31, 2004.  The COBRA continuation coverage is
     the same coverage as in effect prior to your termination.
     Currently, the period of time that coverage can be
     continued through COBRA is 18 months from the date of
     termination.

     LIFE INSURANCE
     The $100,000 non-contributory life insurance you are
     currently insured for will cease upon your termination,
     May 31, 2004.

     Our records indicate you are currently insured for $200,000
     contributory life insurance. The amount of contributory
     life insurance you are insured for on May 31, 2004, can be
     continued as a retiree benefit.  However, the coverage will
     decrease to 25% of the amount in effect immediately prior
     to retirement.  The premium to continue this benefit will
     be the premiums in effect May 31, 2004.

     VOLUNTARY AD&D INSURANCE
     You earlier waived participation in this plan.

     VACATION
     You will be paid for your accrued and used vacation balance
     as of October 31, 2002. Additional vacation that is accrued
     during the employment continuation period will be recorded
     as used to reflect a balance of zero as of May 31, 2004.

     UTILITY DISCOUNT
     In accordance with company policy, the utility discount of
     33 1/3 percent will remain in effect during the employment
     continuation period, as long as it is offered as an active
     employee benefit. This will be extended to you as a retiree
     benefit, effective May 31, 2004, as long as you remain in a
     service area and the benefit continues to be extended to
     retirees.

     401(k) PLAN
     Upon termination of your employment on May 31, 2004, you
     will be eligible to rollover the amount in your 401(k) Plan
     account into a self-directed retirement account or to take
     distribution of your 401(k) Plan account.  If you elect
     distribution of your account, the portion of your account
     invested in MDU Resources common stock will be distributed
     in the form of a stock certificate.  All other investments
     in the Plan will be distributed in the form of cash.

     To request a distribution, you will need to use Benefits
     Complete at (800) 294-3575, which will provide you the
     appropriate forms you will need to complete indicating the
     specifics of your request.  For access to your account,
     have your PIN and Social Security number available.
     Distributions are made as soon as administratively feasible
     upon request.  If you do not request a distribution prior
     to your 65th birthday, distribution will automatically be
     made as soon as administratively possible following your
     65th birthday.

     PENSION PLAN
     Under current provisions of the pension plan, there are two
     options of settlement of pension benefits available upon
     your termination of employment, effective May 31, 2004: 1)
     an immediate monthly pension benefit, or 2) a deferred
     monthly pension benefit to begin no earlier than age 55 and
     no later than age 65.  The following are the estimated
     benefits under the above-referred options using a
     termination date of May 31, 2004.

     In calculating the estimated benefit, the 2002 interest
     rate factors, IRS maximum recognizable compensation, and
     integration factor were used.  Since distribution will be
     made after 2002, the sum could vary depending on the
     interest rate factors, maximum recognizable compensation,
     and integration factor in effect for the year of
     distribution.

     Pension elections forms must be completed and returned to
     MDU Resources Group, Inc. benefits department in order to
     commence your benefits.  These must be received into the
     benefit department no later than May 15, 2004, if you wish
     to commence benefits June 1, 2004.

                         Age 55 0 Months
                          May 31, 2004

                                  Actuarial    Benefit
     Forms of Payment               Factor     Amount

     Straight Life                  1.000      $5,994.47
     Ten Year Certain & Life        0.973      $5,832.62
     Qualified Joint & Survivor     0.950      $5,694.75
     Joint & Two-Thirds             0.950      $5,694.75

     If you commence monthly pension benefits prior to age 60,
     assuming you are least age 55, the pension amount is
     reduced by one-fourth of one percent per month, dating
     backward from your 60th birthday.

     SUPPLEMENTAL INCOME SECURITY PLAN (SISP)
     You are 100% vested in the SISP at level 63 which would
     provide $125,700 per year in retirement benefits payable
     for 15 years as early as age 65 or $251,400 per year as a
     death benefit payable for 15 years.  Please refer to the
     Summary Plan Description Booklet, previously provided to
     you for details on SISP benefits.

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