Document:

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.
        (the
        "Company") and any subsidiaries participating in the Plan (each a "Subsidiary",
        and together, the "Subsidiaries") 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") of the Company 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. 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 of the Company or the Subsidiaries who are determined by the
        Committee to have a key role in both the establishment and achievement of
        Company and/or Subsidiary 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
        or
        any Subsidiary to terminate any Participant's employment at any time, for
        any
        reason or no reason in the Company's or a Subsidiary's sole discretion, or
        confer upon any Participant any right to continue in the employment of the
        Company or any Subsidiary. 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. 

      The
        performance measure reflective of shareholders' interest will be the percentage
        attainment of corporate goals, as determined each year by the Committee.
        This
        measure may be applied at the Company level for some individuals, such as
        the
        President, whose major or sole impact is Company-wide, or at the Subsidiary
        level for individuals whose major or sole impact is on Subsidiary
        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. 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 a Subsidiary's objectives. A schedule showing the target
        awards
        as a percentage of Salary for eligible positions will be prepared by the
        Committee for 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.

      After
        the
        close of each Plan Year, the Company will prepare an analysis showing the
        Company's and each Subsidiary'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.

      

      VIII.     INDIVIDUAL
        AWARD DETERMINATION

      Each
        individual Participant's award will be based first upon the level of performance
        achieved by the Company and/or the Subsidiary and secondly based upon the
        individual's performance. The criteria applicable for assessing individual
        performance will be approved by the Committee no later than its regularly
        scheduled February meeting during the 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 Subsidiary 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 the Subsidiary for the entire Plan Year. 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 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.

      A
        Participant who transfers between the Company or a Subsidiary and another
        company in the MDU Resources Group, Inc. system 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 will be made in cash no later than March 15 of the year
        following the end of the calendar year for which the award is earned. Incentive
        awards may be deferred if the appropriate elections have been executed on
        or
        prior to December 31 of the year preceding the Plan Year for which such
        incentive awards are earned or, if later, within 30 days after a Participant
        first becomes eligible for the Plan. 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), any award deferred by a 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, 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.

      

      X.     ACCOUNTING
        RESTATEMENTS.
        This
        Section X shall apply only to incentive awards granted to Participants in
        the
        Plan who are employees of the Company. Notwithstanding anything in the Plan
        or
        the Plan's Rules and Regulations to the contrary, if the Company's audited
        financial statements are restated, the Committee may, in accordance with
        the
        Company's Guidelines
        for Repayment of Incentives Due to Accounting Restatements,
        take
        such actions as it deems appropriate (in its sole discretion) with respect
        to

      (a) unpaid
        incentive awards under the Plan (including incentive awards relating to
        completed Plan Years, but with respect to which payments have not yet been
        made
        or deferred) ("Outstanding Awards") and 

      (b) prior
        incentive awards that were paid (or deferred) within the 3 year period preceding
        the restatement ("Prior Awards"), provided such Prior Awards were not paid
        prior
        to the date the Plan was amended to add this Section X, 

      if
        the
        calculation of the amounts payable, paid or deferred under such awards are,
        or
        would have been, directly impacted by the restatement, including, without
        limitation, (i) securing (or causing to be secured) repayment of some or
        all
        payments made pursuant to (or deferrals relating to) Prior Awards, (ii) making
        (or causing to be made) additional payments (or crediting additional deferrals),
        (iii) reducing or otherwise adjusting the amount payable pursuant to Outstanding
        Awards and/or (iv) causing the forfeiture of Outstanding Awards. The Committee
        may, in its sole discretion, take different actions pursuant to this Section
        X
        with respect to different awards, different Participants (or beneficiaries)
        and/or different classes of awards or Participants (or beneficiaries). The
        Committee has no obligation to take any action permitted by this Section
        X. The
        Committee may consider any factors it chooses in taking (or determining whether
        to take) any action permitted by this Section X, including, without limitation,
        the following:

      (A) The
        reason for the restatement of the financial statements;

      (B) The
        amount of time between the initial publication and subsequent restatement
        of the
        financial statements; and

      (C) The
        Participant's current employment status, and the viability of successfully
        obtaining repayment.

      If
        the
        Committee requires repayment of all or part of a Prior Award, the amount
        of
        repayment may be based on, among other things, the difference between the
        amount
        paid to the individual and the amount that the Committee determines in its
        sole
        discretion should have been paid based on the restated results. The Committee
        shall determine whether repayment shall be effected (i) by seeking repayment
        from the Participant, (ii) by reducing (subject to applicable law and the
        terms
        and conditions of the applicable plan, program or arrangement) the amount
        that
        would otherwise be provided to the Participant under any compensatory plan,
        program or arrangement maintained by the Company or any of its affiliates,
        (iii)
        by withholding payment of future increases in compensation (including the
        payment of any discretionary bonus amount) or grants of compensatory awards
        that
        would otherwise have been made in accordance with the Company's otherwise
        applicable compensation practices, or (iv) by any combination of the foregoing.
        Additionally, by accepting an incentive award under the Plan, Participants
        acknowledge and agree that the Committee may take any actions permitted by
        this
        Section X with respect to Outstanding Awards to the extent repayment is to
        be
        made pursuant to another plan, program or arrangement maintained by the Company
        or any of its affiliates.

      

      

      WBI
        HOLDINGS, INC. 

      EXECUTIVE
        INCENTIVE COMPENSATION PLAN

      RULES
        AND REGULATIONS

      

      The
        Compensation Committee of the Board of Directors of WBI Holdings, Inc. (formerly
        known as Williston Basin Interstate Pipeline Company) (the "Company") hereby
        adopts the following Rules and Regulations for the administration of the
        Executive Incentive Compensation Plan (the "Plan"). 

      

      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
                  "Committee" shall be the Compensation Committee of the Board of
                  Directors
                  of the Company.

              

      

      

      
        	 	
                2.

              	
                The
                  "Company" shall refer to WBI Holdings,
                  Inc.

              

      

      

      
        	 	
                3.

              	
                "Participants"
                  for any Plan Year shall be those key executives of the Company
                  or
                  Subsidiaries 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 IX of the Plan and
                  Section
                  VII of these Rules and Regulations, which shall be no later than
                  March 15
                  of the year following the end of the calendar year for which the
                  award is
                  earned.

              

      

      

      
        	 	
                5.

              	
                The
                  "Plan" shall refer to the WBI Holdings, Inc. 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 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.

              

      

      

      
        	 	
                8.

              	
                The
                  "Prime Rate" shall be the base rate on corporate loans posted by
                  at least
                  75 percent of the nation's largest banks as reported 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, MDU Resources
                  Group,
                  Inc. or any subsidiary of MDU Resources Group,
                  Inc.

              

      

      

      
        	 	
                10.

              	
                "Subsidiary"
                  means any subsidiary of the Company participating in the
                  Plan.

              

      

      

      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 that
                  member's 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.

              

      

      

      
        	 	
                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.

              

      

      

      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
                  a Subsidiary.

              

      

      

      
        	 	 	
                3.

              	
                Individual
                  performance will be assessed based on the achievement of annually
                  established individual objectives.

              

      

      

      
        	 	 	
                4.

              	
                Plan
                  performance measures may be applied at the Company level for individuals
                  such as the President whose major or sole impact is Company-wide,
                  or at
                  the Subsidiary level for individuals whose major or sole impact
                  is on
                  Subsidiary results. The Annual Operating Plan shall contain a list
                  of
                  individuals to whom the Plan performance measures will be applied
                  at the
                  Company level and a list of those individuals for whom the Plan
                  performance measures will be applied at the Subsidiary level. The
                  relevant
                  Subsidiary for each individual will be
                  identified.

              

      

      

      
        	 	 	
                5.

              	
                The
                  Committee shall set threshold, target and maximum award levels
                  for the
                  performance measures for each Subsidiary 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.

              

      

      

      
        	 	
                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
                  and each
                  Subsidiary's performance in relation to the performance measures.
                  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/or the Subsidiary
                  and
                  secondly 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 or Subsidiary
                  performance.

              

      

      

      VII.     PAYMENT
        OF AWARDS

      

      
        	 	
                1.

              	
                On
                  the date the 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 the Company or the Subsidiary for the entire Plan
                  Year.

              

      

      

      
        	 	
                3.

              	
                A
                  Participant who transfers between the Company or a Subsidiary and
                  another
                  company in the MDU Resources Group, Inc. system may receive a prorated
                  award at the discretion of the
                  Committee.

              

      

      

      
        	 	
                4.

              	
                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 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.

              

      

      

      
        	 	
                5.

              	
                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 provided
                  by the
                  Company, on or prior to December 31 of the year preceding the Plan
                  Year
                  for which such incentive awards are earned or, if later, within
                  30 days
                  after a Participant first becomes eligible for the
                  Plan.

              

      

      

      
        	 	
                6.

              	
                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 amount of the Participant's award to the extent deferred
                  will be
                  credited to the Participant's account on the Payment
                  Date.

              

      

      

      
        	 	
                7.

              	
                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.

              

      

       

      
        	 	
                8.

              	
                Interest
                  shall accrue on the balance credited to a Participant's account
                  from the
                  date the balance is credited. The rate of interest shall be the
                  Prime Rate
                  plus 1 percentage point as reported on the last business day of the
                  preceding year to be effective on January 1 of each new Plan
                  Year.

              

      

      

      
        	 	
                9.

              	
                Interest
                  shall be compounded and credited to the account
                  monthly.

              

      

      

            10.   A
        Participant may elect to defer any percentage, not to exceed l00, of an annual
        award.

       

       11.   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.

              

      

      

      
        	 	 	
                12.

              	
                At
                  the same time a Participant makes a deferral election, 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.

              

      

      

      
        	 	 	
                13.

              	
                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.

              

      

      

      
        	 	 	
                14.

              	
                In
                  the event of a "Change in Control" any award deferred by a Participant
                  shall become immediately payable to the Participant. In the event
                  the
                  Participant files suit to collect a deferred award, 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.Knife River EICP Plan and Rules & Regulations

    

      KNIFE
        RIVER CORPORATION

      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 Knife River Corporation (the "Company")
        and
        any subsidiaries participating in the Plan (each a "Subsidiary", and together,
        the "Subsidiaries") 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") of the Company 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. 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 of the Company or the Subsidiaries who are determined by the
        Committee to have a key role in both the establishment and achievement of
        Company and/or Subsidiary 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
        or
        any Subsidiary to terminate any Participant's employment at any time, for
        any
        reason or no reason in the Company's or a Subsidiary's sole discretion, or
        confer upon any Participant any right to continue in the employment of the
        Company or any Subsidiary. 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. 

      The
        performance measure reflective of shareholders' interest will be the percentage
        attainment of corporate goals, as determined each year by the Committee.
        This
        measure may be applied at the Company level for some individuals, such as
        the
        President, whose major or sole impact is Company-wide, or at the Subsidiary
        level for individuals whose major or sole impact is on Subsidiary
        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. 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 a Subsidiary's objectives. A schedule showing the target
        awards
        as a percentage of Salary for eligible positions will be prepared by the
        Committee for 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.

      After
        the
        close of each Plan Year, the Company will prepare an analysis showing the
        Company's and each Subsidiary'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.

      

      

      VIII.   INDIVIDUAL
        AWARD DETERMINATION

      Each
        individual Participant's award will be based first upon the level of performance
        achieved by the Company and/or the Subsidiary and secondly based upon the
        individual's performance. The criteria applicable for assessing individual
        performance will be approved by the Committee no later than its regularly
        scheduled February meeting during the 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 Subsidiary 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 the Subsidiary for the entire Plan Year. 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 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.

      A
        Participant who transfers between the Company or a Subsidiary and another
        company in the MDU Resources Group, Inc. system 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 will be made in cash no later than March 15 of the year
        following the end of the calendar year for which the award is earned. Incentive
        awards may be deferred if the appropriate elections have been executed on
        or
        prior to December 31 of the year preceding the Plan Year for which such
        incentive awards are earned or, if later, within 30 days after a Participant
        first becomes eligible for the Plan. 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), any award deferred by a 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, 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.

      

      X.     ACCOUNTING
        RESTATEMENTS 

      This
        Section X shall apply only to incentive awards granted to Participants in
        the
        Plan who are employees of the Company. Notwithstanding anything in the Plan
        or
        the Plan's Rules and Regulations to the contrary, if the Company's audited
        financial statements are restated, the Committee may, in accordance with
        the
        Company's Guidelines
        for Repayment of Incentives Due to Accounting Restatements,
        take
        such actions as it deems appropriate (in its sole discretion) with respect
        to

      (a) unpaid
        incentive awards under the Plan (including incentive awards relating to
        completed Plan Years, but with respect to which payments have not yet been
        made
        or deferred) ("Outstanding Awards") and 

      (b) prior
        incentive awards that were paid (or deferred) within the 3 year period preceding
        the restatement ("Prior Awards"), provided such Prior Awards were not paid
        prior
        to the date the Plan was amended to add this Section X, 

      if
        the
        calculation of the amounts payable, paid or deferred under such awards are,
        or
        would have been, directly impacted by the restatement, including, without
        limitation, (i) securing (or causing to be secured) repayment of some or
        all
        payments made pursuant to (or deferrals relating to) Prior Awards, (ii) making
        (or causing to be made) additional payments (or crediting additional deferrals),
        (iii) reducing or otherwise adjusting the amount payable pursuant to Outstanding
        Awards and/or (iv) causing the forfeiture of Outstanding Awards. The Committee
        may, in its sole discretion, take different actions pursuant to this Section
        X
        with respect to different awards, different Participants (or beneficiaries)
        and/or different classes of awards or Participants (or beneficiaries). The
        Committee has no obligation to take any action permitted by this Section
        X. The
        Committee may consider any factors it chooses in taking (or determining whether
        to take) any action permitted by this Section X, including, without limitation,
        the following:

      (A) The
        reason for the restatement of the financial statements;

      (B) The
        amount of time between the initial publication and subsequent restatement
        of the
        financial statements; and

      (C) The
        Participant's current employment status, and the viability of successfully
        obtaining repayment.

      If
        the
        Committee requires repayment of all or part of a Prior Award, the amount
        of
        repayment may be based on, among other things, the difference between the
        amount
        paid to the individual and the amount that the Committee determines in its
        sole
        discretion should have been paid based on the restated results. The Committee
        shall determine whether repayment shall be effected (i) by seeking repayment
        from the Participant, (ii) by reducing (subject to applicable law and the
        terms
        and conditions of the applicable plan, program or arrangement) the amount
        that
        would otherwise be provided to the Participant under any compensatory plan,
        program or arrangement maintained by the Company or any of its affiliates,
        (iii)
        by withholding payment of future increases in compensation (including the
        payment of any discretionary bonus amount) or grants of compensatory awards
        that
        would otherwise have been made in accordance with the Company's otherwise
        applicable compensation practices, or (iv) by any combination of the foregoing.
        Additionally, by accepting an incentive award under the Plan, Participants
        acknowledge and agree that the Committee may take any actions permitted by
        this
        Section X with respect to Outstanding Awards to the extent repayment is to
        be
        made pursuant to another plan, program or arrangement maintained by the Company
        or any of its affiliates.

      

      

      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
        adopts the following Rules and Regulations for the administration of the
        Executive Incentive Compensation Plan (the "Plan").

       

      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
                  "Committee" shall be the Compensation Committee of the Board of
                  Directors
                  of the Company.

              

      

      

      
        	 	
                2.

              	
                The
                  "Company" shall refer to Knife River
                  Corporation.

              

      

      

      
        	 	
                3.

              	
                "Participants"
                  for any Plan Year shall be those key executives of the Company
                  or
                  Subsidiaries 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 IX of the Plan and
                  Section
                  VII of these Rules and Regulations, which shall be no later than
                  March 15
                  of the year following the end of the calendar year for which the
                  award is
                  earned.

              

      

      

      
        	 	
                5.

              	
                The
                  "Plan" shall refer to the Knife River Corporation 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 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.

              

      

      

      
        	 	
                8.

              	
                The
                  "Prime Rate" shall be the base rate on corporate loans posted by
                  at least
                  75 percent of the nation's largest banks as reported 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, MDU Resources
                  Group,
                  Inc. or any Subsidiary of MDU Resources Group,
                  Inc.

              

      

      

      
        	 	
                10.

              	
                "Subsidiary"
                  means any Subsidiary of the Company participating in the
                  Plan.

              

      

       

      
        	
                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 that
                  member's 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.

              

      

      

      
        	 	
                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.

              

      

      

      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
                  a Subsidiary.

              

      

      

      
        	 	
                3.

              	
                Individual
                  performance will be assessed based on the achievement of annually
                  established individual objectives.

              

      

      

      
        	 	
                4.

              	
                Plan
                  performance measures may be applied at the Company level for individuals
                  such as the President whose major or sole impact is Company-wide,
                  or at
                  the Subsidiary level for individuals whose major or sole impact
                  is on
                  Subsidiary results. The Annual Operating Plan shall contain a list
                  of
                  individuals to whom the Plan performance measures will be applied
                  at the
                  Company level and a list of those individuals for whom the Plan
                  performance measures will be applied at the Subsidiary level. The
                  relevant
                  Subsidiary for each individual will be
                  identified.

              

      

      

      
        	 	
                5.

              	
                The
                  Committee shall set threshold, target and maximum award levels
                  for the
                  performance measures, for each Subsidiary 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.

              

      

      

      
        	 	
                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
                  and each
                  Subsidiary's performance in relation to the performance measures.
                  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/or the Subsidiary
                  and
                  secondly 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 or Subsidiary
                  performance.

              

      

      

      
        	
                VII.

              	
                PAYMENT
                  OF AWARDS

              

      

      

      
        	 	
                1.

              	
                On
                  the date the 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 the Company or the Subsidiary for the entire Plan
                  Year.

              

      

      

      
        	 	
                3.

              	
                A
                  Participant who transfers between the Company or a Subsidiary and
                  another
                  company in the MDU Resources Group, Inc. system may receive a prorated
                  award at the discretion of the
                  Committee.

              

      

      

      
        	 	
                4.

              	
                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 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.

              

      

      

      
        	 	
                5.

              	
                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 provided by the Company, on or prior to December
                  31 of the
                  year preceding the Plan Year for which such incentive awards are
                  earned
                  or, if later, within 30 days after a Participant first becomes
                  eligible
                  for the Plan.

              

      

      

      
        	 	
                6.

              	
                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 amount of the Participant's award to the extent deferred
                  will be
                  credited to the Participant's account on the Payment Date.
                  

              

      

      

      
        	 	
                7.

              	
                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. 

              

      

      

      
        	 	
                8.

              	
                Interest
                  shall accrue on the balance credited to a Participant's account
                  from the
                  date the balance is credited. The rate of interest shall be the
                  Prime Rate
                  plus 1 percentage point as reported on the last business day of the
                  preceding year to be effective on January 1 of each new Plan
                  Year.

              

      

      

      
        	 	
                9.

              	
                Interest
                  shall be compounded and credited to the account
                  monthly.

              

      

      

      
        	 	
                 
                  10.

              	
                A
                  Participant may elect to defer any percentage, not to exceed 100,
                  of an
                  annual award.

              

      

      

      
        	 	
                 
                  11.

              	
                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.

              

      

      

      
        	 	
                12.

              	
                At
                  the same time a Participant makes a deferral election, 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.

              

      

      

      
        	 	
                13.

              	
                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.

              

      

      

      
        	 	
                14.

              	
                In
                  the event of a "Change in Control" any award deferred by a Participant
                  shall become immediately payable to the Participant. In the event
                  the
                  Participant files suit to collect a deferred award, 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.

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