Document:

MDU RESOURCES GROUP, INC.
       1997 NON-EMPLOYEE DIRECTOR LONG-TERM INCENTIVE PLAN

Article 1. Establishment, Purpose and Duration

     1.1  Establishment of the Plan. MDU Resources Group, Inc., a
Delaware  corporation (hereinafter referred to as the "Company"),
hereby  establishes an incentive plan to be  known  as  the  "MDU
Resources   Group,  Inc.  1997  Non-Employee  Director  Long-Term
Incentive Plan" (hereinafter referred to as the "Plan"),  as  set
forth   in  this  document.   The  Plan  permits  the  grant   of
Nonqualified  Stock  Options (NQSO),  Stock  Appreciation  Rights
(SAR),  Restricted  Stock, Performance Units, Performance  Shares
and other awards.

     The  Plan  shall  become effective  when  approved  by  the
stockholders  at  the  annual meeting on  April  22,  1997,  (the
"Effective  Date"),  and shall remain in effect  as  provided  in
Section 1.3 herein.

     1.2   Purpose of the Plan.  The purpose of the Plan  is  to
promote  the  success and enhance the value  of  the  Company  by
linking  the  personal  interests of  Participants  to  those  of
Company stockholders and customers.  The Plan is further intended
to  assist  the Company in its ability to motivate,  attract  and
retain highly qualified individuals to serve as directors of  the
Company.

     1.3  Duration of the Plan.  The Plan shall commence on  the
Effective  Date,  as described in Section 1.1 herein,  and  shall
remain  in effect, subject to the right of the Board of Directors
to  terminate the Plan at any time pursuant to Article 14 herein,
until  all  Shares  subject to it shall have  been  purchased  or
acquired according to the Plan's provisions.

Article 2. Definitions

     Whenever  used in the Plan, the following terms shall  have
the  meanings set forth below and, when such meaning is intended,
the initial letter of the word is capitalized:

     2.1   "Award" means, individually or collectively, a  grant
under  the  Plan  of  NQSOs, SARs, Restricted Stock,  Performance
Units,  Performance Shares or any other type of  award  permitted
under Article 10 of the Plan.

     2.2   "Award Agreement" means an agreement entered into  by
each  Participant and the Company, setting forth  the  terms  and
provisions applicable to an Award granted to a Participant  under
the Plan.

     2.3   "Base Value" of an SAR shall have the meaning set forth
in Section 7.1 herein.

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

     2.5   "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 such that, during any period of two (2)
consecutive  years,  individuals who at  the  beginning  of  such
period constitute the Board 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 at least two-thirds  (2/3)  of  the
Directors then still in office who were members of the  Board  at
the  beginning of the period; (e) any other event which shall  be
deemed by a majority of the Committee to constitute a "change  in
control".

     2.6   "Code"  means the Internal Revenue Code of  1986,  as
amended from time to time.

     2.7   "Committee"  means  the Committee,  as  specified  in
Article  3,  appointed by the Board to administer the  Plan  with
respect to Awards.

     2.8   "Company" means MDU Resources Group, Inc., a Delaware
corporation, or any successor thereto as provided in  Article  15
herein.

     2.9   "Director" means any individual who is a member of the
Board of Directors of the Company.

     2.10  "Dividend Equivalent" means, with respect  to  Shares
subject  to  an  Award, a right to be paid  an  amount  equal  to
dividends declared on an equal number of outstanding Shares.

     2.11  "Employee" means any full-time or regularly-scheduled
part-time   employee  of  the  Company  or   of   the   Company's
Subsidiaries,  who  is  not covered by any collective  bargaining
agreement  to which the Company or any of its Subsidiaries  is  a
party.

     2.12  "Exchange Act" means the Securities Exchange  Act  of
1934, as amended from time to time, or any successor act thereto.

     2.13  "Exercise Period" means the period during which an SAR
or  Option  is  exercisable, as set forth in  the  related  Award
Agreement.

     2.14  "Fair Market Value" shall mean the average of the high
and  low  sale prices as reported in the consolidated transaction
reporting  system or, if there is no such sale  on  the  relevant
date, then on the last previous day on which a sale was reported.

     2.15  "Freestanding  SAR" means  an  SAR  that  is  granted
independently of any Option.

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

     2.17  "Nonqualified Stock Option" or "NQSO" means an option
to  purchase Shares, granted under Article 6 herein, which is not
intended to be an Incentive Stock Option under Section 422 of the
Code.

     2.18  "Option" means a Nonqualified Stock Option.

     2.19  "Option Price" means the price at which a Share may be
purchased  by a Participant pursuant to an Option, as  determined
by the Committee and set forth in the Option Award Agreement.

     2.20  "Participant" means a Non-Employee Director  who  has
outstanding an Award granted under the Plan.

     2.21  "Performance  Unit"  means  an  Award  granted  to  a
Participant, as described in Article 9 herein.

     2.22  "Performance  Share" means  an  Award  granted  to  a
Participant, as described in Article 9 herein.

     2.23  "Period of Restriction" means the period during which
the  transfer  of  Restricted Stock is limited in  some  way,  as
provided in Article 8 herein.

     2.24  "Person" shall have the meaning ascribed to such  term
in Section 3(a)(9) of the Exchange Act, as used in Sections 13(d)
and 14(d) thereof, including usage in the definition of a "group"
in Section 13(d) thereof.

     2.25  "Restricted Stock" means an Award of Shares granted to
a Participant pursuant to Article 8 herein.

     2.26  "Shares"  means the shares of  common  stock  of  the
Company.

     2.27  "Stock  Appreciation Right" or "SAR" means  a  right,
granted  alone or in connection with a related Option, designated
as  an  SAR,  to  receive  a payment on  the  day  the  right  is
exercised, pursuant to the terms of Article 7 herein.   Each  SAR
shall be denominated in terms of one Share.

     2.28  "Subsidiary"  means  any  corporation  that   is   a
"subsidiary corporation" of the Company as that term  is  defined
in Section 424(f) of the Code.

     2.29  "Tandem SAR" means an SAR that is granted in connection
with  a  related  Option,  the exercise of  which  shall  require
forfeiture  of  the right to purchase a Share under  the  related
Option  (and  when  a Share is purchased under  the  Option,  the
Tandem SAR shall be similarly canceled).

Article 3. Administration

     3.1   The Committee.  The Plan shall be administered by  any
committee  appointed by the Board or by the  Board  of  Directors
(the "Committee").

     3.2   Authority of the Committee.  The Committee shall have
full   power   except  as  limited  by  law,  the   Articles   of
Incorporation  and  the Bylaws of the Company,  subject  to  such
other restricting limitations or directions as may be imposed  by
the  Board and subject to the provisions herein, to determine the
size  and  types of Awards; to determine the terms and conditions
of  such Awards in a manner consistent with the Plan; to construe
and  interpret  the Plan and any agreement or instrument  entered
into  under  the  Plan; to establish, amend or  waive  rules  and
regulations  for the Plan's administration; and (subject  to  the
provisions  of  Article  14  herein)  to  amend  the  terms   and
conditions  of  any  outstanding Award.  Further,  the  Committee
shall  make  all other determinations which may be  necessary  or
advisable  for the administration of the Plan.  As  permitted  by
law,  the  Committee may delegate its authorities  as  identified
hereunder.

     3.3   Restrictions on Share Transferability.  The Committee
may  impose such restrictions on any Shares acquired pursuant  to
Awards  under  the  Plan  as  it may deem  advisable,  including,
without   limitation,  restrictions  to  comply  with  applicable
Federal  securities  laws,  with the requirements  of  any  stock
exchange or market upon which such Shares are then listed  and/or
traded  and with any blue sky or state securities laws applicable
to such Shares.

     3.4   Approval.  The Committee or the Board shall approve all
Awards   made   under  the  Plan  and  all  elections   made   by
Participants,  prior  to  their effective  date,  to  the  extent
necessary to comply with Rule 16b-3 under the Exchange Act.

     3.5   Decisions Binding.  All determinations and  decisions
made by the Committee pursuant to the provisions of the Plan  and
all  related orders or resolutions of the Board shall  be  final,
conclusive and binding on all persons, including the Company, its
stockholders, Participants and their estates and beneficiaries.

     3.6   Costs.   The  Company  shall  pay  all   costs   of
administration of the Plan.

Article 4. Shares Subject to the Plan

     4.1   Number of Shares.  Subject to Section 4.2 herein,  the
maximum number of Shares available for grant under the Plan shall
be  300,000.   Shares underlying lapsed or forfeited  Awards,  or
Awards  that  are  not paid in Shares, may be  reused  for  other
Awards.   Shares  granted  pursuant  to  the  Plan  may  be   (i)
authorized  but  unissued Shares of Common Stock,  (ii)  treasury
shares, or (iii) shares purchased on the open market.

     4.2   Adjustments in Authorized Shares.  In the event of any
merger,    reorganization,    consolidation,    recapitalization,
separation,   liquidation,   stock  dividend,   split-up,   share
combination  or  other change in the corporate structure  of  the
Company  affecting the Shares, such adjustment shall be  made  in
the  number and class of Shares which may be delivered under  the
Plan,  and  in  the number and class of and/or  price  of  Shares
subject to outstanding Awards granted under the Plan, as  may  be
determined  to be appropriate and equitable by the Committee,  in
its  sole  discretion,  to  prevent dilution  or  enlargement  of
rights;  provided, however, that the number of Shares subject  to
any Award shall always be a whole number.

Article 5. Eligibility and Participation

     5.1   Eligibility.  Persons eligible to participate in  the
Plan  are any persons elected or appointed to the Board  who  are
not Employees.

     5.2   Actual Participation.  Subject to the provisions of the
Plan,  the  Committee  may, from time to time,  select  from  all
eligible  Non-Employee Directors those to whom  Awards  shall  be
granted and shall determine the nature and amount of each Award.

Article 6. Stock Options

     6.1   Grant of Options.  Subject to the terms and conditions
of the Plan, Options may be granted to a Non-Employee Director at
any  time  and from time to time, as shall be determined  by  the
Committee.

     The Committee shall have complete discretion in determining
the   number  of  Shares  subject  to  Options  granted  to  each
Participant  (subject to Article 4 herein) and,  consistent  with
the  provisions  of  the  Plan,  in  determining  the  terms  and
conditions pertaining to such Options.

     6.2   Option Award Agreement.  Each Option grant  shall  be
evidenced  by  an Option Award Agreement that shall  specify  the
Option  Price, the term of the Option, the number  of  Shares  to
which  the  Option pertains, the Exercise Period and  such  other
provisions  as the Committee shall determine, including  but  not
limited to any rights to Dividend Equivalents.

     6.3   Exercise of and Payment for Options.  Options granted
under  the Plan shall be exercisable at such times and be subject
to  such  restrictions and conditions as the Committee  shall  in
each instance approve.

     A Participant may exercise an Option at any time during the
Exercise Period.  Options shall be exercised by the delivery of a
written  notice  of  exercise to the  Company  or  its  designee,
setting  forth  the number of Shares with respect  to  which  the
Option  is  to be exercised, accompanied by provisions  for  full
payment for the Shares.

     The  Option  Price  upon exercise of any  Option  shall  be
payable  either: (a) in cash or its equivalent, (b) by  tendering
previously acquired Shares having an aggregate Fair Market  Value
at the time of exercise equal to the total Option Price (provided
that  the  Shares which are tendered must have been held  by  the
Participant for at least six (6) months prior to their tender  to
satisfy  the  Option  Price), (c) by Share  withholding,  (d)  by
cashless  exercise or (e)by a combination of (a),(b),(c),  and/or
(d).

      As   soon  as  practicable  after  receipt  of  a  written
notification  of  exercise of an Option and provisions  for  full
payment therefor, there shall be delivered to the Participant, in
the  Participant's  name, Share certificates  in  an  appropriate
amount  based  upon  the  number of Shares  purchased  under  the
Option(s).

     6.4   Termination  of Director Status.  Each  Option  Award
Agreement  shall  set forth the extent to which  the  Participant
shall have the right to exercise the Option following termination
of  the Participant's position on the Board of the Company.  Such
provisions  shall  be determined in the sole  discretion  of  the
Committee,  shall  be  included in  the  Option  Award  Agreement
entered  into  with Participants, need not be uniform  among  all
Options  granted  pursuant to the Plan or among Participants  and
may reflect distinctions based on the reasons for termination  of
director status.

     6.5   Transferability  of  Options.   Except  as  otherwise
determined  by  the Committee and set forth in the  Option  Award
Agreement,  no  Option  granted  under  the  Plan  may  be  sold,
transferred,   pledged,  assigned,  or  otherwise  alienated   or
hypothecated,  other than by will or by the laws of  descent  and
distribution, and all Options granted to a Participant under  the
Plan shall be exercisable during his or her lifetime only by such
Participant or his or her legal representative.

Article 7. Stock Appreciation Rights

     7.1   Grant of SARs.  Subject to the terms and conditions of
the Plan, an SAR may be granted to a Non-Employee Director at any
time  and  from  time  to  time as shall  be  determined  by  the
Committee.   The  Committee may grant Freestanding  SARs,  Tandem
SARs or any combination of these forms of SAR.

     The Committee shall have complete discretion in determining
the  number  of  SARs  granted to each  Participant  (subject  to
Article  4  herein)  and, consistent with the provisions  of  the
Plan, in determining the terms and conditions pertaining to  such
SARs.

     The  Base Value of a Freestanding SAR shall equal the  Fair
Market  Value  of a Share on the date of grant of the  SAR.   The
Base  Value  of Tandem SARs shall equal the Option Price  of  the
related Option.

     7.2   SAR Award Agreement.  Each SAR grant shall be evidenced
by  an SAR Award Agreement that shall specify the number of  SARs
granted, the Base Value, the term of the SAR, the Exercise Period
and such other provisions as the Committee shall determine.

     7.3   Exercise  and Payment of SARs.  Tandem  SARs  may  be
exercised  for all or part of the Shares subject to  the  related
Option upon the surrender of the right to exercise the equivalent
portion  of  the related Option.  A Tandem SAR may  be  exercised
only  with respect to the Shares for which its related Option  is
then exercisable.

     Freestanding SARs may be exercised upon whatever terms  and
conditions  the Committee, in its sole discretion,  imposes  upon
them.

     A  Participant may exercise an SAR at any time  during  the
Exercise  Period.  SARs shall be exercised by the delivery  of  a
written  notice  of  exercise to the Company, setting  forth  the
number  of  SARs being exercised.  Upon exercise  of  an  SAR,  a
Participant shall be entitled to receive payment from the Company
in an amount equal to the product of:

     (a)  the excess of (i) the Fair Market Value of a Share
          on  the  date  of  exercise over (ii)  the  Base  Value
          multiplied by

     (b)  the number of Shares with respect to which the SAR
          is exercised.

     At the sole discretion of the Committee, the payment to the
Participant  upon  SAR  exercise may be in  cash,  in  Shares  of
equivalent value, or in some combination thereof.

     7.4   Termination  of  Director  Status.   Each  SAR  Award
Agreement  shall  set forth the extent to which  the  Participant
shall have the right to exercise the SAR following termination of
the  Participant's  position on the Board of the  Company.   Such
provisions  shall  be determined in the sole  discretion  of  the
Committee,  shall be included in the SAR Award Agreement  entered
into  with  Participants,  need not be  uniform  among  all  SARs
granted  pursuant  to  the  Plan or among  Participants  and  may
reflect  distinctions  based on the reasons  for  termination  of
director status.

     7.5   Transferability  of  SARs.   Except  as   otherwise
determined  by  the  Committee and set forth  in  the  SAR  Award
Agreement,   no  SAR  granted  under  the  Plan  may   be   sold,
transferred,   pledged,  assigned,  or  otherwise  alienated   or
hypothecated,  other than by will or by the laws of  descent  and
distribution,  and  all SARs granted to a Participant  under  the
Plan shall be exercisable during his or her lifetime only by such
Participant or his or her legal representative.

Article 8. Restricted Stock

     8.1   Grant of Restricted Stock.  Subject to the terms  and
conditions of the Plan, Restricted Stock may be granted to a Non-
Employee Director at any time and from time to time, as shall  be
determined by the Committee.

     The Committee shall have complete discretion in determining
the  number  of  shares  of  Restricted  Stock  granted  to  each
Participant  (subject to Article 4 herein) and,  consistent  with
the  provisions  of  the  Plan,  in  determining  the  terms  and
conditions pertaining to such Restricted Stock.

     8.2   Restricted  Stock Award Agreement.   Each  Restricted
Stock  grant  shall  be  evidenced by a  Restricted  Stock  Award
Agreement   that  shall  specify  the  Period   or   Periods   of
Restriction,  the number of Restricted Stock Shares  granted  and
such other provisions as the Committee shall determine.

     8.3   Transferability.  Restricted Stock granted  hereunder
may  not  be  sold, transferred, pledged, assigned, or  otherwise
alienated or hypothecated until the end of the applicable  Period
of  Restriction established by the Committee and specified in the
Restricted Stock Award Agreement.  All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant  or
his or her legal representative.

     8.4   Certificate  Legend.   Each certificate  representing
Restricted Stock granted pursuant to the Plan may bear
a legend substantially as follows:

     "The  sale  or  other transfer of the shares  of  stock
     represented  by  this certificate,  whether  voluntary,
     involuntary  or  by  operation of law,  is  subject  to
     certain  restrictions on transfer as set forth  in  MDU
     Resources Group, Inc. 1997 Non-Employee Director  Long-
     Term  Incentive Plan, and in a Restricted  Stock  Award
     Agreement.  A copy of such Plan and such Agreement  may
     be obtained from MDU Resources Group, Inc."

     The Company shall have the right to retain the certificates
representing  Restricted Stock in the Company's possession  until
such time as all restrictions applicable to such Shares have been
satisfied.

     8.5   Removal of Restrictions.  Restricted Stock shall become
freely transferable by the Participant after the last day of  the
Period of Restriction applicable thereto.  Once Restricted  Stock
is  released  from  the  restrictions, the Participant  shall  be
entitled  to  have the legend referred to in Section 8.4  removed
from his or her stock certificate.

     8.6   Voting  Rights.   During the Period  of  Restriction,
Participants  holding Restricted Stock may exercise  full  voting
rights with respect to those Shares.

     8.7   Dividends  and Other Distributions.  Subject  to  the
Committee's  right to determine otherwise at the time  of  grant,
during the Period of Restriction, Participants holding Restricted
Stock  shall receive all regular cash dividends paid with respect
to  all  Shares  while they are so held.  All other distributions
paid  with respect to such Restricted Stock shall be credited  to
Participants  subject to the same restrictions on transferability
and  forfeitability as the Restricted Stock with respect to which
they were paid and shall be paid to the Participant within forty-
five (45) days following the full vesting of the Restricted Stock
with respect to which such distributions were made.

     8.8   Termination of Director Status.  Each Restricted Stock
Award  Agreement  shall  set  forth  the  extent  to  which   the
Participant  shall have the right to receive unvested  Restricted
Stock following termination of the Participant's position on  the
Board of the Company.  Such provisions shall be determined in the
sole  discretion  of  the Committee, shall  be  included  in  the
Restricted  Stock Award Agreement entered into with Participants,
need not be uniform among all grants of Restricted Stock or among
Participants  and may reflect distinctions based on  the  reasons
for termination of director status.

Article 9. Performance Units and Performance Shares

     9.1   Grant  of  Performance Units and Performance  Shares.
Subject  to  the  terms and conditions of the  Plan,  Performance
Units  and/or Performance Shares may be granted to a Non-Employee
Director  at  any  time  and  from time  to  time,  as  shall  be
determined by the Committee.

      The Committee shall have complete discretion in determining
the number of Performance Units and/or Performance Shares granted
to each Participant (subject to Article 4 herein) and, consistent
with  the  provisions of the Plan, in determining the  terms  and
conditions pertaining to such Awards.

     9.2   Performance  Unit/Performance Share Award  Agreement.
Each  grant of Performance Units and/or Performance Shares  shall
be evidenced by a Performance Unit and/or Performance Share Award
Agreement  that  shall  specify the number of  Performance  Units
and/or   Performance  Shares  granted,  the  initial  value   (if
applicable),  the Performance Period, the performance  goals  and
such other provisions as the Committee shall determine, including
but not limited to any rights to Dividend Equivalents.

     9.3   Value of Performance Units/Performance Shares.   Each
Performance  Unit shall have an initial value that is established
by  the  Committee  at  the  time  of  grant.   The  value  of  a
Performance Share shall be equal to the Fair Market  Value  of  a
Share.   The  Committee  shall  set  performance  goals  in   its
discretion which, depending on the extent to which they are  met,
will   determine   the   number  and/or  value   of   Performance
Units/Performance  Shares  that  will  be   paid   out   to   the
Participants.  The time period during which the performance goals
must be met shall be called a "Performance Period."

     9.4  Earning of Performance Units/Performance Shares.  After
the  applicable  Performance Period  has  ended,  the  holder  of
Performance Units/Performance Shares shall be entitled to receive
a payout with respect to the Performance Units/Performance Shares
earned  by  the  Participant over the Performance Period,  to  be
determined as a function of the extent to which the corresponding
performance goals have been achieved.

     9.5    Form   and   Timing  of  Payment   of   Performance
Units/Performance   Shares.   Payment   of   earned   Performance
Units/Performance Shares shall be made following the close of the
applicable  Performance  Period.   The  Committee,  in  its  sole
discretion,  may pay earned Performance Units/Performance  Shares
in cash or in Shares (or in a combination thereof), which have an
aggregate  Fair  Market Value equal to the value  of  the  earned
Performance  Units/Performance  Shares  at  the  close   of   the
applicable  Performance  Period.   Such  Shares  may  be  granted
subject to any restrictions deemed appropriate by the Committee.

     9.6   Termination  of  Director Status.   Each  Performance
Unit/Performance Share Award Agreement shall set forth the extent
to  which  the  Participant shall have the  right  to  receive  a
Performance  Unit/Performance Share payment following termination
of  the Participant's position on the Board of the Company during
a Performance Period.  Such provisions shall be determined in the
sole  discretion of the Committee, shall be included in the Award
Agreement  entered into with Participants, need  not  be  uniform
among all grants of Performance Units/Performance Shares or among
Participants  and may reflect distinctions based on  reasons  for
termination of director status.

     9.7   Transferability.  Except as otherwise determined by the
Committee and set forth in the Performance Unit/Performance Share
Award Agreement, Performance Units/Performance Shares may not  be
sold,  transferred, pledged, assigned or otherwise  alienated  or
hypothecated,  other than by will or by the laws of  descent  and
distribution,  and  a  Participant's  rights  with   respect   to
Performance Units/Performance Shares granted under the Plan shall
be  available  during  the Participant's lifetime  only  to  such
Participant or the Participant's legal representative.

Article 10.  Other Awards

     The  Committee shall have the right to grant  other  Awards
which  may include, without limitation, the grant of Shares based
on  certain conditions and the payment of Shares in lieu of cash,
or   cash  based  on  performance  criteria  established  by  the
Committee.  Payment under or settlement of any such Awards  shall
be  made  in  such manner and at such times as the Committee  may
determine.

Article 11.  Beneficiary Designation

     Each Participant under the Plan may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all
of such benefit.  Each such designation shall revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed
by the Participant in writing with the Company during the
Participant's lifetime.  In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be
paid to the Participant's estate.

     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.

Article 12.  Deferrals

     The  Committee  may  permit  a  Participant  to  defer  the
Participant's receipt of the payment of cash or the  delivery  of
Shares that would otherwise be due to such Participant under  the
Plan.   If any such deferral election is permitted, the Committee
shall, in its sole discretion, establish rules and procedures for
such payment deferrals.

Article 13.  Change in Control

     The  terms  of  this  Article 13 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  this
Plan.

     Upon a Change in Control

     (a)   Any  and  all Options and SARs granted  hereunder
           shall become immediately exercisable;

     (b)   Any  restriction periods and restrictions imposed
           on  Restricted Shares shall be deemed to  have  expired
           and  such  Restricted Shares shall  become  immediately
           vested in full; and

     (c)   The target payout opportunity attainable under all
           outstanding  Awards  of Performance Units,  Performance
           Shares  and other Awards shall be deemed to  have  been
           fully earned for the entire Performance Period(s) as of
           the  effective  date  of the Change  in  Control.   The
           vesting  of all Awards denominated in Shares  shall  be
           accelerated as of the effective date of the  Change  in
           Control,  and  there  shall be  paid  out  in  cash  to
           Participants  immediately following the effective  date
           of  the  Change  in  Control the  full  amount  of  the
           targeted  cash  payout  opportunities  associated  with
           outstanding cash-based Awards.

Article 14.  Amendment, Modification and Termination

     14.1  Amendment, Modification and Termination.   The  Board
may, at any time and from time to time, alter, amend, suspend  or
terminate the Plan in whole or in part.

     14.2  Awards Previously Granted.  No termination, amendment
or  modification  of  the  Plan shall  adversely  affect  in  any
material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award, unless
such  termination,  modification  or  amendment  is  required  by
applicable law.

Article 15.  Successors

     All obligations of the Company under the Plan, with respect
to Awards granted hereunder, shall be binding on any successor to
the  Company,  whether  the existence of such  successor  is  the
result of a direct or indirect purchase, merger, consolidation or
otherwise,  of  all or substantially all of the  business  and/or
assets of the Company.

Article 16.  Legal Construction

     16.1  Gender and Number.  Except where otherwise indicated by
the  context,  any masculine term used herein also shall  include
the  feminine,  the  plural shall include the  singular  and  the
singular shall include the plural.

     16.2  Severability.  In the event any provision of the  Plan
shall  be  held illegal or invalid for any reason, the illegality
or  invalidity shall not affect the remaining parts of the  Plan,
and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

     16.3  Requirements of Law.  The granting of Awards and  the
issuance  of  Shares  under the Plan  shall  be  subject  to  all
applicable laws, rules and regulations, and to such approvals  by
any governmental agencies or national securities exchanges as may
be required.

     16.4  Governing Law.  To the extent not preempted by Federal
law,  the  Plan, and all agreements hereunder, shall be construed
in  accordance with, and governed by, the laws of  the  State  of
Delaware.MDU RESOURCES GROUP, INC.
            1997 EXECUTIVE LONG-TERM INCENTIVE PLAN

Article 1. Establishment, Purpose and Duration

     1.1   Establishment of the Plan.  MDU Resources Group, Inc.,
a   Delaware  corporation  (hereinafter  referred   to   as   the
"Company"), hereby establishes an incentive compensation plan  to
be  known as the "MDU Resources Group, Inc. 1997 Executive  Long-
Term Incentive Plan" (hereinafter referred to as the "Plan"),  as
set  forth  in  this  document.  The Plan permits  the  grant  of
Nonqualified Stock Options (NQSO), Incentive Stock Options (ISO),
Stock  Appreciation  Rights (SAR), Restricted Stock,  Performance
Units, Performance Shares and other awards.

     The  Plan  shall  become effective  when  approved  by  the
stockholders  at  the  annual meeting  on  April  22,  1997  (the
"Effective  Date"),  and shall remain in effect  as  provided  in
Section 1.3 herein.

     1.2   Purpose of the Plan.  The purpose of the Plan  is  to
promote  the  success and enhance the value  of  the  Company  by
linking  the  personal  interests of  Participants  to  those  of
Company stockholders and customers.

     The Plan is further intended to provide flexibility to  the
Company  in  its  ability  to motivate, attract  and  retain  the
services  of  Participants  upon  whose  judgment,  interest  and
special  effort  the  successful conduct  of  its  operations  is
largely dependent.

     1.3   Duration of the Plan.  The Plan shall commence on  the
Effective  Date,  as described in Section 1.1 herein,  and  shall
remain  in effect, subject to the right of the Board of Directors
to  terminate the Plan at any time pursuant to Article 15 herein,
until  all  Shares  subject to it shall have  been  purchased  or
acquired  according  to the Plan's provisions.   However,  in  no
event  may  an Award be made under the Plan on or after  the  day
immediately  preceding  the tenth anniversary  of  the  Effective
Date.

Article 2. Definitions

     Whenever  used in the Plan, the following terms shall  have
the  meanings set forth below and, when such meaning is intended,
the initial letter of the word is capitalized:

     2.1   "Award" means, individually or collectively, a  grant
under   the   Plan  of  NQSOs,  ISOs,  SARs,  Restricted   Stock,
Performance Units, Performance Shares or any other type of  award
permitted under Article 10 of the Plan.

     2.2   "Award Agreement" means an agreement entered into  by
each  Participant and the Company, setting forth  the  terms  and
provisions applicable to an Award granted to a Participant  under
the Plan.

     2.3   "Base Value" of an SAR shall have the meaning set forth
in Section 7.1 herein.

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

     2.5   "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 such that, during any period of two (2)
consecutive  years,  individuals who at  the  beginning  of  such
period constitute the Board 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 at least two-thirds  (2/3)  of  the
Directors then still in office who were members of the  Board  at
the beginning of the period; (e) the sale or other disposition of
all   or  substantially  all  of  the  assets  of  Montana-Dakota
Utilities Co., other than to a subsidiary of the Company; or  (f)
any  other  event  which shall be deemed by  a  majority  of  the
Compensation Committee to constitute a "change in control".

     2.6   "Code"  means the Internal Revenue Code of  1986,  as
amended from time to time.

     2.7   "Committee"  means  the Committee,  as  specified  in
Article  3,  appointed by the Board to administer the  Plan  with
respect to Awards.

     2.8   "Company" means MDU Resources Group, Inc., a Delaware
corporation, or any successor thereto as provided in  Article  17
herein.

     2.9   "Covered Employee" means any Participant who would  be
considered a "Covered Employee" for purposes of Section 162(m) of
the Code.

     2.10  "Director" means any individual who is a member of the
Board of Directors of the Company.

     2.11  "Disability"  means "permanent and total disability" as
defined under Section 22(e)(3)of the Code.

     2.12  "Dividend Equivalent" means, with respect  to  Shares
subject  to  an  Award, a right to be paid  an  amount  equal  to
dividends declared on an equal number of outstanding Shares.

     2.13  "Eligible Employee" means an Employee who is eligible
to participate in the Plan, as set forth in Section 5.1 herein.

     2.14  "Employee" means any full-time or regularly-scheduled
part-time   employee  of  the  Company  or   of   the   Company's
Subsidiaries,  who  is  not covered by any collective  bargaining
agreement  to which the Company or any of its Subsidiaries  is  a
party.   Directors who are not otherwise employed by the  Company
shall not be considered Employees for purposes of the Plan.   For
purposes  of  the Plan, transfer of employment of  a  Participant
between  the Company and any one of its Subsidiaries (or  between
Subsidiaries) shall not be deemed a termination of employment.

     2.15  "Exchange Act" means the Securities Exchange  Act  of
1934, as amended from time to time, or any successor act thereto.

     2.16  "Exercise Period" means the period during which an SAR
or  Option  is  exercisable, as set forth in  the  related  Award
Agreement.

     2.17  "Fair Market Value" shall mean the average of the high
and  low  sale prices as reported in the consolidated transaction
reporting  system or, if there is no such sale  on  the  relevant
date, then on the last previous day on which a sale was reported.

     2.18  "Freestanding  SAR" means  an  SAR  that  is  granted
independently of any Option.

     2.19  "Incentive Stock Option" or "ISO" means an option  to
purchase  Shares,  granted  under  Article  6  herein,  which  is
designated  as  an  Incentive  Stock  Option  and  satisfies  the
requirements of Section 422 of the Code.

     2.20  "Nonqualified Stock Option" or "NQSO" means an option
to  purchase Shares, granted under Article 6 herein, which is not
intended to be an Incentive Stock Option under Section 422 of the
Code.

     2.21  "Option"  means  an  Incentive  Stock  Option  or  a
Nonqualified Stock Option.

     2.22  "Option Price" means the price at which a Share may be
purchased  by a Participant pursuant to an Option, as  determined
by the Committee and set forth in the Option Award Agreement.

     2.23  "Participant" means an Employee of the Company who has
outstanding an Award granted under the Plan.

     2.24  "Performance  Goals"  means  the  performance  goals
established by the Committee, which shall be based on one or more
of  the  following  measures:  sales or  revenues,  earnings  per
share,  shareholder return and/or value, funds  from  operations,
operating income, gross income, net income, cash flow, return  on
equity,  return  on capital, earnings before interest,  operating
ratios,  stock  price, customer satisfaction,  accomplishment  of
mergers,  acquisitions,  dispositions  or  similar  extraordinary
business  transactions,  profit returns  and  margins,  financial
return  ratios and/or market performance.  Performance goals  may
be  measured  solely on a corporate subsidiary or  business  unit
basis,  or a combination thereof.  Performance goals may  reflect
absolute  entity performance or a relative comparison  of  entity
performance  to  the performance of a peer group of  entities  or
other external measure.

     2.25  "Performance  Unit" means  an  Award  granted  to  an
Employee, as described in Article 9 herein.

     2.26  "Performance  Share" means an  Award  granted  to  an
Employee, as described in Article 9 herein.

     2.27  "Period of Restriction" means the period during which
the  transfer  of  Restricted Stock is limited in  some  way,  as
provided in Article 8 herein.

     2.28  "Person" shall have the meaning ascribed to such  term
in Section 3(a)(9) of the Exchange Act, as used in Sections 13(d)
and 14(d) thereof, including usage in the definition of a "group"
in Section 13(d) thereof.

     2.29  "Qualified  Restricted  Stock"  means  an  Award  of
Restricted Stock designated as Qualified Restricted Stock by  the
Committee  at the time of grant and intended to qualify  for  the
exemption  from  the  limitation  on  deductibility  imposed   by
Section   162(m)   of   the   Code   that   is   set   forth   in
Section 162(m)(4)(C).

     2.30  "Restricted Stock" means an Award of Shares granted to
a Participant pursuant to Article 8 herein.

     2.31  "Shares"  means the shares of  common  stock  of  the
Company.

     2.32  "Stock  Appreciation Right" or "SAR" means  a  right,
granted  alone or in connection with a related Option, designated
as  an  SAR,  to  receive  a payment on  the  day  the  right  is
exercised, pursuant to the terms of Article 7 herein.   Each  SAR
shall be denominated in terms of one Share.

     2.33  "Subsidiary"  means  any  corporation  that   is   a
"subsidiary corporation" of the Company as that term  is  defined
in Section 424(f) of the Code.

     2.34  "Tandem SAR" means an SAR that is granted in connection
with  a  related  Option,  the exercise of  which  shall  require
forfeiture  of  the right to purchase a Share under  the  related
Option  (and  when  a Share is purchased under  the  Option,  the
Tandem SAR shall be similarly canceled).

Article 3. Administration

     3.1   The Committee.  The Plan shall be administered by  the
Compensation  Committee of the Board, or by any  other  Committee
appointed  by the Board.  The members of the Committee  shall  be
appointed from time to time by, and shall serve at the discretion
of, the Board of Directors.

     3.2   Authority of the Committee.  The Committee shall have
full   power   except  as  limited  by  law,  the   Articles   of
Incorporation  and  the Bylaws of the Company,  subject  to  such
other restricting limitations or directions as may be imposed  by
the  Board and subject to the provisions herein, to determine the
size  and  types of Awards; to determine the terms and conditions
of  such Awards in a manner consistent with the Plan; to construe
and  interpret  the Plan and any agreement or instrument  entered
into  under  the  Plan; to establish, amend or  waive  rules  and
regulations  for the Plan's administration; and (subject  to  the
provisions  of  Article  15  herein)  to  amend  the  terms   and
conditions  of  any  outstanding Award.  Further,  the  Committee
shall  make  all other determinations which may be  necessary  or
advisable  for the administration of the Plan.  As  permitted  by
law,  the  Committee may delegate its authorities  as  identified
hereunder.

     3.3   Restrictions on Share Transferability.  The Committee
may  impose such restrictions on any Shares acquired pursuant  to
Awards  under  the  Plan  as  it may deem  advisable,  including,
without   limitation,  restrictions  to  comply  with  applicable
Federal  securities  laws,  with the requirements  of  any  stock
exchange or market upon which such Shares are then listed  and/or
traded  and with any blue sky or state securities laws applicable
to such Shares.

     3.4   Approval.  The Board or the Committee shall approve all
Awards   made   under  the  Plan  and  all  elections   made   by
Participants,  prior  to  their effective  date,  to  the  extent
necessary to comply with Rule 16b-3 under the Exchange Act.

     3.5   Decisions Binding.  All determinations and  decisions
made by the Committee pursuant to the provisions of the Plan  and
all  related orders or resolutions of the Board shall  be  final,
conclusive and binding on all persons, including the Company, its
stockholders,  Employees,  Participants  and  their  estates  and
beneficiaries.

     3.6   Costs.   The  Company  shall  pay  all   costs   of
administration of the Plan.

Article 4. Shares Subject to the Plan

     4.1   Number of Shares.  Subject to Section 4.2 herein,  the
maximum number of Shares available for grant under the Plan shall
be  1,800,000.  Shares underlying lapsed or forfeited Awards,  or
Awards  that  are  not paid in Shares, may be  reused  for  other
Awards.   Shares  granted  pursuant  to  the  Plan  may  be   (i)
authorized  but  unissued Shares of Common Stock,  (ii)  treasury
shares, or (iii) shares purchased on the open market.

     4.2   Adjustments in Authorized Shares.  In the event of any
merger,    reorganization,    consolidation,    recapitalization,
separation,  liquidation, stock split, stock dividend,  split-up,
share  combination or other change in the corporate structure  of
the  Company affecting the Shares, such adjustment shall be  made
in  the  number and class of Shares which may be delivered  under
the  Plan, and in the number and class of and/or price of  Shares
subject to outstanding Awards granted under the Plan, as  may  be
determined  to be appropriate and equitable by the Committee,  in
its  sole  discretion,  to  prevent dilution  or  enlargement  of
rights;  provided, however, that the number of Shares subject  to
any  Award  shall always be a whole number.  Notwithstanding  the
foregoing, (i) each such adjustment with respect to an  Incentive
Stock Option shall comply with the rules of Section 424(a) of the
Code  and  (ii)  in no event shall any adjustment be  made  which
would  render any Incentive Stock Option granted hereunder to  be
other than an incentive stock option for purposes of Section  422
of the Code.

     4.3   Individual Limitations.  Subject to Section 4.2 herein,
(i)  the total number of Shares with respect to which Options  or
SARs  may be granted in any calendar year to any Covered Employee
shall  not exceed 200,000 Shares; (ii) the total number of shares
of Qualified Restricted Stock that may be granted in any calendar
year  to  any  Covered Employee shall not exceed 200,000  Shares;
(iii) the total number of Performance Shares or Performance Units
that  may be granted in any calendar year to any Covered Employee
shall  not  exceed 200,000 Shares or Units, as the case  may  be;
(iv) the total number of Shares that are intended to qualify  for
deduction  under Section 162(m) of the Code granted  pursuant  to
Article  10  herein in any calendar year to any Covered  Employee
shall not exceed 200,000 Shares; (v) the total cash Award that is
intended  to  qualify for deduction under Section 162(m)  of  the
Code  that  may  be  paid pursuant to Article 10  herein  in  any
calendar   year  to  any  Covered  Employee  shall   not   exceed
$1,500,000; and (vi) the aggregate number of Dividend Equivalents
that  are intended to qualify for deduction under Section  162(m)
of  the  Code that a Covered Employee may receive in any calendar
year shall not exceed $1,500,000.

Article 5. Eligibility and Participation

     5.1   Eligibility.  Persons eligible to participate in  the
Plan  include all officers and key employees of the  Company  and
its  Subsidiaries,  as  determined by  the  Committee,  including
Employees  who are members of the Board, but excluding  Directors
who are not Employees.

     5.2   Actual Participation.  Subject to the provisions of the
Plan,  the  Committee  may, from time to time,  select  from  all
eligible  Employees  those to whom Awards shall  be  granted  and
shall determine the nature and amount of each Award.

Article 6. Stock Options

     6.1   Grant of Options.  Subject to the terms and conditions
of  the  Plan, Options may be granted to an Eligible Employee  at
any  time  and from time to time, as shall be determined  by  the
Committee.

     The Committee shall have complete discretion in determining
the   number  of  Shares  subject  to  Options  granted  to  each
Participant  (subject to Article 4 herein) and,  consistent  with
the  provisions  of  the  Plan,  in  determining  the  terms  and
conditions pertaining to such Options.  The Committee  may  grant
ISOs, NQSOs, or a combination thereof.

     6.2   Option Award Agreement.  Each Option grant  shall  be
evidenced  by  an Option Award Agreement that shall  specify  the
Option  Price, the term of the Option, the number  of  Shares  to
which  the  Option pertains, the Exercise Period and  such  other
provisions  as the Committee shall determine, including  but  not
limited to any rights to Dividend Equivalents.  The Option  Award
Agreement shall also specify whether the Option is intended to be
an ISO or an NQSO.

     The  Option  Price  for  each Share purchasable  under  any
Incentive  Stock Option granted hereunder shall be not less  than
one hundred percent (100%) of the Fair Market Value per Share  at
the  date the Option is granted; and provided, further,  that  in
the case of an Incentive Stock Option granted to a person who, at
the  time such Incentive Stock Option is granted, owns shares  of
stock of the Company or of any Subsidiary which possess more than
ten  percent  (10%)  of the total combined voting  power  of  all
classes  of  shares of stock of the Company or of any Subsidiary,
the  Option  Price  for each Share shall be  not  less  than  one
hundred ten percent (110%) of the Fair Market Value per Share  at
the date the Option is granted.  The Option Price will be subject
to adjustment in accordance with the provisions of Section 4.2 of
the Plan.

     No Incentive Stock Option by its terms shall be exercisable
after the expiration of ten (10) years from the date of grant  of
the  Option; provided, however, in the case of an Incentive Stock
Option  granted  to  a  person who, at the time  such  Option  is
granted, owns shares of stock of the Company or of any Subsidiary
possessing  more  than ten percent (10%) of  the  total  combined
voting power of all classes of shares of stock of the Company  or
of any Subsidiary, such Option shall not be exercisable after the
expiration  of  five  (5)  years from the  date  such  Option  is
granted.

     6.3   Exercise of and Payment for Options.  Options granted
under  the Plan shall be exercisable at such times and be subject
to  such  restrictions and conditions as the Committee  shall  in
each instance approve.

     A Participant may exercise an Option at any time during the
Exercise Period.  Options shall be exercised by the delivery of a
written  notice  of  exercise to the  Company  or  its  designee,
setting  forth  the number of Shares with respect  to  which  the
Option  is  to be exercised, accompanied by provisions  for  full
payment for the Shares.

     The  Option  Price  upon exercise of any  Option  shall  be
payable  either: (a) in cash or its equivalent, (b) by  tendering
previously acquired Shares having an aggregate Fair Market  Value
at the time of exercise equal to the total Option Price (provided
that  the  Shares which are tendered must have been held  by  the
Participant for at least six (6) months prior to their tender  to
satisfy  the  Option  Price), (c) by share  withholding,  (d)  by
cashless exercise or (e) by a combination of (a),(b),(c),  and/or
(d).

     As   soon  as  practicable  after  receipt  of  a  written
notification  of  exercise of an Option and provisions  for  full
payment therefor, there shall be delivered to the Participant, in
the  Participant's  name, Share certificates  in  an  appropriate
amount  based  upon  the  number of Shares  purchased  under  the
Option(s).

     6.4   Termination of Employment.  Each Option Award Agreement
shall  set  forth the extent to which the Participant shall  have
the  right  to exercise the Option following termination  of  the
Participant's  employment with the Company and its  Subsidiaries.
Such provisions shall be determined in the sole discretion of the
Committee (subject to applicable law), shall be included  in  the
Option  Award Agreement entered into with Participants, need  not
be  uniform  among all Options granted pursuant to  the  Plan  or
among  Participants  and may reflect distinctions  based  on  the
reasons  for termination of employment.  If the employment  of  a
Participant by the Company or by any Subsidiary is terminated for
any  reason other than death, any Incentive Stock Option  granted
to  such  Participant may not be exercised later than  three  (3)
months  (one  (1)  year  in  the  case  of  termination  due   to
Disability) after the date of such termination of employment.

     6.5   Transferability  of  Options.   Except  as  otherwise
determined  by  the Committee and set forth in the  Option  Award
Agreement,  no  Option  granted  under  the  Plan  may  be  sold,
transferred,   pledged,  assigned,  or  otherwise  alienated   or
hypothecated,  other than by will or by the laws of  descent  and
distribution,  and  all  Incentive Stock  Options  granted  to  a
Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.

Article 7. Stock Appreciation Rights

     7.1   Grant of SARs.  Subject to the terms and conditions of
the  Plan, an SAR may be granted to an Eligible Employee  at  any
time  and  from  time  to  time as shall  be  determined  by  the
Committee.   The  Committee may grant Freestanding  SARs,  Tandem
SARs or any combination of these forms of SAR.

     The Committee shall have complete discretion in determining
the  number  of  SARs  granted to each  Participant  (subject  to
Article  4  herein)  and, consistent with the provisions  of  the
Plan, in determining the terms and conditions pertaining to  such
SARs.

     The  Base Value of a Freestanding SAR shall equal the  Fair
Market  Value  of a Share on the date of grant of the  SAR.   The
Base  Value  of Tandem SARs shall equal the Option Price  of  the
related Option.

     7.2   SAR Award Agreement.  Each SAR grant shall be evidenced
by  an SAR Award Agreement that shall specify the number of  SARs
granted, the Base Value, the term of the SAR, the Exercise Period
and such other provisions as the Committee shall determine.

     7.3   Exercise  and Payment of SARs.  Tandem  SARs  may  be
exercised  for all or part of the Shares subject to  the  related
Option upon the surrender of the right to exercise the equivalent
portion  of  the related Option.  A Tandem SAR may  be  exercised
only  with respect to the Shares for which its related Option  is
then exercisable.

     Notwithstanding  any other provision of  the  Plan  to  the
contrary, with respect to a Tandem SAR granted in connection with
an  ISO:  (i)  the  Tandem  SAR will expire  no  later  than  the
expiration  of the underlying ISO; (ii) the value of  the  payout
with  respect  to  the Tandem SAR may be for  no  more  than  one
hundred percent (100%) of the difference between the Option Price
of  the  underlying ISO and the Fair Market Value of  the  Shares
subject  to  the  underlying ISO at the time the  Tandem  SAR  is
exercised;  and (iii) the Tandem SAR may be exercised  only  when
the  Fair  Market Value of the Shares subject to the ISO  exceeds
the Option Price of the ISO.

     Freestanding SARs may be exercised upon whatever terms  and
conditions  the Committee, in its sole discretion,  imposes  upon
them.

     A  Participant may exercise an SAR at any time  during  the
Exercise  Period.  SARs shall be exercised by the delivery  of  a
written  notice  of  exercise to the Company, setting  forth  the
number  of  SARs being exercised.  Upon exercise  of  an  SAR,  a
Participant shall be entitled to receive payment from the Company
in an amount equal to the product of:

     (a)   the excess of (i) the Fair Market Value of a Share
           on  the  date  of  exercise over (ii)  the  Base  Value
           multiplied by

     (b)   the number of Shares with respect to which the SAR
           is exercised.

     At the sole discretion of the Committee, the payment to the
Participant  upon  SAR  exercise may be in  cash,  in  Shares  of
equivalent value, or in some combination thereof.

     7.4   Termination of Employment.  Each SAR Award  Agreement
shall  set  forth the extent to which the Participant shall  have
the  right  to  exercise  the SAR following  termination  of  the
Participant's  employment with the Company and its  Subsidiaries.
Such provisions shall be determined in the sole discretion of the
Committee,  shall be included in the SAR Award Agreement  entered
into  with  Participants,  need not be  uniform  among  all  SARs
granted  pursuant  to  the  Plan or among  Participants  and  may
reflect  distinctions  based on the reasons  for  termination  of
employment.

     7.5   Transferability  of  SARs.   Except  as   otherwise
determined  by  the  Committee and set forth  in  the  SAR  Award
Agreement,   no  SAR  granted  under  the  Plan  may   be   sold,
transferred,   pledged,  assigned,  or  otherwise  alienated   or
hypothecated,  other than by will or by the laws of  descent  and
distribution,  and  all SARs granted to a Participant  under  the
Plan shall be exercisable during his or her lifetime only by such
Participant or his or her legal representative.

Article 8. Restricted Stock

     8.1   Grant of Restricted Stock.  Subject to the terms  and
conditions of the Plan, Restricted Stock may be granted to
Eligible Employees at any time and from time to time, as shall be
determined by the Committee.

     The Committee shall have complete discretion in determining
the  number  of  shares  of  Restricted  Stock  granted  to  each
Participant  (subject to Article 4 herein) and,  consistent  with
the  provisions  of  the  Plan,  in  determining  the  terms  and
conditions pertaining to such Restricted Stock.

     In addition, the Committee may, prior to or at the time  of
grant,  designate  an  Award  of Restricted  Stock  as  Qualified
Restricted Stock, in which event it will condition the  grant  or
vesting,  as applicable, of such Qualified Restricted Stock  upon
the   attainment  of  the  Performance  Goals  selected  by   the
Committee.

     8.2   Restricted  Stock Award Agreement.   Each  Restricted
Stock  grant  shall  be  evidenced by a  Restricted  Stock  Award
Agreement   that  shall  specify  the  Period   or   Periods   of
Restriction,  the number of Restricted Stock Shares  granted  and
such other provisions as the Committee shall determine.

     8.3   Transferability.  Restricted Stock granted  hereunder
may  not  be  sold, transferred, pledged, assigned, or  otherwise
alienated or hypothecated until the end of the applicable  Period
of  Restriction established by the Committee and specified in the
Restricted Stock Award Agreement.  All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be
available during his or her lifetime only to such Participant  or
his or her legal representative.

     8.4   Certificate  Legend.   Each certificate  representing
Restricted Stock granted pursuant to the Plan may bear  a  legend
substantially as follows:

     "The  sale  or  other transfer of the shares  of  stock
     represented  by  this certificate,  whether  voluntary,
     involuntary  or  by  operation of law,  is  subject  to
     certain  restrictions on transfer as set forth  in  MDU
     Resources   Group,   Inc.  1997   Executive   Long-Term
     Incentive  Plan,  and  in  a  Restricted  Stock   Award
     Agreement.  A copy of such Plan and such Agreement  may
     be obtained from MDU Resources Group, Inc."

     The Company shall have the right to retain the certificates
representing  Restricted Stock in the Company's possession  until
such time as all restrictions applicable to such Shares have been
satisfied.

     8.5   Removal of Restrictions.  Restricted Stock shall become
freely transferable by the Participant after the last day of  the
Period of Restriction applicable thereto.  Once Restricted  Stock
is  released  from  the  restrictions, the Participant  shall  be
entitled  to  have the legend referred to in Section 8.4  removed
from his or her stock certificate.

     8.6   Voting  Rights.   During the Period  of  Restriction,
Participants  holding Restricted Stock may exercise  full  voting
rights with respect to those Shares.

     8.7   Dividends  and Other Distributions.  Subject  to  the
Committee's  right to determine otherwise at the time  of  grant,
during the Period of Restriction, Participants holding Restricted
Stock  shall receive all regular cash dividends paid with respect
to  all  Shares  while they are so held.  All other distributions
paid  with respect to such Restricted Stock shall be credited  to
Participants  subject to the same restrictions on transferability
and  forfeitability as the Restricted Stock with respect to which
they were paid and shall be paid to the Participant within forty-
five (45) days following the full vesting of the Restricted Stock
with respect to which such distributions were made.

     8.8   Termination of Employment.  Each Restricted Stock Award
Agreement  shall  set forth the extent to which  the  Participant
shall  have  the  right  to  receive  unvested  Restricted  Stock
following  termination of the Participant's employment  with  the
Company   and  its  Subsidiaries.   Such  provisions   shall   be
determined  in  the  sole discretion of the Committee,  shall  be
included  in  the Restricted Stock Award Agreement  entered  into
with  Participants,  need  not be uniform  among  all  grants  of
Restricted   Stock  or  among  Participants   and   may   reflect
distinctions based on the reasons for termination of employment.

Article 9. Performance Units and Performance Shares

     9.1   Grant  of  Performance Units and Performance  Shares.
Subject  to  the  terms and conditions of the  Plan,  Performance
Units  and/or  Performance Shares may be granted to  an  Eligible
Employee  at  any  time  and  from time  to  time,  as  shall  be
determined by the Committee.

     The Committee shall have complete discretion in determining
the number of Performance Units and/or Performance Shares granted
to each Participant (subject to Article 4 herein) and, consistent
with  the  provisions of the Plan, in determining the  terms  and
conditions pertaining to such Awards.

     9.2   Performance  Unit/Performance Share Award  Agreement.
Each  grant of Performance Units and/or Performance Shares  shall
be evidenced by a Performance Unit and/or Performance Share Award
Agreement  that  shall  specify the number of  Performance  Units
and/or   Performance  Shares  granted,  the  initial  value   (if
applicable),  the Performance Period, the Performance  Goals  and
such other provisions as the Committee shall determine, including
but not limited to any rights to Dividend Equivalents.

     9.3   Value of Performance Units/Performance Shares.   Each
Performance  Unit shall have an initial value that is established
by  the  Committee  at  the  time  of  grant.   The  value  of  a
Performance Share shall be equal to the Fair Market  Value  of  a
Share.   The  Committee  shall  set  Performance  Goals  in   its
discretion which, depending on the extent to which they are  met,
will   determine   the   number  and/or  value   of   Performance
Units/Performance  Shares  that  will  be   paid   out   to   the
Participants.  The time period during which the Performance Goals
must be met shall be called a "Performance Period."

     9.4   Earning of Performance Units/Performance Shares.  After
the  applicable  Performance Period  has  ended,  the  holder  of
Performance Units/Performance Shares shall be entitled to receive
a payout with respect to the Performance Units/Performance Shares
earned  by  the  Participant over the Performance Period,  to  be
determined as a function of the extent to which the corresponding
Performance Goals have been achieved.

     9.5   Form   and   Timing  of  Payment   of   Performance
Units/Performance   Shares.   Payment   of   earned   Performance
Units/Performance Shares shall be made following the close of the
applicable  Performance  Period.   The  Committee,  in  its  sole
discretion,  may pay earned Performance Units/Performance  Shares
in cash or in Shares (or in a combination thereof), which have an
aggregate  Fair  Market Value equal to the value  of  the  earned
Performance  Units/Performance  Shares  at  the  close   of   the
applicable  Performance  Period.   Such  Shares  may  be  granted
subject to any restrictions deemed appropriate by the Committee.

     9.6   Termination   of  Employment.    Each   Performance
Unit/Performance Share Award Agreement shall set forth the extent
to  which  the  Participant shall have the  right  to  receive  a
Performance  Unit/Performance Share payment following termination
of   the  Participant's  employment  with  the  Company  and  its
Subsidiaries during a Performance Period.  Such provisions  shall
be  determined in the sole discretion of the Committee, shall  be
included  in  the Award Agreement entered into with Participants,
need   not   be   uniform   among  all  grants   of   Performance
Units/Performance Shares or among Participants  and  may  reflect
distinctions based on reasons for termination of employment.

     9.7   Transferability.  Except as otherwise determined by the
Committee and set forth in the Performance Unit/Performance Share
Award Agreement, Performance Units/Performance Shares may not  be
sold,  transferred, pledged, assigned or otherwise  alienated  or
hypothecated,  other than by will or by the laws of  descent  and
distribution,  and  a  Participant's  rights  with   respect   to
Performance Units/Performance Shares granted under the Plan shall
be  available  during  the Participant's lifetime  only  to  such
Participant or the Participant's legal representative.

Article 10.  Other Awards

     The  Committee shall have the right to grant  other  Awards
which  may include, without limitation, the grant of Shares based
on  attainment of Performance Goals established by the Committee,
the  payment  of  Shares  in  lieu of  cash,  or  cash  based  on
attainment of Performance Goals established by the Committee, and
the  payment  of  Shares  in  lieu of cash  under  other  Company
incentive or bonus programs.  Payment under or settlement of  any
such Awards shall be made in such manner and at such times as the
Committee may determine.

Article 11.  Beneficiary Designation

     Each Participant under the Plan may, from time to time, name
any  beneficiary or beneficiaries (who may be named  contingently
or successively) to whom any benefit under the Plan is to be paid
in  case of his or her death before he or she receives any or all
of  such  benefit.  Each such designation shall revoke all  prior
designations  by  the  same  Participant,  shall  be  in  a  form
prescribed by the Company, and will be effective only when  filed
by  the  Participant  in  writing with  the  Company  during  the
Participant's lifetime.  In the absence of any such  designation,
benefits  remaining unpaid at the Participant's  death  shall  be
paid to the Participant's estate.

     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.

Article 12.  Deferrals

     The  Committee  may  permit  a  Participant  to  defer  the
Participant's receipt of the payment of cash or the  delivery  of
Shares that would otherwise be due to such Participant under  the
Plan.   If any such deferral election is permitted, the Committee
shall, in its sole discretion, establish rules and procedures for
such payment deferrals.

Article 13.  Rights of Employees

     13.1  Employment.  Nothing in the Plan shall interfere  with
or  limit  in  any way the right of the Company to terminate  any
Participant's employment at any time, for any reason or no reason
in the Company's sole discretion, nor confer upon any Participant
any right to continue in the employ of the Company.

     13.2  Participation.  No Employee 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.

Article 14.  Change in Control

     The  terms  of  this  Article 14 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  this
Plan.

     Upon a Change in Control

     (a)   Any  and  all Options and SARs granted  hereunder
           shall become immediately exercisable;

     (b)   Any  restriction periods and restrictions imposed
           on  Restricted  Shares and Qualified Restricted  Shares
           shall  be  deemed  to have expired and such  Restricted
           Shares  and  Qualified Restricted Shares  shall  become
           immediately vested in full; and

     (c)   The target payout opportunity attainable under all
           outstanding  Awards  of Performance Units,  Performance
           Shares  and other Awards shall be deemed to  have  been
           fully earned for the entire Performance Period(s) as of
           the  effective  date  of the Change  in  Control.   The
           vesting  of all Awards denominated in Shares  shall  be
           accelerated as of the effective date of the  Change  in
           Control,  and  there  shall be  paid  out  in  cash  to
           Participants  immediately following the effective  date
           of  the  Change  in  Control the  full  amount  of  the
           targeted  cash  payout  opportunities  associated  with
           outstanding cash-based Awards.

Article 15.  Amendment, Modification and Termination

     15.1  Amendment, Modification and Termination.   The  Board
may, at any time and from time to time, alter, amend, suspend  or
terminate  the  Plan  in  whole or  in  part,  provided  that  no
amendment shall be made which shall increase the total number  of
Shares  which may be issued and sold pursuant to Incentive  Stock
Options,  reduce the minimum exercise price in  the  case  of  an
Incentive  Stock  Option  or modify the provisions  of  the  Plan
relating  to eligibility with respect to Incentive Stock  Options
unless  such  amendment is made by or with the  approval  of  the
stockholders  within  12  months of the effective  date  of  such
amendment,  but  only  if  such  approval  is  required  by   any
applicable  provision  of law.  The Board  of  Directors  of  the
Company  is  also  authorized to amend the Plan and  the  Options
granted hereunder to maintain qualification as "incentive stock
options" within the meaning  of Section 422 of the Code, if
applicable.

     15.2  Awards Previously Granted.  No termination, amendment
or  modification  of  the  Plan shall  adversely  affect  in  any
material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award, unless
such  termination,  modification  or  amendment  is  required  by
applicable law and except as otherwise provided herein.

Article 16.  Withholding

     16.1  Tax Withholding.  The Company shall have the power and
the  right  to  deduct or withhold, or require a  Participant  to
remit  to  the Company, an amount sufficient to satisfy  Federal,
state   and   local  taxes  (including  the  Participant's   FICA
obligation)  required by law to be withheld with  respect  to  an
Award made under the Plan.

     16.2  Share  Withholding.   With  respect  to  withholding
required upon the exercise of Options or SARs, upon the lapse  of
restrictions on Restricted Stock, or upon any other taxable event
arising  out  of  or  as  a result of Awards  granted  hereunder,
Participants may elect to satisfy the withholding requirement, in
whole  or  in  part, by tendering previously-owned Shares  or  by
having the Company withhold Shares having a Fair Market Value  on
the date the tax is to be determined equal to the statutory total
tax  which  could be imposed on the transaction.   All  elections
shall  be  irrevocable,  made  in  writing  and  signed  by   the
Participant.

Article 17. Successors

     All obligations of the Company under the Plan, with respect
to Awards granted hereunder, shall be binding on any successor to
the  Company,  whether  the existence of such  successor  is  the
result of a direct or indirect purchase, merger, consolidation or
otherwise,  of  all or substantially all of the  business  and/or
assets of the Company.

Article 18.  Legal Construction

     18.1  Gender and Number.  Except where otherwise indicated by
the  context,  any masculine term used herein also shall  include
the  feminine,  the  plural shall include the  singular  and  the
singular shall include the plural.

     18.2  Severability.  In the event any provision of the  Plan
shall  be  held illegal or invalid for any reason, the illegality
or  invalidity shall not affect the remaining parts of the  Plan,
and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

     18.3  Requirements of Law.  The granting of Awards and  the
issuance  of  Shares  under the Plan  shall  be  subject  to  all
applicable laws, rules and regulations, and to such approvals  by
any governmental agencies or national securities exchanges as may
be required.

     18.4  Governing Law.  To the extent not preempted by Federal
law,  the  Plan, and all agreements hereunder, shall be construed
in  accordance with, and governed by, the laws of  the  State  of
Delaware.

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