CHANGE OF CONTROL

 

                      EMPLOYMENT AGREEMENT

 

     AGREEMENT by and between MDU Resources Group, Inc., a

Delaware corporation (the "Company") and Martin A. White (the

"Executive"), dated as of the 11th day of November, 1998.

 

     The Board of Directors of the Company (the "Board"),

has determined that it is in the best interests of the Company

and its shareholders to assure that the Company will have the

continued dedication of the Executive, notwithstanding the

possibility, threat or occurrence of a Change of Control (as

defined below) of the Company.  The Board believes it is

imperative to diminish the inevitable distraction of the

Executive by virtue of the personal uncertainties and risks

created by a pending or threatened Change of Control and to

encourage the Executive's full attention and dedication to the

Company currently and in the event of any threatened or pending

Change of Control, and to provide the Executive with compensation

and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Executive

will be satisfied and which are competitive with those of other

corporations.  Therefore, in order to accomplish these

objectives, the Board has caused the Company to enter into this

Agreement.

 

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

     1.  Certain Definitions.  (a)  The "Effective Date" shall mean

the first date during the Change of Control Period (as defined in

Section 1(b)) on which a Change of Control (as defined in Section

2) occurs.  Anything in this Agreement to the contrary

notwithstanding, if a Change of Control occurs and if the

Executive's employment with the Company is terminated prior to

the date on which the Change of Control occurs, and if it is

reasonably demonstrated by the Executive that such termination of

employment (i) was at the request of a third party who has taken

steps reasonably calculated to effect a Change of Control or (ii)

otherwise arose in connection with or anticipation of a Change of

Control, then for all purposes of this Agreement the "Effective

Date" shall mean the date immediately prior to the date of such

termination of employment.

 

         (b)  The "Change of Control Period" shall mean the period

commencing on the date hereof and ending on the third anniversary

of the date hereof; provided, however, that commencing on the

date one year after the date hereof, and on each annual

anniversary of such date (such date and each annual anniversary

thereof shall be hereinafter referred to as the "Renewal Date"),

unless previously terminated, the Change of Control Period shall

be automatically extended so as to terminate three years from

such Renewal Date, unless at least 60 days prior to the Renewal

Date the Company shall give notice to the Executive that the

Change of Control Period shall not be so extended.

 

     2.  Change of Control.   For the purpose of this Agreement, a

"Change of Control" shall mean:

 

         (a)  The acquisition by any individual, entity or group (within

the meaning of Section 13(d)(3) or 14(d)(2) of the Securities

Exchange Act of 1934, as amended (the "Exchange Act")) (a

"Person") of beneficial ownership (within the meaning of Rule 13d-3

promulgated under the Exchange Act) of 20% or more of either

(i) the then outstanding shares of common stock of the Company

(the "Outstanding Company Common Stock") or (ii) the combined

voting power of the then outstanding voting securities of the

Company entitled to vote generally in the election of directors

(the "Outstanding Company Voting Securities"); provided, however,

that for purposes of this subsection (a), the following

acquisitions shall not constitute a Change of Control:  (i) any

acquisition directly from the Company, (ii) any acquisition by

the Company, (iii) any acquisition by any employee benefit plan

(or related trust) sponsored or maintained by the Company or any

corporation controlled by the Company or (iv) any acquisition by

any corporation pursuant to a transaction which complies with

clauses (i), (ii) and (iii) of subsection (c) of this Section 2;

or

 

         (b)  Individuals who, as of the date hereof, constitute the Board

(the "Incumbent Board") cease for any reason to constitute at

least a majority of the Board; provided, however, that any

individual becoming a director subsequent to the date hereof

whose election, or nomination for election by the Company's

shareholders, was approved by a vote of at least a majority of

the directors then comprising the Incumbent Board shall be

considered as though such individual were a member of the

Incumbent Board, but excluding, for this purpose, any such

individual whose initial assumption of office occurs as a result

of an actual or threatened election contest with respect to the

election or removal of directors or other actual or threatened

solicitation of proxies or consents by or on behalf of a Person

other than the Board; or

 

         (c)  Consummation of a reorganization, merger or consolidation or

sale or other disposition of all or substantially all of the

assets of the Company (a "Business Combination"), in each case,

unless, following such Business Combination, (i) all or

substantially all of the individuals and entities who were the

beneficial owners, respectively, of the Outstanding Company

Common Stock and Outstanding Company Voting Securities

immediately prior to such Business Combination beneficially own,

directly or indirectly, more than 60% of, respectively, the then

outstanding shares of common stock and the combined voting power

of the then outstanding voting securities entitled to vote

generally in the election of directors, as the case may be, of

the corporation resulting from such Business Combination

(including, without limitation, a corporation which as a result

of such transaction owns the Company or all or substantially all

of the Company's assets either directly or through one or more

subsidiaries) in substantially the same proportions as their

ownership, immediately prior to such Business Combination of the

Outstanding Company Common Stock and Outstanding Company Voting

Securities, as the case may be, (ii) no Person (excluding any

corporation resulting from such Business Combination or any

employee benefit plan (or related trust) of the Company or such

corporation resulting from such Business Combination)

beneficially owns, directly or indirectly, 20% or more of,

respectively, the then outstanding shares of common stock of the

corporation resulting from such Business Combination or the

combined voting power of the then outstanding voting securities

of such corporation except to the extent that such ownership

existed prior to the Business Combination and (iii) at least a

majority of the members of the board of directors of the

corporation resulting from such Business Combination were members

of the Incumbent Board at the time of the execution of the

initial agreement, or of the action of the Board, providing for

such Business Combination; or

 

         (d)  Approval by the shareholders of the Company of a complete

liquidation or dissolution of the Company.

 

     3.  Employment Period.  The Company hereby agrees to continue

the Executive in its employ, and the Executive hereby agrees to

remain in the employ of the Company subject to the terms and

conditions of this Agreement, for the period commencing on the

Effective Date and ending on the third anniversary of such date

(the "Employment Period").

 

     4.  Terms of Employment.  (a)  Position and Duties.  (i)  During

the Employment Period, (A) the Executive's position (including

status, offices, titles and reporting requirements), authority,

duties and responsibilities shall be at least commensurate in all

material respects with the most significant of those held,

exercised and assigned at any time during the 120-day period

immediately preceding the Effective Date and (B) the Executive's

services shall be performed at the location where the Executive

was employed immediately preceding the Effective Date or any

office or location less than 35 miles from such location.

 

            (ii)  During the Employment Period, and excluding any periods of

vacation and sick leave to which the Executive is entitled, the

Executive agrees to devote reasonable attention and time during

normal business hours to the business and affairs of the Company

and, to the extent necessary to discharge the responsibilities

assigned to the Executive hereunder, to use the Executive's

reasonable best efforts to perform faithfully and efficiently

such responsibilities.  During the Employment Period it shall not

be a violation of this Agreement for the Executive to (A) serve

on corporate, civic or charitable boards or committees, (B)

deliver lectures, fulfill speaking engagements or teach at

educational institutions and (C) manage personal investments, so

long as such activities do not significantly interfere with the

performance of the Executive's responsibilities as an employee of

the Company in accordance with this Agreement.  It is expressly

understood and agreed that to the extent that any such activities

have been conducted by the Executive prior to the Effective Date,

the continued conduct of such activities (or the conduct of

activities similar in nature and scope thereto) subsequent to the

Effective Date shall not thereafter be deemed to interfere with

the performance of the Executive's responsibilities to the

Company.

 

         (b)  Compensation.  (i)  Base Salary.  During the Employment

Period, the Executive shall receive an annual base salary

("Annual Base Salary"), which shall be paid at a monthly rate, at

least equal to twelve times the highest monthly base salary paid

or payable, including any base salary which has been earned but

deferred, to the Executive by the Company and its affiliated

companies in respect of the twelve-month period immediately

preceding the month in which the Effective Date occurs.  During

the Employment Period, the Annual Base Salary shall be reviewed

no more than 12 months after the last salary increase awarded to

the Executive prior to the Effective Date and thereafter at least

annually.  Any increase in Annual Base Salary shall not serve to

limit or reduce any other obligation to the Executive under this

Agreement.  Annual Base Salary shall not be reduced after any

such increase and the term Annual Base Salary as utilized in this

Agreement shall refer to Annual Base Salary as so increased.  As

used in this Agreement, the term "affiliated companies" shall

include any company controlled by, controlling or under common

control with the Company.

 

            (ii)  Annual Bonus.  In addition to Annual Base Salary, the

Executive shall be awarded, for each fiscal year ending during

the Employment Period, an annual bonus (the "Annual Bonus") in

cash at least equal to the Executive's highest bonus under the

Company's Executive Incentive Compensation Plan, or any

comparable bonus under any predecessor or successor plan, for the

last three full fiscal years prior to the Effective Date

(annualized in the event that the Executive was not employed by

the Company for the whole of such fiscal year) (the "Recent

Annual Bonus").  Each such Annual Bonus shall be paid no later

than the end of the third month of the fiscal year next following

the fiscal year for which the Annual Bonus is awarded, unless the

Executive shall elect to defer the receipt of such Annual Bonus.

 

            (iii) Incentive, Savings and Retirement Plans.  During the

Employment Period, the Executive shall be entitled to participate

in all incentive, savings and retirement plans, practices,

policies and programs applicable generally to other peer

executives of the Company and its affiliated companies, but in no

event shall such plans, practices, policies and programs provide

the Executive with incentive opportunities (measured with respect

to both regular and special incentive opportunities, to the

extent, if any, that such distinction is applicable), savings

opportunities and retirement benefit opportunities, in each case,

less favorable, in the aggregate, than the most favorable of

those provided by the Company and its affiliated companies for

the Executive under such plans, practices, policies and programs

as in effect at any time during the 120-day period immediately

preceding the Effective Date or if more favorable to the

Executive, those provided generally at any time after the

Effective Date to other peer executives of the Company and its

affiliated companies.

 

            (iv)  Welfare Benefit Plans.  During the Employment Period, the

Executive and/or the Executive's family, as the case may be,

shall be eligible for participation in and shall receive all

benefits under welfare benefit plans, practices, policies and

programs provided by the Company and its affiliated companies

(including, without limitation, medical, prescription, dental,

disability, employee life, group life, accidental death and

travel accident insurance plans and programs) to the extent

applicable generally to other peer executives of the Company and

its affiliated companies, but in no event shall such plans,

practices, policies and programs provide the Executive with

benefits which are less favorable, in the aggregate, than the

most favorable of such plans, practices, policies and programs in

effect for the Executive at any time during the 120-day period

immediately preceding the Effective Date or, if more favorable to

the Executive, those provided generally at any time after the

Effective Date to other peer executives of the Company and its

affiliated companies.

 

            (v)   Expenses.  During the Employment Period, the Executive shall

be entitled to receive prompt reimbursement for all reasonable

expenses incurred by the Executive in accordance with the most

favorable policies, practices and procedures of the Company and

its affiliated companies in effect for the Executive at any time

during the 120-day period immediately preceding the Effective

Date or, if more favorable to the Executive, as in effect

generally at any time thereafter with respect to other peer

executives of the Company and its affiliated companies.

 

            (vi)  Fringe Benefits.  During the Employment Period, the

Executive shall be entitled to fringe benefits, including,

without limitation, tax and financial planning services, payment

of club dues, and, if applicable, use of an automobile and

payment of related expenses, in accordance with the most

favorable plans, practices, programs and policies of the Company

and its affiliated companies in effect for the Executive at any

time during the 120-day period immediately preceding the

Effective Date or, if more favorable to the Executive, as in

effect generally at any time thereafter with respect to other

peer executives of the Company and its affiliated companies.

 

            (vii) Office and Support Staff.  During the Employment

Period, the Executive shall be entitled to an office or offices

of a size and with furnishings and other appointments, and to

exclusive personal secretarial and other assistance, at least

equal to the most favorable of the foregoing provided to the

Executive by the Company and its affiliated companies at any time

during the 120-day period immediately preceding the Effective

Date or, if more favorable to the Executive, as provided

generally at any time thereafter with respect to other peer

executives of the Company and its affiliated companies.

 

            (viii) Vacation.  During the Employment Period, the Executive

shall be entitled to paid vacation in accordance with the most

favorable plans, policies, programs and practices of the Company

and its affiliated companies as in effect for the Executive at

any time during the 120-day period immediately preceding the

Effective Date or, if more favorable to the Executive, as in

effect generally at any time thereafter with respect to other

peer executives of the Company and its affiliated companies.

 

     5.  Termination of Employment.  (a)  Death or Disability.  The

Executive's employment shall terminate automatically upon the

Executive's death during the Employment Period.  If the Company

determines in good faith that the Disability of the Executive has

occurred during the Employment Period (pursuant to the definition

of Disability set forth below), it may give to the Executive

written notice in accordance with Section 12(b) of this Agreement

of its intention to terminate the Executive's employment.  In

such event, the Executive's employment with the Company shall

terminate effective on the 30th day after receipt of such notice

by the Executive (the "Disability Effective Date"), provided

that, within the 30 days after such receipt, the Executive shall

not have returned to full-time performance of the Executive's

duties.  For purposes of this Agreement, "Disability" shall mean

the absence of the Executive from the Executive's duties with the

Company on a full-time basis for 180 consecutive business days as

a result of incapacity due to mental or physical illness which is

determined to be total and permanent by a physician selected by

the Company or its insurers and acceptable to the Executive or

the Executive's legal representative.

 

         (b)  Cause.  The Company may terminate the Executive's employment

during the Employment Period for Cause.  For purposes of this

Agreement, "Cause" shall mean:

 

            (i)   the willful and continued failure of the Executive to

perform substantially the Executive's duties with the Company or

one of its affiliates (other than any such failure resulting from

incapacity due to physical or mental illness), after a written

demand for substantial performance is delivered to the Executive

by the Board or the Chief Executive Officer of the Company which

specifically identifies the manner in which the Board or Chief

Executive Officer believes that the Executive has not

substantially performed the Executive's duties, or

 

            (ii)  the willful engaging by the Executive in illegal conduct or

gross misconduct which is materially and demonstrably injurious

to the Company.

 

              For purposes of this provision, no act or failure to act,

on the part of the Executive, shall be considered "willful" unless it

is done, or omitted to be done, by the Executive in bad faith or

without reasonable belief that the Executive's action or omission was

in the best interests of the Company.  Any act, or failure to act,

based upon authority given pursuant to a resolution duly adopted by

the Board or upon the instructions of the Chief Executive Officer or

a senior officer of the Company or based upon the advice of counsel

for the Company shall be conclusively presumed to be done, or omitted

to be done, by the Executive in good faith and in the best interests

of the Company.  The cessation of employment of the Executive shall

not be deemed to be for Cause unless and until there shall have been

delivered to the Executive a copy of a resolution duly adopted by the

affirmative vote of not less than three-quarters of the entire

membership of the Board at a meeting of the Board called and held for

such purpose (after reasonable notice is provided to the Executive

and the Executive is given an opportunity, together with counsel, to

be heard before the Board), finding that, in the good faith opinion

of the Board, the Executive is guilty of the conduct described in

subparagraph (i) or (ii) above, and specifying the particulars

thereof in detail.

 

         (c)  Good Reason.  The Executive's employment may be terminated

by the Executive for Good Reason.  For purposes of this

Agreement, "Good Reason" shall mean:

 

            (i)   the assignment to the Executive of any duties inconsistent

in any respect with the Executive's position (including status,

offices, titles and reporting requirements), authority, duties or

responsibilities as contemplated by Section 4(a) of this

Agreement, or any other action by the Company which results in a

diminution in such position, authority, duties or

responsibilities, excluding for this purpose an isolated,

insubstantial and inadvertent action not taken in bad faith and

which is remedied by the Company promptly after receipt of notice

thereof given by the Executive;

 

            (ii)  any failure by the Company to comply with any of the

provisions of Section 4(b) of this Agreement, other than an

isolated, insubstantial and inadvertent failure not occurring in

bad faith and which is remedied by the Company promptly after

receipt of notice thereof given by the Executive;

 

            (iii) the Company's requiring the Executive to be based at

any office or location other than as provided in Section

4(a)(i)(B) hereof or the Company's requiring the Executive to

travel on Company business to a substantially greater extent than

required immediately prior to the Effective Date;

 

            (iv)  any purported termination by the Company of the Executive's

employment otherwise than as expressly permitted by this

Agreement; or

 

            (v)   any failure by the Company to comply with and satisfy

Section 11(c) of this Agreement.

 

         For purposes of this Section 5(c), any good faith

determination of "Good Reason" made by the Executive shall be

conclusive.   Anything in this Agreement to the contrary

notwithstanding, a termination by the Executive for any reason during

the 30-day period immediately following the first anniversary of the

Effective Date shall be deemed to be a termination for Good Reason

for all purposes of this Agreement.

 

         (d)  Notice of Termination.  Any termination by the Company for

Cause, or by the Executive for Good Reason, shall be communicated

by Notice of Termination to the other party hereto given in

accordance with Section 12(b) of this Agreement.  For purposes of

this Agreement, a "Notice of Termination" means a written notice

which (i) indicates the specific termination provision in this

Agreement relied upon, (ii) to the extent applicable, sets forth

in reasonable detail the facts and circumstances claimed to

provide a basis for termination of the Executive's employment

under the provision so indicated and (iii) if the Date of

Termination (as defined below) is other than the date of receipt

of such notice, specifies the termination date (which date shall

be not more than thirty days after the giving of such notice).

The failure by the Executive or the Company to set forth in the

Notice of Termination any fact or circumstance which contributes

to a showing of Good Reason or Cause shall not waive any right of

the Executive or the Company, respectively, hereunder or preclude

the Executive or the Company, respectively, from asserting such

fact or circumstance in enforcing the Executive's or the

Company's rights hereunder.

 

         (e)  Date of Termination.  "Date of Termination" means (i) if the

Executive's employment is terminated by the Company for Cause, or

by the Executive for Good Reason, the date of receipt of the

Notice of Termination or any later date specified therein, as the

case may be, (ii) if the Executive's employment is terminated by

the Company other than for Cause or Disability, the Date of

Termination shall be the date on which the Company notifies the

Executive of such termination and (iii) if the Executive's

employment is terminated by reason of death or Disability, the

Date of Termination shall be the date of death of the Executive

or the Disability Effective Date, as the case may be.

 

     6.  Obligations of the Company upon Termination.  (a)  Good

Reason; Other Than for Cause, Death or Disability.  If, during

the Employment Period, the Company shall terminate the

Executive's employment other than for Cause or Disability or the

Executive shall terminate employment for Good Reason:

 

            (i)   the Company shall pay to the Executive in a lump sum in cash

within 30 days after the Date of Termination the aggregate of the

following amounts:

 

                  A.  the sum of (1) the Executive's Annual Base Salary

through the Date of Termination to the extent not theretofore paid, (2)

the product of (x) the higher of (I) the Recent Annual Bonus and

(II) the Annual Bonus paid or payable, including any bonus or

portion thereof which has been earned but deferred (and

annualized for any fiscal year consisting of less than twelve

full months or during which the Executive was employed for less

than twelve full months), for the most recently completed fiscal

year during the Employment Period, if any (such higher amount

being referred to as the "Highest Annual Bonus") and (y) a

fraction, the numerator of which is the number of days in the

current fiscal year through the Date of Termination, and the

denominator of which is 365 and (3) any compensation previously

deferred by the Executive (together with any accrued interest or

earnings thereon) and any accrued vacation pay, in each case to

the extent not theretofore paid (the sum of the amounts described

in clauses (1), (2), and (3) shall be hereinafter referred to as

the "Accrued Obligations"); and

 

                  B.  the amount equal to the product of (1) three and (2)

the sum of (x) the Executive's Annual Base Salary and (y) the Highest

Annual Bonus; and

 

                  C.  an amount equal to the excess of (a) the actuarial

equivalent of the benefit under the Company's Pension Plan for

Non-Bargaining Unit Employees and/or any other Company-sponsored

qualified defined benefit retirement plan in which the Executive

participates (collectively, the "Retirement Plan") (utilizing

actuarial assumptions no less favorable to the Executive than

those in effect under the Company's Retirement Plan immediately

prior to the Effective Date), and the Company's Supplemental

Income Security Plan and/or any other Company-sponsored excess or

supplemental defined benefit retirement plan in which the

Executive participates (collectively, the "SISP") which the

Executive would receive if the Executive's employment continued

for three years after the Date of Termination assuming for this

purpose that all accrued benefits are fully vested, and, assuming

that the Executive's compensation in each of the three years is

that required by Section 4(b)(i) and Section 4(b)(ii), over (b)

the actuarial equivalent of the Executive's actual benefit (paid

or payable), if any, under the Retirement Plan and the SISP as of

the Date of Termination;

 

            (ii)  for three years after the Executive's Date of Termination,

or such longer period as may be provided by the terms of the

appropriate plan, program, practice or policy, the Company shall

continue benefits to the Executive and/or the Executive's family

at least equal to those which would have been provided to them in

accordance with the plans, programs, practices and policies

described in Section 4(b)(iv) of this Agreement if the

Executive's employment had not been terminated or, if more

favorable to the Executive, as in effect generally at any time

thereafter with respect to other peer executives of the Company

and its affiliated companies and their families, provided,

however, that if the Executive becomes reemployed with another

employer and is eligible to receive medical or other welfare

benefits under another employer provided plan, the medical and

other welfare benefits described herein shall be secondary to

those provided under such other plan during such applicable

period of eligibility.  For purposes of determining eligibility

(but not the time of commencement of benefits) of the Executive

for retiree benefits pursuant to such plans, practices, programs

and policies, the Executive shall be considered to have remained

employed until three years after the Date of Termination and to

have retired on the last day of such period;

 

            (iii) the Company shall, at its sole expense as incurred,

provide the Executive with outplacement services the scope and

provider of which shall be selected by the Executive in his sole

discretion; and

 

            (iv)  to the extent not theretofore paid or provided, the Company

shall timely pay or provide to the Executive any other amounts or

benefits required to be paid or provided or which the Executive

is eligible to receive under any plan, program, policy or

practice or contract or agreement of the Company and its

affiliated companies (such other amounts and benefits shall be

hereinafter referred to as the "Other Benefits").

 

         (b)  Death.  If the Executive's employment is terminated by

reason of the Executive's death during the Employment Period,

this Agreement shall terminate without further obligations to the

Executive's legal representatives under this Agreement, other

than for payment of Accrued Obligations and the timely payment or

provision of Other Benefits.  Accrued Obligations shall be paid

to the Executive's estate or beneficiary, as applicable, in a

lump sum in cash within 30 days of the Date of Termination.  With

respect to the provision of Other Benefits, the term Other

Benefits as utilized in this Section 6(b) shall include, without

limitation, and the Executive's estate and/or beneficiaries shall

be entitled to receive, benefits at least equal to the most

favorable benefits provided by the Company and affiliated

companies to the estates and beneficiaries of peer executives of

the Company and such affiliated companies under such plans,

programs, practices and policies relating to death benefits, if

any, as in effect with respect to other peer executives and their

beneficiaries at any time during the 120-day period immediately

preceding the Effective Date or, if more favorable to the

Executive's estate and/or the Executive's beneficiaries, as in

effect on the date of the Executive's death with respect to other

peer executives of the Company and its affiliated companies and

their beneficiaries.

 

         (c)  Disability.  If the Executive's employment is terminated by

reason of the Executive's Disability during the Employment

Period, this Agreement shall terminate without further

obligations to the Executive, other than for payment of Accrued

Obligations and the timely payment or provision of Other

Benefits.  Accrued Obligations shall be paid to the Executive in

a lump sum in cash within 30 days of the Date of Termination.

With respect to the provision of Other Benefits, the term Other

Benefits as utilized in this Section 6(c) shall include, and the

Executive shall be entitled after the Disability Effective Date

to receive, disability and other benefits at least equal to the

most favorable of those generally provided by the Company and its

affiliated companies to disabled executives and/or their families

in accordance with such plans, programs, practices and policies

relating to disability, if any, as in effect generally with

respect to other peer executives and their families at any time

during the 120-day period immediately preceding the Effective

Date or, if more favorable to the Executive and/or the

Executive's family, as in effect at any time thereafter generally

with respect to other peer executives of the Company and its

affiliated companies and their families.

 

         (d)  Cause; Other than for Good Reason.  If the Executive's

employment shall be terminated for Cause during the Employment

Period, this Agreement shall terminate without further

obligations to the Executive other than the obligation to pay to

the Executive (x) his Annual Base Salary through the Date of

Termination, (y) the amount of any compensation previously

deferred by the Executive, and (z) Other Benefits, in each case

to the extent theretofore unpaid.  If the Executive voluntarily

terminates employment during the Employment Period, excluding a

termination for Good Reason, this Agreement shall terminate

without further obligations to the Executive, other than for

Accrued Obligations and the timely payment or provision of Other

Benefits.  In such case, all Accrued Obligations shall be paid to

the Executive in a lump sum in cash within 30 days of the Date of

Termination.

 

     7.  Non-exclusivity of Rights.  Nothing in this Agreement shall

prevent or limit the Executive's continuing or future

participation in any plan, program, policy or practice provided

by the Company or any of its affiliated companies and for which

the Executive may qualify, nor, subject to Section 12(f), shall

anything herein limit or otherwise affect such rights as the

Executive may have under any contract or agreement with the

Company or any of its affiliated companies.  Amounts which are

vested benefits or which the Executive is otherwise entitled to

receive under any plan, policy, practice or program of or any

contract or agreement with the Company or any of its affiliated

companies at or subsequent to the Date of Termination shall be

payable in accordance with such plan, policy, practice or program

or contract or agreement except as explicitly modified by this

Agreement.

 

     8.  Full Settlement.  The Company's obligation to make the

payments provided for in this Agreement and otherwise to perform

its obligations hereunder shall not be affected by any set-off,

counterclaim, recoupment, defense or other claim, right or action

which the Company may have against the Executive or others.  In

no event shall the Executive be obligated to seek other

employment or take any other action by way of mitigation of the

amounts payable to the Executive under any of the provisions of

this Agreement and such amounts shall not be reduced whether or

not the Executive obtains other employment.  The Company agrees

to pay as incurred, to the full extent permitted by law, all

legal fees and expenses which the Executive may reasonably incur

as a result of any contest (regardless of the outcome thereof) by

the Company, the Executive or others of the validity or

enforceability of, or liability under, any provision of this

Agreement or any guarantee of performance thereof (including as a

result of any contest by the Executive about the amount of any

payment pursuant to this Agreement), plus in each case interest

on any delayed payment at the applicable Federal rate provided

for in Section 7872(f)(2)(A) of the Internal Revenue Code of

1986, as amended (the "Code").

 

     9.  Certain Additional Payments by the Company.

 

         (a)  Anything in this Agreement to the contrary notwithstanding

and except as set forth below, in the event it shall be

determined that any payment or distribution by the Company or its

affiliates to or for the benefit of the Executive (whether paid

or payable or distributed or distributable pursuant to the terms

of this Agreement or otherwise, but determined without regard to

any additional payments required under this Section 9) (a

"Payment") would be subject to the excise tax imposed by Section

4999 of the Code or any interest or penalties are incurred by the

Executive with respect to such excise tax (such excise tax,

together with any such interest and penalties, are hereinafter

collectively referred to as the "Excise Tax"), then the Executive

shall be entitled to receive an additional payment (a "Gross-Up

Payment") in an amount such that after payment by the Executive

of all taxes (including any interest or penalties imposed with

respect to such taxes), including, without limitation, any income

taxes (and any interest and penalties imposed with respect

thereto) and Excise Tax imposed upon the Gross-Up Payment, the

Executive retains an amount of the Gross-Up Payment equal to the

Excise Tax imposed upon the Payments.  Notwithstanding the

foregoing provisions of this Section 9(a), if it shall be

determined that the Executive is entitled to a Gross-Up Payment,

but that the Payments do not exceed 110% of the greatest amount

(the "Reduced Amount") that could be paid to the Executive such

that the receipt of Payments would not give rise to any Excise

Tax, then no Gross-Up Payment shall be made to the Executive and

the Payments, in the aggregate, shall be reduced to the Reduced

Amount.

 

         (b)  Subject to the provisions of Section 9(c), all

determinations required to be made under this Section 9,

including whether and when a Gross-Up Payment is required and the

amount of such Gross-Up Payment and the assumptions to be

utilized in arriving at such determination, shall be made by

Ernst & Young or such other certified public accounting firm as

may be designated by the Executive (the "Accounting Firm") which

shall provide detailed supporting calculations both to the

Company and the Executive within 15 business days of the receipt

of notice from the Executive that there has been a Payment, or

such earlier time as is requested by the Company.  In the event

that the Accounting Firm is serving as accountant or auditor for

the individual, entity or group effecting the Change of Control,

the Executive shall appoint another nationally recognized

accounting firm to make the determinations required hereunder

(which accounting firm shall then be referred to as the

Accounting Firm hereunder).  All fees and expenses of the

Accounting Firm shall be borne solely by the Company.  Any Gross-

Up Payment, as determined pursuant to this Section 9, shall be

paid by the Company to the Executive within five days of the

receipt of the Accounting Firm's determination.  Any

determination by the Accounting Firm shall be binding upon the

Company and the Executive.  As a result of the uncertainty in the

application of Section 4999 of the Code at the time of the

initial determination by the Accounting Firm hereunder, it is

possible that Gross-Up Payments which will not have been made by

the Company should have been made ("Underpayment"), consistent

with the calculations required to be made hereunder.  In the

event that the Company exhausts its remedies pursuant to Section

9(c) and the Executive thereafter is required to make a payment

of any Excise Tax, the Accounting Firm shall determine the amount

of the Underpayment that has occurred and any such Underpayment

shall be promptly paid by the Company to or for the benefit of

the Executive.

 

         (c)  The Executive shall notify the Company in writing of any

claim by the Internal Revenue Service that, if successful, would

require the payment by the Company of the Gross-Up Payment.  Such

notification shall be given as soon as practicable but no later

than ten business days after the Executive is informed in writing

of such claim and shall apprise the Company of the nature of such

claim and the date on which such claim is requested to be paid.

The Executive shall not pay such claim prior to the expiration of

the 30-day period following the date on which it gives such

notice to the Company (or such shorter period ending on the date

that any payment of taxes with respect to such claim is due).  If

the Company notifies the Executive in writing prior to the

expiration of such period that it desires to contest such claim,

the Executive shall:

 

            (i)   give the Company any information reasonably requested by

the Company relating to such claim,

 

            (ii)  take such action in connection with contesting such claim

as the Company shall reasonably request in writing from time to

time, including, without limitation, accepting legal

representation with respect to such claim by an attorney

reasonably selected by the Company,

 

            (iii) cooperate with the Company in good faith in order

effectively to contest such claim, and

 

            (iv)  permit the Company to participate in any proceedings

relating to such claim;

 

provided, however, that the Company shall bear and pay directly

all costs and expenses (including additional interest and

penalties) incurred in connection with such contest and shall

indemnify and hold the Executive harmless, on an after-tax basis,

for any Excise Tax or income tax (including interest and

penalties with respect thereto) imposed as a result of such

representation and payment of costs and expenses.  Without

limitation on the foregoing provisions of this Section 9(c), the

Company shall control all proceedings taken in connection with

such contest and, at its sole option, may pursue or forgo any and

all administrative appeals, proceedings, hearings and conferences

with the taxing authority in respect of such claim and may, at

its sole option, either direct the Executive to pay the tax

claimed and sue for a refund or contest the claim in any

permissible manner, and the Executive agrees to prosecute such

contest to a determination before any administrative tribunal, in

a court of initial jurisdiction and in one or more appellate

courts, as the Company shall determine; provided, however, that

if the Company directs the Executive to pay such claim and sue

for a refund, the Company shall advance the amount of such

payment to the Executive, on an interest-free basis and shall

indemnify and hold the Executive harmless, on an after-tax basis,

from any Excise Tax or income tax (including interest or

penalties with respect thereto) imposed with respect to such

advance or with respect to any imputed income with respect to

such advance; and further provided that any extension of the

statute of limitations relating to payment of taxes for the

taxable year of the Executive with respect to which such

contested amount is claimed to be due is limited solely to such

contested amount.  Furthermore, the Company's control of the

contest shall be limited to issues with respect to which a Gross-

Up Payment would be payable hereunder and the Executive shall be

entitled to settle or contest, as the case may be, any other

issue raised by the Internal Revenue Service or any other taxing

authority.

 

         (d)  If, after the receipt by the Executive of an amount advanced

by the Company pursuant to Section 9(c), the Executive becomes

entitled to receive any refund with respect to such claim, the

Executive shall (subject to the Company's complying with the

requirements of Section 9(c)) promptly pay to the Company the

amount of such refund (together with any interest paid or

credited thereon after taxes applicable thereto).  If, after the

receipt by the Executive of an amount advanced by the Company

pursuant to Section 9(c), a determination is made that the

Executive shall not be entitled to any refund with respect to

such claim and the Company does not notify the Executive in

writing of its intent to contest such denial of refund prior to

the expiration of 30 days after such determination, then such

advance shall be forgiven and shall not be required to be repaid

and the amount of such advance shall offset, to the extent

thereof, the amount of Gross-Up Payment required to be paid.

 

     10. Confidential Information.  The Executive shall hold in a

fiduciary capacity for the benefit of the Company all secret or

confidential information, knowledge or data relating to the

Company or any of its affiliated companies, and their respective

businesses, which shall have been obtained by the Executive

during the Executive's employment by the Company or any of its

affiliated companies and which shall not be or become public

knowledge (other than by acts by the Executive or representatives

of the Executive in violation of this Agreement).  After

termination of the Executive's employment with the Company, the

Executive shall not, without the prior written consent of the

Company or as may otherwise be required by law or legal process,

communicate or divulge any such information, knowledge or data to

anyone other than the Company and those designated by it.  In no

event shall an asserted violation of the provisions of this

Section 10 constitute a basis for deferring or withholding any

amounts otherwise payable to the Executive under this Agreement.

 

     11. Successors.  (a)  This Agreement is personal to the

Executive and without the prior written consent of the Company

shall not be assignable by the Executive otherwise than by will

or the laws of descent and distribution.  This Agreement shall

inure to the benefit of and be enforceable by the Executive's

legal representatives.

 

         (b)  This Agreement shall inure to the benefit of and be binding

upon the Company and its successors and assigns.

 

         (c)  The Company will require any successor (whether direct or

indirect, by purchase, merger, consolidation or otherwise) to all

or substantially all of the business and/or assets of the Company

to assume expressly and agree to perform this Agreement in the

same manner and to the same extent that the Company would be

required to perform it if no such succession had taken place.  As

used in this Agreement, "Company" shall mean the Company as

hereinbefore defined and any successor to its business and/or

assets as aforesaid which assumes and agrees to perform this

Agreement by operation of law, or otherwise.

 

     12. Miscellaneous.  (a)  This Agreement shall be governed by and

construed in accordance with the laws of the State of Delaware,

without reference to principles of conflict of laws.  The

captions of this Agreement are not part of the provisions hereof

and shall have no force or effect.  This Agreement may not be

amended or modified otherwise than by a written agreement

executed by the parties hereto or their respective successors and

legal representatives.

 

         (b)  All notices and other communications hereunder shall be in

writing and shall be given by hand delivery to the other party or

by registered or certified mail, return receipt requested,

postage prepaid, addressed as follows:

 

         If to the Executive:

 

         Martin A. White

         3308 46th Avenue SE

         Mandan, ND 58554

 

 

         If to the Company:

 

         MDU Resources Group, Inc.

         Schuchart Building

         918 East Divide Avenue

 

         Mailing Address:

 

         P.O. Box 5650

         Bismarck, ND 58506-5650

 

              Attention:  General Counsel

 

or to such other address as either party shall have furnished to

the other in writing in accordance herewith.  Notice and

communications shall be effective when actually received by the

addressee.

 

         (c)  The invalidity or unenforceability of any provision of this

Agreement shall not affect the validity or enforceability of any

other provision of this Agreement.

 

         (d)  The Company may withhold from any amounts payable under this

Agreement such Federal, state, local or foreign taxes as shall be

required to be withheld pursuant to any applicable law or

regulation.

 

         (e)  The Executive's or the Company's failure to insist upon

strict compliance with any provision of this Agreement or the

failure to assert any right the Executive or the Company may have

hereunder, including, without limitation, the right of the

Executive to terminate employment for Good Reason pursuant to

Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be

a waiver of such provision or right or any other provision or

right of this Agreement.

 

         (f)  The Executive and the Company acknowledge that, except as

may otherwise be provided under any other written agreement

between the Executive and the Company, the employment of the

Executive by the Company is "at will" and, subject to Section

1(a) hereof, prior to the Effective Date, the Executive's

employment may be terminated by either the Executive or the

Company at any time prior to the Effective Date, in which case

the Executive shall have no further rights under this Agreement.

From and after the Effective Date this Agreement shall supersede

any other agreement between the parties with respect to the

subject matter hereof.

 

         IN WITNESS WHEREOF, the Executive has hereunto set the

Executive's hand and, pursuant to the authorization from its Board of

Directors, the Company has caused these presents to be executed in

its name on its behalf, all as of the day and year first above

written.

 

 

 

                                  /s/  Martin A. White

                                       Martin A. White

 

 

 

                              MDU RESOURCES GROUP, INC.

 

Attest:

 

 

 

/s/  Lester H. Loble, II      By: /s/  Douglas C. Kane

Lester H. Loble, II                    Douglas C. Kane, Executive

Secretary                              Vice President, Chief Administrative

                                       and Corporate Development Officer